Who qualifies for mortgage help and how to get it
By DAVE CARPENTER, AP Business WriterTue Jul 29, 11:02 PM ET
Questions and answers about the Hope for Homeowners Act of 2008, passed by Congress last weekend to try to steer as many as 400,000 struggling homeowners away from foreclosure:
Q: What exactly will the legislation do?
A: It will allow those who qualify to cancel their old mortgage loans and replace them with 30-year fixed-rate loans for up to 90 percent of the home's current value. The FHA will insure a total of $300 billion of the loans over a three-year period.
But the decision on whether to write such a loan remains up to banks, which would have to be willing to take a loss on the existing loans in exchange for avoiding an often-costly foreclosure.
Q: Who is eligible?
A: Eligible borrowers must have spent more than 31 percent of their monthly incomes on their mortgages as of March 1, 2008. The troubled loan must have originated no later than Jan. 1, 2008, and be on the borrower's primary residence. And the borrower's income must be verified.
Q: When does the program start?
A: It takes effect Oct. 1 and runs through September 2011, although the FHA isn't likely to have it operating at full capacity until next year.
Q: Since lenders can pick and choose which loans to refinance, how can consumers determine if theirs will be selected?
A: Check with the bank or financial company servicing your mortgage, but it may be weeks before they make decisions concerning the new guidelines and assess individual loans.
Even then, keep expectations limited.
"Servicers are going to be reluctant to take the government up on their offer," predicted Mark Zandi, chief economist at Moody's Economy.com. "The earliest they'll start taking them up on it is early next year. And even then it's likely to be modest."
Q: Is there anything a homeowner can do to improve chances of benefiting from the program, such as crunching numbers to make a case for the bank?
A: Not really. The best step is to keep up your payments as best you can.
Q: But doesn't this provide an incentive to NOT pay your mortgage, if you're barely keeping ahead of bills and are underwater on your house, so you can qualify?
A: No. If your situation deteriorates enough, the bank may reject any possible new loan.
"Turning yourself into a financial basket case is not going to work," said Dan Seiver, a finance professor at San Diego State University. "If you turn into a complete deadbeat, the servicer is going to just foreclose and dump it."
Q: So what should I be doing now besides trying to keep up with payments?
A: Talk to a local credit counselor and call the toll-free hot line of the Hope Now alliance — an industry group trying to coordinate a response to the mortgage crisis — at 1-888-995-HOPE. It is available 24 hours a day to provide mortgage counseling in multiple languages.
Mary Thomason, director of resource development for The Impact Group of Atlanta, a housing counseling group, also suggests tracking expenses and income closely in order to be able to forecast your cash flow for the next six months and give yourself better control of your finances.
Q: If the banks and lenders refuse to write these loans, then what?
A: Public and political pressure may prompt them to participate. If not, and more people continue to lose their homes, Zandi says the next White House administration subject them to additional regulations or investigations if they remain unwilling to take on the risks.
Q: What happens if I'm able to sell my home after I refinance?
A: If you sell during the next five years, you must agree to share 50 percent of any profits from the resale with the government. What's more, homeowners can only retain equity gains based on a sliding scale. The homeowner would have zero equity from a sale in the first year, with the amount rising 10 percent in each succeeding year and capping at 50 percent from a sale in year five and thereafter.
The equity must be repaid because the maximum amount on the new loans will be capped at 90 percent of the current market value, which automatically gives the previously troubled homeowner 10 percent equity in the home.
Q: Where can consumers find more detailed information about the plan?
A: There is a six-page summary of the housing act at
http://banking.senate.gov/public/_files/HousingandEconomicRecoveryActSummary.pdf
and the FHA's Web site at http://www.fha.gov is a place to watch for updated information. The entire 694-page bill is at http://www.house.gov/apps/list/press/financialsvcs_dem/hr3221_bill_text.pdf
Copyright © 2008 The Associated Press
Bush signs housing bill to provide mortgage relief
By JENNIFER LOVEN, Associated Press Writer 41 minutes ago
President Bush on Wednesday signed a massive housing bill intended to provide mortgage relief for 400,000 struggling homeowners and stabilize financial markets.
Bush signed the bill without any fanfare or signing ceremony, affixing his signature to the measure he once threatened to veto, in the Oval Office in the early morning hours. He was surrounded by top administration officials, including Treasury Secretary Henry Paulson and Housing Secretary Steve Preston.
"We look forward to put in place new authorities to improve confidence and stability in markets," White House spokesman Tony Fratto said. He said that the Federal Housing Administration would begin right away to implement new policies "intended to keep more deserving American families in their homes."
The measure, regarded as the most significant housing legislation in decades, lets homeowners who cannot afford their payments refinance into more affordable government-backed loans rather than losing their homes.
It offers a temporary financial lifeline to troubled mortgage companies Fannie Mae and Freddie Mac and tightens controls over the two government-sponsored businesses.
The House passed the bill a week ago; the Senate voted Saturday to send it to the president.
Bush didn't like the version emerging from Congress, and initially said he would veto it, particularly over a provision containing $3.9 billion in neighborhood grants. He contended the money would benefit lenders who helped cause the mortgage meltdown, encouraging them to foreclose rather than work with borrowers.
But he withdrew that threat early last week, saying hurting homeowners could not wait — and even blaming the Democratic Congress' delays in action for forcing an imperfect solution.
Meanwhile, many Republicans, particularly those from areas hit hardest by housing woes, were eager to get behind a housing rescue as they looked ahead to tough re-election contests. Paulson's request for the emergency power to rescue Fannie Mae and Freddie Mac helped push through the measure. So did the creation of a regulator with stronger reins on the government-sponsored companies, as Republicans long have sought.
Democrats won cherished priorities in the bargain: the aid for homeowners, a permanent affordable housing fund financed by Fannie Mae and Freddie Mac, and the neighborhood grants.
The bill takes several approaches to curing the ailing housing market.
It aims to spare an estimated 400,000 debt-strapped homeowners, many of whom owe more their houses are worth, from foreclosure by allowing them to get more affordable mortgages backed by the Federal Housing Administration.
The FHA could insure $300 billion in such mortgages, which would be available to homeowners who showed they could afford a new loan. Banks would first have to agree to take a large loss on the existing loans in exchange for avoiding an often-costly foreclosure.
The plan also is designed to relieve a broader credit crunch that has taken hold because of rising defaults and falling home values. To free up safer and more affordable mortgage credit, the bill permanently would increase to $625,000 the size of home loans that Fannie Mae and Freddie Mac can buy and the FHA can insure. They also could buy and back mortgages 15 percent higher than the median home price in certain areas.
It goes far beyond addressing the current crisis, however.
The legislation overhauls the Depression-era FHA. It requires lenders to show how high a borrower's payment could get under the terms of his mortgage. It provides $180 million in pre-foreclosure counseling for struggling homeowners.
The Treasury Department gains unlimited power, until the end of 2009, to lend money to Fannie Mae and Freddie Mac or buy their stock should they need it. The Federal Reserve takes on a new "consultative" role overseeing the companies.
The measure includes $15 billion in tax cuts, including a significant expansion of the low-income housing tax credit and a credit of up to $7,500 for first-time home buyers for houses purchased between April 9, 2008, and July 1, 2009.
Democratic leaders, recognizing that the measure could be one of the last items to become law during what's left of their abbreviated election-year schedule, tacked on an $800 billion increase, to $10.6 trillion, in the statutory limit on the national debt.
Conservative Republicans were vehemently opposed to the bill, particularly the help for Fannie Mae and Freddie Mac. Critics charge the companies enjoy lavish profits in good times and wield their outsized political clout to resist regulation while depending on the government to bail them out should they falter.
Copyright © 2008 The Associated Press
Wednesday, July 30, 2008
Monday, July 28, 2008
In this MegaVote for Texas' 24th Congressional District
July 28, 2008
In this MegaVote for Texas' 24th Congressional District:
Recent Congressional Votes -
Senate: Foreclosure Prevention Act
House: Foreclosure Prevention Act
House: Consumer Energy Supply Act
House: National Highway Bridge Reconstruction and Inspection Act
Upcoming Congressional Bills -
Senate: Advancing America's Priorities
Senate: Stop Excessive Energy Speculation Act
House: Military Construction and Veterans Affairs Appropriations, FY2009
House: Paycheck Fairness Act
--------------------------------------------------------------------------------
Recent Senate Votes
Foreclosure Prevention Act - Vote Agreed to (72-13, 15 Not Voting)
The Senate gave final approval to this housing-recovery package.
Sen. Kay Bailey Hutchison voted NO......send e-mail or see bio
Sen. John Cornyn voted NO......send e-mail or see bio
--------------------------------------------------------------------------------
Recent House Votes
Foreclosure Prevention Act - Vote Passed (272-152, 11 Not Voting)
The House passed this housing-recovery package.
Rep. Kenny Marchant voted NO......send e-mail or see bio
--------------------------------------------------------------------------------
Consumer Energy Supply Act - Vote Failed (268-157, 10 Not Voting)
The House failed to attain the two-thirds margin needed to pass this bill to release 10 percent of the Strategic Petroleum Reserve.
Rep. Kenny Marchant voted NO......send e-mail or see bio
--------------------------------------------------------------------------------
National Highway Bridge Reconstruction and Inspection Act - Vote Passed (367-55, 12 Not Voting)
The House passed this bill that would help states and the Federal Highway Administration create a uniform inspection system for bridges and highways.
Rep. Kenny Marchant voted NO......send e-mail or see bio --------------------------------------------------------------------------------
Upcoming Votes
Advancing America's Priorities - S.3297
The Senate may take up this omnibus bill combining a number of health care bills.
--------------------------------------------------------------------------------
Stop Excessive Energy Speculation Act - S.3268
This Senate bill is intended to prevent excessive speculation in the energy commodities market.
--------------------------------------------------------------------------------
Military Construction and Veterans Affairs Appropriations, FY2009 - H.R.6599
The House is scheduled to take up this $73 billion bill funding military construction and the Department of Veterans Affairs for the upcoming fiscal year.
--------------------------------------------------------------------------------
Paycheck Fairness Act - H.R.1338
The House will also take up this bill intended to prevent gender-based wage discrimination.
megavote@mailmanager.net
In this MegaVote for Texas' 24th Congressional District:
Recent Congressional Votes -
Senate: Foreclosure Prevention Act
House: Foreclosure Prevention Act
House: Consumer Energy Supply Act
House: National Highway Bridge Reconstruction and Inspection Act
Upcoming Congressional Bills -
Senate: Advancing America's Priorities
Senate: Stop Excessive Energy Speculation Act
House: Military Construction and Veterans Affairs Appropriations, FY2009
House: Paycheck Fairness Act
--------------------------------------------------------------------------------
Recent Senate Votes
Foreclosure Prevention Act - Vote Agreed to (72-13, 15 Not Voting)
The Senate gave final approval to this housing-recovery package.
Sen. Kay Bailey Hutchison voted NO......send e-mail or see bio
Sen. John Cornyn voted NO......send e-mail or see bio
--------------------------------------------------------------------------------
Recent House Votes
Foreclosure Prevention Act - Vote Passed (272-152, 11 Not Voting)
The House passed this housing-recovery package.
Rep. Kenny Marchant voted NO......send e-mail or see bio
--------------------------------------------------------------------------------
Consumer Energy Supply Act - Vote Failed (268-157, 10 Not Voting)
The House failed to attain the two-thirds margin needed to pass this bill to release 10 percent of the Strategic Petroleum Reserve.
Rep. Kenny Marchant voted NO......send e-mail or see bio
--------------------------------------------------------------------------------
National Highway Bridge Reconstruction and Inspection Act - Vote Passed (367-55, 12 Not Voting)
The House passed this bill that would help states and the Federal Highway Administration create a uniform inspection system for bridges and highways.
Rep. Kenny Marchant voted NO......send e-mail or see bio --------------------------------------------------------------------------------
Upcoming Votes
Advancing America's Priorities - S.3297
The Senate may take up this omnibus bill combining a number of health care bills.
--------------------------------------------------------------------------------
Stop Excessive Energy Speculation Act - S.3268
This Senate bill is intended to prevent excessive speculation in the energy commodities market.
--------------------------------------------------------------------------------
Military Construction and Veterans Affairs Appropriations, FY2009 - H.R.6599
The House is scheduled to take up this $73 billion bill funding military construction and the Department of Veterans Affairs for the upcoming fiscal year.
--------------------------------------------------------------------------------
Paycheck Fairness Act - H.R.1338
The House will also take up this bill intended to prevent gender-based wage discrimination.
megavote@mailmanager.net
Obama promises efforts to revive economy
By MIKE GLOVER, Associated Press Writer
Democratic presidential candidate Barack Obama on Monday blamed "irresponsible decisions" by the Bush administration and Wall Street for the country's economic woes as government officials said the budget deficit would soar to record heights next year.
Turning to domestic problems after a week's tour of the Middle East and Europe, Obama met with more than a dozen economic advisers, appearing with them briefly before retreating for a two-hour closed meeting. The new deficit numbers were the latest sign of an economy in decline, with foreclosures rising, home prices falling, soaring energy prices and nearly a half-million job losses since January.
"It was not an accident or a normal part of the business cycle that led us to this situation," Obama said. "There were some irresponsible decisions that were made on Wall Street and in Washington."
Obama said the economy needs both short- and long-term fixes, including another round of "stimulus" measures from Congress to revive the economy and a longer-term focus on renewable energy to curb high gas prices and on universal health care to trim costs. He said he would move "rapidly and vigorously" to respond.
"We are also going to have to provide some short-term relief," Obama said. "People are hurting right now. We need to respond rapidly and vigorously to problems, and to anticipate the problems that may be on the horizon."
Present at the meeting were AFL-CIO President John Sweeney, former treasury secretary Paul ONeill, former Federal Reserve chairman Paul Volcker, former New Jersey Sen. Bill Bradley, Google chairman and CEO Eric Schmidt and New Jersey Gov. Jon Corzine, the former head of Wall street investment firm Goldman Sachs. Billionaire investor Warren Buffett joined via speaker phone.
Republican John McCain said the culprit for the deficit was the administration's wasteful spending.
"There is no more striking reminder of the need to reverse the profligate spending that has characterized this administration's fiscal policy," McCain said in a statement issued Monday.
"As president, I have committed to balancing the budget by the end of my first term," McCain said. "Today's news makes that job harder but should not change our resolve to make the tough decisions and the genuine effort to reach across the aisle that are needed to ensure a lasting solution to the spending problem that threatens the very stability of our economy."
Obama didn't name the Bush administration, but his implication was clear.
"We can't afford, I believe, to keep on doing the same things we've been doing," said Obama. "We have to change course, and we have to take immediate action."
Obama has called for an aggressive course from Washington to stimulate the economy, and while he offered few details about his plans, he said the economy would be the focus of much of his attention in the three months until the election.
"This is an emergency we feel not only when reading the Wall Street Journal, but when we travel across Ohio and Michigan, New Mexico, no matter where you meet people day after day who are one foreclosure, one illness, one pink slip away from economic disaster," he said.
The states Obama mentioned, as he read from prepared text, all are key battleground states in November. He fueled more campaign speculation Monday as he headed to a three-hour closed meeting in Washington; campaign aides would not say who would be there or what the topic would be, but Obama is widely expected to announce his selection of a running mate prior to the Democratic National Convention next month.
He warned his economic advisers that the current crunch was "a direct result of putting off tough decisions for too many years. I believe that more action is going to be necessary. The economic emergency is more and more severe."
The Illinois senator said he would convene his economic advisers routinely through the campaign to get advice. It's also a way of putting the focus on domestic issues, where polls have shown him running strongly against McCain, an Arizona Republican senator.
"I've laid out an economic strategy in this campaign that I think will provide short-term relief and long-term growth," Obama said. He planned to focus on the economy this week. He also was heading to Missouri and Iowa later in the week, and raising money in Texas before heading to Florida.
http://news.yahoo.com/s/ap/obama_economy&printer=1;_ylt=AumStkuaR_FQIrden1K6Qith24cA
Copyright © 2008 The Associated Press
Democratic presidential candidate Barack Obama on Monday blamed "irresponsible decisions" by the Bush administration and Wall Street for the country's economic woes as government officials said the budget deficit would soar to record heights next year.
Turning to domestic problems after a week's tour of the Middle East and Europe, Obama met with more than a dozen economic advisers, appearing with them briefly before retreating for a two-hour closed meeting. The new deficit numbers were the latest sign of an economy in decline, with foreclosures rising, home prices falling, soaring energy prices and nearly a half-million job losses since January.
"It was not an accident or a normal part of the business cycle that led us to this situation," Obama said. "There were some irresponsible decisions that were made on Wall Street and in Washington."
Obama said the economy needs both short- and long-term fixes, including another round of "stimulus" measures from Congress to revive the economy and a longer-term focus on renewable energy to curb high gas prices and on universal health care to trim costs. He said he would move "rapidly and vigorously" to respond.
"We are also going to have to provide some short-term relief," Obama said. "People are hurting right now. We need to respond rapidly and vigorously to problems, and to anticipate the problems that may be on the horizon."
Present at the meeting were AFL-CIO President John Sweeney, former treasury secretary Paul ONeill, former Federal Reserve chairman Paul Volcker, former New Jersey Sen. Bill Bradley, Google chairman and CEO Eric Schmidt and New Jersey Gov. Jon Corzine, the former head of Wall street investment firm Goldman Sachs. Billionaire investor Warren Buffett joined via speaker phone.
Republican John McCain said the culprit for the deficit was the administration's wasteful spending.
"There is no more striking reminder of the need to reverse the profligate spending that has characterized this administration's fiscal policy," McCain said in a statement issued Monday.
"As president, I have committed to balancing the budget by the end of my first term," McCain said. "Today's news makes that job harder but should not change our resolve to make the tough decisions and the genuine effort to reach across the aisle that are needed to ensure a lasting solution to the spending problem that threatens the very stability of our economy."
Obama didn't name the Bush administration, but his implication was clear.
"We can't afford, I believe, to keep on doing the same things we've been doing," said Obama. "We have to change course, and we have to take immediate action."
Obama has called for an aggressive course from Washington to stimulate the economy, and while he offered few details about his plans, he said the economy would be the focus of much of his attention in the three months until the election.
"This is an emergency we feel not only when reading the Wall Street Journal, but when we travel across Ohio and Michigan, New Mexico, no matter where you meet people day after day who are one foreclosure, one illness, one pink slip away from economic disaster," he said.
The states Obama mentioned, as he read from prepared text, all are key battleground states in November. He fueled more campaign speculation Monday as he headed to a three-hour closed meeting in Washington; campaign aides would not say who would be there or what the topic would be, but Obama is widely expected to announce his selection of a running mate prior to the Democratic National Convention next month.
He warned his economic advisers that the current crunch was "a direct result of putting off tough decisions for too many years. I believe that more action is going to be necessary. The economic emergency is more and more severe."
The Illinois senator said he would convene his economic advisers routinely through the campaign to get advice. It's also a way of putting the focus on domestic issues, where polls have shown him running strongly against McCain, an Arizona Republican senator.
"I've laid out an economic strategy in this campaign that I think will provide short-term relief and long-term growth," Obama said. He planned to focus on the economy this week. He also was heading to Missouri and Iowa later in the week, and raising money in Texas before heading to Florida.
http://news.yahoo.com/s/ap/obama_economy&printer=1;_ylt=AumStkuaR_FQIrden1K6Qith24cA
Copyright © 2008 The Associated Press
How Obama Became Acting President
By FRANK RICH
IT almost seems like a gag worthy of “Borat”: A smooth-talking rookie senator with an exotic name passes himself off as the incumbent American president to credulous foreigners. But to dismiss Barack Obama’s magical mystery tour through old Europe and two war zones as a media-made fairy tale would be to underestimate the ingenious politics of the moment. History was on the march well before Mr. Obama boarded his plane, and his trip was perfectly timed to reap the whirlwind.
He never would have been treated as a president-in-waiting by heads of state or network talking heads if all he offered were charisma, slick rhetoric and stunning visuals. What drew them instead was the raw power Mr. Obama has amassed: the power to start shaping events and the power to move markets, including TV ratings. (Even “Access Hollywood” mustered a 20 percent audience jump by hosting the Obama family.) Power begets more power, absolutely.
The growing Obama clout derives not from national polls, where his lead is modest. Nor is it a gift from the press, which still gives free passes to its old bus mate John McCain. It was laughable to watch journalists stamp their feet last week to try to push Mr. Obama into saying he was “wrong” about the surge. More than five years and 4,100 American fatalities later, they’re still not demanding that Mr. McCain admit he was wrong when he assured us that our adventure in Iraq would be fast, produce little American “bloodletting” and “be paid for by the Iraqis.”
Never mind. This election remains about the present and the future, where Iraq ’s $10 billion a month drain on American pocketbooks and military readiness is just one moving part in a matrix of national crises stretching from the gas pump to Pakistan . That’s the high-rolling political casino where Mr. Obama amassed the chips he cashed in last week. The “change” that he can at times wield like a glib marketing gimmick is increasingly becoming a substantive reality — sometimes through Mr. Obama’s instigation, sometimes by luck. Obama-branded change is snowballing, whether it’s change you happen to believe in or not.
Looking back now, we can see that the fortnight preceding the candidate’s flight to Kuwait was like a sequence in an old movie where wind blows away calendar pages to announce an epochal plot turn. First, on July 7, the Iraqi prime minister, Nuri al-Maliki, dissed Bush dogma by raising the prospect of a withdrawal timetable for our troops. Then, on July 15, Mr. McCain suddenly noticed that more Americans are dying in Afghanistan than Iraq and called for more American forces to be sent there. It was a long-overdue recognition of the obvious that he could no longer avoid: both Robert Gates, the defense secretary, and Adm. Mike Mullen, the chairman of the Joint Chiefs of Staff, had already called for more American troops to battle the resurgent Taliban, echoing the policy proposed by Mr. Obama a year ago.
On July 17 we learned that President Bush, who had labeled direct talks with Iran “appeasement,” would send the No. 3 official in the State Department to multilateral nuclear talks with Iran . Lest anyone doubt that the White House had moved away from the rigid stand endorsed by Mr. McCain and toward Mr. Obama’s, a former Rumsfeld apparatchik weighed in on The Wall Street Journal’s op-ed page: “Now Bush Is Appeasing Iran.”
Within 24 hours, the White House did another U-turn, endorsing an Iraq withdrawal timetable as long as it was labeled a “general time horizon.” In a flash, as Mr. Obama touched down in Kuwait, Mr. Maliki approvingly cited the Democratic candidate by name while laying out a troop-withdrawal calendar of his own that, like Mr. Obama’s, would wind down in 2010. On Tuesday, the British prime minister, Gordon Brown, announced a major drawdown of his nation’s troops by early 2009.
But it’s not merely the foreign policy consensus that is shifting Obama-ward. The Texas oilman T. Boone Pickens has now joined another high-profile McCain supporter, Arnold Schwarzenegger, in knocking the McCain nostrum that America can drill its way out of its energy crisis. Mr. Pickens, who financed the Swift-boat campaign smearing John Kerry in 2004, was thought to be a sugar daddy for similar assaults against the Democrats this year. Instead, he is underwriting nonpartisan ads promoting wind power and speaks of how he would welcome Al Gore as energy czar if there’s an Obama administration.
The Obama stampede is forcing Mr. McCain to surrender on other domestic fronts. After the Democrat ran ads in 14 states berating chief executives who are “making more in 10 minutes” than many workers do in a year, a newly populist Mr. McCain began railing against “corporate greed” — much as he also followed Mr. Obama’s example and belatedly endorsed a homeowners’ bailout he had at first opposed. Given that Mr. McCain has already used a refitted, hand-me-down Obama campaign slogan (“A Leader You Can Believe In”), it can’t be long before he takes up fist bumps. They’ve become the rage among young (nonterrorist) American businessmen, according to USA Today.
“We have one president at a time,” Mr. Obama is careful to say. True, but the sitting president, a lame duck despised by voters and shunned by his own party’s candidates, now has all the gravitas of Mr. Cellophane in “ Chicago .” The opening for a successor arrived prematurely, and the vacuum had been waiting to be filled. What was most striking about the Obama speech in Berlin was not anything he said so much as the alternative reality it fostered: many American children have never before seen huge crowds turn out abroad to wave American flags instead of burn them.
Mr. McCain could also have stepped into the leadership gap left by Mr. Bush’s de facto abdication. His inability to even make a stab at doing so is troubling. While drama-queen commentators on television last week were busy building up false suspense about the Obama trip — will he make a world-class gaffe? will he have too large an audience in Germany ? — few focused on the alarms that Mr. McCain’s behavior at home raise about his fitness to be president.
Once again the candidate was making factual errors about the only subject he cares about, imagining an Iraq-Pakistan border and garbling the chronology of the Anbar Awakening. Once again he displayed a tantrum-prone temperament ill-suited to a high-pressure 21st-century presidency. His grim-faced crusade to brand his opponent as a traitor who wants to “lose a war” isn’t even a competent impersonation of Joe McCarthy. Mr. McCain comes off instead like the ineffectual Mr. Wilson, the retired neighbor perpetually busting a gasket at the antics of pesky little Dennis the Menace.
The week’s most revealing incident occurred on Wednesday when the new, supposedly improved McCain campaign management finalized its grand plan to counter Mr. Obama’s Berlin speech with a “Mission Accomplished”-like helicopter landing on an oil rig off Louisiana ’s coast. The announcement was posted on politico.com even as any American with a television could see that Hurricane Dolly was imminent. Needless to say, this bit of theater was almost immediately “postponed” but not before raising the question of whether a McCain administration would be just as hapless in anticipating the next Katrina as the Bush-Brownie storm watch.
When not plotting such stunts, the McCain campaign whines about its lack of press attention like a lover jilted for a younger guy. The McCain camp should be careful what it wishes for. As its relentless goading of Mr. Obama to visit Iraq only ratcheted up anticipation for the Democrat’s triumphant trip, so its insistent demand for joint town-hall meetings with Mr. Obama and for more televised chronicling of Mr. McCain’s wanderings could be self-inflicted disasters in the making.
Mr. McCain may be most comfortable at town-hall meetings before largely friendly crowds, but his performance under pressure at this year’s G.O.P. primary debates was erratic. His sound-bite-deep knowledge of the country’s No. 1 issue, the economy, is a Gerald Ford train wreck waiting to happen in any matchup with Mr. Obama that requires focused, time-limited answers rather than rambling.
During Mr. McCain’s last two tours of the Middle East — conducted without the invasive scrutiny of network anchors — the only news he generated was his confusion of Sunni with Shia and his embarrassing stroll through a “safe” Baghdad market with helicopter cover. He should thank his stars that few TV viewers saw that he was even less at home when walking through a chaotic Pennsylvania supermarket last week. He inveighed against the price of milk while reading from a note card and felt the pain of a shopper planted by the local Republican Party.
The election remains Mr. Obama’s to lose, and he could lose it, whether through unexpected events, his own vanity or a vice-presidential misfire. But what we’ve learned this month is that America, our allies and most likely the next Congress are moving toward Mr. Obama’s post-Iraq vision of the future, whether he reaches the White House or not. That’s some small comfort as we contemplate the strange alternative offered by the Republicans: a candidate so oblivious to our nation’s big challenges ahead that he is doubling down in his campaign against both Mr. Maliki and Mr. Obama to be elected commander in chief of the surge.
http://www.nytimes.com/2008/07/27/opinion/27rich.html?_r=1&oref=slogin
IT almost seems like a gag worthy of “Borat”: A smooth-talking rookie senator with an exotic name passes himself off as the incumbent American president to credulous foreigners. But to dismiss Barack Obama’s magical mystery tour through old Europe and two war zones as a media-made fairy tale would be to underestimate the ingenious politics of the moment. History was on the march well before Mr. Obama boarded his plane, and his trip was perfectly timed to reap the whirlwind.
He never would have been treated as a president-in-waiting by heads of state or network talking heads if all he offered were charisma, slick rhetoric and stunning visuals. What drew them instead was the raw power Mr. Obama has amassed: the power to start shaping events and the power to move markets, including TV ratings. (Even “Access Hollywood” mustered a 20 percent audience jump by hosting the Obama family.) Power begets more power, absolutely.
The growing Obama clout derives not from national polls, where his lead is modest. Nor is it a gift from the press, which still gives free passes to its old bus mate John McCain. It was laughable to watch journalists stamp their feet last week to try to push Mr. Obama into saying he was “wrong” about the surge. More than five years and 4,100 American fatalities later, they’re still not demanding that Mr. McCain admit he was wrong when he assured us that our adventure in Iraq would be fast, produce little American “bloodletting” and “be paid for by the Iraqis.”
Never mind. This election remains about the present and the future, where Iraq ’s $10 billion a month drain on American pocketbooks and military readiness is just one moving part in a matrix of national crises stretching from the gas pump to Pakistan . That’s the high-rolling political casino where Mr. Obama amassed the chips he cashed in last week. The “change” that he can at times wield like a glib marketing gimmick is increasingly becoming a substantive reality — sometimes through Mr. Obama’s instigation, sometimes by luck. Obama-branded change is snowballing, whether it’s change you happen to believe in or not.
Looking back now, we can see that the fortnight preceding the candidate’s flight to Kuwait was like a sequence in an old movie where wind blows away calendar pages to announce an epochal plot turn. First, on July 7, the Iraqi prime minister, Nuri al-Maliki, dissed Bush dogma by raising the prospect of a withdrawal timetable for our troops. Then, on July 15, Mr. McCain suddenly noticed that more Americans are dying in Afghanistan than Iraq and called for more American forces to be sent there. It was a long-overdue recognition of the obvious that he could no longer avoid: both Robert Gates, the defense secretary, and Adm. Mike Mullen, the chairman of the Joint Chiefs of Staff, had already called for more American troops to battle the resurgent Taliban, echoing the policy proposed by Mr. Obama a year ago.
On July 17 we learned that President Bush, who had labeled direct talks with Iran “appeasement,” would send the No. 3 official in the State Department to multilateral nuclear talks with Iran . Lest anyone doubt that the White House had moved away from the rigid stand endorsed by Mr. McCain and toward Mr. Obama’s, a former Rumsfeld apparatchik weighed in on The Wall Street Journal’s op-ed page: “Now Bush Is Appeasing Iran.”
Within 24 hours, the White House did another U-turn, endorsing an Iraq withdrawal timetable as long as it was labeled a “general time horizon.” In a flash, as Mr. Obama touched down in Kuwait, Mr. Maliki approvingly cited the Democratic candidate by name while laying out a troop-withdrawal calendar of his own that, like Mr. Obama’s, would wind down in 2010. On Tuesday, the British prime minister, Gordon Brown, announced a major drawdown of his nation’s troops by early 2009.
But it’s not merely the foreign policy consensus that is shifting Obama-ward. The Texas oilman T. Boone Pickens has now joined another high-profile McCain supporter, Arnold Schwarzenegger, in knocking the McCain nostrum that America can drill its way out of its energy crisis. Mr. Pickens, who financed the Swift-boat campaign smearing John Kerry in 2004, was thought to be a sugar daddy for similar assaults against the Democrats this year. Instead, he is underwriting nonpartisan ads promoting wind power and speaks of how he would welcome Al Gore as energy czar if there’s an Obama administration.
The Obama stampede is forcing Mr. McCain to surrender on other domestic fronts. After the Democrat ran ads in 14 states berating chief executives who are “making more in 10 minutes” than many workers do in a year, a newly populist Mr. McCain began railing against “corporate greed” — much as he also followed Mr. Obama’s example and belatedly endorsed a homeowners’ bailout he had at first opposed. Given that Mr. McCain has already used a refitted, hand-me-down Obama campaign slogan (“A Leader You Can Believe In”), it can’t be long before he takes up fist bumps. They’ve become the rage among young (nonterrorist) American businessmen, according to USA Today.
“We have one president at a time,” Mr. Obama is careful to say. True, but the sitting president, a lame duck despised by voters and shunned by his own party’s candidates, now has all the gravitas of Mr. Cellophane in “ Chicago .” The opening for a successor arrived prematurely, and the vacuum had been waiting to be filled. What was most striking about the Obama speech in Berlin was not anything he said so much as the alternative reality it fostered: many American children have never before seen huge crowds turn out abroad to wave American flags instead of burn them.
Mr. McCain could also have stepped into the leadership gap left by Mr. Bush’s de facto abdication. His inability to even make a stab at doing so is troubling. While drama-queen commentators on television last week were busy building up false suspense about the Obama trip — will he make a world-class gaffe? will he have too large an audience in Germany ? — few focused on the alarms that Mr. McCain’s behavior at home raise about his fitness to be president.
Once again the candidate was making factual errors about the only subject he cares about, imagining an Iraq-Pakistan border and garbling the chronology of the Anbar Awakening. Once again he displayed a tantrum-prone temperament ill-suited to a high-pressure 21st-century presidency. His grim-faced crusade to brand his opponent as a traitor who wants to “lose a war” isn’t even a competent impersonation of Joe McCarthy. Mr. McCain comes off instead like the ineffectual Mr. Wilson, the retired neighbor perpetually busting a gasket at the antics of pesky little Dennis the Menace.
The week’s most revealing incident occurred on Wednesday when the new, supposedly improved McCain campaign management finalized its grand plan to counter Mr. Obama’s Berlin speech with a “Mission Accomplished”-like helicopter landing on an oil rig off Louisiana ’s coast. The announcement was posted on politico.com even as any American with a television could see that Hurricane Dolly was imminent. Needless to say, this bit of theater was almost immediately “postponed” but not before raising the question of whether a McCain administration would be just as hapless in anticipating the next Katrina as the Bush-Brownie storm watch.
When not plotting such stunts, the McCain campaign whines about its lack of press attention like a lover jilted for a younger guy. The McCain camp should be careful what it wishes for. As its relentless goading of Mr. Obama to visit Iraq only ratcheted up anticipation for the Democrat’s triumphant trip, so its insistent demand for joint town-hall meetings with Mr. Obama and for more televised chronicling of Mr. McCain’s wanderings could be self-inflicted disasters in the making.
Mr. McCain may be most comfortable at town-hall meetings before largely friendly crowds, but his performance under pressure at this year’s G.O.P. primary debates was erratic. His sound-bite-deep knowledge of the country’s No. 1 issue, the economy, is a Gerald Ford train wreck waiting to happen in any matchup with Mr. Obama that requires focused, time-limited answers rather than rambling.
During Mr. McCain’s last two tours of the Middle East — conducted without the invasive scrutiny of network anchors — the only news he generated was his confusion of Sunni with Shia and his embarrassing stroll through a “safe” Baghdad market with helicopter cover. He should thank his stars that few TV viewers saw that he was even less at home when walking through a chaotic Pennsylvania supermarket last week. He inveighed against the price of milk while reading from a note card and felt the pain of a shopper planted by the local Republican Party.
The election remains Mr. Obama’s to lose, and he could lose it, whether through unexpected events, his own vanity or a vice-presidential misfire. But what we’ve learned this month is that America, our allies and most likely the next Congress are moving toward Mr. Obama’s post-Iraq vision of the future, whether he reaches the White House or not. That’s some small comfort as we contemplate the strange alternative offered by the Republicans: a candidate so oblivious to our nation’s big challenges ahead that he is doubling down in his campaign against both Mr. Maliki and Mr. Obama to be elected commander in chief of the surge.
http://www.nytimes.com/2008/07/27/opinion/27rich.html?_r=1&oref=slogin
Friday, July 25, 2008
I Need Your Ideas Part 2
I Need Your Ideas
I want to run a campaign that talks with Texans, not one that talks at Texans. Too many times, we have allowed politics to be about slogans and manufactured news articles, but ignore the problems of environment, healthcare, and the economy that truly effect our daily lives. Many of you have original and creative ideas that make the phrase "We The People" not just a line from history, but a real and working concept to solve America's problem and bring us to the 21st Century.
You are and will always be the government, not some politician in Washington or Austin that is out of touch and tells you what they think you want to hear, but does in fact not listen to what problems we as individuals and as a community face. They only really listen to the lobbyists and do not hear Texans at all.
Please send me your suggestions and your ideas to: www.tomlove4Texas@sbcglobal.net . Let's discuss and create real solutions to real problems and bring about real change for our children's future. We are at that unique point in history that will determine if we can achieve a bright future or more of the same with the same results and limited success. I will post the ideas on my website, so we can have a true discussion.
Tom Love
Democratic Candidate for US Congress TX District 24
Office phone # 972-263-5630
Office address:132 E Main St Ste 110
Grand Prairie, TX 75050
Mailing address:Po Box 7231
Arlington, Tx 75005-7231
I want to run a campaign that talks with Texans, not one that talks at Texans. Too many times, we have allowed politics to be about slogans and manufactured news articles, but ignore the problems of environment, healthcare, and the economy that truly effect our daily lives. Many of you have original and creative ideas that make the phrase "We The People" not just a line from history, but a real and working concept to solve America's problem and bring us to the 21st Century.
You are and will always be the government, not some politician in Washington or Austin that is out of touch and tells you what they think you want to hear, but does in fact not listen to what problems we as individuals and as a community face. They only really listen to the lobbyists and do not hear Texans at all.
Please send me your suggestions and your ideas to: www.tomlove4Texas@sbcglobal.net . Let's discuss and create real solutions to real problems and bring about real change for our children's future. We are at that unique point in history that will determine if we can achieve a bright future or more of the same with the same results and limited success. I will post the ideas on my website, so we can have a true discussion.
Tom Love
Democratic Candidate for US Congress TX District 24
Office phone # 972-263-5630
Office address:132 E Main St Ste 110
Grand Prairie, TX 75050
Mailing address:Po Box 7231
Arlington, Tx 75005-7231
US Foreclosure Filings More Than Double Over Last Year
By J.W. ELPHINSTONE, AP Business Writer
The number of households facing the foreclosure process more than doubled in the second quarter compared to a year ago, according to data released Friday.
Nationwide, 739,714 homes received at least one foreclosure-related notice during the quarter, or one in every 171 U.S. households, Irvine, Calif.-based RealtyTrac Inc. said. That's up 121 percent from the second quarter of 2007.
Soft housing sales, declining home values, tighter lending standards and a sluggish U.S. economy have left strapped homeowners with few options to avoid foreclosure. Many can't find buyers or owe more than their home is worth and can't refinance into an affordable loan.
Foreclosure filings increased year-over-year in all but two states, North Dakota and Alaska.
Nevada, California, Arizona, and Florida continued to clock in the highest foreclosure rates. One in every 43 Nevada households received a filing during the quarter.
Cities in California and Florida accounted for 16 of the worst 20 metro foreclosure rates. Stockton, Calif., had the worst rate, with one in every 25 homes in the town receiving a foreclosure filing. That's nearly seven times the national average.
RealtyTrac monitors default notices, auction sale notices and bank repossessions. Banks took back more than 222,000 properties nationwide in the second quarter, the company said. Bank repossessions accounted for 30 percent of total foreclosure activity, up from 24 percent in the previous quarter.
Mark Zandi, chief economist at Moody's Economy.com projects that by the end of next year, nearly 2.8 million U.S. households will either face foreclosure, turn over their homes to their lender or sell the properties for less than their mortgage's value.
The foreclosure report comes as the Senate is on track to pass a massive housing rescue bill by Saturday.
The bill is designed to keep an estimated 400,000 homeowners out of foreclosure and support troubled mortgage finance giants Fannie Mae and Freddie Mac. It's considered the most significant housing legislation in a generation.
The plan creates a new regulator and tighter controls on the government-sponsored mortgage firms and starts a permanent affordable housing program to be financed by their profits. That fund would be tapped to cover any government losses from the foreclosure rescue.
At a hearing Friday on Capitol Hill, Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, reiterated threats to more closely regulate loan servicing companies if they don't modify more home loans to prevent foreclosures. Loan servicing companies, which collect mortgage payments and distribute them to investors, have been criticized by lawmakers and consumer advocates for not doing more to help troubled borrowers.
Shares of Fannie and Freddie tumbled Friday. Investors remain jittery about the two government-sponsored mortgage companies' ability to raise cash to protect against losses. Fannie's stock fell 74 cents, or 6.2 percent, to $11.28. Freddie shares fell 62 cents, or 7 percent, to $8.19.
AP Business Writer Alan Zibel and Associated Press Writer Julie Hirschfeld Davis in Washington contributed to this report.
http://news.yahoo.com/s/ap/20080725/ap_on_bi_ge/foreclosure_rates
Copyright © 2008 The Associated Press
The number of households facing the foreclosure process more than doubled in the second quarter compared to a year ago, according to data released Friday.
Nationwide, 739,714 homes received at least one foreclosure-related notice during the quarter, or one in every 171 U.S. households, Irvine, Calif.-based RealtyTrac Inc. said. That's up 121 percent from the second quarter of 2007.
Soft housing sales, declining home values, tighter lending standards and a sluggish U.S. economy have left strapped homeowners with few options to avoid foreclosure. Many can't find buyers or owe more than their home is worth and can't refinance into an affordable loan.
Foreclosure filings increased year-over-year in all but two states, North Dakota and Alaska.
Nevada, California, Arizona, and Florida continued to clock in the highest foreclosure rates. One in every 43 Nevada households received a filing during the quarter.
Cities in California and Florida accounted for 16 of the worst 20 metro foreclosure rates. Stockton, Calif., had the worst rate, with one in every 25 homes in the town receiving a foreclosure filing. That's nearly seven times the national average.
RealtyTrac monitors default notices, auction sale notices and bank repossessions. Banks took back more than 222,000 properties nationwide in the second quarter, the company said. Bank repossessions accounted for 30 percent of total foreclosure activity, up from 24 percent in the previous quarter.
Mark Zandi, chief economist at Moody's Economy.com projects that by the end of next year, nearly 2.8 million U.S. households will either face foreclosure, turn over their homes to their lender or sell the properties for less than their mortgage's value.
The foreclosure report comes as the Senate is on track to pass a massive housing rescue bill by Saturday.
The bill is designed to keep an estimated 400,000 homeowners out of foreclosure and support troubled mortgage finance giants Fannie Mae and Freddie Mac. It's considered the most significant housing legislation in a generation.
The plan creates a new regulator and tighter controls on the government-sponsored mortgage firms and starts a permanent affordable housing program to be financed by their profits. That fund would be tapped to cover any government losses from the foreclosure rescue.
At a hearing Friday on Capitol Hill, Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, reiterated threats to more closely regulate loan servicing companies if they don't modify more home loans to prevent foreclosures. Loan servicing companies, which collect mortgage payments and distribute them to investors, have been criticized by lawmakers and consumer advocates for not doing more to help troubled borrowers.
Shares of Fannie and Freddie tumbled Friday. Investors remain jittery about the two government-sponsored mortgage companies' ability to raise cash to protect against losses. Fannie's stock fell 74 cents, or 6.2 percent, to $11.28. Freddie shares fell 62 cents, or 7 percent, to $8.19.
AP Business Writer Alan Zibel and Associated Press Writer Julie Hirschfeld Davis in Washington contributed to this report.
http://news.yahoo.com/s/ap/20080725/ap_on_bi_ge/foreclosure_rates
Copyright © 2008 The Associated Press
Tuesday, July 22, 2008
Uncomfortable Answers to Questions on the Economy
by Peter S. Goodman
You have heard that Fannie and Freddie, their gentle names notwithstanding, may cripple the financial system without a large infusion of taxpayer money. You have gleaned that jobs are disappearing, housing prices are plummeting, and paychecks are effectively shrinking as food and energy prices soar. You have noted the disturbing talk of crisis hovering over Wall Street.
Something has clearly gone wrong with the economy. But how bad are things, really? And how bad might they get before better days return? Even to many economists who recently thought the gloom was overblown, the situation looks grim. The economy is in the midst of a very rough patch. The worst is probably still ahead.
Job losses will probably accelerate through this year and into 2009, and the job market will probably stay weak even longer. Home prices will probably keep falling, shrinking household wealth and eroding spending power.
"The open question is whether we're in for a bad couple of years, or a bad decade," said Kenneth S. Rogoff, a former chief economist at the International Monetary Fund, now a professor at Harvard.
Is This a Recession?
Officially, no. The economy is not in recession until a panel at a private institution called the National Bureau of Economic Research says so. Unofficially, many economists think a recession started six or seven months ago, even as the economy has continued to expand -- albeit at a tepid pace.
Many assume that if the economy expands at all, then it isn't a recession, but that's not true. The bureau defines a recession as "a significant decline in economic activity spread across the economy, lasting more than a few months." If enough people lose their jobs, factories stop making things, stores stop selling things, and less money lands in people's pockets, it is probably a recession.
Whatever it is called, it is a painful time for tens of millions of people. Indeed, this may turn out to be the most wrenching downturn since the two recessions in the early 1980s; almost surely worse than the recession that ended the technology bubble at the beginning of this decade; perhaps worse than the downturn of the early 1990s that followed the last dip in real estate prices.
But, despite what some doomsayers now proclaim, this is not the Great Depression, when unemployment spiked to 25 percent and millions of previously working people woke up in shantytowns. Not by any measure, even as your neighbors make cryptic remarks above dusting off lessons passed down from grandparents about how to turn a can of beans into a family meal.
How Bad is Housing?
Bad in many markets, awful in some, and still O.K. in a few.
The downturn has its roots in the real estate frenzy that turned lonely Nevada ranches into suburban ranch homes and swampland in Florida into condominiums. Speculators drove home prices beyond any historical connection to incomes. Gravity did the rest. After roughly doubling in value from 2000 to 2005, home prices have fallen about 17 percent -- and more like 25 percent in inflation-adjusted terms -- according to the widely watched Case-Shiller index.
Even so, most economists think house prices must fall an additional 10 to 15 percent to get back to reality. One useful measure is the relationship between the costs of buying and renting a home. From 1985 to 2002, the average American home sold for about 14 times the annual rent for a similar home, according to Moody's Economy.com. By early 2006, home prices ballooned to 25 times rental prices. Since then, the ratio has dipped back to about 20 -- still far above the historical norm.
With mortgages now hard to obtain and speculation no longer attractive, arithmetic has replaced momentum as the guiding force for housing prices. The fundamental equation points down: Even as construction grinds down, there are still many more houses on the market than there are people to buy them, and more on the way as more homeowners slip into foreclosure.
By the reckoning of Economy.com, enough houses are on the market to satisfy demand for the next two-and-a-half years without building a single new one.
The time it takes to sell a newly completed house has expanded from an average of four months in 2005 to about nine months, according to analysis by Dean Baker, co-director of the Center for Economic and Policy Research.
And many sales are falling through -- more than 30 percent in some parts of California and Florida -- as buyers fail to secure financing, exacerbating the glut of homes, Mr. Baker said.
No wonder that in Los Angeles, San Francisco, Phoenix and Las Vegas, house prices have in recent months declined at annual rates of more than 33 percent.
When Will Banks Revive?
So far, they have written off more than $300 billion in loans. Many experts now predict the toll will rise to $1 trillion or more -- a staggering sum that could cripple many institutions for years.
Back when home prices were multiplying, banks poured oceans of borrowed money into real estate loans. Unlike the dot-com companies at the heart of the last speculative investment bubble, the new gold rush was centered on something that seemed unimpeachably solid -- the American home.
But the whole thing worked only as long as housing prices rose. Falling prices landed like a bomb. Homeowners fell behind on their loans and could not qualify for new ones: There was no value left in their house to borrow against. As millions of people defaulted, the banks confronted enormous losses in a bloody period of reckoning.
In March, the Federal Reserve helped engineer a deal for JPMorgan Chase to buy troubled investment bank Bear Stearns. Many assumed the worst was over. But, this month, the open distress of Fannie Mae and Freddie Mac -- two huge, government sponsored institutions that together own or guarantee nearly half of the nation's $12 trillion in outstanding mortgages -- sent a signal that more ugly surprises may lie in wait.
To calm markets, the government last weekend hurriedly put together a rescue package for Fannie and Freddie that, if used, could cost as much as $300 billion. The urgent need for a rescue -- together with another round of billion-dollar write-offs on Wall Street -- has unnerved economists and investors.
"I was a relative optimist, but I've certainly become more pessimistic," said Alan S. Blinder, an economist at Princeton, and a former vice chairman of the board of governors at the Federal Reserve. "The financial system looks substantially worse now than it did a month ago. If the Freddie and Fannie bailout were to fail, it could get a hell of a lot worse. If we get more bank failures, we have the possibility of seeing more of these pictures of people standing in line to pull their money out. That could really scare consumers."
In one respect, Mr. Blinder added, this is like the Great Depression. "We haven't seen this kind of travail in the financial markets since the 1930s," he said.
More than two years ago, Nouriel Roubini, an economist at the Stern School of Business at New York University, said that the housing bubble would give way to a financial crisis and a recession. He was widely dismissed as an attention-seeking Chicken Little. Now, Mr. Roubini says the worst is yet to come, because the account-squaring has so far been confined mostly to bad mortgages, leaving other areas remaining -- credit cards, auto loans, corporate and municipal debt.
Mr. Roubini says the cost of the financial system's losses could reach $2 trillion. Even if it's closer to $1 trillion, he adds, "we're not even a third of the way there."
Where will the banks raise the huge sums needed to replenish the capital they have apparently lost? And what will happen if they cannot?
The answers to these questions are unknown, an unsettling void that holds much of the economy at a standstill.
"We're in a dangerous spot," said Andrew Tilton, an economist at Goldman Sachs. "The big threat is more capital losses."
Banks are a crucial piece of the economy's arterial system, steering capital where it is needed to fuel spending and power growth. Now, they are holding tight to their dollars, starving businesses of loans they might use to expand, and depriving families of money they might use to buy houses and fill them with furniture and appliances.
From last June to this June, commercial bank lending declined more than 9 percent, according to an analysis of Federal Reserve data by Goldman Sachs.
"You have another wave of anxiety, another tightening of credit," said Robert Barbera, chief economist at the research and trading firm ITG. "The idea that we'll have a second half of the year recovery has gone by the boards."
Is My Job Safe?
Economic slowdowns always mean job losses. Unemployment already has risen, and almost certainly will increase more.
The first signs of distress emerged in housing. Construction companies, real estate agencies, mortgage brokers and banks began laying people off. Next, jobs started being cut at factories making products linked to housing, from carpets and furniture to lighting and flooring.
But as the real estate bust spilled over into the broader economy, depleting household wealth, the impacts rippled out to retailers, beauty parlors, law offices and trucking companies, inflicting cutbacks throughout the economy, save for health care, farming and energy. Over the last six months, the economy has shed 485,000 private sector jobs, according to the Labor Department. Many people have seen hours reduced.
The unemployment rate still remains low by historical standards, at 5.5 percent. And so far, the job losses -- about 65,000 a month this year -- do not approach the magnitude of those seen in past downturns, particularly the twin recessions at the beginning of the 1980s, when the economy shed upward of 140,000 jobs a month and the unemployment rate exceeded 10 percent.
But Goldman Sachs assumes unemployment will reach 6.5 percent by the end of 2009, which translates into several hundred thousand more Americans out of work.
These losses are landing on top of what was, for most Americans, a remarkably weak period of expansion. From 1992 to 2000 -- as the technology boom catalyzed spending and hiring -- the economy added more than 22 million private sector jobs. Over the last eight years, only 5 million new jobs have been added.
The loss of work is hitting Americans along with an assortment of troubles -- gasoline prices in excess of $4 a gallon, over all inflation of about 5 percent, and declining wages.
"In every dimension, people are worse off than they were," said Mr. Roubini, the New York University economist.
Are Consumers Done?
That is a major worry.
The fate of the economy now rests on the shoulders of the American consumer, whose spending amounts to 70 percent of all economic activity.
When people go to the mall and buy televisions and eat out, their money circulates through the economy. When they tighten their belts, austerity ripples out and chokes growth.
Through the years of the housing boom, many Americans came to treat their homes like automated teller machines that never required a deposit. They harvested cash through sales, second mortgages and home equity lines of credit -- an artery of finance that reached $840 billion a year from 2004 to 2006, according to work by the economists James Kennedy and Alan Greenspan, the former Federal Reserve chairman. That allowed Americans to live far in excess of what they brought home from work.
But by the first three months of this year, that flow had constricted to an annual rate of about $200 billion.
Average household debt has swelled to 120 percent of annual income, up from 60 percent in 1984, according to the Federal Reserve.
And now the banks are turning off the credit taps.
"Credit is going to remain tight for a time potentially measured in years," said Mr. Tilton, the Goldman Sachs economist.
This is the landscape that has so many economists convinced that consumer spending must dip, putting the squeeze on the economy for several years.
"The question is, will it get as bad as the 1970s?" asked Mr. Rogoff, recalling an era of spiking gas prices and double-digit inflation.
Long term, Americans may have no choice but to spend less, save more and reduce debts -- in short, to live within their means.
"We're getting a lot of the adjustment and it hurts," said Kristin Forbes, a former member of the Council of Economic Advisers under President George W. Bush, and now a scholar at M.I.T.'s Sloan School of Management. "But it's an adjustment we're going to have to make."
Who's to Blame?
There is plenty to go around.
In the estimation of many economists, it starts with the Federal Reserve. The central bank lowered interest rates following the calamitous end of the technology bubble in 2000, lowered them more after the terrorist attacks of Sept. 11, 2001, and then kept them low, even as speculators began to trade homes like dot-com stocks.
Meanwhile, the Fed sat back and watched as Wall Street's financial wizards engineered diabolically complicated investments linked to mortgages, generating huge amounts of speculative capital that turned real estate into a conflagration.
"At the end of this movie, it's clear that the Fed will have to care about excesses," Mr. Barbera said.
Prices multiplied as many homeowners took on more property than they could afford, lured by low introductory interest rates that eventually reset higher, sending many people into foreclosure.
Mortgage brokers netted commissions as they lent almost indiscriminately, offering exotically lenient terms -- no money down, no income or job required. Wall Street banks earned billions selling risky mortgage-linked securities around the world, aided by ratings agencies that branded them solid.
Through it all, a lot of ordinary Americans borrowed a lot more money then they could afford to pay back, running up enormous credit card bills and borrowing against the value of their homes. Now comes the day of reckoning.
http://finance.yahoo.com/banking-budgeting/article/105427/Uncomfortable-Answers-to-Questions-on-the-Economy
You have heard that Fannie and Freddie, their gentle names notwithstanding, may cripple the financial system without a large infusion of taxpayer money. You have gleaned that jobs are disappearing, housing prices are plummeting, and paychecks are effectively shrinking as food and energy prices soar. You have noted the disturbing talk of crisis hovering over Wall Street.
Something has clearly gone wrong with the economy. But how bad are things, really? And how bad might they get before better days return? Even to many economists who recently thought the gloom was overblown, the situation looks grim. The economy is in the midst of a very rough patch. The worst is probably still ahead.
Job losses will probably accelerate through this year and into 2009, and the job market will probably stay weak even longer. Home prices will probably keep falling, shrinking household wealth and eroding spending power.
"The open question is whether we're in for a bad couple of years, or a bad decade," said Kenneth S. Rogoff, a former chief economist at the International Monetary Fund, now a professor at Harvard.
Is This a Recession?
Officially, no. The economy is not in recession until a panel at a private institution called the National Bureau of Economic Research says so. Unofficially, many economists think a recession started six or seven months ago, even as the economy has continued to expand -- albeit at a tepid pace.
Many assume that if the economy expands at all, then it isn't a recession, but that's not true. The bureau defines a recession as "a significant decline in economic activity spread across the economy, lasting more than a few months." If enough people lose their jobs, factories stop making things, stores stop selling things, and less money lands in people's pockets, it is probably a recession.
Whatever it is called, it is a painful time for tens of millions of people. Indeed, this may turn out to be the most wrenching downturn since the two recessions in the early 1980s; almost surely worse than the recession that ended the technology bubble at the beginning of this decade; perhaps worse than the downturn of the early 1990s that followed the last dip in real estate prices.
But, despite what some doomsayers now proclaim, this is not the Great Depression, when unemployment spiked to 25 percent and millions of previously working people woke up in shantytowns. Not by any measure, even as your neighbors make cryptic remarks above dusting off lessons passed down from grandparents about how to turn a can of beans into a family meal.
How Bad is Housing?
Bad in many markets, awful in some, and still O.K. in a few.
The downturn has its roots in the real estate frenzy that turned lonely Nevada ranches into suburban ranch homes and swampland in Florida into condominiums. Speculators drove home prices beyond any historical connection to incomes. Gravity did the rest. After roughly doubling in value from 2000 to 2005, home prices have fallen about 17 percent -- and more like 25 percent in inflation-adjusted terms -- according to the widely watched Case-Shiller index.
Even so, most economists think house prices must fall an additional 10 to 15 percent to get back to reality. One useful measure is the relationship between the costs of buying and renting a home. From 1985 to 2002, the average American home sold for about 14 times the annual rent for a similar home, according to Moody's Economy.com. By early 2006, home prices ballooned to 25 times rental prices. Since then, the ratio has dipped back to about 20 -- still far above the historical norm.
With mortgages now hard to obtain and speculation no longer attractive, arithmetic has replaced momentum as the guiding force for housing prices. The fundamental equation points down: Even as construction grinds down, there are still many more houses on the market than there are people to buy them, and more on the way as more homeowners slip into foreclosure.
By the reckoning of Economy.com, enough houses are on the market to satisfy demand for the next two-and-a-half years without building a single new one.
The time it takes to sell a newly completed house has expanded from an average of four months in 2005 to about nine months, according to analysis by Dean Baker, co-director of the Center for Economic and Policy Research.
And many sales are falling through -- more than 30 percent in some parts of California and Florida -- as buyers fail to secure financing, exacerbating the glut of homes, Mr. Baker said.
No wonder that in Los Angeles, San Francisco, Phoenix and Las Vegas, house prices have in recent months declined at annual rates of more than 33 percent.
When Will Banks Revive?
So far, they have written off more than $300 billion in loans. Many experts now predict the toll will rise to $1 trillion or more -- a staggering sum that could cripple many institutions for years.
Back when home prices were multiplying, banks poured oceans of borrowed money into real estate loans. Unlike the dot-com companies at the heart of the last speculative investment bubble, the new gold rush was centered on something that seemed unimpeachably solid -- the American home.
But the whole thing worked only as long as housing prices rose. Falling prices landed like a bomb. Homeowners fell behind on their loans and could not qualify for new ones: There was no value left in their house to borrow against. As millions of people defaulted, the banks confronted enormous losses in a bloody period of reckoning.
In March, the Federal Reserve helped engineer a deal for JPMorgan Chase to buy troubled investment bank Bear Stearns. Many assumed the worst was over. But, this month, the open distress of Fannie Mae and Freddie Mac -- two huge, government sponsored institutions that together own or guarantee nearly half of the nation's $12 trillion in outstanding mortgages -- sent a signal that more ugly surprises may lie in wait.
To calm markets, the government last weekend hurriedly put together a rescue package for Fannie and Freddie that, if used, could cost as much as $300 billion. The urgent need for a rescue -- together with another round of billion-dollar write-offs on Wall Street -- has unnerved economists and investors.
"I was a relative optimist, but I've certainly become more pessimistic," said Alan S. Blinder, an economist at Princeton, and a former vice chairman of the board of governors at the Federal Reserve. "The financial system looks substantially worse now than it did a month ago. If the Freddie and Fannie bailout were to fail, it could get a hell of a lot worse. If we get more bank failures, we have the possibility of seeing more of these pictures of people standing in line to pull their money out. That could really scare consumers."
In one respect, Mr. Blinder added, this is like the Great Depression. "We haven't seen this kind of travail in the financial markets since the 1930s," he said.
More than two years ago, Nouriel Roubini, an economist at the Stern School of Business at New York University, said that the housing bubble would give way to a financial crisis and a recession. He was widely dismissed as an attention-seeking Chicken Little. Now, Mr. Roubini says the worst is yet to come, because the account-squaring has so far been confined mostly to bad mortgages, leaving other areas remaining -- credit cards, auto loans, corporate and municipal debt.
Mr. Roubini says the cost of the financial system's losses could reach $2 trillion. Even if it's closer to $1 trillion, he adds, "we're not even a third of the way there."
Where will the banks raise the huge sums needed to replenish the capital they have apparently lost? And what will happen if they cannot?
The answers to these questions are unknown, an unsettling void that holds much of the economy at a standstill.
"We're in a dangerous spot," said Andrew Tilton, an economist at Goldman Sachs. "The big threat is more capital losses."
Banks are a crucial piece of the economy's arterial system, steering capital where it is needed to fuel spending and power growth. Now, they are holding tight to their dollars, starving businesses of loans they might use to expand, and depriving families of money they might use to buy houses and fill them with furniture and appliances.
From last June to this June, commercial bank lending declined more than 9 percent, according to an analysis of Federal Reserve data by Goldman Sachs.
"You have another wave of anxiety, another tightening of credit," said Robert Barbera, chief economist at the research and trading firm ITG. "The idea that we'll have a second half of the year recovery has gone by the boards."
Is My Job Safe?
Economic slowdowns always mean job losses. Unemployment already has risen, and almost certainly will increase more.
The first signs of distress emerged in housing. Construction companies, real estate agencies, mortgage brokers and banks began laying people off. Next, jobs started being cut at factories making products linked to housing, from carpets and furniture to lighting and flooring.
But as the real estate bust spilled over into the broader economy, depleting household wealth, the impacts rippled out to retailers, beauty parlors, law offices and trucking companies, inflicting cutbacks throughout the economy, save for health care, farming and energy. Over the last six months, the economy has shed 485,000 private sector jobs, according to the Labor Department. Many people have seen hours reduced.
The unemployment rate still remains low by historical standards, at 5.5 percent. And so far, the job losses -- about 65,000 a month this year -- do not approach the magnitude of those seen in past downturns, particularly the twin recessions at the beginning of the 1980s, when the economy shed upward of 140,000 jobs a month and the unemployment rate exceeded 10 percent.
But Goldman Sachs assumes unemployment will reach 6.5 percent by the end of 2009, which translates into several hundred thousand more Americans out of work.
These losses are landing on top of what was, for most Americans, a remarkably weak period of expansion. From 1992 to 2000 -- as the technology boom catalyzed spending and hiring -- the economy added more than 22 million private sector jobs. Over the last eight years, only 5 million new jobs have been added.
The loss of work is hitting Americans along with an assortment of troubles -- gasoline prices in excess of $4 a gallon, over all inflation of about 5 percent, and declining wages.
"In every dimension, people are worse off than they were," said Mr. Roubini, the New York University economist.
Are Consumers Done?
That is a major worry.
The fate of the economy now rests on the shoulders of the American consumer, whose spending amounts to 70 percent of all economic activity.
When people go to the mall and buy televisions and eat out, their money circulates through the economy. When they tighten their belts, austerity ripples out and chokes growth.
Through the years of the housing boom, many Americans came to treat their homes like automated teller machines that never required a deposit. They harvested cash through sales, second mortgages and home equity lines of credit -- an artery of finance that reached $840 billion a year from 2004 to 2006, according to work by the economists James Kennedy and Alan Greenspan, the former Federal Reserve chairman. That allowed Americans to live far in excess of what they brought home from work.
But by the first three months of this year, that flow had constricted to an annual rate of about $200 billion.
Average household debt has swelled to 120 percent of annual income, up from 60 percent in 1984, according to the Federal Reserve.
And now the banks are turning off the credit taps.
"Credit is going to remain tight for a time potentially measured in years," said Mr. Tilton, the Goldman Sachs economist.
This is the landscape that has so many economists convinced that consumer spending must dip, putting the squeeze on the economy for several years.
"The question is, will it get as bad as the 1970s?" asked Mr. Rogoff, recalling an era of spiking gas prices and double-digit inflation.
Long term, Americans may have no choice but to spend less, save more and reduce debts -- in short, to live within their means.
"We're getting a lot of the adjustment and it hurts," said Kristin Forbes, a former member of the Council of Economic Advisers under President George W. Bush, and now a scholar at M.I.T.'s Sloan School of Management. "But it's an adjustment we're going to have to make."
Who's to Blame?
There is plenty to go around.
In the estimation of many economists, it starts with the Federal Reserve. The central bank lowered interest rates following the calamitous end of the technology bubble in 2000, lowered them more after the terrorist attacks of Sept. 11, 2001, and then kept them low, even as speculators began to trade homes like dot-com stocks.
Meanwhile, the Fed sat back and watched as Wall Street's financial wizards engineered diabolically complicated investments linked to mortgages, generating huge amounts of speculative capital that turned real estate into a conflagration.
"At the end of this movie, it's clear that the Fed will have to care about excesses," Mr. Barbera said.
Prices multiplied as many homeowners took on more property than they could afford, lured by low introductory interest rates that eventually reset higher, sending many people into foreclosure.
Mortgage brokers netted commissions as they lent almost indiscriminately, offering exotically lenient terms -- no money down, no income or job required. Wall Street banks earned billions selling risky mortgage-linked securities around the world, aided by ratings agencies that branded them solid.
Through it all, a lot of ordinary Americans borrowed a lot more money then they could afford to pay back, running up enormous credit card bills and borrowing against the value of their homes. Now comes the day of reckoning.
http://finance.yahoo.com/banking-budgeting/article/105427/Uncomfortable-Answers-to-Questions-on-the-Economy
Obstacles for Obama in Meeting Health Care Goal
By KEVIN SACK
It is one of the most audacious promises in a campaign that has been thick with them.
In speech after speech, Senator Barack Obama has pledged that he will lower the country’s health care costs enough to “bring down premiums by $2,500 for the typical family.” Moreover, Mr. Obama, the presumptive Democratic nominee, has promised that his health plan will be in place “by the end of my first term as president of the United States.”
Whether Mr. Obama can deliver is a matter of considerable dispute among health analysts and economists. While there is consensus that the American health care system is bloated with waste, eliminating enough to save $2,500 per family would require simultaneous and synergistic solutions to a host of problems that have proved intractable for decades. Even if the next president and Congress can muster the political will, analysts question whether significant savings would materialize in as little as four years, or even in 10.
But as Mr. Obama confronts an electorate that is deeply unsettled by escalating health costs, he is offering a precise “chicken-in-every-pot guarantee” based on numbers that are largely unknowable. Furthermore, it is not completely clear what he is promising.
His words about lowering “premiums” by $2,500 for the average family of four have been fairly consistent. But the health policy advisers who formulated the figure say it actually represents the average family’s share of savings not only in premiums paid by individuals, but also in premiums paid by employers and in tax-supported health programs like Medicare and Medicaid.
“What we’re trying to do,” said one of the advisers, David Cutler, in explaining the gap between Mr. Obama’s words and his intent, “is find a way to talk to people in a way they understand.”
The original arithmetic was somewhat basic. In May 2007, three Harvard professors who serve as unpaid advisers to the Obama campaign — Mr. Cutler, David Blumenthal and Jeffrey Liebman — produced a memorandum offering their “best guess” that a menu of changes would produce savings of at least $200 billion a year (it has since been revised to $214 billion). That would amount to about 8 percent of the $2.5 trillion in health care spending projected for 2009, when the next president takes office.
The memorandum attributed specific savings to several broad initiatives, with the numbers plucked from recently published studies. Investments in computerized medical records would save $77 billion a year, the advisers wrote. Reducing administrative costs in the insurance industry would yield up to $46 billion. Improving prevention programs and chronic disease management would be worth $81 billion.
The total savings were then divided by the country’s population, multiplied for a family of four, and rounded down slightly to a number that was easy to grasp: $2,500. The average cost of family coverage bought through an employer was $12,106 in 2007, with workers paying $3,281 of that amount, according to the Kaiser Family Foundation, a health research group.
Mr. Obama aspires to cover the country’s 47 million uninsured by requiring insurers to accept all comers, regardless of their health status, and by providing generous tax credits to low-income workers. The tax credits could be used to buy into a new federal health plan or private plans marketed through a government exchange.
The subsidies are expensive, estimated at well over $100 billion. Other components of the Obama plan also bear up-front costs, like his pledge to spend $50 billion over five years to speed the computerization of health records, $6 billion a year on tax credits to small businesses that provide coverage to workers, and an unspecified amount to buffer businesses from high-cost insurance claims.
The source Mr. Obama has identified to pay for them — the repeal of President Bush’s tax cuts for those making more than $250,000 — would cover only about half. That means additional health care savings will be needed, not only to keep premiums under control but also to help pay for the subsidies.
A consensus has emerged among health economists that at least a third of the country’s spending on health care is unnecessary. Both Mr. Obama, of Illinois, and his Republican rival, Senator John McCain of Arizona, agree that significant sums could be saved through reductions in unneeded procedures and improvements in electronic record-keeping, prevention and chronic disease management.
But the dollar values Mr. Obama has attached to individual components of his plan are beginning to attract scrutiny. In particular, the Congressional Budget Office issued a report in May questioning the amount to be saved from the computerization of health systems.
Mr. Obama took his estimate of $77 billion a year from a 2005 study by the RAND Corporation (which cautioned that reductions of that magnitude would not emerge for 15 years). The Congressional analysts found, however, that for various methodological reasons the RAND study was “not an appropriate guide” to potential savings.
This month, , Mr. Obama’s health advisers tried to recast the debate so that the questioning of any one number would not undermine the plan’s broader credibility. They enlisted eight health policy experts to sign a letter that, without endorsing the math behind any single initiative, proclaimed it was “not only possible, but likely” that Mr. Obama could save $200 billion annually. They did not say by when.
Mr. Cutler, who helped collect the signatures, said he and his colleagues had decided “that our attempt to lay out one plausible scenario for the savings had created more problems than it had solved.” He added: “Putting the debate where this message puts it — do you believe we can save 8 percent of health spending through a major series of public and private reforms — asks the question in a way that is much more productive than the issue of ‘Do you believe a single estimate among many, many studies?’ ”
Mr. Obama’s economic policy director, Jason Furman, said the campaign’s estimates were conservative and asserted that much of the savings would come quickly. “We think we could get to $2,500 in savings by the end of the first term, or be very close to it,” Mr. Furman said.
The campaign won additional backing this week from Kenneth E. Thorpe of Emory University, an authority on health care costs who helped formulate Bill Clinton’s failed plan in 1993. In an assessment that he initiated in coordination with the campaign, Mr. Thorpe wrote that if all of Mr. Obama’s proposals were enacted, they would reduce national health spending by between $203 billion and $273 billion by 2012. He calculated that half of the savings would accrue to the federal government.
The Obama advisers said that while not all of the savings would translate into lower premiums, consumers would gain in other ways. The savings to employers would be passed along as higher wages, they predicted, and the savings to government would eventually mean either lower taxes or added benefits.
But whether employers and governments respond that way cannot be guaranteed, particularly in a difficult economy. And a number of health policy experts have questioned whether the $2,500 projection is either fiscally or politically realistic.
Reducing health care costs, they emphasized, means taking money from someone’s pocket and rationing care that Americans have come to expect, a recipe for stiff resistance.
“There is no easy money because, as the saying goes, one person’s fraud and abuse is another person’s income,” said Joseph R. Antos of the American Enterprise Institute. “I wouldn’t think that four years or eight years or probably 10 years will be enough to see numbers of that sort.”
The Commonwealth Fund, a health research group in New York, published a study in December projecting that a robust overhaul consisting of 15 broad initiatives would generate savings of only 6 percent after 10 years. “Doing it by the end of a first term is ambitious and would require tough policies,” said Karen Davis, the group’s president.
Jonathan B. Oberlander, who teaches health policy at the University of North Carolina at Chapel Hill, called it wishful thinking. “Do they have the potential to generate significant savings in the long run?” Dr. Oberlander asked. “Yes. Do I believe they will produce substantial savings in the short run that can be used to finance Obama’s plan? No.”
Copyright 2008 The New York Times Company
http://www.nytimes.com/2008/07/23/us/23health.html?exprod=myyahoo
It is one of the most audacious promises in a campaign that has been thick with them.
In speech after speech, Senator Barack Obama has pledged that he will lower the country’s health care costs enough to “bring down premiums by $2,500 for the typical family.” Moreover, Mr. Obama, the presumptive Democratic nominee, has promised that his health plan will be in place “by the end of my first term as president of the United States.”
Whether Mr. Obama can deliver is a matter of considerable dispute among health analysts and economists. While there is consensus that the American health care system is bloated with waste, eliminating enough to save $2,500 per family would require simultaneous and synergistic solutions to a host of problems that have proved intractable for decades. Even if the next president and Congress can muster the political will, analysts question whether significant savings would materialize in as little as four years, or even in 10.
But as Mr. Obama confronts an electorate that is deeply unsettled by escalating health costs, he is offering a precise “chicken-in-every-pot guarantee” based on numbers that are largely unknowable. Furthermore, it is not completely clear what he is promising.
His words about lowering “premiums” by $2,500 for the average family of four have been fairly consistent. But the health policy advisers who formulated the figure say it actually represents the average family’s share of savings not only in premiums paid by individuals, but also in premiums paid by employers and in tax-supported health programs like Medicare and Medicaid.
“What we’re trying to do,” said one of the advisers, David Cutler, in explaining the gap between Mr. Obama’s words and his intent, “is find a way to talk to people in a way they understand.”
The original arithmetic was somewhat basic. In May 2007, three Harvard professors who serve as unpaid advisers to the Obama campaign — Mr. Cutler, David Blumenthal and Jeffrey Liebman — produced a memorandum offering their “best guess” that a menu of changes would produce savings of at least $200 billion a year (it has since been revised to $214 billion). That would amount to about 8 percent of the $2.5 trillion in health care spending projected for 2009, when the next president takes office.
The memorandum attributed specific savings to several broad initiatives, with the numbers plucked from recently published studies. Investments in computerized medical records would save $77 billion a year, the advisers wrote. Reducing administrative costs in the insurance industry would yield up to $46 billion. Improving prevention programs and chronic disease management would be worth $81 billion.
The total savings were then divided by the country’s population, multiplied for a family of four, and rounded down slightly to a number that was easy to grasp: $2,500. The average cost of family coverage bought through an employer was $12,106 in 2007, with workers paying $3,281 of that amount, according to the Kaiser Family Foundation, a health research group.
Mr. Obama aspires to cover the country’s 47 million uninsured by requiring insurers to accept all comers, regardless of their health status, and by providing generous tax credits to low-income workers. The tax credits could be used to buy into a new federal health plan or private plans marketed through a government exchange.
The subsidies are expensive, estimated at well over $100 billion. Other components of the Obama plan also bear up-front costs, like his pledge to spend $50 billion over five years to speed the computerization of health records, $6 billion a year on tax credits to small businesses that provide coverage to workers, and an unspecified amount to buffer businesses from high-cost insurance claims.
The source Mr. Obama has identified to pay for them — the repeal of President Bush’s tax cuts for those making more than $250,000 — would cover only about half. That means additional health care savings will be needed, not only to keep premiums under control but also to help pay for the subsidies.
A consensus has emerged among health economists that at least a third of the country’s spending on health care is unnecessary. Both Mr. Obama, of Illinois, and his Republican rival, Senator John McCain of Arizona, agree that significant sums could be saved through reductions in unneeded procedures and improvements in electronic record-keeping, prevention and chronic disease management.
But the dollar values Mr. Obama has attached to individual components of his plan are beginning to attract scrutiny. In particular, the Congressional Budget Office issued a report in May questioning the amount to be saved from the computerization of health systems.
Mr. Obama took his estimate of $77 billion a year from a 2005 study by the RAND Corporation (which cautioned that reductions of that magnitude would not emerge for 15 years). The Congressional analysts found, however, that for various methodological reasons the RAND study was “not an appropriate guide” to potential savings.
This month, , Mr. Obama’s health advisers tried to recast the debate so that the questioning of any one number would not undermine the plan’s broader credibility. They enlisted eight health policy experts to sign a letter that, without endorsing the math behind any single initiative, proclaimed it was “not only possible, but likely” that Mr. Obama could save $200 billion annually. They did not say by when.
Mr. Cutler, who helped collect the signatures, said he and his colleagues had decided “that our attempt to lay out one plausible scenario for the savings had created more problems than it had solved.” He added: “Putting the debate where this message puts it — do you believe we can save 8 percent of health spending through a major series of public and private reforms — asks the question in a way that is much more productive than the issue of ‘Do you believe a single estimate among many, many studies?’ ”
Mr. Obama’s economic policy director, Jason Furman, said the campaign’s estimates were conservative and asserted that much of the savings would come quickly. “We think we could get to $2,500 in savings by the end of the first term, or be very close to it,” Mr. Furman said.
The campaign won additional backing this week from Kenneth E. Thorpe of Emory University, an authority on health care costs who helped formulate Bill Clinton’s failed plan in 1993. In an assessment that he initiated in coordination with the campaign, Mr. Thorpe wrote that if all of Mr. Obama’s proposals were enacted, they would reduce national health spending by between $203 billion and $273 billion by 2012. He calculated that half of the savings would accrue to the federal government.
The Obama advisers said that while not all of the savings would translate into lower premiums, consumers would gain in other ways. The savings to employers would be passed along as higher wages, they predicted, and the savings to government would eventually mean either lower taxes or added benefits.
But whether employers and governments respond that way cannot be guaranteed, particularly in a difficult economy. And a number of health policy experts have questioned whether the $2,500 projection is either fiscally or politically realistic.
Reducing health care costs, they emphasized, means taking money from someone’s pocket and rationing care that Americans have come to expect, a recipe for stiff resistance.
“There is no easy money because, as the saying goes, one person’s fraud and abuse is another person’s income,” said Joseph R. Antos of the American Enterprise Institute. “I wouldn’t think that four years or eight years or probably 10 years will be enough to see numbers of that sort.”
The Commonwealth Fund, a health research group in New York, published a study in December projecting that a robust overhaul consisting of 15 broad initiatives would generate savings of only 6 percent after 10 years. “Doing it by the end of a first term is ambitious and would require tough policies,” said Karen Davis, the group’s president.
Jonathan B. Oberlander, who teaches health policy at the University of North Carolina at Chapel Hill, called it wishful thinking. “Do they have the potential to generate significant savings in the long run?” Dr. Oberlander asked. “Yes. Do I believe they will produce substantial savings in the short run that can be used to finance Obama’s plan? No.”
Copyright 2008 The New York Times Company
http://www.nytimes.com/2008/07/23/us/23health.html?exprod=myyahoo
ENERGY: We Can Solve It
Today, Texas oil tycoon T. Boone Pickens will testify on "Energy Security" before the Senate Committee on Homeland Security and Governmental Affairs. A lifelong oilman, Pickens is in the process of building the world's largest wind farm in Texas, "a $10 billion behemoth that could power a small city by itself." The power from the 4,000 megawatt farm is set to go online by 2011, just three years from now. (By contrast, oil produced through new offshore drilling -- conservatives' panacea to the energy crisis -- would take close to 10 years to reach the market.) "I have the same feelings about wind, as I had about the best oil field I ever found," Pickens told the New York Times. Earlier this month, Pickens released the "Pickens Plan," which advocates expanding wind power and the use of natural gas. "It's our crisis," Pickens says at the end of his first TV spot promoting his plan, "and we can solve it." John Podesta, President and CEO of the Center for American Progress Action Fund, praised Pickens' plan: "It is time to believe in America's ability to solve problems again. With clean energy, we can finally break our dependence on oil."
GORE'S GOAL: Pickens' message echoes the themes of former vice president Al Gore's WeCanSolveIt campaign, launched earlier this spring. Speaking in Washington, D.C. last Thursday, Gore warned, "The survival of the United States of America as we know it is at risk." He called for a new, ambitious goal to derive 100 percent of all American electricity from clean, renewable sources, such as wind, solar, and geothermal power. Calling the goal "achievable, affordable and transformative," Gore declared that the science of global warming requires immediate action. In fact, he explained, the entire North polar ice cap is likely to melt completely in the summer months within five years. "The leading experts predict that we have less than 10 years to make dramatic changes in our global warming pollution lest we lose our ability to ever recover from this environmental crisis," he said. On NBC's Meet the Press Sunday, Gore emphasized the emergency the world is facing. "This climate crisis is threatening our country, threatening all of human civilization," he said. "I know that sounds shrill, and I know people don't like to hear phrases like that, but it is the reality. We have to awaken to it, and we have to mobilize to confront it."
A GORE-PICKENS PLAN: Pickens and Gore approach the issue from two perspectives. Pickens believes that oil production has reached maximum capacity, while Gore is concerned about the pressing disaster of global warming. Yet both problems point to the need for real energy solutions through the implementation of clean, renewable sources. Though Gore notes that his recent speech laid out a goal, not a prescription, there are clear paths towards achieving it. "The United States is the Saudi Arabia of wind power," the Pickens Plan website says. "Building wind facilities in the corridor that stretches from the Texas panhandle to North Dakota could produce 20% of the electricity for the United States at a cost of $1 trillion" -- which would allow for the production of a free, inexhaustible power source and is a bargain compared to the $700 billion the United States spends on foreign oil every year. What's clear to both Pickens and Gore is what is not the answer: drilling for more oil. "This is one emergency we can't drill our way out of," Pickens declares in the plan's first TV spot. Speaking at the Netroots Nation convention this Saturday, Gore commented on the absurdity of increased drilling to address global warming, comparing it to an old remedy for a hangover: "the hair of the dog that bit you." "They'd recommend just going in and having another drink in the morning. That's sort of what that reminds me of," said Gore. "When you're in a hole, stop digging."
CONSERVATIVES STONEWALL: On Meet the Press, Gore remarked, "The only limiting factor here is political will." Achieving Gore's goal or enacting the Pickens Plan won't be easy. Last December, conservatives led by President Bush successfully stripped a measure from the 2007 energy bill requiring a mere 15 percent of American electricity to be generated from renewable sources -- a far cry from Gore's 100 percent goal. Conservatives have attached themselves to former Speaker Newt Gingrich's plan to "Drill Here, Drill Now, Pay Less," despite the fact that expanding domestic drilling "would not have a significant impact" on oil production or gas prices "before 2030," according to the Energy Information Agency. Conservatives still like to mock renewable power. "I'm not entirely convinced," said Rep. John E. Peterson (R-PA) said of Pickens's push for wind power. Sen. James Inhofe (R-OK) said disparagingly, "You can't run the most heavily industrialized nation in the world on windmills." Last week, Rush Limbaugh claimed it was "very, very sad" that Americans "have bought into this whole notion that alternatives are somehow pristine, clean and pure." These conservatives ignore the fact that, as Gore pointed out, "enough wind power blows through the Midwest corridor every day to...meet 100 percent of US electricity demand."
"The Progress Report"
GORE'S GOAL: Pickens' message echoes the themes of former vice president Al Gore's WeCanSolveIt campaign, launched earlier this spring. Speaking in Washington, D.C. last Thursday, Gore warned, "The survival of the United States of America as we know it is at risk." He called for a new, ambitious goal to derive 100 percent of all American electricity from clean, renewable sources, such as wind, solar, and geothermal power. Calling the goal "achievable, affordable and transformative," Gore declared that the science of global warming requires immediate action. In fact, he explained, the entire North polar ice cap is likely to melt completely in the summer months within five years. "The leading experts predict that we have less than 10 years to make dramatic changes in our global warming pollution lest we lose our ability to ever recover from this environmental crisis," he said. On NBC's Meet the Press Sunday, Gore emphasized the emergency the world is facing. "This climate crisis is threatening our country, threatening all of human civilization," he said. "I know that sounds shrill, and I know people don't like to hear phrases like that, but it is the reality. We have to awaken to it, and we have to mobilize to confront it."
A GORE-PICKENS PLAN: Pickens and Gore approach the issue from two perspectives. Pickens believes that oil production has reached maximum capacity, while Gore is concerned about the pressing disaster of global warming. Yet both problems point to the need for real energy solutions through the implementation of clean, renewable sources. Though Gore notes that his recent speech laid out a goal, not a prescription, there are clear paths towards achieving it. "The United States is the Saudi Arabia of wind power," the Pickens Plan website says. "Building wind facilities in the corridor that stretches from the Texas panhandle to North Dakota could produce 20% of the electricity for the United States at a cost of $1 trillion" -- which would allow for the production of a free, inexhaustible power source and is a bargain compared to the $700 billion the United States spends on foreign oil every year. What's clear to both Pickens and Gore is what is not the answer: drilling for more oil. "This is one emergency we can't drill our way out of," Pickens declares in the plan's first TV spot. Speaking at the Netroots Nation convention this Saturday, Gore commented on the absurdity of increased drilling to address global warming, comparing it to an old remedy for a hangover: "the hair of the dog that bit you." "They'd recommend just going in and having another drink in the morning. That's sort of what that reminds me of," said Gore. "When you're in a hole, stop digging."
CONSERVATIVES STONEWALL: On Meet the Press, Gore remarked, "The only limiting factor here is political will." Achieving Gore's goal or enacting the Pickens Plan won't be easy. Last December, conservatives led by President Bush successfully stripped a measure from the 2007 energy bill requiring a mere 15 percent of American electricity to be generated from renewable sources -- a far cry from Gore's 100 percent goal. Conservatives have attached themselves to former Speaker Newt Gingrich's plan to "Drill Here, Drill Now, Pay Less," despite the fact that expanding domestic drilling "would not have a significant impact" on oil production or gas prices "before 2030," according to the Energy Information Agency. Conservatives still like to mock renewable power. "I'm not entirely convinced," said Rep. John E. Peterson (R-PA) said of Pickens's push for wind power. Sen. James Inhofe (R-OK) said disparagingly, "You can't run the most heavily industrialized nation in the world on windmills." Last week, Rush Limbaugh claimed it was "very, very sad" that Americans "have bought into this whole notion that alternatives are somehow pristine, clean and pure." These conservatives ignore the fact that, as Gore pointed out, "enough wind power blows through the Midwest corridor every day to...meet 100 percent of US electricity demand."
"The Progress Report"
Stem Cell Research: At the Crossroads of Religion and Politics
by Christine Vestal, Staff Writer, Stateline.org
July 18, 2008
Embryonic stem cell research, which uses special cells to seek cures for a host of chronic diseases, has sparked a major moral and political debate in the United States. In the 10 years since University of Wisconsin scientists announced they had harvested potentially life-saving cells from surplus embryos donated by fertility clinics, the ethical dilemma presented by the studies has absorbed activists on both sides of the issue and has risen to the top of state and federal political agendas.
For patients and their families, embryonic stem cell research offers the hope of cures for chronic and debilitating conditions, such as juvenile diabetes, Alzheimer's disease, Parkinson's disease, spinal cord injuries and blindness. For scientists, it represents a revolutionary path to discovering the causes and cures for many more human maladies. Embryonic stem cells are pluripotent, that is, they have the unique ability to develop into any of the 220 cell types in the human body. In addition to their versatility, embryonic stem cells are easier to grow in the laboratory than adult stem cells. (See The Science Behind Stem Cell Research.1 )
But many opponents, including some religious leaders, believe that stem cell research raises the same moral issues as abortion. Furthermore, opponents maintain that scientists have other promising ways of reaching the same goals, including non-controversial adult stem cell research. (See The Case Against Embryonic Stem Cell Research: An Interview with Yuval Levin.2 ) But proponents (see The Case For Embryonic Stem Cell Research: An Interview with Jonathan Moreno.3) of the research point out that there is no substitute at this time for research using embryos. In addition, they say, the research has resulted in the destruction of only a few hundred embryos, making it fundamentally different from abortion, which results in the destruction of millions of human embryos every year.
Different religious groups hold a wide variety of opinions on embryonic stem cell research. (See Religious Groups' Official Positions on Stem Cell Research.4 ) For the Catholic Church and many other Christian groups, life begins at conception, making the research tantamount to homicide because it results in the destruction of human embryos. "Human embryos obtained in vitro are human beings and are subjects with rights; their dignity and right to life must be respected from the first moment of their existence," the late Pope John Paul II wrote in his 1995 encyclical, The Gospel of Life. Other religious groups do not take a position on the issue, and some, including many Jewish and more-liberal Christian groups, support embryonic stem cell research
National polls indicate that a slim majority of Americans support the research. According to a 2007 national poll by the Pew Forum on Religion & Public Life and the Pew Research Center for the People & the Press, 51 percent say it is more important to conduct stem cell research that could result in new medical cures than to avoid destroying the potential life of human embryos. The same poll found that 35 percent say it is more important not to destroy embryos.5
As the pace of the cutting-edge research quickens and the prospect for cures moves closer to reality, advocates on both sides of the debate see the possibility that, within a few years, scientists will find a way to harvest stem cells without destroying embryos. In late 2007, researchers in Wisconsin and Tokyo announced they had transformed ordinary human skin cells into those that appeared to have the same properties as embryonic stem cells. Religious leaders hailed the discovery as proof that the destruction of embryos is unnecessary. President George W. Bush, in his 2008 State of the Union address, said the groundbreaking new research "has the potential to move us beyond the divisive debates of the past."
But far from resolving the moral quandary, the highly publicized breakthrough has only intensified the discussion. Scientists around the world quickly cautioned that, although promising, the new research did not guarantee that adult stem cells could successfully be transformed into pluripotent cells. Many, including James Thomson, the researcher who led the team at the University of Wisconsin, publicly argued that embryonic stem cell research should continue.
In Europe, only the United Kingdom, Sweden and Belgium allow all forms of embryonic stem cell studies. On the other end of the spectrum, Austria, Ireland, Poland and Lithuania have outlawed all forms of stem cell research. Germany and Italy have criminalized the extraction of stem cells from human embryos, but scientists are permitted to conduct research on stem cells created elsewhere. Denmark, Finland, France, Greece, Spain and the Netherlands restrict scientists to producing stem cell lines from surplus embryos that fertility clinics plan to destroy. (See Stem Cell Research Around the World.6 )
Political Debate in the U.S.
In the United States, the primary question is whether the federal government should fund embryonic stem cell research. Unlike Japan and most European countries, no federal laws actually limit the research, although six states - Arkansas, Indiana, Louisiana, Michigan, North Dakota and South Dakota - prohibit the creation or destruction of human embryos for medical research.
At the national level, most Democratic politicians favor federal funding of embryonic stem cell research, including Democratic presidential candidate Sen. Barack Obama of Illinois. In 2005, Obama voted for legislation that would have allowed federal funding for stem cell research using embryos slated to be discarded from fertility clinics. Bush vetoed the bill.
The issue has split Republican lawmakers. Some oppose any research that involves the destruction of human embryos. Kansas Sen. Sam Brownback and former Pennsylvania Sen. Rick Santorum, for example, are vocal opponents of the research. Others, including Republican presidential candidate Sen. John McCain of Arizona, favor certain aspects of the research. For example, McCain supports federal funding not only for adult stem cell research but also for research using embryos slated for destruction by fertility clinics. Still other high-profile Republicans are vocal supporters. Former first lady Nancy Reagan, who watched her husband, President Ronald Reagan, succumb to the devastating effects of Alzheimer's disease, has joined other patient advocates in seeking federal funding for embryonic stem cell research. Even staunch abortion opponent Sen. Orrin Hatch of Utah has proposed legislation to support this research.
Still, powerful forces on both sides of the issue have created a deadlock in Washington, D.C., over the funding issue. In 2006 and 2007, for instance, Bush vetoed bipartisan bills that would have unlocked federal funding for the research. Meanwhile, attempts in the U.S. Congress to ban any research involving human embryos have repeatedly failed.
With a stalemate in Washington, much of the debate has shifted to state capitals. At least seven states saw the shortage of federal funding as an opportunity: By investing in the nascent science, they hoped to attract top scientists and incubate what experts predict will be a new multi-billion-dollar biotechnology industry.
In early 2004, New Jersey became the first state to invest in stem cell research. California followed in November of the same year, when voters approved a $3 billion bond measure to fund the research. Over the next two years, Connecticut, Illinois, Maryland, New York and Wisconsin joined the list of states making a commitment to fund stem cell research. Three states - Iowa, Massachusetts and Missouri - made the research legal but did not offer state funding; Massachusetts lawmakers are currently considering an investment in the science.
While these states have taken action to move forward on stem cell research, the issue is unsettled in much of the country. Because the U.S. government allows the research as long as no federal money is spent, state universities and private, nonprofit and corporate laboratories are free to pursue it, except in states that prohibit it.
History of the Debate
Embryonic stem cell research first drew widespread media attention in 2001 when Bush, under pressure from both opponents and supporters, attempted to forge a compromise. That compromise entailed allowing the nation's medical research underwriters, the National Institutes of Health (NIH), to begin funding these studies using stem cells harvested from surplus embryos before Aug. 9, 2001, the date of his decision.
Religious opponents, who had argued for a federal ban, were disappointed, while scientists complained that most existing stem cell lines (cultured embryonic stem cells grown in a Petri dish) were either contaminated or dying.
Although most Americans became aware of the issue once Bush made his controversial funding decision, the ethical debate over research involving human embryos began much earlier. In the mid-1970s, for example, federal policymakers prohibited funding for so-called test tube babies, laying the groundwork for future discussions of whether the U.S. government should fund research that many people consider immoral.
Around the same time, the U.S. Supreme Court handed down its 1973 Roe v. Wade decision legalizing abortion. That historic decision mobilized abortion opponents, many of whom would later oppose stem cell research because of what they consider to be the destruction of human life.
Some two decades later, President Bill Clinton approved, for the first time, funding of stem cell research involving surplus embryos from fertility clinics. At the same time, he placed a moratorium on support for research involving human cloning, a restriction Bush extended in 2000.
In 1995, Congress overrode Clinton's decision to fund some types of stem cell research, enacting an appropriations rider, still on the books today, that prevents NIH from funding any research that harms or destroys human embryos. Bush sidestepped this law in 2001 when he allowed funding for stem cell lines that already had been created, also assuring many of his supporters that no new embryos would be destroyed.
Opponents of embryonic stem cell research object to two basic techniques: harvesting stem cells from human embryos, and creating cloned human embryos from a human egg and an adult donor cell - a technique called somatic cell nuclear transfer. In both cases, the embryo is ultimately destroyed.
Although many abortion opponents oppose both techniques, some supporters say harvesting potentially life-saving cells from embryos that otherwise would be destroyed is justified. But some supporters of the research also argue against the creation of embryos for the sole purpose of harvesting cells and then destroying them.
Bioethics experts say the stem cell debate marks the first time in U.S. history that medical science has played such a prominent role in electoral politics. Indeed, the issue had a significant impact on the 2006 U.S. Senate election in Missouri, where voters debated and ultimately approved a proposed state constitutional amendment ensuring the legality of embryonic stem cell research. Missouri Democrat Claire McCaskill, who supports the research, ousted Republican incumbent and stem cell research opponent Jim Talent in part because of their differences over this issue. McCaskill backed the first-in-the-nation amendment; Talent opposed it.
If the next president decides to drop Bush's restrictions on stem cell funding, Congress could press again for federal money. But with an economic downturn and a growing budget deficit, competition for NIH funding is expected to be stiff. Even without federal money, however, state and private investment in stem cell studies is expected to continue.
http://pewforum.org/bioethics/
The Case For Embryonic Stem Cell Research: An Interview with Jonathan Moreno
Scientists largely agree that stem cells may hold a key to the treatment, and even cure, of many serious medical conditions. But while the use of adult stem cells is widely accepted, many religious groups and others oppose stem cell research involving the use and destruction of human embryos. At the same time, many scientists say that embryonic stem cell research is necessary to unlock the promise of stem cell therapies since embryonic stem cells can develop into any cell type in the human body.
In late 2007, researchers in the United States and Japan succeeded in reprogramming adult skin cells to act like embryonic stem cells. The new development offers the possibility that the controversy over the use of embryos could end. But many scientists and supporters of embryonic stem cell research caution that this advance has not eliminated the need for embryos, at least for the time being.
Recently, the Pew Forum sat down with University of Pennsylvania professor Jonathan Moreno to discuss the ethical and moral grounds for supporting embryonic stem cell research. Moreno is the David and Lyn Silfen University Professor and Professor of Medical Ethics and of History and Sociology of Science at Penn as well as a senior fellow at the Center for American Progress in Washington, D.C. Previously, he was president of the American Society for Bioethics and Humanities and served as a senior staff member for two presidential advisory committees.
Featuring:
Jonathan Moreno, David and Lyn Silfen University Professor and Professor of Medical Ethics and of the History and Sociology of Science, University of Pennsylvania; Senior Fellow, Center for American Progress
Interviewer:
David Masci, Senior Research Fellow, Pew Forum on Religion & Public Life
Question & Answer
Recently, scientists in the United States and Japan succeeded in turning adult skin cells into cells that appeared to behave like embryonic stem cells in that they could be programmed to act like any cell in the body. When this breakthrough was announced, some pundits and commentators said that it essentially ends the debate over whether to destroy embryos for stem cell research. Is this true?
From the very beginning of this controversy, there has been a tendency for non-scientists to talk as though they were scientists. If you talk to any of the stem cell biologists, they’ll tell you that the need for human embryonic stem cells continues and will continue for the foreseeable future for a number of reasons. For one thing, in order to know what those alternatives can do, they’ll need to be compared with something, and the gold standard continues to be human embryonic stem cells. For another, there may be some biological limits to the utility of alternative sources, such as these skin cells. And, of course, the techniques now being used involve a genetic factor that is carcinogenic. At this point it is still too early to tell exactly what this news means.
There is some work about to be published suggesting that adult stem cells are less capable of being reprogrammed to become like embryonic stem cells if they come from older people, which would obviously greatly compromise their utility for therapeutic purposes for that donor. I think all the evidence suggests that, for the foreseeable future, human embryonic stem cell lines will be needed to continue this research.
Do you believe a human embryo has intrinsic worth? And if it does, what sort of rights should we accord it?
First, it is important to note that not all Abrahamic religions universally agree with the notion that a human embryo has any moral status at all. Orthodox Jews, imams in the Islamic tradition and many Protestant denominations do not equate the embryo with the moral status of a born human person. The Roman Catholic Church did not traditionally attribute personhood to the embryo, and this view only started to change in the middle of the 19th century. Even now there are many people who are pro-life who support human embryonic stem cell research.
So I think there is not, in fact, a neat division between people who are pro-life and pro-choice on this question, nor is there a neat division between people who ascribe a great deal of moral status and relatively little moral status to a human embryo. There is a lot of variation here, which is one of the reasons the debate has been so complicated. It is not a bumper-sticker debate.
I don’t consider myself a great moral theologian. I am trained in philosophy, and I’m an observer of those thinkers. In this country, at least, the consensus among people who think about these things, like theologians and philosophers, seems to be that the human embryo has a greater moral status than a sperm and egg alone, but the embryo does not necessarily have rights. That being said, I would say that the embryo that is intentionally created has to be respected. This means that, for purposes of medical research, before one can justify the destruction of an embryo, one must give a sound argument that existing human embryonic stem cell lines are not adequate for this research purpose and demonstrate the importance of the research purpose – for example, something related to a serious disease. I would say that we are at the stage of what the theologians and philosophers call “weighing and balancing.”
Of course, there is another view.
Yes, there are people who attribute the absolute same moral status to an embryo as they would to you or me. These people believe – and I think many of the bioconservatives fall in this category – that unless we ascribe a very high level of respect to the human embryo, biotechnology will take us down a very dark road, a kind of slippery slope or revival of eugenics. I don’t see that as the course that we are on. It seems to me that our empathy for people who suffer has become greater in the last 2,000 years rather than less, and that medical science is an expression of concern about suffering and an attempt, as the rabbis put it, to heal the world.
If a child dies from a disease that might have been preventable if we had been able to research that disease using embryos already slated for destruction or persistent refrigeration – such as embryos used at in vitro fertilization clinics – I don’t see how the death of that child contributes to human dignity.
You dismissed the slippery slope argument. But what if we get to the a point where genetic manipulation for therapeutic purposes reaches a level of sophistication where we can really begin to alter who we are as human beings?
I don’t mean to suggest that I don’t think we will have strenuous, vigorous debates about which kinds of genetic interventions to entertain in the next decades. I think we will. But I don’t think that the course of those debates is so settled that we can give up the potential for improving the opportunities for human flourishing. I certainly don’t dismiss those concerns, but I also think we should be very careful to ground these debates in facts.
When we look at these questions, we have to be careful not to mystify the power of science by thinking that these discoveries will take us in the direction of our wildest imagination. If we do that, we really damage the opportunities that science gives us to expand our consciousness.
There are people of faith on both sides of this debate. Do Judeo-Christian teachings inform your views on this issue? If so, how?
It would be hard to say that the Judeo-Christian tradition doesn’t inform, in some sense, everybody’s views about everything. But after five-plus thousand years of Judaism and a couple thousand years of Christianity, that tradition does not speak with a single voice. I’m very leery of those who purport to offer the univocal interpretation of that tradition. As I’ve already mentioned, there is variation within traditions about the nature and significance of the human embryo.
As for myself, there is one concept in the Judeo-Christian tradition that I find particularly important: the sense that we are all basically made of the same stuff and have an overwhelming obligation not to be cruel to each other. Cruelty can manifest itself in all sorts of ways, including – in my view – a failure to take advantage of the opportunities for the human good that medical science can provide.
What about the idea, taken from both Judaism and Christianity, that there is essential human dignity based on God’s care for each individual in his creation? Has this notion of God-centered concern for each individual made Western societies, in particular, more careful about ethical issues than countries with different traditions, such as China or Korea?
I think one has to be careful. You know, one country that is especially vigorous in the stem cell research field is Israel, which is, of course, the birthplace of both Judaism and Christianity. So I would be reluctant to generalize based on geography.
The Pew Forum and the Pew Research Center for the People & the Press have done polling on the stem cell issue over the last six or seven years and have found that Americans generally favor embryonic stem cell research. Today, a slim majority supports it. Opponents of embryonic stem cell research often say this support indicates a public that is misinformed about the research and its potential benefits. In particular, they criticize celebrities, politicians and others who claim that stem cell research will soon cure many of the most dreaded diseases. Is that criticism fair?
There’s certainly plenty of hyperbole on both sides. There have been descriptions of disemboweling embryos as though they were fetuses, exploiting the fact that most Americans don’t have a Ph.D. in embryology or fetal anatomy. I think that opponents of stem cell research are losing the American people because Americans don’t like to see an area of potentially important medical research or science closed off.
Recently, I’ve been reading a history of science policy in the United States, and it is fascinating to be reminded that virtually every one of the founders considered him- or herself a scientist or a natural philosopher. John Quincy Adams, the sixth president, gave a very vigorous speech at the beginning of his term of office advocating vast internal improvements including not only canals and roads but also scientific improvements. The main objection at the time was that such activities should be undertaken by individual states rather than the federal government – it was a states’ rights issue.
That’s interesting, because the states are helping to drive policy on stem cells in a way that they don’t in many other research endeavors.
That’s right. I think having the states take the lead is a good thing in the short term. In the long term, however, we will rue having states drive policy because it’s going to make other issues a lot more complicated, such as policies on intellectual property rights. Without greater federal involvement, there will be a huge coordination problem. Ironically, it was that coordination problem that led the federal government to build canals and roads because the big states insisted that they needed them, and the federal government was in the best position to coordinate these projects. The same is true today for stem cell research.
Regardless of who wins the upcoming presidential election, do you anticipate the federal government becoming much more involved in embryonic stem cell research in the coming years as a result of the change in administration?
I think that there is a real impetus for change because the science is taking us there and the public feeling is taking us there. So, I think the federal government will get more involved no matter who wins. The devil is in the details, but, on the whole, I think the next administration will change policy. The important questions now are how much of a leadership role will the next administration take and how efficiently will the government be able to push this very promising field of scientific research forward?
July 18, 2008
Embryonic stem cell research, which uses special cells to seek cures for a host of chronic diseases, has sparked a major moral and political debate in the United States. In the 10 years since University of Wisconsin scientists announced they had harvested potentially life-saving cells from surplus embryos donated by fertility clinics, the ethical dilemma presented by the studies has absorbed activists on both sides of the issue and has risen to the top of state and federal political agendas.
For patients and their families, embryonic stem cell research offers the hope of cures for chronic and debilitating conditions, such as juvenile diabetes, Alzheimer's disease, Parkinson's disease, spinal cord injuries and blindness. For scientists, it represents a revolutionary path to discovering the causes and cures for many more human maladies. Embryonic stem cells are pluripotent, that is, they have the unique ability to develop into any of the 220 cell types in the human body. In addition to their versatility, embryonic stem cells are easier to grow in the laboratory than adult stem cells. (See The Science Behind Stem Cell Research.1 )
But many opponents, including some religious leaders, believe that stem cell research raises the same moral issues as abortion. Furthermore, opponents maintain that scientists have other promising ways of reaching the same goals, including non-controversial adult stem cell research. (See The Case Against Embryonic Stem Cell Research: An Interview with Yuval Levin.2 ) But proponents (see The Case For Embryonic Stem Cell Research: An Interview with Jonathan Moreno.3) of the research point out that there is no substitute at this time for research using embryos. In addition, they say, the research has resulted in the destruction of only a few hundred embryos, making it fundamentally different from abortion, which results in the destruction of millions of human embryos every year.
Different religious groups hold a wide variety of opinions on embryonic stem cell research. (See Religious Groups' Official Positions on Stem Cell Research.4 ) For the Catholic Church and many other Christian groups, life begins at conception, making the research tantamount to homicide because it results in the destruction of human embryos. "Human embryos obtained in vitro are human beings and are subjects with rights; their dignity and right to life must be respected from the first moment of their existence," the late Pope John Paul II wrote in his 1995 encyclical, The Gospel of Life. Other religious groups do not take a position on the issue, and some, including many Jewish and more-liberal Christian groups, support embryonic stem cell research
National polls indicate that a slim majority of Americans support the research. According to a 2007 national poll by the Pew Forum on Religion & Public Life and the Pew Research Center for the People & the Press, 51 percent say it is more important to conduct stem cell research that could result in new medical cures than to avoid destroying the potential life of human embryos. The same poll found that 35 percent say it is more important not to destroy embryos.5
As the pace of the cutting-edge research quickens and the prospect for cures moves closer to reality, advocates on both sides of the debate see the possibility that, within a few years, scientists will find a way to harvest stem cells without destroying embryos. In late 2007, researchers in Wisconsin and Tokyo announced they had transformed ordinary human skin cells into those that appeared to have the same properties as embryonic stem cells. Religious leaders hailed the discovery as proof that the destruction of embryos is unnecessary. President George W. Bush, in his 2008 State of the Union address, said the groundbreaking new research "has the potential to move us beyond the divisive debates of the past."
But far from resolving the moral quandary, the highly publicized breakthrough has only intensified the discussion. Scientists around the world quickly cautioned that, although promising, the new research did not guarantee that adult stem cells could successfully be transformed into pluripotent cells. Many, including James Thomson, the researcher who led the team at the University of Wisconsin, publicly argued that embryonic stem cell research should continue.
In Europe, only the United Kingdom, Sweden and Belgium allow all forms of embryonic stem cell studies. On the other end of the spectrum, Austria, Ireland, Poland and Lithuania have outlawed all forms of stem cell research. Germany and Italy have criminalized the extraction of stem cells from human embryos, but scientists are permitted to conduct research on stem cells created elsewhere. Denmark, Finland, France, Greece, Spain and the Netherlands restrict scientists to producing stem cell lines from surplus embryos that fertility clinics plan to destroy. (See Stem Cell Research Around the World.6 )
Political Debate in the U.S.
In the United States, the primary question is whether the federal government should fund embryonic stem cell research. Unlike Japan and most European countries, no federal laws actually limit the research, although six states - Arkansas, Indiana, Louisiana, Michigan, North Dakota and South Dakota - prohibit the creation or destruction of human embryos for medical research.
At the national level, most Democratic politicians favor federal funding of embryonic stem cell research, including Democratic presidential candidate Sen. Barack Obama of Illinois. In 2005, Obama voted for legislation that would have allowed federal funding for stem cell research using embryos slated to be discarded from fertility clinics. Bush vetoed the bill.
The issue has split Republican lawmakers. Some oppose any research that involves the destruction of human embryos. Kansas Sen. Sam Brownback and former Pennsylvania Sen. Rick Santorum, for example, are vocal opponents of the research. Others, including Republican presidential candidate Sen. John McCain of Arizona, favor certain aspects of the research. For example, McCain supports federal funding not only for adult stem cell research but also for research using embryos slated for destruction by fertility clinics. Still other high-profile Republicans are vocal supporters. Former first lady Nancy Reagan, who watched her husband, President Ronald Reagan, succumb to the devastating effects of Alzheimer's disease, has joined other patient advocates in seeking federal funding for embryonic stem cell research. Even staunch abortion opponent Sen. Orrin Hatch of Utah has proposed legislation to support this research.
Still, powerful forces on both sides of the issue have created a deadlock in Washington, D.C., over the funding issue. In 2006 and 2007, for instance, Bush vetoed bipartisan bills that would have unlocked federal funding for the research. Meanwhile, attempts in the U.S. Congress to ban any research involving human embryos have repeatedly failed.
With a stalemate in Washington, much of the debate has shifted to state capitals. At least seven states saw the shortage of federal funding as an opportunity: By investing in the nascent science, they hoped to attract top scientists and incubate what experts predict will be a new multi-billion-dollar biotechnology industry.
In early 2004, New Jersey became the first state to invest in stem cell research. California followed in November of the same year, when voters approved a $3 billion bond measure to fund the research. Over the next two years, Connecticut, Illinois, Maryland, New York and Wisconsin joined the list of states making a commitment to fund stem cell research. Three states - Iowa, Massachusetts and Missouri - made the research legal but did not offer state funding; Massachusetts lawmakers are currently considering an investment in the science.
While these states have taken action to move forward on stem cell research, the issue is unsettled in much of the country. Because the U.S. government allows the research as long as no federal money is spent, state universities and private, nonprofit and corporate laboratories are free to pursue it, except in states that prohibit it.
History of the Debate
Embryonic stem cell research first drew widespread media attention in 2001 when Bush, under pressure from both opponents and supporters, attempted to forge a compromise. That compromise entailed allowing the nation's medical research underwriters, the National Institutes of Health (NIH), to begin funding these studies using stem cells harvested from surplus embryos before Aug. 9, 2001, the date of his decision.
Religious opponents, who had argued for a federal ban, were disappointed, while scientists complained that most existing stem cell lines (cultured embryonic stem cells grown in a Petri dish) were either contaminated or dying.
Although most Americans became aware of the issue once Bush made his controversial funding decision, the ethical debate over research involving human embryos began much earlier. In the mid-1970s, for example, federal policymakers prohibited funding for so-called test tube babies, laying the groundwork for future discussions of whether the U.S. government should fund research that many people consider immoral.
Around the same time, the U.S. Supreme Court handed down its 1973 Roe v. Wade decision legalizing abortion. That historic decision mobilized abortion opponents, many of whom would later oppose stem cell research because of what they consider to be the destruction of human life.
Some two decades later, President Bill Clinton approved, for the first time, funding of stem cell research involving surplus embryos from fertility clinics. At the same time, he placed a moratorium on support for research involving human cloning, a restriction Bush extended in 2000.
In 1995, Congress overrode Clinton's decision to fund some types of stem cell research, enacting an appropriations rider, still on the books today, that prevents NIH from funding any research that harms or destroys human embryos. Bush sidestepped this law in 2001 when he allowed funding for stem cell lines that already had been created, also assuring many of his supporters that no new embryos would be destroyed.
Opponents of embryonic stem cell research object to two basic techniques: harvesting stem cells from human embryos, and creating cloned human embryos from a human egg and an adult donor cell - a technique called somatic cell nuclear transfer. In both cases, the embryo is ultimately destroyed.
Although many abortion opponents oppose both techniques, some supporters say harvesting potentially life-saving cells from embryos that otherwise would be destroyed is justified. But some supporters of the research also argue against the creation of embryos for the sole purpose of harvesting cells and then destroying them.
Bioethics experts say the stem cell debate marks the first time in U.S. history that medical science has played such a prominent role in electoral politics. Indeed, the issue had a significant impact on the 2006 U.S. Senate election in Missouri, where voters debated and ultimately approved a proposed state constitutional amendment ensuring the legality of embryonic stem cell research. Missouri Democrat Claire McCaskill, who supports the research, ousted Republican incumbent and stem cell research opponent Jim Talent in part because of their differences over this issue. McCaskill backed the first-in-the-nation amendment; Talent opposed it.
If the next president decides to drop Bush's restrictions on stem cell funding, Congress could press again for federal money. But with an economic downturn and a growing budget deficit, competition for NIH funding is expected to be stiff. Even without federal money, however, state and private investment in stem cell studies is expected to continue.
http://pewforum.org/bioethics/
The Case For Embryonic Stem Cell Research: An Interview with Jonathan Moreno
Scientists largely agree that stem cells may hold a key to the treatment, and even cure, of many serious medical conditions. But while the use of adult stem cells is widely accepted, many religious groups and others oppose stem cell research involving the use and destruction of human embryos. At the same time, many scientists say that embryonic stem cell research is necessary to unlock the promise of stem cell therapies since embryonic stem cells can develop into any cell type in the human body.
In late 2007, researchers in the United States and Japan succeeded in reprogramming adult skin cells to act like embryonic stem cells. The new development offers the possibility that the controversy over the use of embryos could end. But many scientists and supporters of embryonic stem cell research caution that this advance has not eliminated the need for embryos, at least for the time being.
Recently, the Pew Forum sat down with University of Pennsylvania professor Jonathan Moreno to discuss the ethical and moral grounds for supporting embryonic stem cell research. Moreno is the David and Lyn Silfen University Professor and Professor of Medical Ethics and of History and Sociology of Science at Penn as well as a senior fellow at the Center for American Progress in Washington, D.C. Previously, he was president of the American Society for Bioethics and Humanities and served as a senior staff member for two presidential advisory committees.
Featuring:
Jonathan Moreno, David and Lyn Silfen University Professor and Professor of Medical Ethics and of the History and Sociology of Science, University of Pennsylvania; Senior Fellow, Center for American Progress
Interviewer:
David Masci, Senior Research Fellow, Pew Forum on Religion & Public Life
Question & Answer
Recently, scientists in the United States and Japan succeeded in turning adult skin cells into cells that appeared to behave like embryonic stem cells in that they could be programmed to act like any cell in the body. When this breakthrough was announced, some pundits and commentators said that it essentially ends the debate over whether to destroy embryos for stem cell research. Is this true?
From the very beginning of this controversy, there has been a tendency for non-scientists to talk as though they were scientists. If you talk to any of the stem cell biologists, they’ll tell you that the need for human embryonic stem cells continues and will continue for the foreseeable future for a number of reasons. For one thing, in order to know what those alternatives can do, they’ll need to be compared with something, and the gold standard continues to be human embryonic stem cells. For another, there may be some biological limits to the utility of alternative sources, such as these skin cells. And, of course, the techniques now being used involve a genetic factor that is carcinogenic. At this point it is still too early to tell exactly what this news means.
There is some work about to be published suggesting that adult stem cells are less capable of being reprogrammed to become like embryonic stem cells if they come from older people, which would obviously greatly compromise their utility for therapeutic purposes for that donor. I think all the evidence suggests that, for the foreseeable future, human embryonic stem cell lines will be needed to continue this research.
Do you believe a human embryo has intrinsic worth? And if it does, what sort of rights should we accord it?
First, it is important to note that not all Abrahamic religions universally agree with the notion that a human embryo has any moral status at all. Orthodox Jews, imams in the Islamic tradition and many Protestant denominations do not equate the embryo with the moral status of a born human person. The Roman Catholic Church did not traditionally attribute personhood to the embryo, and this view only started to change in the middle of the 19th century. Even now there are many people who are pro-life who support human embryonic stem cell research.
So I think there is not, in fact, a neat division between people who are pro-life and pro-choice on this question, nor is there a neat division between people who ascribe a great deal of moral status and relatively little moral status to a human embryo. There is a lot of variation here, which is one of the reasons the debate has been so complicated. It is not a bumper-sticker debate.
I don’t consider myself a great moral theologian. I am trained in philosophy, and I’m an observer of those thinkers. In this country, at least, the consensus among people who think about these things, like theologians and philosophers, seems to be that the human embryo has a greater moral status than a sperm and egg alone, but the embryo does not necessarily have rights. That being said, I would say that the embryo that is intentionally created has to be respected. This means that, for purposes of medical research, before one can justify the destruction of an embryo, one must give a sound argument that existing human embryonic stem cell lines are not adequate for this research purpose and demonstrate the importance of the research purpose – for example, something related to a serious disease. I would say that we are at the stage of what the theologians and philosophers call “weighing and balancing.”
Of course, there is another view.
Yes, there are people who attribute the absolute same moral status to an embryo as they would to you or me. These people believe – and I think many of the bioconservatives fall in this category – that unless we ascribe a very high level of respect to the human embryo, biotechnology will take us down a very dark road, a kind of slippery slope or revival of eugenics. I don’t see that as the course that we are on. It seems to me that our empathy for people who suffer has become greater in the last 2,000 years rather than less, and that medical science is an expression of concern about suffering and an attempt, as the rabbis put it, to heal the world.
If a child dies from a disease that might have been preventable if we had been able to research that disease using embryos already slated for destruction or persistent refrigeration – such as embryos used at in vitro fertilization clinics – I don’t see how the death of that child contributes to human dignity.
You dismissed the slippery slope argument. But what if we get to the a point where genetic manipulation for therapeutic purposes reaches a level of sophistication where we can really begin to alter who we are as human beings?
I don’t mean to suggest that I don’t think we will have strenuous, vigorous debates about which kinds of genetic interventions to entertain in the next decades. I think we will. But I don’t think that the course of those debates is so settled that we can give up the potential for improving the opportunities for human flourishing. I certainly don’t dismiss those concerns, but I also think we should be very careful to ground these debates in facts.
When we look at these questions, we have to be careful not to mystify the power of science by thinking that these discoveries will take us in the direction of our wildest imagination. If we do that, we really damage the opportunities that science gives us to expand our consciousness.
There are people of faith on both sides of this debate. Do Judeo-Christian teachings inform your views on this issue? If so, how?
It would be hard to say that the Judeo-Christian tradition doesn’t inform, in some sense, everybody’s views about everything. But after five-plus thousand years of Judaism and a couple thousand years of Christianity, that tradition does not speak with a single voice. I’m very leery of those who purport to offer the univocal interpretation of that tradition. As I’ve already mentioned, there is variation within traditions about the nature and significance of the human embryo.
As for myself, there is one concept in the Judeo-Christian tradition that I find particularly important: the sense that we are all basically made of the same stuff and have an overwhelming obligation not to be cruel to each other. Cruelty can manifest itself in all sorts of ways, including – in my view – a failure to take advantage of the opportunities for the human good that medical science can provide.
What about the idea, taken from both Judaism and Christianity, that there is essential human dignity based on God’s care for each individual in his creation? Has this notion of God-centered concern for each individual made Western societies, in particular, more careful about ethical issues than countries with different traditions, such as China or Korea?
I think one has to be careful. You know, one country that is especially vigorous in the stem cell research field is Israel, which is, of course, the birthplace of both Judaism and Christianity. So I would be reluctant to generalize based on geography.
The Pew Forum and the Pew Research Center for the People & the Press have done polling on the stem cell issue over the last six or seven years and have found that Americans generally favor embryonic stem cell research. Today, a slim majority supports it. Opponents of embryonic stem cell research often say this support indicates a public that is misinformed about the research and its potential benefits. In particular, they criticize celebrities, politicians and others who claim that stem cell research will soon cure many of the most dreaded diseases. Is that criticism fair?
There’s certainly plenty of hyperbole on both sides. There have been descriptions of disemboweling embryos as though they were fetuses, exploiting the fact that most Americans don’t have a Ph.D. in embryology or fetal anatomy. I think that opponents of stem cell research are losing the American people because Americans don’t like to see an area of potentially important medical research or science closed off.
Recently, I’ve been reading a history of science policy in the United States, and it is fascinating to be reminded that virtually every one of the founders considered him- or herself a scientist or a natural philosopher. John Quincy Adams, the sixth president, gave a very vigorous speech at the beginning of his term of office advocating vast internal improvements including not only canals and roads but also scientific improvements. The main objection at the time was that such activities should be undertaken by individual states rather than the federal government – it was a states’ rights issue.
That’s interesting, because the states are helping to drive policy on stem cells in a way that they don’t in many other research endeavors.
That’s right. I think having the states take the lead is a good thing in the short term. In the long term, however, we will rue having states drive policy because it’s going to make other issues a lot more complicated, such as policies on intellectual property rights. Without greater federal involvement, there will be a huge coordination problem. Ironically, it was that coordination problem that led the federal government to build canals and roads because the big states insisted that they needed them, and the federal government was in the best position to coordinate these projects. The same is true today for stem cell research.
Regardless of who wins the upcoming presidential election, do you anticipate the federal government becoming much more involved in embryonic stem cell research in the coming years as a result of the change in administration?
I think that there is a real impetus for change because the science is taking us there and the public feeling is taking us there. So, I think the federal government will get more involved no matter who wins. The devil is in the details, but, on the whole, I think the next administration will change policy. The important questions now are how much of a leadership role will the next administration take and how efficiently will the government be able to push this very promising field of scientific research forward?
MegaVote for Texas' 24th Congressional District
July 21, 2008
In this MegaVote for Texas' 24th Congressional District:
Recent Congressional Votes -
Senate: Veto Override; Medicare Improvement for Patients and Providers Act
Senate: U.S. Global Leadership Against HIV/AIDS, Tuberculosis, and Malaria Reauthorization Act
House: Veto Override; Medicare Improvement for Patients and Providers Act
House: Drill Responsibly in Leased Lands Act
Upcoming Congressional Bills -
Senate: Stop Excessive Energy Speculation Act
Senate: American Housing Rescue and Foreclosure Prevention Act
House: American Housing Rescue and Foreclosure Prevention Act
House: The National Highway Bridge Reconstruction and Inspection Act
House: U.S. Global Leadership Against HIV/AIDS, Tuberculosis, and Malaria Reauthorization Act
--------------------------------------------------------------------------------
Recent Senate Votes
Veto Override; Medicare Improvement for Patients and Providers Act - Vote Passed (70-26, 4 Not Voting)
The Senate overrode the President's veto of a bill that cancels a scheduled 10.6 percent cut in Medicare physician payments.
Sen. Kay Bailey Hutchison voted YES......send e-mail or see bio
Sen. John Cornyn voted YES......send e-mail or see bio
--------------------------------------------------------------------------------
U.S. Global Leadership Against HIV/AIDS, Tuberculosis, and Malaria Reauthorization Act - Vote Passed (80-16, 4 Not Voting)
The Senate passed this bill to triple spending for President Bush's program to treat and prevent AIDS, malaria and tuberculosis in foreign countries.
Sen. Kay Bailey Hutchison voted NO......send e-mail or see bio
Sen. John Cornyn voted NO......send e-mail or see bio
--------------------------------------------------------------------------------
Recent House Votes
Veto Override; Medicare Improvement for Patients and Providers Act - Vote Passed (383-41, 11 Not Voting)
The House overrode the President's veto of a bill that cancels a scheduled 10.6 percent cut in Medicare physician payments.
Rep. Kenny Marchant voted NO......send e-mail or see bio
--------------------------------------------------------------------------------
Drill Responsibly in Leased Lands Act - Vote Failed (244-173, 18 Not Voting)
The House failed to attain the necessary two-thirds margin needed to pass this bill that would have required energy companies to drill for oil and gas in areas where licenses have already been acquired.
Rep. Kenny Marchant voted Not Voting......send e-mail or see bio
--------------------------------------------------------------------------------
Upcoming Votes
Stop Excessive Energy Speculation Act - S.3268
The Senate is scheduled to vote on this bill intended to prevent price speculation in the oil markets.
--------------------------------------------------------------------------------
American Housing Rescue and Foreclosure Prevention Act - H.R.3221
The Senate is expected to vote on this housing-recovery package after it passes the House.
--------------------------------------------------------------------------------
American Housing Rescue and Foreclosure Prevention Act - H.R.3221
The House will vote this week on this housing-recovery bill.
--------------------------------------------------------------------------------
The National Highway Bridge Reconstruction and Inspection Act - H.R.3999
The House is scheduled to vote on this bill to improve highway bridge safety.
--------------------------------------------------------------------------------
U.S. Global Leadership Against HIV/AIDS, Tuberculosis, and Malaria Reauthorization Act - H.R.5501
This bill funds programs in foreign countries that combat HIV/AIDS, tuberculosis, and malaria.
megavote@mailmanager.net
In this MegaVote for Texas' 24th Congressional District:
Recent Congressional Votes -
Senate: Veto Override; Medicare Improvement for Patients and Providers Act
Senate: U.S. Global Leadership Against HIV/AIDS, Tuberculosis, and Malaria Reauthorization Act
House: Veto Override; Medicare Improvement for Patients and Providers Act
House: Drill Responsibly in Leased Lands Act
Upcoming Congressional Bills -
Senate: Stop Excessive Energy Speculation Act
Senate: American Housing Rescue and Foreclosure Prevention Act
House: American Housing Rescue and Foreclosure Prevention Act
House: The National Highway Bridge Reconstruction and Inspection Act
House: U.S. Global Leadership Against HIV/AIDS, Tuberculosis, and Malaria Reauthorization Act
--------------------------------------------------------------------------------
Recent Senate Votes
Veto Override; Medicare Improvement for Patients and Providers Act - Vote Passed (70-26, 4 Not Voting)
The Senate overrode the President's veto of a bill that cancels a scheduled 10.6 percent cut in Medicare physician payments.
Sen. Kay Bailey Hutchison voted YES......send e-mail or see bio
Sen. John Cornyn voted YES......send e-mail or see bio
--------------------------------------------------------------------------------
U.S. Global Leadership Against HIV/AIDS, Tuberculosis, and Malaria Reauthorization Act - Vote Passed (80-16, 4 Not Voting)
The Senate passed this bill to triple spending for President Bush's program to treat and prevent AIDS, malaria and tuberculosis in foreign countries.
Sen. Kay Bailey Hutchison voted NO......send e-mail or see bio
Sen. John Cornyn voted NO......send e-mail or see bio
--------------------------------------------------------------------------------
Recent House Votes
Veto Override; Medicare Improvement for Patients and Providers Act - Vote Passed (383-41, 11 Not Voting)
The House overrode the President's veto of a bill that cancels a scheduled 10.6 percent cut in Medicare physician payments.
Rep. Kenny Marchant voted NO......send e-mail or see bio
--------------------------------------------------------------------------------
Drill Responsibly in Leased Lands Act - Vote Failed (244-173, 18 Not Voting)
The House failed to attain the necessary two-thirds margin needed to pass this bill that would have required energy companies to drill for oil and gas in areas where licenses have already been acquired.
Rep. Kenny Marchant voted Not Voting......send e-mail or see bio
--------------------------------------------------------------------------------
Upcoming Votes
Stop Excessive Energy Speculation Act - S.3268
The Senate is scheduled to vote on this bill intended to prevent price speculation in the oil markets.
--------------------------------------------------------------------------------
American Housing Rescue and Foreclosure Prevention Act - H.R.3221
The Senate is expected to vote on this housing-recovery package after it passes the House.
--------------------------------------------------------------------------------
American Housing Rescue and Foreclosure Prevention Act - H.R.3221
The House will vote this week on this housing-recovery bill.
--------------------------------------------------------------------------------
The National Highway Bridge Reconstruction and Inspection Act - H.R.3999
The House is scheduled to vote on this bill to improve highway bridge safety.
--------------------------------------------------------------------------------
U.S. Global Leadership Against HIV/AIDS, Tuberculosis, and Malaria Reauthorization Act - H.R.5501
This bill funds programs in foreign countries that combat HIV/AIDS, tuberculosis, and malaria.
megavote@mailmanager.net
Monday, July 21, 2008
AP IMPACT: Big Oil profits steered to investors
By JOHN PORRETTO, AP Business Writer
As giant oil companies like Exxon Mobil and ConocoPhillips get set to report what will probably be another round of eye-popping quarterly profits, just where is all that money going?
The companies insist they're trying to find new oil that might help bring down gas prices, but the money they spend on exploration is nothing compared with what they spend on stock buybacks and dividends.
It's good news for shareholders, including mutual funds and retirement plans for millions of Americans, but no help to drivers already making drastic cutbacks to offset the high cost of fuel.
The five biggest international oil companies plowed about 55 percent of the cash they made from their businesses into stock buybacks and dividends last year, up from 30 percent in 2000 and just 1 percent in 1993, according to Rice University's James A. Baker III Institute for Public Policy.
The percentage they spend to find new deposits of fossil fuels has remained flat for years, in the mid-single digits.
The issue has become more sensitive as lawmakers and Americans frustrated by high gas prices have balked at gaudy reports of oil industry profits. ConocoPhillips is scheduled to kick off the latest round of Big Oil earnings reports Wednesday.
Oil prices are set on the open market, not by the oil industry. But that hasn't stopped public protests, a series of congressional grillings for top oil executives, and a failed attempt by lawmakers to slap Big Oil with a windfall profits tax.
In the first three months of this year, Exxon Mobil Corp., the world's biggest publicly traded oil company, shelled out $8.8 billion on stock buybacks alone, compared with $5.5 billion on exploration and other capital projects.
ConocoPhillips has already told investors that its stock buybacks for April to June of this year will come to about $2.5 billion — nine times what it spent on exploration.
Stock buybacks are common throughout corporate America, not just for Big Oil. They shrink the amount of stock on the open market, essentially increasing its value and giving individual shareholders a bigger stake in the company.
But some critics say Big Oil focuses too much on boosting stock prices, in an industry that sometimes ties executive pay to stock price.
And in focusing on buybacks and dividends over exploring for new oil, some critics say, oil companies jeopardize its already dwindling share of world supply.
"If you're not spending your money finding and developing new oil, then there's no new oil," said Amy Myers Jaffe, an energy expert at Rice University who's studied spending patterns of the major oil companies.
Investor-owned companies like Exxon Mobil and Chevron hold less than 10 percent of global oil and gas reserves, way down from past decades. And finding new oil has become harder and more expensive.
State-run oil companies, like those in Saudi Arabia and Venezuela, control about 80 percent of oil reserves — and at today's prices, it's not surprising they're keeping a tight grip on what they have. Scarce equipment and hard-to-find labor also pose problems.
No one questions that Big Oil is rolling in cash. The cash the biggest oil companies bring in from running their businesses, or operating cash flow, is four times what it was in the early 1990s.
"It becomes a management decision," said Howard Silverblatt, a senior index analyst at Standard & Poor's. "It's not like they're going to the board and saying, 'Well, I can do one or the other or the other.' The balance sheets are flush with cash."
So what's Big Oil to do?
The companies say they are doing what they can to find more fossil fuels around the world, but the easy oil is gone. Exploring these days may mean expensive projects in thousands of feet of water in the Gulf of Mexico or costly ventures pulling petroleum from Canada's vast oil-sands deposits.
TransCanada Corp. and ConocoPhillips Co. just said they'd spend $7 billion to nearly double the amount of crude flowing through a pipeline from Canada's tar sands to the U.S. Gulf Coast.
And analysts point out that because there's no guarantee oil prices will stay in the stratosphere, oil companies should approach exploration projects with caution.
"There's only so much money you can throw at it without being ridiculous," said Joseph Stanislaw, a senior adviser to Deloitte LLP's Energy & Resources practice. "I think they're doing what they can."
It's also important to remember it can take several years before a company produces the first barrel of oil from a new field.
One example is an oil field in the Gulf of Mexico called Thunder Horse. Operated by BP and partly owned by Exxon Mobil, the platform only last month began producing oil and gas — nine years after the field's discovery.
At its peak, the multibillion-dollar project is designed to produce 250,000 barrels of oil and 200 million cubic feet of natural gas each day, which would make it the Gulf's largest producer.
"When you look at the spending that's going on, the companies are bringing on a lot of long-term discoveries," said John Parry, a senior analyst with John S. Herold Inc.
At ConocoPhillips, the capital spending budget for 2008, which includes exploration and production, is $15.3 billion, more than double the spending of five years ago.
"Could we spend $20 billion or $25 billion? Absolutely," spokesman Gary Russell said. "Could we do it effectively, in a way that provides ultimate value to our shareholders? Probably not."
Exxon Mobil, known for its disciplined approach to investing in energy projects, has drawn criticism for its reluctance to invest in alternative energy sources like wind and solar power.
The company expects to spent $25 billion to $30 billion on capital and exploration projects each of the next five years. Last year, it spent about $32 billion on share buybacks.
"You fund your investments that make sense," said spokesman Alan Jeffers. "You have criteria, and you have to meet that to be a good investment for the shareholder. And then if you've got cash that's left over, you're going to return it to the shareholder because it's theirs."
Exxon Mobil often touts its $100 million contribution to Stanford University's Global Climate and Energy Project. By contrast, BP says it plans to spend $8 billion over the next decade developing alternative energy using wind, hydrogen and other means.
Big Oil isn't alone buying back large amounts of stock, but the companies are certainly some of the biggest indulgers.
A boom in stock buybacks has been under way in corporate America since 2004. In the first quarter of this year, Exxon, ConocoPhillips and Chevron were all among the top 10 companies for share buybacks in the S&P 500.
In Washington, one Democratic proposal would impose a 25 percent tax on "unreasonable" profits of the top five oil companies, which together made more than $120 billion in 2007, and put the money toward a trust fund for investment in alternative energy sources. Republicans say it's a gimmick that won't help at the pump and will discourage domestic oil production.
But Sen. Charles Schumer, D-N.Y., said the fervor for stock buybacks is a clear sign Big Oil isn't interested in new production or alternative energy.
"When you hear that," he said, "it screams out for a windfall profits tax."
http://news.yahoo.com/s/ap/20080721/ap_on_bi_ge/oil_profits
Copyright © 2008 The Associated Press.
As giant oil companies like Exxon Mobil and ConocoPhillips get set to report what will probably be another round of eye-popping quarterly profits, just where is all that money going?
The companies insist they're trying to find new oil that might help bring down gas prices, but the money they spend on exploration is nothing compared with what they spend on stock buybacks and dividends.
It's good news for shareholders, including mutual funds and retirement plans for millions of Americans, but no help to drivers already making drastic cutbacks to offset the high cost of fuel.
The five biggest international oil companies plowed about 55 percent of the cash they made from their businesses into stock buybacks and dividends last year, up from 30 percent in 2000 and just 1 percent in 1993, according to Rice University's James A. Baker III Institute for Public Policy.
The percentage they spend to find new deposits of fossil fuels has remained flat for years, in the mid-single digits.
The issue has become more sensitive as lawmakers and Americans frustrated by high gas prices have balked at gaudy reports of oil industry profits. ConocoPhillips is scheduled to kick off the latest round of Big Oil earnings reports Wednesday.
Oil prices are set on the open market, not by the oil industry. But that hasn't stopped public protests, a series of congressional grillings for top oil executives, and a failed attempt by lawmakers to slap Big Oil with a windfall profits tax.
In the first three months of this year, Exxon Mobil Corp., the world's biggest publicly traded oil company, shelled out $8.8 billion on stock buybacks alone, compared with $5.5 billion on exploration and other capital projects.
ConocoPhillips has already told investors that its stock buybacks for April to June of this year will come to about $2.5 billion — nine times what it spent on exploration.
Stock buybacks are common throughout corporate America, not just for Big Oil. They shrink the amount of stock on the open market, essentially increasing its value and giving individual shareholders a bigger stake in the company.
But some critics say Big Oil focuses too much on boosting stock prices, in an industry that sometimes ties executive pay to stock price.
And in focusing on buybacks and dividends over exploring for new oil, some critics say, oil companies jeopardize its already dwindling share of world supply.
"If you're not spending your money finding and developing new oil, then there's no new oil," said Amy Myers Jaffe, an energy expert at Rice University who's studied spending patterns of the major oil companies.
Investor-owned companies like Exxon Mobil and Chevron hold less than 10 percent of global oil and gas reserves, way down from past decades. And finding new oil has become harder and more expensive.
State-run oil companies, like those in Saudi Arabia and Venezuela, control about 80 percent of oil reserves — and at today's prices, it's not surprising they're keeping a tight grip on what they have. Scarce equipment and hard-to-find labor also pose problems.
No one questions that Big Oil is rolling in cash. The cash the biggest oil companies bring in from running their businesses, or operating cash flow, is four times what it was in the early 1990s.
"It becomes a management decision," said Howard Silverblatt, a senior index analyst at Standard & Poor's. "It's not like they're going to the board and saying, 'Well, I can do one or the other or the other.' The balance sheets are flush with cash."
So what's Big Oil to do?
The companies say they are doing what they can to find more fossil fuels around the world, but the easy oil is gone. Exploring these days may mean expensive projects in thousands of feet of water in the Gulf of Mexico or costly ventures pulling petroleum from Canada's vast oil-sands deposits.
TransCanada Corp. and ConocoPhillips Co. just said they'd spend $7 billion to nearly double the amount of crude flowing through a pipeline from Canada's tar sands to the U.S. Gulf Coast.
And analysts point out that because there's no guarantee oil prices will stay in the stratosphere, oil companies should approach exploration projects with caution.
"There's only so much money you can throw at it without being ridiculous," said Joseph Stanislaw, a senior adviser to Deloitte LLP's Energy & Resources practice. "I think they're doing what they can."
It's also important to remember it can take several years before a company produces the first barrel of oil from a new field.
One example is an oil field in the Gulf of Mexico called Thunder Horse. Operated by BP and partly owned by Exxon Mobil, the platform only last month began producing oil and gas — nine years after the field's discovery.
At its peak, the multibillion-dollar project is designed to produce 250,000 barrels of oil and 200 million cubic feet of natural gas each day, which would make it the Gulf's largest producer.
"When you look at the spending that's going on, the companies are bringing on a lot of long-term discoveries," said John Parry, a senior analyst with John S. Herold Inc.
At ConocoPhillips, the capital spending budget for 2008, which includes exploration and production, is $15.3 billion, more than double the spending of five years ago.
"Could we spend $20 billion or $25 billion? Absolutely," spokesman Gary Russell said. "Could we do it effectively, in a way that provides ultimate value to our shareholders? Probably not."
Exxon Mobil, known for its disciplined approach to investing in energy projects, has drawn criticism for its reluctance to invest in alternative energy sources like wind and solar power.
The company expects to spent $25 billion to $30 billion on capital and exploration projects each of the next five years. Last year, it spent about $32 billion on share buybacks.
"You fund your investments that make sense," said spokesman Alan Jeffers. "You have criteria, and you have to meet that to be a good investment for the shareholder. And then if you've got cash that's left over, you're going to return it to the shareholder because it's theirs."
Exxon Mobil often touts its $100 million contribution to Stanford University's Global Climate and Energy Project. By contrast, BP says it plans to spend $8 billion over the next decade developing alternative energy using wind, hydrogen and other means.
Big Oil isn't alone buying back large amounts of stock, but the companies are certainly some of the biggest indulgers.
A boom in stock buybacks has been under way in corporate America since 2004. In the first quarter of this year, Exxon, ConocoPhillips and Chevron were all among the top 10 companies for share buybacks in the S&P 500.
In Washington, one Democratic proposal would impose a 25 percent tax on "unreasonable" profits of the top five oil companies, which together made more than $120 billion in 2007, and put the money toward a trust fund for investment in alternative energy sources. Republicans say it's a gimmick that won't help at the pump and will discourage domestic oil production.
But Sen. Charles Schumer, D-N.Y., said the fervor for stock buybacks is a clear sign Big Oil isn't interested in new production or alternative energy.
"When you hear that," he said, "it screams out for a windfall profits tax."
http://news.yahoo.com/s/ap/20080721/ap_on_bi_ge/oil_profits
Copyright © 2008 The Associated Press.
It’s the Economic Stupidity, Stupid
By FRANK RICH
THE best thing to happen to John McCain was for the three network anchors to leave him in the dust this week while they chase Barack Obama on his global Lollapalooza tour. Were voters forced to actually focus on Mr. McCain’s response to our spiraling economic crisis at home, the prospect of his ascension to the Oval Office could set off a panic that would make the IndyMac Bank bust in Pasadena look as merry as the Rose Bowl.
“In a time of war,” Mr. McCain said last week, “the commander in chief doesn’t get a learning curve.” Fair enough, but he imparted this wisdom in a speech that was almost a year behind Mr. Obama in recognizing Afghanistan as the central front in the war against Al Qaeda. Given that it took the deadliest Taliban suicide bombing in Kabul since 9/11 to get Mr. McCain’s attention, you have to wonder if even General Custer’s learning curve was faster than his.
Mr. McCain still doesn’t understand that we can’t send troops to Afghanistan unless they’re shifted from Iraq. But simple math, to put it charitably, has never been his forte. When it comes to the central front of American anxiety — the economy — his learning curve has flat-lined.
In 2000, he told an interviewer that he would make up for his lack of attention to “those issues.” As he entered the 2008 campaign, Mr. McCain was still saying the same, vowing to read “Greenspan’s book” as a tutorial. Last weekend, the resolutely analog candidate told The New York Times he is at last starting to learn how “to get online myself.” Perhaps he’ll retire his abacus by Election Day.
Mr. McCain’s fiscal ineptitude has received so little scrutiny in some press quarters that his chief economic adviser, the former Senator Phil Gramm of Texas, got a free pass until the moment he self-immolated on video by whining about “a nation of whiners.” The McCain-Gramm bond, dating back 15 years, is more scandalous than Mr. Obama’s connection with his pastor, the Rev. Jeremiah Wright. Mr. McCain has been so dependent on Mr. Gramm for economic policy that he sent him to newspaper editorial board meetings, no doubt to correct the candidate’s numbers much as Joe Lieberman cleans up after his confusions of Sunni and Shia.
Just two weeks before publicly sharing his thoughts about America’s “mental recession,” Mr. Gramm laid out equally incendiary views in a Wall Street Journal profile that portrayed him as “almost certainly” the McCain choice for Treasury secretary. Mr. Gramm said that the former chief executive of AT&T, Ed Whitacre, was “probably the most exploited worker in American history” since he received only a $158 million pay package rather than the “billions” he deserved for his success in growing Southwestern Bell.
But no one in the news media seemed to notice Mr. Gramm’s naked expression of the mind-set he’d bring to a McCain White House. And few journalists have vetted the presumptive Treasury secretary’s post-Senate history as an executive at UBS. The stock of that banking giant has lost 70 percent of its value in a year after its reckless adventures in the subprime lending market. It’s now fending off federal investigation for helping the megarich avoid taxes.
Mr. McCain made a big show of banishing Mr. Gramm after his whining “gaffe,” but it’s surely at most a temporary suspension. When the candidate said back in January that there’s nobody he knows who is stronger on economic issues than his old Senate pal, he was telling the truth. Left to his own devices — or those of his new No. 1 economic surrogate, Carly Fiorina — Mr. McCain is clueless. Even Arnold Schwarzenegger, a supporter, said that Mr. McCain’s latest panacea for high gas prices, offshore drilling, is snake oil — and then announced his availability to serve as energy czar in an Obama administration.
The term flip-flopping doesn’t do justice to Mr. McCain’s self-contradictory economic pronouncements because that implies there’s some rational, if hypocritical, logic at work. What he serves up instead is plain old incoherence, as if he were compulsively consulting one of those old Magic 8 Balls. In a single 24-hour period in April, Mr. McCain went from saying there’s been “great economic progress” during the Bush presidency to saying “Americans are not better off than they were eight years ago.” He reversed his initial condemnation of mortgage bailouts in just two weeks.
In February Mr. McCain said he would balance the federal budget by the end of his first term even while extending the gargantuan Bush tax cuts. In April he said he’d accomplish this by the end of his second term. In July he’s again saying he’ll do it in his first term. Why not just say he’ll do it on Inauguration Day? It really doesn’t matter since he’s never supplied real numbers that would give this promise even a patina of credibility.
Mr. McCain’s plan for Social Security reform is “along the lines that President Bush proposed.” Or so he said in March. He came out against such “privatization” in June (though his policy descriptions still support it). Last week he indicated he isn’t completely clear on what Social Security does. He called the program’s premise — young taxpayers foot the bill for their elders (including him) — an “absolute disgrace.”
Given that Mr. McCain’s sole private-sector job was a fleeting stint in public relations at his father-in-law’s beer distributorship, he comes by his economic ignorance honestly. But there’s no A team aboard the Straight Talk Express to fill him in. His campaign economist, the former Bush adviser Douglas Holtz-Eakin, could be found in the June 5 issue of American Banker suggesting even at that late date that we still don’t know “the depth of the housing crisis” and proposing that “monitoring is the right thing to do in these circumstances.”
Ms. Fiorina, the ubiquitous new public face of McCain economic policy, adds nothing to the mix beyond her incessant display of corporate jargon, from “trend lines” to “start-ups.” Before she was fired at Hewlett-Packard, its stock had declined 50 percent during her five-plus years in charge. She missed earning projections — by 23 percent in one quarter — much as she now misrepresents both the Obama and McCain records. This month she said Mr. McCain wanted to require insurance plans to cover birth control medications along with Viagra, when in fact he had voted against it.
Ms. Fiorina received a $42 million payout (half in cash) from H.P., according to a shareholders’ subsequent lawsuit. With this inspiring résumé, she now aspires to be Mr. McCain’s running mate. So does the irrepressible Mitt Romney, who actually was a business whiz before serving as Massachusetts’s governor. Beltway wisdom has it that the addition of such a corporate star will remedy Mr. McCain’s fiscal flatulence.
But Mr. Romney, while more plausible than Ms. Fiorina, is hardly what America wants at this desperate time. His leveraged buyout dealings as co-founder of Bain Capital induced plant closings, mass layoffs and outsourcing. If Mr. McCain truly intends to “put our country’s interests” above politics and reach across the aisle to move the nation forward, as he constantly tells us, why not go for a vice president who’s the very best fit for the huge challenges at hand?
The obvious choice would be Michael Bloomberg — who, as a former Republican turned independent, would necessitate that Mr. McCain reach only halfway across the aisle, and to someone who is his friend rather than a vanquished rival he is learning to tolerate.
Romney vs. Bloomberg is not a close contest. Bloomberg L.P. has roughly three times the revenues and employees of Bain & Company, where Mr. Romney ultimately served as chief executive. Mr. Romney rescued the Salt Lake City Olympics while running it in 2002, but Mayor Bloomberg revitalized New York, the nation’s largest metropolis, after the most devastating attack in our history. The city he manages has more than twice the budget of Mr. Romney’s state.
Yes, Mr. Bloomberg is a closet Democrat and an alpha dog who doesn’t want to be a second banana. And his views on gay civil rights and abortion would roil the G.O.P. base. But Mr. Romney shared some of those same views before he flip-flopped, and besides, these are not ordinary times. Millions of Americans are losing their homes and jobs. Whole industries are going belly up. The national crisis at hand, not yesterday’s culture wars, should drive the vice-presidential pick.
Mr. McCain reminds us every day how principled he is. That presumably means he’d risk a revolt by his party’s dwindling agents of intolerance and do everything in his power to persuade Mr. Bloomberg to join his ticket in the spirit of patriotic sacrifice. The politics could be advantageous too. A Bloomberg surprise could impress independents and keep the television audience tuned in to a G.O.P. convention that will unfold in the shadow of Mr. Obama’s address to 75,000 screaming fans in Denver.
But this is fantasy political baseball, not reality. Mr. McCain, sad to say, hung up his old maverick’s spurs the day he embraced the Bush tax cuts he had once opposed as “too tilted to the wealthy.” And Mr. Bloomberg? It’s hard to picture a titan who built his empire on computer terminals investing any capital, political or otherwise, in a chief executive who is still learning how to do, as Mr. McCain puts it, “a Google.”
Copyright 2008 The New York Times Company
http://www.nytimes.com/2008/07/20/opinion/20rich.html?em&ex=1216785600&en=bf3ebbdcbb67e7fc&ei=5087%0A&exprod=myyahoo
THE best thing to happen to John McCain was for the three network anchors to leave him in the dust this week while they chase Barack Obama on his global Lollapalooza tour. Were voters forced to actually focus on Mr. McCain’s response to our spiraling economic crisis at home, the prospect of his ascension to the Oval Office could set off a panic that would make the IndyMac Bank bust in Pasadena look as merry as the Rose Bowl.
“In a time of war,” Mr. McCain said last week, “the commander in chief doesn’t get a learning curve.” Fair enough, but he imparted this wisdom in a speech that was almost a year behind Mr. Obama in recognizing Afghanistan as the central front in the war against Al Qaeda. Given that it took the deadliest Taliban suicide bombing in Kabul since 9/11 to get Mr. McCain’s attention, you have to wonder if even General Custer’s learning curve was faster than his.
Mr. McCain still doesn’t understand that we can’t send troops to Afghanistan unless they’re shifted from Iraq. But simple math, to put it charitably, has never been his forte. When it comes to the central front of American anxiety — the economy — his learning curve has flat-lined.
In 2000, he told an interviewer that he would make up for his lack of attention to “those issues.” As he entered the 2008 campaign, Mr. McCain was still saying the same, vowing to read “Greenspan’s book” as a tutorial. Last weekend, the resolutely analog candidate told The New York Times he is at last starting to learn how “to get online myself.” Perhaps he’ll retire his abacus by Election Day.
Mr. McCain’s fiscal ineptitude has received so little scrutiny in some press quarters that his chief economic adviser, the former Senator Phil Gramm of Texas, got a free pass until the moment he self-immolated on video by whining about “a nation of whiners.” The McCain-Gramm bond, dating back 15 years, is more scandalous than Mr. Obama’s connection with his pastor, the Rev. Jeremiah Wright. Mr. McCain has been so dependent on Mr. Gramm for economic policy that he sent him to newspaper editorial board meetings, no doubt to correct the candidate’s numbers much as Joe Lieberman cleans up after his confusions of Sunni and Shia.
Just two weeks before publicly sharing his thoughts about America’s “mental recession,” Mr. Gramm laid out equally incendiary views in a Wall Street Journal profile that portrayed him as “almost certainly” the McCain choice for Treasury secretary. Mr. Gramm said that the former chief executive of AT&T, Ed Whitacre, was “probably the most exploited worker in American history” since he received only a $158 million pay package rather than the “billions” he deserved for his success in growing Southwestern Bell.
But no one in the news media seemed to notice Mr. Gramm’s naked expression of the mind-set he’d bring to a McCain White House. And few journalists have vetted the presumptive Treasury secretary’s post-Senate history as an executive at UBS. The stock of that banking giant has lost 70 percent of its value in a year after its reckless adventures in the subprime lending market. It’s now fending off federal investigation for helping the megarich avoid taxes.
Mr. McCain made a big show of banishing Mr. Gramm after his whining “gaffe,” but it’s surely at most a temporary suspension. When the candidate said back in January that there’s nobody he knows who is stronger on economic issues than his old Senate pal, he was telling the truth. Left to his own devices — or those of his new No. 1 economic surrogate, Carly Fiorina — Mr. McCain is clueless. Even Arnold Schwarzenegger, a supporter, said that Mr. McCain’s latest panacea for high gas prices, offshore drilling, is snake oil — and then announced his availability to serve as energy czar in an Obama administration.
The term flip-flopping doesn’t do justice to Mr. McCain’s self-contradictory economic pronouncements because that implies there’s some rational, if hypocritical, logic at work. What he serves up instead is plain old incoherence, as if he were compulsively consulting one of those old Magic 8 Balls. In a single 24-hour period in April, Mr. McCain went from saying there’s been “great economic progress” during the Bush presidency to saying “Americans are not better off than they were eight years ago.” He reversed his initial condemnation of mortgage bailouts in just two weeks.
In February Mr. McCain said he would balance the federal budget by the end of his first term even while extending the gargantuan Bush tax cuts. In April he said he’d accomplish this by the end of his second term. In July he’s again saying he’ll do it in his first term. Why not just say he’ll do it on Inauguration Day? It really doesn’t matter since he’s never supplied real numbers that would give this promise even a patina of credibility.
Mr. McCain’s plan for Social Security reform is “along the lines that President Bush proposed.” Or so he said in March. He came out against such “privatization” in June (though his policy descriptions still support it). Last week he indicated he isn’t completely clear on what Social Security does. He called the program’s premise — young taxpayers foot the bill for their elders (including him) — an “absolute disgrace.”
Given that Mr. McCain’s sole private-sector job was a fleeting stint in public relations at his father-in-law’s beer distributorship, he comes by his economic ignorance honestly. But there’s no A team aboard the Straight Talk Express to fill him in. His campaign economist, the former Bush adviser Douglas Holtz-Eakin, could be found in the June 5 issue of American Banker suggesting even at that late date that we still don’t know “the depth of the housing crisis” and proposing that “monitoring is the right thing to do in these circumstances.”
Ms. Fiorina, the ubiquitous new public face of McCain economic policy, adds nothing to the mix beyond her incessant display of corporate jargon, from “trend lines” to “start-ups.” Before she was fired at Hewlett-Packard, its stock had declined 50 percent during her five-plus years in charge. She missed earning projections — by 23 percent in one quarter — much as she now misrepresents both the Obama and McCain records. This month she said Mr. McCain wanted to require insurance plans to cover birth control medications along with Viagra, when in fact he had voted against it.
Ms. Fiorina received a $42 million payout (half in cash) from H.P., according to a shareholders’ subsequent lawsuit. With this inspiring résumé, she now aspires to be Mr. McCain’s running mate. So does the irrepressible Mitt Romney, who actually was a business whiz before serving as Massachusetts’s governor. Beltway wisdom has it that the addition of such a corporate star will remedy Mr. McCain’s fiscal flatulence.
But Mr. Romney, while more plausible than Ms. Fiorina, is hardly what America wants at this desperate time. His leveraged buyout dealings as co-founder of Bain Capital induced plant closings, mass layoffs and outsourcing. If Mr. McCain truly intends to “put our country’s interests” above politics and reach across the aisle to move the nation forward, as he constantly tells us, why not go for a vice president who’s the very best fit for the huge challenges at hand?
The obvious choice would be Michael Bloomberg — who, as a former Republican turned independent, would necessitate that Mr. McCain reach only halfway across the aisle, and to someone who is his friend rather than a vanquished rival he is learning to tolerate.
Romney vs. Bloomberg is not a close contest. Bloomberg L.P. has roughly three times the revenues and employees of Bain & Company, where Mr. Romney ultimately served as chief executive. Mr. Romney rescued the Salt Lake City Olympics while running it in 2002, but Mayor Bloomberg revitalized New York, the nation’s largest metropolis, after the most devastating attack in our history. The city he manages has more than twice the budget of Mr. Romney’s state.
Yes, Mr. Bloomberg is a closet Democrat and an alpha dog who doesn’t want to be a second banana. And his views on gay civil rights and abortion would roil the G.O.P. base. But Mr. Romney shared some of those same views before he flip-flopped, and besides, these are not ordinary times. Millions of Americans are losing their homes and jobs. Whole industries are going belly up. The national crisis at hand, not yesterday’s culture wars, should drive the vice-presidential pick.
Mr. McCain reminds us every day how principled he is. That presumably means he’d risk a revolt by his party’s dwindling agents of intolerance and do everything in his power to persuade Mr. Bloomberg to join his ticket in the spirit of patriotic sacrifice. The politics could be advantageous too. A Bloomberg surprise could impress independents and keep the television audience tuned in to a G.O.P. convention that will unfold in the shadow of Mr. Obama’s address to 75,000 screaming fans in Denver.
But this is fantasy political baseball, not reality. Mr. McCain, sad to say, hung up his old maverick’s spurs the day he embraced the Bush tax cuts he had once opposed as “too tilted to the wealthy.” And Mr. Bloomberg? It’s hard to picture a titan who built his empire on computer terminals investing any capital, political or otherwise, in a chief executive who is still learning how to do, as Mr. McCain puts it, “a Google.”
Copyright 2008 The New York Times Company
http://www.nytimes.com/2008/07/20/opinion/20rich.html?em&ex=1216785600&en=bf3ebbdcbb67e7fc&ei=5087%0A&exprod=myyahoo
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