USA > History > 2010 > Politics > Congress > Senate (I)

As Seats in Congress Shift,

Redistricting Looms Large

December 24, 2010
The New York Times
By MICHAEL COOPER
and SABRINA TAVERNISE

The political jockeying over how to draw new Congressional districts began in earnest this week after new census data showed almost a dozen seats shifting to the South and West, leaving Republicans poised to build on their gains from November’s midterm elections and forcing several northern Democratic incumbents to begin plotting to save their jobs.

The biggest immediate danger to incumbent Democrats will be in the Rust Belt, where Michigan, Pennsylvania and Ohio are all losing Congressional seats and Republicans now control the state governments, giving them the power to draw the new political maps. Politicians liken this process to a game of musical chairs, wondering who will be left without a seat. With Ohio losing two seats, political analysts expect the Republicans to eliminate a Democratic seat from the Cleveland area — possibly the one now held by Representative Dennis J. Kucinich.

“My Aunt Betty called me after the news report, and she says, ‘Dennis, what are we going to do — are they putting you out of Congress?’ ” Mr. Kucinich said in an interview, explaining that he would try not to worry about it right now, since it is beyond his control. But he added that “the fundamental rule of politics is you have to have a district to run.”

Republicans, meanwhile, are preparing for the more enviable task of drawing up new Congressional districts in states where they are strong. Their victories in statehouse elections gave them control of redistricting in five of the eight states that are gaining seats, including the two biggest winners, Texas, which is adding four, and Florida, which is adding two.

That has made Don Gaetz, the chairman of the Florida State Senate’s Reapportionment Committee, a popular man. There was the friendly hug he got from a member of Congress, who offered that his district’s current lines were just fine, and the ambitious fellow lawmaker who sidled up to him at a meeting, saying that he had a great idea for a possible district.

“I’m just a lowly state senator from the panhandle of Florida, but I have all sorts of new friends,” Mr. Gaetz marveled. “Members of Congress who didn’t know I existed, and people who would like to be in Congress who I didn’t know existed.”

The next step comes in February, when the Census Bureau will begin releasing detailed local demographic data, allowing the actual redrawing of districts to begin. In states losing Democratic seats, this will be the moment party elders start asking veteran lawmakers if they might like to retire, and younger lawmakers if they might want to seek other offices or accept comfortable positions somewhere else. This will also be the moment that tenacious Democrats quietly commission polls to see how they might fare against their ostensible Democratic allies.

Some of this is already beginning to play out in Massachusetts, where the all-Democratic House delegation will shrink to 9 seats from 10. Even before the demographic data, which will give officials a better idea of which districts might be merged, is in, there is talk of trying to get a member to run for the seat of Senator Scott P. Brown, a Republican.

Republicans also stand to gain ground in states that are not adding or losing seats, thanks to their victories in state elections this year. When Republicans won control of both houses of the North Carolina legislature in November for the first time since Reconstruction, they also gained control of the redistricting process. By state law they will draw the maps, and the Democratic governor, Beverly Perdue, will have no veto over them. Some Republican lawmakers there believe they can draw lines that would allow them to pick up at least two seats.

The most likely immediate impact of the coming redistricting, political analysts said, is that Republicans will be able to use their new power in the nation’s statehouses and governor’s mansions to draw new districts that will help the party strengthen its hold on the 63 seats in Congress that it picked up in November. When the new data comes in, both parties will use sophisticated computer software to begin carving up districts through politically creative cartography. But Republicans will have the upper hand, giving them the opportunity to add Republican voters to many districts where the party’s candidates won by narrow margins this year, making it easier for them to be re-elected.

“The Republicans are going to have their hand on the computer mouse, and when you have your hand on the computer mouse, you can change a district from a D to an R,” said Kimball W. Brace, president of Election Data Services, who has worked on redistricting for state legislatures and commissions.

Redistricting, it is often said, turns the idea of democracy on its head by allowing leaders to choose their voters, instead of the other way around. The new lines are drawn once a decade, after every census, to make sure that all Congressional districts have roughly the same number of people, to preserve the one-person, one-vote standard. But as a practical matter, both Democrats and Republicans often use it as an excuse to gerrymander districts for their own political advantage. This time, Republicans are better positioned to do it.

Tim Storey, an expert on redistricting at the National Conference of State Legislatures, said that Republicans were in their strongest position to draw lines in decades. Of the districts drawn by state legislatures, he said, Republicans have the power to unilaterally draw 196, four times as many as the Democrats. A decade ago, he said, Democrats had the advantage.

Texas will test the hopes of both parties. Democrats said that since much of the population growth was among minorities that traditionally support Democrats, they should benefit when Texas’s four new Congressional districts are drawn. Republicans, who control the process, said that much of the growth took place in Republican areas, so they will be able to draw more Republican seats. Tension lingers from the state’s redistricting in 2003, when Representative Tom DeLay, then the House majority leader, helped Republicans gain a large advantage in Texas’ House delegation.

Martin Frost, a former Democratic congressman whose district in the Fort Worth area was split during that redistricting, said he thought the Democrats would have a good chance of getting two of the four new seats, especially given the federal Voting Rights Act, which is supposed to ensure that the new lines do not dilute the voting power of minorities. And he said that the first order of business for Republicans would likely be to consolidate the gains they have made in recent elections by strengthening the districts of the party’s incumbents.

But Representative Joe L. Barton, a senior Republican from Texas who has been involved in redistricting for years, said that most Republican officeholders in Texas needed little help. He speculated that three of the four new seats would go to Republicans. “We, the Republicans, don’t feel we have to do anything radically partisan, primarily because the current map basically reflects the demographics of the state,” he said. “But if we’re going to have a fight, I’m glad I’ve got an R by my name.”

Of the 10 states losing seats, Democrats will draw the maps in only two: Massachusetts, where a Democrat will of necessity lose a seat, and Illinois, where they will try to eliminate a Republican seat. New York is losing two Congressional seats, and since the Democrats just lost control of the State Senate, they will have to come up with a compromise plan. In the past, that has meant eliminating one seat in each party; now, some lawmakers are pushing to create an independent redistricting commission.

Both parties also have experienced lawyers working on their redistricting efforts, since the courts will inevitably play a big role in the end. The Voting Rights Act limits how districts can be drawn in many states. Republicans have turned it to their advantage in the past, by packing so many Democratic voters into some minority districts that their power was diluted in neighboring districts. And where new lines are drawn, court challenges often follow.

Political analysts said that Republicans were poised to add anywhere from a net of 3 to a net of 15 Republican-leaning seats. But they note that the impact can be short-lived.

In times of upheaval, said Michael Barone, who covers redistricting exhaustively as a co-author of “The Almanac of American Politics,” it can be hard to predict how voters in some districts will behave. “When opinion changes,” he said, “it turns out some of those 53-percent districts aren’t yours anymore.”

As Seats in Congress Shift, Redistricting Looms Large, NYT, 24.12.2010, http://www.nytimes.com/2010/12/25/us/politics/25redistrict.html

The Senate Surmounts Politics

December 23, 2010
The New York Times

Wednesday was not a good day for Senator Mitch McConnell’s single-minded project to make Barack Obama a one-term president. Over the minority leader’s objections, 13 Republicans joined every Democratic senator to ratify the New Start nuclear arms treaty with Russia, reducing the size of the countries’ nuclear stockpiles and making the world a safer place. The 71-to-26 vote was the capstone to what now shapes up to be a remarkably successful legislative agenda for President Obama’s first two years.

Earlier in the day, the president signed a bill allowing the repeal of the military’s ban on open service by gay, lesbian and bisexual soldiers — a bill passed with the assistance of 23 Congressional Republicans, again over the objections of Mr. McConnell.

And the Senate unanimously approved a bill to pay for the medical care of workers who cleaned up ground zero after the attacks on Sept. 11, 2001, coming to its senses after Mr. McConnell and other Republicans blocked the bill 13 days earlier, causing a national uproar.

(Unfortunately, the bill was scaled back substantially by the demands of a few holdout senators who thought it was too generous, though it added nothing to the deficit. The bill was later approved by the House.)

These deeply gratifying developments hardly spell the end of partisanship, which is likely to return with a vengeance in the next Congress. But they do suggest that many Republicans are willing to reject Mr. McConnell’s particularly noxious version, under which any bill, no matter how beneficial for the country, can be blown up if it could be seen as a victory for President Obama. On Tuesday, to pick one shabby example, he made a thoroughly underhanded attempt to sabotage the repeal of “don’t ask, don’t tell” when he thought no one was looking.

In a more rational world, of course, the ratification of New Start could have been done by unanimous consent. Though the treaty is vital, it makes relatively modest reductions in the nuclear stockpile and continues the inspection regime employed by Democratic and Republican presidents going back to Ronald Reagan. If the same document had been signed by a Republican president, it would have been approved months ago.

In the obstructionist climate of the 111th Congress, the ratification could be done only in the last hours. Mr. McConnell and his allies, notably Jon Kyl of Arizona, put up a series of specious arguments to delay it, mostly centering around a fiction: that the treaty would prevent the United States from erecting a missile defense system. Their efforts backfired, making Mr. Obama’s victory ring more loudly that it should have.

Thirteen Republicans wouldn’t buy that nonsense, and others saw the wisdom in letting all Americans serve their country honestly and openly. Those defeats and others infuriated the party’s dead-enders. “Harry Reid has eaten our lunch,” complained Senator Lindsey Graham of South Carolina, who voted against both measures, referring to the majority leader.

There were disappointments in the lame-duck session, and Mr. Obama said at a news conference that the biggest was probably the Republicans’ killing of the Dream Act, which would have given the children of illegal immigrants a chance at being legal if they serve in the military or attend college. The failure of the Senate to pass a spending bill for the current fiscal year means that the budget fights in the next term will be deeper and longer, and potentially more destructive to the economy.

Mr. McConnell won those fights. But to be repudiated on the treaty and on “don’t ask” by so many members of his own caucus clearly stung, and turned him into a very sore loser. On Tuesday, Mr. McConnell tried to sneak an amendment into the defense authorization bill that would require the approval of each military service chief before “don’t ask, don’t tell” could be repealed. Given the continuing reservations of the Marine Corps, that could have stalled progress indefinitely. But Joseph Lieberman objected to the amendment, and it was defused.

Next term, there will be many more Republicans in Congress spoiling for a fight, and the White House will have to be far more pugnacious and adept to preserve its priorities and avoid trickery and extortion. But this week’s examples of Democrats and Republicans coming together for a common purpose will not soon be forgotten. As the president said on Wednesday, if that continues, “we are not doomed to endless gridlock.”

    The Senate Surmounts Politics, NYT, 23.12.2010, http://www.nytimes.com/2010/12/23/opinion/23thu1.html

After Bruising Session, Congress Faces New Battles

December 22, 2010
The New York Times
By CARL HULSE and DAVID M. HERSZENHORN

WASHINGTON — The 111th Congress ended as it began two years ago, with a burst of legislative productivity, as Democrats forced through a historic social change by lifting the ban on gay men and lesbians serving openly in the military and a major foreign policy achievement in approving the New Start arms control treaty with Russia.

Along the way, they enacted a landmark health care law and a sweeping overhaul of Wall Street rules, bookended by a $787 billion economic stimulus package at the start of 2009 and an $858 billion tax-cut package at the end of 2010.

It was a dizzying, maddening, agonizing, exhilarating, arduous, bruising and, for scores of Democrats, ultimately career-ending journey from the stimulus to Start — and the party paid a devastating price for its accomplishments, losing control of the House and six Senate seats.

It is a period that will no doubt be pored over by historians for years.

But it is already clear that much of the next two years will be spent fighting over what was done in the past two.

“They have been enormously successful in one sense in passing their legislative agenda,” Senator John Cornyn, Republican of Texas, said of Democrats. “The problem is the country just doesn’t like it very much.”

The Democrats’ biggest victories were secured on party-line or near-party-line votes, and some lawmakers predicted partisan animosity would spill over into the 112th Congress, raising a question of whether it would be characterized by deal-making or deadlock.

As many Democrats cast their last votes on Wednesday, top lawmakers said that most of them considered their defeat well worth the price considering the legislative victories they wrote into the history books, accomplishments that have prompted comparisons to the progressive glory days of Franklin D. Roosevelt’s New Deal and Lyndon B. Johnson’s Great Society.

“Almost every member who lost, without fail, has said, ‘I am proud of the work,’ ” said Representative Steny H. Hoyer of Maryland, the majority leader. “They say, ‘If it cost me my election, I can point to the fact that I was a member of the productive Congress that did health care, did credit cards, did student loan reform, just go through the entire list.’ ”

Democrats also disputed that the election results were a repudiation of their agenda and pointed instead at the hard times many Americans are suffering through. “The economy has been awful all over the country,” said Senator Harry Reid of Nevada, the majority leader. “The economy is the reason you had the uproar from the Tea Party. That’s all it was.”

At a news conference on Wednesday, just as the House and Senate were wrapping up, President Obama — the catalyst for much of what happened, substantively and politically — called the 111th Congress the most productive in generations and said the postelection legislative blitz proved that the two parties could work together.

“If there’s any lesson to draw from these past few weeks, it’s that we are not doomed to endless gridlock,” Mr. Obama said. “We’ve shown in the wake of the November elections that we have the capacity not only to make progress, but to make progress together.”

The ability of Congressional Democrats, in concert with Mr. Obama, to push through a string of major initiatives in some sense conflicted with the notion that Congress is broken and dysfunctional.

But the advent of divided government next month will test the ability of Congress anew. Even Democrats happy with the outcome of the past two years say the process was often ugly and allowed Republicans to cast much of the legislation as flawed.

Measures that have almost become afterthoughts — pay equity for women and the new power of the Food and Drug Administration to regulate tobacco, for instance — could have been signature achievements in other Congresses. And the Senate confirmed two of Mr. Obama’s nominees to the Supreme Court — both women, one Hispanic.

“You’re president of the United States and you get two women on the Supreme Court? Bang, bang,” said Senator Maria Cantwell, Democrat of Washington. “That’s historic.”

But the fights over the stimulus, health care, financial regulation and, most recently, tax policy, dominated the landscape and obscured how Congress failed in other respects.

Because of the time those fights consumed — and the eagerness of lawmakers to avoid tough votes in a charged partisan atmosphere — the Congressional spending and budget process completely collapsed this year for the first time in a quarter-century and Congress did not fulfill its most basic responsibility, allocating money to federal agencies.

That lapse sets up a spending fight early in the next Congress over financing the government for the remainder of the fiscal year while House Republicans try to carry out their plan to cut $100 billion in domestic spending.

Returning for the lame-duck, Democrats put an exclamation point on the session, squeezing through a raft of priorities despite concerted Republican resistance, particularly in the Senate where Democrats were forced to thread the procedural needle time after time.

Republican leaders discovered that the power of the minority only extended so far if Democrats were tenacious and were able — as with the repeal of “don’t ask, don’t tell” and the Start treaty — to lure decisive numbers of Republicans away from the leadership’s opposition.

Many Republicans complained bitterly in recent days that Democrats were ignoring their rejection in the election and abusing their last weeks of Congressional control to jam through a final flurry of expensive, intrusive programs. And they said efforts by Democrats to score political points by forcing a vote on an immigration measure they knew would fail had angered Republicans and diminished their interest in a major immigration overhaul in the next Congress.

“I think it has hurt,” said Senator Lindsey Graham, Republican of South Carolina.

Republicans did score some some victories of their own in the final days. The compromise that extended Bush-era tax cuts even on the highest incomes and provided a generous exemption for the estates of affluent families was embraced by wide Republican majorities. And they managed to derail a giant $1.2 trillion spending plan that was stuffed with tens of millions of dollars of pet spending projects, delaying crucial spending decisions until early next year when they will run the House and have more clout in the Senate.

At the same time, House and Senate Republicans have pledged to work to repeal the health care law and deny financing for other newly passed initiatives, like the tighter financial regulation.

But Republicans also say the new dynamic on Capitol Hill will put them in a much stronger position to take the offensive and challenge Mr. Obama and Senate Democrats by initiating conservative bills in the House and pushing for Senate floor votes. Even if they fail on some bills, Republicans say, they will make the case to expand their control from the House to the Senate and the White House in 2012.

“The big part is showing America what we stand for,” said Senator Jim DeMint, the conservative South Carolina Republican.

Even as he celebrated the successes, Mr. Obama acknowledged the obstacles ahead. “I’m not naïve,” he said. “I know there will be tough fights.”

    After Bruising Session, Congress Faces New Battles, NYT, 22.12.2010, http://www.nytimes.com/2010/12/23/us/politics/23cong.html

In Late Flurry, Senator Gains Her Foothold

December 22, 2010
The New York Times
By DAVID M. HALBFINGER

The spotlight was shining on her at last, and Kirsten E. Gillibrand, the oft-overshadowed junior senator from New York, did not hold back.

Pounding the lectern on the Senate floor, raising her voice almost to a shout, Ms. Gillibrand hectored, reasoned with and sought to shame her colleagues into ending the 17-year-old ban on gays’ serving openly in the military.

“If you care about national security, if you care about our military readiness,” she demanded, “then you will repeal this corrosive policy.”

The repeal passed two hours later on Saturday, but Ms. Gillibrand, a Democrat, had little time to savor the moment.

The next morning, she was off to Senate strategy sessions, a news conference and Fox News to push for the passage of another major initiative: a bill to provide medical care for rescue workers sickened by inhaling fumes, dust and smoke at the site of the World Trade Center attack.

When that measure, too, won approval on Wednesday, it not only marked a victory of legislative savvy and persistence. It also signaled the serious emergence of Ms. Gillibrand, the 43-year-old successor to Hillary Rodham Clinton.

Once derided as an accidental senator, lampooned for her verbosity and threatened with many challengers who openly doubted her abilities, a succinct, passionate and effective Senator Gillibrand has made her presence felt in the final days of this Congress.

Her efforts have won grudging admiration from critics, adulation from national liberals and gay rights groups, and accolades from New York politicians across the political spectrum, including Mayor Michael R. Bloomberg, who once shopped for potential candidates to oust her.

Even her relentlessness, which once drew mockery, is now earning the highest compliment of all: professional jealousy from her more senior colleagues.

“To have gone from a virtual unknown to being a major player on some landmark legislation in such a short period of time just shows what Kirsten is capable of,” said Ilyse Hogue, director of political advocacy for MoveOn.org.

Ms. Gillibrand faced extreme skepticism when, as an obscure House member, she was appointed in January 2009 by Gov. David A. Paterson.

Shortly after being sworn in as senator, she began delving into the “don’t ask, don’t tell” policy, in what amounted to a perfect marriage of an issue without a champion and a would-be champion in search of a defining issue.

She had just met with a National Guardsman and West Point graduate, Lt. Dan Choi — a linguist with a specialty in Arabic who was facing discharge because of his homosexuality. At the time, the effort to repeal was languishing: its leader in the Senate, Edward M. Kennedy, was dying of cancer.

Ms. Gillibrand hit on a new approach to get the issue moving again: proposing an 18-month moratorium on the discharge of gay men and lesbians from the military. She polled Senate Democrats — the first time anyone had done so on “don’t ask,” she said — and was 10 votes shy of the 60 needed, so she did not introduce the bill.

Some of those opposed told her they wanted to hear from the Pentagon on the issue. Ms. Gillibrand, who was not even a member of the Armed Services Committee, asked Senator Carl Levin, the Michigan Democrat who is its chairman, to hold the first hearings on the policy. He agreed.

“She’s been a bird dog on this,” Mr. Levin said. “She is not shy about her views, and pressing her views and talking to anybody and everybody, on the floor and not on the floor, and in office visits, and in the hallways.”

Ms. Gillibrand, who had represented a conservative upstate district in Congress, was not well known to liberals or gay rights groups at the time. But in an interview, she said she had realized from an early age that discrimination against gays was wrong.

Her mother — a black belt in karate who the senator said “did things differently her whole life” — worked in the arts and surrounded herself with gay friends. During the height of the AIDS crisis, Ms. Gillibrand’s sister, a playwright and actress, volunteered to help children with AIDS.

And when Ms. Gillibrand was a young associate, working long nights at the law firm Davis Polk & Wardwell, she recalled, “the straight men found time to date and get married and have kids and went home at six every night, and the only ones left were the women and gay men.”

So she wound up vacationing with gay colleagues on Fire Island and in the Hamptons, and forging lifelong friendships. “A lot of them are now having children,” she said. “And it never occurred to me that they should not have every benefit that I have.”

Richard Socarides, a former aide to President Bill Clinton and founder of Equality Matters, a gay advocacy organization, said he was initially wary of Ms. Gillibrand, thinking she was courting gays for purely political reasons as she sought to broaden her appeal statewide.

But she won him over with her fervor, strategic thinking, fearlessness and litigator’s tenacity. “If she has decided she’s going to get something done,” he said, “don’t get in her way, because you will get run over.”

Last February, the hearings she had pushed Mr. Levin to hold made headlines when Adm. Mike Mullen, the chairman of the Joint Chiefs of Staff, called for an end to the “don’t ask, don’t tell” policy, saying it was undermining the military’s integrity by forcing service members to “lie about who they are in order to defend their fellow citizens.”

“My jaw dropped,” Ms. Gillibrand recalled. “I couldn’t believe how powerful that testimony was, and I knew, at that moment, we were going to repeal the policy.”

Ms. Gillibrand also set up a Web site featuring videos of gay and lesbian veterans, some of whom had been discharged, telling their personal stories.

She followed a similar playbook in pressing the 9/11 health care legislation, for which Mrs. Clinton had long struggled to attract Republican support.

In summer 2009, Ms. Gillibrand introduced the bill in the Senate. She helped lobby House members — at one point prompting Representative Carolyn B. Maloney, who briefly considered a challenge to Ms. Gillibrand, to lash out at her for being late to the issue. She persuaded Senator Tom Harkin, Democrat of Iowa and chairman of the health committee, to call the only Senate hearing on the bill.

And she buttonholed fellow senators, especially Republicans. “On the 9/11 bill, one of my colleagues said to me, ‘Can you please talk to your friend from New York, Kirsten, and tell her to stop asking me?’ ” Senator Joseph I. Lieberman, independent of Connecticut, said.

Ms. Gillibrand has scored smaller victories during the lame-duck session, including approval of new food safety rules and a ban on drop-side cribs, after 32 infant deaths.

On Wednesday afternoon, Ms. Gillibrand reflected on how far she had come since those first ugly days after her appointment. Back then, she recalled, she had to reassure her own relatives that she had made the right decision.

“We had a lot of bad press early on,” she said, “and I said to my husband: ‘Don’t worry, honey — it’ll work out.’”

And with that, she hung up and walked back onto the Senate floor, pinned a 9/11 ribbon on Vice President Joseph R. Biden Jr., who was presiding, and waited for the vote on the bill. It passed, unanimously, on a voice vote.

    In Late Flurry, Senator Gains Her Foothold, NYT, 22.12.2010, http://www.nytimes.com/2010/12/23/nyregion/23gillibrand.html

Senate Passes 9/11 Health Bill as Republicans Back Down

December 22, 2010
The New York Times
By RAYMOND HERNANDEZ

WASHINGTON — After years of fierce lobbying and debate, Congress approved a bill on Wednesday to cover the cost of medical care for rescue workers and others who became sick from toxic fumes, dust and smoke after the 2001 attack on the World Trade Center.

The $4.3 billion bill cleared its biggest hurdle early in the afternoon when the Senate unexpectedly approved it just 12 days after Republican senators had blocked a more expensive House version from coming to the floor of the Senate for a vote.

In recent days, Republican senators had been under fire for their opposition to the legislation.

The House quickly passed the Senate bill a few hours later, as was widely expected. The vote was 206 to 60, breaking down largely along party lines. The White House said President Obama would sign the bill into law.

After the Senate vote, a celebration broke out in a room in the Capitol that was packed with emergency workers and 9/11 families, as well as the two senators from New York, Charles E. Schumer and Kirsten E. Gillibrand, and the two senators from New Jersey, Frank R. Lautenberg and Robert Menendez. The senators, all Democrats, were greeted with a huge ovation and repeated chants of “U.S.A.! U.S.A.!”

Mr. Schumer, the state’s senior senator, allowed Ms. Gillibrand to address the group first, in apparent deference to the role she took in the Senate on the 9/11 legislation.

“Our Christmas miracle has arrived,” she said to applause and cheers.

“To the firefighters here, the police officers here, everyone involved in the recovery, all the volunteers, the family members: Thank you!” she continued. “It was your work, it was your heroism, it was your dedication that made the difference. It was your effort, coming here week after week to tell senators and Congress members about your stories and what you went through.”

The votes came after prolonged aggressive lobbying by top New York officials and lawmakers, police and firefighter groups and 9/11 families, who argued that the nation had a moral obligation to provide medical assistance to rescue workers who spent days, weeks and even months at ground zero.

In a reminder of the bill’s long road to passage, Secretary of State Hillary Rodham Clinton, who sponsored the legislation when she represented New York in the Senate, was coincidentally at the Capitol on Wednesday for a Senate vote on ratification of the New Start treaty

The 9/11 health measure calls for providing $1.8 billion over the next five years to monitor and treat injuries stemming from exposure to toxic dust and debris at ground zero; New York City would pay 10 percent of these costs.

There are nearly 60,000 people enrolled in health-monitoring and treatment programs related to the 9/11 attack. The federal government currently provides the bulk of the financing for these programs.

The legislation adopted on Wednesday also sets aside $2.5 billion to reopen the September 11th Victim Compensation Fund for five years to provide payment for job and economic losses.

In a statement released by City Hall, Mayor Michael R. Bloomberg hailed the passage of the legislation, saying it “affirms our nation’s commitment to protecting those who protect us all.”

The bill was adopted during a flurry of activity as lawmakers rushed to adjourn for the year. It was a major turn of events since the bill appeared to have fallen victim to partisan squabbling and rancor.

In September, after years of negotiation and debate, the House passed legislation that called for providing $7.4 billion over eight years to cover the medical care of 9/11 rescue workers and others. But this month, Republicans derailed that legislation in the Senate, expressing concern about its cost.

By Wednesday, Senate Republicans budged, following a barrage of criticism over the last few days — not just from Democrats, but also from allies, including former Mayor Rudolph W. Giuliani of New York and conservative news outlets like Fox News. The 9/11 health care issue also became a cause of Jon Stewart, who used the platform of his program, “The Daily Show,” to bring national attention to the bill.

Before agreeing to lift their opposition, Senate Republicans managed to get Democrats to scale back the size of the original House bill.

The Senate adopted the legislation by a voice vote, eliminating the need for a recorded vote, as lawmakers rushed to bring the Congressional session to a close.

One of the main critics of the original House bill, Senator Tom Coburn, Republican of Oklahoma, expressed satisfaction with the legislation’s final cost.

“Every American recognizes the heroism of the 9/11 first responders,” Mr. Coburn said. “But it is not compassionate to help one group while robbing future generations of opportunity.”

Still, the acrimonious fight over the 9/11 legislation appeared to leave Republicans on the defensive and concerned that their party had been unfairly demonized for raising legitimate objections to the original $7.4 billion bill the House passed.

“Some have tried to portray this debate as a debate between those who support 9/11 workers and those who don’t,” said Senator Mitch McConnell of Kentucky, the Republican leader. “This is a gross distortion of the facts. There was never any doubt about supporting the first responders. It was about doing it right.”

In the House, there was some disappointment among Democrats over the deal cut in the Senate. But many concluded that the Senate bill was the best they could get at the moment.

“This compromise isn’t everything we wanted,” Representative Carolyn B. Maloney, Democrat of New York, a chief sponsor of the original legislation, said. “But in the end we got a strong program that will save lives.”

The bill is formally known as the James Zadroga 9/11 Health and Compensation Act, named after a New York police detective who took part in the rescue efforts at ground zero and later developed breathing complications. He died in January 2006. The cause of his death became a source of debate after the city’s medical examiner concluded that it was not directly related to the attack.

The legislation allows for money from the Victims’ Compensation Fund to be paid to any eligible claimant who receives a payment under the settlement of lawsuits that more than 10,000 rescue and cleanup workers recently reached with the city. Currently, those who receive a settlement are limited in how much compensation they can get from the fund.

In New York, a federal judge told lawyers for the 10,000 that payments from the settlement must start going out by late January. The judge, Alvin K. Hellerstein of United States District Court in Manhattan, worked out a timetable with the lawyers so that the settlement terms, which call for payments of at least $625 million, become final within the next two weeks.

David M. Herszenhorn contributed reporting from Washington, and Mireya Navarro from New York.

    Senate Passes 9/11 Health Bill as Republicans Back Down, NYT, 22.12.2010, http://www.nytimes.com/2010/12/23/nyregion/23health.html

Senate Support Builds for Pact on Arms Control

December 20, 2010
The New York Times
By PETER BAKER

WASHINGTON — The Senate moved closer on Monday to approving a new arms control treaty with Russia over the opposition of Republican leaders as lawmakers worked on a side deal to assure skeptics that the arms pact would not inhibit American plans to build missile defense systems.

A Republican senator announced that he would vote for the treaty and two others said they were leaning toward it after a closed-door session on classified aspects of the pact. At the same time, Senator John McCain, Republican of Arizona, produced separate legislation that could reassure fellow Republicans worried about the treaty’s impact on missile defense.

By the end of another tumultuous day, treaty backers said they could count more than the two-thirds majority required for approval in votes that could begin as early as Tuesday. The Senate mustered as many as 64 votes in defeating Republican amendments on Monday, just two short of what supporters need for final approval, and three senators who supported one of the amendments have already said they will vote for the treaty in the end.

The momentum building for the treaty came despite the announcements of the two top Senate Republican leaders, Mitch McConnell of Kentucky and Jon Kyl of Arizona, that they will vote against the treaty, known as New Start. Treaty supporters pressured wavering Republicans on Monday with an appeal by Adm. Mike Mullen, chairman of the Joint Chiefs of Staff and the nation’s top military officer, to approve the agreement.

“Ratification of the New Start treaty is vital to U.S. national security,” Admiral Mullen wrote in a letter to the Senate. “Through the trust it engenders, the cuts it requires, and the flexibility it preserves, this treaty enhances our ability to do that which we in the military have been charged to do: protect and defend the citizens of the United States.”

The treaty has become the defining final test for President Obama’s legislative agenda before the current Congress adjourns for good. He has called it critical to the relationship with Russia and the fight against the spread of nuclear weapons. Opponents argue that its verification procedures are weak and that it could undermine missile defense.

The treaty requires the United States and Russia to reduce their nuclear stockpiles so that within seven years of ratification neither deploys more than 1,550 strategic warheads and 700 launchers. It would also require the resumption of on-site inspections that lapsed last December when the original Start treaty expired.

Republican opponents have tried to amend the treaty to fix what they see as flaws, but the White House has rejected that because any change in the text would require the United States and Russia to go back to the negotiating table. Russia weighed in on Monday, warning the Senate not to rewrite the treaty.

“I can only underscore that the strategic nuclear arms treaty, worked out on the strict basis of parity, in our view fully answers to the national interests of Russia and the United States,” Sergey V. Lavrov, the foreign minister, told the Interfax news agency. “It cannot be opened up and become the subject of new negotiations.”

The statement provoked a sharp response from Mr. Kyl. “What’s wrong with that?” he asked of reopening negotiations to improve the treaty. “Unless you think the U.S. Constitution was really stupid to give the Senate a role in this, it doesn’t seem there’s anything wrong with the Senate saying, ‘You’ve got about nine-tenths of it right.’ ”

But the Senate rejected three more such amendments on Monday. One would have tripled the number of inspections. Another would have increased the ceiling on launchers to 720 from 700. The third would have required new negotiations to reduce tactical nuclear weapons within a year. The first two were defeated 64 to 33 and the third 62 to 35.

With that avenue blocked, Mr. McCain was trying to fashion a plan to make clear that Russian objections would not stop American missile defense in Europe. Mr. McCain proposed an amendment to the resolution of ratification that accompanies the treaty, which would not require reopening talks with Russia.

The amendment would state that the United States would fully deploy all four phases of Mr. Obama’s missile defense program by 2020 as he has committed to doing. It would give the president an escape hatch by allowing him to delay the schedule if he reports reasons for delay to the Senate. And it would reaffirm that Russia’s statement against missile defense made at the signing of New Start in April imposed no legal obligation on the United States.

The amendment was co-sponsored by Mr. Kyl and two other Republicans, Senators Lindsey Graham of South Carolina and Mark Kirk of Illinois. Congressional officials have said Mr. McCain was hoping to find a path to supporting the treaty despite his vocal criticisms, and the amendment could win Mr. Kirk’s vote too.

The White House and Senate Democrats offered no comment on the plan on Monday. But Senator John Kerry of Massachusetts, the Democrat leading the fight for the treaty, has been open to reworking the ratification resolution to address Republican concerns.

Even as Mr. McCain’s plan advanced, the treaty was picking up support that could put it over the top. Senator Scott P. Brown, Republican of Massachusetts, emerged from the closed-door session to say he would vote for the treaty. Senators Judd Gregg of New Hampshire and Bob Corker of Tennessee also indicated they probably would.

To get the constitutionally required two-thirds majority, the treaty would need support from nine Republicans. Mr. Brown is the fifth Republican to say he will vote yes, and Mr. Gregg and Mr. Corker would make seven. Senator Johnny Isakson of Georgia voted for it in committee and appeared likely to vote yes on the floor, and a half-dozen or more other Republicans have said they could support it if their concerns were addressed.

The floor debate turned heated at times on Monday. Mr. McConnell accused Mr. Obama of politicizing the treaty by pressing to ratify it before a new Senate takes office in January with five additional Republicans. “Our top concern should be the safety and security of our nation, not some politician’s desire to declare a political victory and host a press conference before the end of the year,” he said.

Mr. Kerry retorted that the treaty had been delayed 13 times at the request of Republicans. “Having accommodated their interests,” he said, “they now come back and turn around and say: ‘Oh, you guys are terrible. You’re bringing this treaty up at the last minute.’ I mean, is there no shame, ever, with respect to the arguments that are made sometimes on the floor of the United States Senate?”

    Senate Support Builds for Pact on Arms Control, NYT, 20.12.2010, http://www.nytimes.com/2010/12/21/world/europe/21start.html

Fixing Error, Senate Passes Food Bill Again

December 19, 2010
The New York Times
By THE ASSOCIATED PRESS

WASHINGTON (AP) — The Senate on Sunday passed a sweeping bill to make food safer, sending it to the House in the waning days of the Congressional session.

It was the second time the Senate passed the bill, which would give the government broad new powers to increase inspections of food-processing plants and force companies to recall tainted food. The first time, three weeks ago, it was caught in a snag when senators mistakenly included tax provisions that by law must originate in the House.

The version passed Sunday was amended to avoid another such problem.

The bill would place stricter standards on imported foods and require larger producers to follow tougher rules for keeping food safe. The legislation has bipartisan support, and supporters say passage is crucial in the wake of E. coli and salmonella outbreaks in peanuts, eggs and produce.

Recent domestic outbreaks have exposed a lack of resources and authority at the Food and Drug Administration as it struggled to contain and trace the contaminated products. The agency rarely inspects many processors or farms, visiting some every decade or so and others not at all.

The bill emphasizes prevention so the agency could try to stop outbreaks before they begin. Farmers and food processors would have to tell the agency how they are working to keep their food safe at different stages of production.

Congress is rushing to wrap up for the year, and many people thought the bill was dead until it was resurrected by majority leader, Senator Harry Reid of Nevada. who said it was necessary because the food safety system had not been updated in almost a century.

Caroline Smith DeWaal, director of food safety at the Center for Science in the Public Interest, called it “a huge victory for consumers following a weekend cliffhanger as both consumer and industry supporters prepared for bad news.”

    Fixing Error, Senate Passes Food Bill Again, NYT, 19.12.2010, http://www.nytimes.com/2010/12/20/us/politics/20food.html

At Long Last, Military Honor

December 19, 2010
The New York Times


More than 14,000 soldiers lost their jobs and their dignity over the last 17 years because they were gay, but there will be no more victims of this injustice. The nation’s military is about to send a message of tolerance and shared purpose to the world — now that political leaders, who voted for legalized bigotry in the armed forces in 1993 and kept it alive since then, have found the strength to stand up and end it.

The Senate vote on Saturday afternoon to allow open service by gay and lesbian soldiers was one of the most important civil rights votes of our time. The ringing message of the decision to end the “don’t ask, don’t tell” law will carry far beyond its immediate practical implications. Saturday may be remembered as the day when sexual tolerance finally become bipartisan.

Sadly, the vast majority of Republicans remained on the benighted side of the party line. Senator John McCain disgraced his distinguished military career by flailing against the vote, claiming it would be celebrated only in liberal bastions like Georgetown salons. But to the surprise even of supporters of repeal, eight Republican senators broke with party orthodoxy and voted with virtually every Democrat to end the policy. Fifteen House Republicans did the same on Wednesday. By focusing on history and decency, they took a stand of which their states can be proud. Perhaps a new moral momentum may even help them erase the remaining traces of prejudice in public life, including Washington’s refusal to recognize same-sex marriage.

They listened to senators like Joseph Lieberman and Susan Collins, who helped round up the votes. They studied the Pentagon’s examination of the implications of repeal, prepared by the Defense Department’s general counsel, Jeh Johnson, which said it posed little risk to the military. They heard the voices of leaders like Defense Secretary Robert Gates and Adm. Michael Mullen, the chairman of the Joint Chiefs of Staff, who said repeal would enhance security by retaining soldiers who would otherwise be discharged or never enlist.

And those 23 Republicans split from those in their party who believe their principal purpose is to humble President Obama. The president, who will soon sign the bill into law, made repeal a signature promise, joined by Democratic leaders in the House and Senate. If he can muster support for the New Start nuclear treaty in the next few days, he will end the year, and the first half of his term, with more solid accomplishments than seemed likely after the midterm elections.

There is still much work to be done. The vote in Congress does not end the policy outright. That will come only after the administration certifies that it has prepared the armed services for the change, and after an additional 60 days. It should take only a few months to properly educate officers and enlisted forces and put the new policy into effect. During those weeks, as a matter of obvious fairness, the military should pledge not to discharge any more soldiers who acknowledge being gay.

After the transformative vote, Mr. Obama said thousands of men and women would no longer have to live a lie in order to serve their country. As they begin this new chapter in their service, their country too will find itself transformed for the better.

    At Long Last, Military Honor, NYT, 19.12.2010, http://www.nytimes.com/2010/12/20/opinion/20mon1.html

Senate Repeals ‘Don’t Ask, Don’t Tell’

December 18, 2010
The New York Times
By CARL HULSE

WASHINGTON — The Senate on Saturday voted to strike down the ban on gay men and lesbians serving openly in the military, bringing to a close a 17-year struggle over a policy that forced thousands of Americans from the ranks and caused others to keep secret their sexual orientation.

By a vote of 65 to 31, with eight Republicans joining Democrats, the Senate approved and sent to President Obama a repeal of the Clinton-era law, known as “don’t ask, don’t tell,” a policy critics said amounted to government-sanctioned discrimination that treated gay, lesbian and bisexual troops as second-class citizens.

Mr. Obama hailed the action, which fulfills his pledge to reverse the ban, and said it was “time to close this chapter in our history.”

“As commander in chief, I am also absolutely convinced that making this change will only underscore the professionalism of our troops as the best-led and best-trained fighting force the world has ever known,” he said in a statement after the Senate, on a preliminary 63-to-33 vote, beat back Republican efforts to block final action on the repeal bill.

The vote marked a historic moment that some equated with the end of racial segregation in the military.

It followed an exhaustive Pentagon review that determined the policy could be changed with only isolated disruptions to unit cohesion and retention, though members of combat units and the Marine Corps expressed greater reservations about the shift. Congressional action was backed by Pentagon officials as a better alternative to a court-ordered end.

Supporters of the repeal said it was long past time to abolish what they saw as an ill-advised practice that cost valuable personnel and forced troops to lie to serve their country.

“We righted a wrong,” said Senator Joseph I. Lieberman, the independent from Connecticut and a leader of the effort to end the ban. “Today we’ve done justice.”

Before voting on the repeal, the Senate blocked a bill that would have created a path to citizenship for certain illegal immigrants who came to the United States at a young age, completed two years of college or military service and met other requirements including passing a criminal background check.

The 55-to-41 vote in favor of the citizenship bill was five votes short of the number needed to clear the way for final passage of what is known as the Dream Act.

The outcome effectively kills it for this year, and its fate beyond that is uncertain since Republicans who will assume control of the House in January oppose the measure and are unlikely to bring it to a vote.

The Senate then moved on to the military legislation, engaging in an emotional back and forth over the merits of the measure as advocates for repeal watched from galleries crowded with people interested in the fate of both the military and immigration measures.

“I don’t care who you love,” Senator Ron Wyden, Democrat of Oregon, said as the debate opened. “If you love this country enough to risk your life for it, you shouldn’t have to hide who you are.”

Mr. Wyden showed up for the Senate vote despite saying earlier that he would be unable to do so because he would be undergoing final tests before his scheduled surgery for prostate cancer on Monday.

The vote came in the final days of the 111th Congress as Democrats sought to force through a final few priorities before they turn over control of the House of Representatives to the Republicans in January and see their clout in the Senate diminished.

It represented a significant victory for the White House, Congressional advocates of lifting the ban and activists who have pushed for years to end the Pentagon policy created in 1993 under the Clinton administration as a compromise effort to end the practice of barring gay men and lesbians entirely from military service.

Saying it represented an emotional moment for members of the gay community nationwide, advocates who supported repeal of “don’t ask, don’t tell” exchanged hugs outside the Senate chamber after the vote.

“Today’s vote means gay and lesbian service members posted all around the world can stand taller knowing that ‘don’t ask, don’t tell’ will soon be coming to an end,” said Aubrey Sarvis, an Army veteran and executive director for Servicemembers Legal Defense Network.

Senator John McCain, Republican of Arizona and his party’s presidential candidate in 2008, led the opposition to the repeal and said the vote was a sad day in history.

“I hope that when we pass this legislation that we will understand that we are doing great damage,” Mr. McCain said. “And we could possibly and probably, as the commandant of the Marine Corps said, and as I have been told by literally thousands of members of the military, harm the battle effectiveness vital to the survival of our young men and women in the military.”

He and others opposed to lifting the ban said the change could harm the unit cohesion that is essential to effective military operations, particularly in combat, and deter some Americans from enlisting or pursuing a career in the military. They noted that despite support for repealing the ban from Defense Secretary Robert M. Gates and Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, other military commanders have warned that changing the practice would prove disruptive.

“This isn’t broke,” Senator James M. Inhofe, Republican of Oklahoma, said about the policy. “It is working very well.”

Other Republicans said that while the policy might need to be changed at some point, Congress should not do so when American troops are fighting overseas.

Only a week ago, the effort to repeal the “don’t ask, don’t tell” policy seemed to be dead and in danger of fading for at least two years with Republicans about to take control of the House. The provision eliminating the ban was initially included in a broader Pentagon policy bill, and Republican backers of repeal had refused to join in cutting off a filibuster against the underlying bill because of objections over limits on debate of the measure.

In a last-ditch effort, Mr. Lieberman and Senator Susan Collins of Maine, a key Republican opponent of the ban, encouraged Democratic Congressional leaders to instead pursue a vote on simply repealing it. The House passed the measure earlier in the week.

The repeal will not take effect for at least 60 days, and probably longer, while some other procedural steps are taken. In addition, the bill requires the defense secretary to determine that policies are in place to carry out the repeal “consistent with military standards for readiness, effectiveness, unit cohesion, and recruiting and retention.”

“It is going to take some time,” Ms. Collins said. “It is not going to happen overnight.”

In a statement, Mr. Gates said that once the measure was signed into law, he would “immediately proceed with the planning necessary to carry out this change carefully and methodically, but purposefully.” In the meantime, he said, “the current law and policy will remain in effect.”

Because of the delay in formally overturning the policy, Mr. Sarvis appealed to Mr. Gates to suspend any investigations into military personnel or discharge proceedings now under way. Legal challenges to the existing ban are also expected to continue until the repeal is fully carried out.

In addition to Ms. Collins, Republicans backing the repeal were Senators Scott P. Brown of Massachusetts, Richard M. Burr of North Carolina, John Ensign of Nevada, Mark Kirk of Illinois, Lisa Murkowski of Alaska, Olympia J. Snowe of Maine and George V. Voinovich of Ohio.

“It was a difficult vote for many of them,” Ms. Collins said, “but in the end they concluded, as I have concluded, that we should welcome the service of any qualified individual who is willing to put on the uniform of this country.”

Mr. Lieberman said the ban undermined the integrity of the military by forcing troops to lie. He said 14,000 people had been forced to leave the armed forces under the policy.

“What a waste,” he said.

The fight erupted in the early days of President Bill Clinton’s administration and has been a roiling political issue ever since. Mr. Obama endorsed repeal in his presidential campaign and advocates saw the current Congress as their best opportunity for ending the ban. Dozens of advocates of ending the ban — including one severely wounded in combat before being forced from the military — watched from the Senate gallery as the debate took place.

Senator Carl Levin, the Michigan Democrat who is chairman of the Armed Services Committee, dismissed Republican complaints that Democrats were trying to race through the repeal to satisfy their political supporters.

“I’m not here for partisan reasons,” Mr. Levin said. “I’m here because men and women wearing the uniform of the United States who are gay and lesbian have died for this country, because gay and lesbian men and women wearing the uniform of this country have their lives on the line right now.”

    Senate Repeals ‘Don’t Ask, Don’t Tell’, NYT, 18.12.2010, http://www.nytimes.com/2010/12/19/us/politics/19cong.html

Senate Rejects Amendment Blocking New Start Treaty

December 18, 2010
The New York Times
By PETER BAKER

WASHINGTON — The Senate on Saturday beat back the most serious Republican effort to block approval of a new arms control treaty with Russia this year, after President Obama reassured lawmakers that it would not constrain American plans to build a missile defense system in Europe.

By a margin of 59 to 37, lawmakers rejected an amendment to strip out language from the treaty preamble that, despite the president’s denial, critics had argued could inhibit missile defense. The White House and Senate Democrats considered the amendment a treaty killer because any change to the text would require the United States and Russia to go back to the negotiating table.

The vote was the first on the substance of the treaty since debate opened last week. Republicans may propose other conditions or statements that would accompany the treaty but not actually alter the pact itself.

Treaty supporters needed only a majority to defeat the amendment but fell short of the two-thirds they will need for final approval, suggesting that they may need to satisfy the concerns of several senators who voted for the amendment.

The vote came shortly after a letter from Mr. Obama was read in part on the Senate floor reaffirming his support for missile defense. Mr. Obama said the treaty “places no limitations on the development or deployment of our missile defense programs” and dismissed Russian warnings that it might withdraw from the treaty if American plans ultimately evolve into a threat to Russia’s nuclear deterrent.

“Regardless of Russia’s actions in this regard, as long as I am president, and as long as the Congress provides the necessary funding, the United States will continue to develop and deploy effective missile defenses to protect the United States, our deployed forces, and our allies and partners,” Mr. Obama said in the letter.

At issue in Saturday’s vote was an attempt by Senator John McCain, Republican of Arizona, to delete a clause in the treaty preamble that says the two sides recognize “the interrelationship between strategic offensive arms and strategic defensive arms” and “this interrelationship will become more important as strategic nuclear arms are reduced.”

Obama administration negotiators have said such language was intended as a nonbinding gesture to Russian concerns about missile defense after American negotiators rejected any meaningful limits in the treaty. Defense Secretary Robert M. Gates and the nation’s top generals have said the preamble language would not constrain missile defense.

Mr. McCain said the language could provide an excuse for Russia to later obstruct American plans to deploy missile defense installations in Eastern Europe by threatening to withdraw from the treaty, known as New Start. Russia issued a statement when New Start was signed reserving the right to pull out if it decides missile defense ever undermines its nuclear deterrent.

“Words matter,” Mr. McCain said. “To open ourselves up to this type of political threat by accepting an outdated interrelationship between nuclear weapons and missile defense is wrong.”

He added, “We have handed the Russian government the political tool they have sought for so long to bind our future decisions and actions.”

Senator John Kerry, the Democrat leading the fight for the treaty, said Republicans were making an issue out of phrases that would have no tangible impact.

Mr. Obama’s letter, according to one official, was privately requested by Mr. McCain, among others, to provide assurances to Republicans who want to vote for the treaty without undermining missile defense. Senator George V. Voinovich, an Ohio Republican who had been leaning toward the treaty, said the letter reassured him and that he would now vote yes.

    Senate Rejects Amendment Blocking New Start Treaty, NYT, 18.12.2010, http://www.nytimes.com/2010/12/19/us/politics/19start.html

9/11 Health Bill Wins Support From G.O.P.

December 18, 2010
The New York Times
By CARL HULSE

WASHINGTON — Senator Kirsten E. Gillibrand said Saturday that she and other sponsors of a stalled 9/11 health bill had won new Republican support for the measure and intended to try again to pass it before the end of the 111th Congress.

Following the Senate’s vote to repeal the ban on gays serving in the military, Ms. Gillibrand, Democrat of New York, said Democrats intended to resurrect the health initiative in the coming days after falling three votes short of breaking a filibuster against it earlier this month.

“We have the votes we need,” Ms. Gillibrand said. “We have indications from several Republicans that they very much want to vote for this bill.”

The $7.4 billion measure is intended to provide medical care to workers and others who had become ill as a result of being exposed to toxic debris and fumes at the site of the World Trade Center attack in 2001.

Republicans have raised concerns about how to pay for the program, and Ms. Gillibrand said the bill’s authors have identified ways to cover the costs through new federal fees that are acceptable to enough Republicans to advance the measure. It stalled on a party line vote of 57 to 42 when 60 votes were required.

She said the Senate could consider the measure after it concludes debate over a nuclear weapons treaty. But with Congress trying to adjourn before Christmas, time is running short, and it is unclear how many additional bills can reach the floor. Senator Harry Reid of Nevada, the majority leader, has indicated that he is open to allowing another vote on the health plan before Congress adjourns.

The bill, formally known as the James Zadroga 9/11 Health and Compensation Act, calls for providing $3.2 billion over the next eight years to monitor and treat injuries stemming from exposure to toxic dust and debris at ground zero. New York City would pay 10 percent of those health costs. The bill would also set aside $4.2 billion to reopen the September 11th Victim Compensation Fund to provide payments for job and economic losses.

    9/11 Health Bill Wins Support From G.O.P., NYT, 18.12.2010, http://www.nytimes.com/2010/12/19/nyregion/19health.html

Immigration Vote Leaves Obama’s Policy in Disarray

December 18, 2010
The New York Times
By JULIA PRESTON

The vote by the Senate on Saturday to block a bill to grant legal status to hundreds of thousands of illegal immigrant students was a painful setback to an emerging movement of immigrants and also appeared to leave the immigration policy of the Obama administration, which has supported the bill and the movement, in disarray.

The bill, known as the Dream Act, gained 55 votes in favor with 41 against, a tally short of the 60 votes needed to bring it to the floor for debate. Five Democrats broke ranks to vote against the bill, while only three Republicans voted for it. The defeat in the Senate came after the House of Representatives passed the bill last week.

The result, although not unexpected, was still a rebuff to President Obama by newly empowered Republicans in Congress on an issue he has called one of his priorities. Supporters believed that the bill — tailored to benefit only immigrants who were brought here illegally when they were children and hoped to attend college or enlist in the military — was the easiest piece to pass out of a larger overhaul of immigration laws that Mr. Obama supports.

His administration has pursued a two-sided policy, coupling tough enforcement — producing a record number of about 390,000 deportations this year — with an effort to pass the overhaul, which would open a path to legal status for an estimated 11 million illegal immigrants. Now, with less hope for any legalization measures once Republicans take over the House in January, the administration is left with just the stick.

Part of the administration’s strategy has been to ramp up border and workplace enforcement to attract Republican votes for the overhaul. The vote on Saturday made it clear that strategy has not succeeded so far.

Mr. Obama will now face growing pressure from immigrant and Latino groups to temper the crackdown and perhaps find ways to use executive powers to bring some illegal immigrants out of the shadows. Latino voters turned out in strength for the Democrats in the midterm elections, arguably saving their majority in the Senate.

The Republicans in the new Congress are especially keen on tough enforcement. The presumed incoming chairman of the House Judiciary Committee’s subcommittee on immigration is Representative Steve King of Iowa, a vigorous opponent of legalization measures, which he rejects as amnesty for lawbreakers. Representative Lamar Smith of Texas, who will be chairman of the Judiciary Committee, is also an outspoken and well-versed opponent of such proposals.

Groups favoring reduced immigration cheered Saturday’s vote as a watershed victory marking the end of a period when they have been on the defensive. Roy Beck, president of NumbersUSA, which lobbied hard against the bill, said the new Congress “has the strongest pro-enforcement membership” in at least 15 years.

“Now, we look forward to moving aggressively to offense,” Mr. Beck said.

During the last year, administration officials considered proposals to allow immigration authorities to use administrative powers to halt deportations of illegal immigrants who might have been eligible for legal status under the student bill. They also sought ways to ease deportations for other illegal immigrants with no criminal record.

Republican lawmakers criticized those proposals as “backdoor amnesty” and pledged to stop the administration from carrying them out.

The administration’s efforts to manage its policy dilemma played out this week. Speaking on Friday before the vote, John Morton, the head of Immigration and Customs Enforcement, said the agency would continue the brisk pace of deportations, focusing on immigrants convicted of crimes. On the same day, the agency released from detention an 18-year-old Guatemalan student from Ohio, Bernard Pastor, granting him a one-year reprieve from deportation to continue his education.

Despite the defeat, Democrats who supported the bill said they would continue to push for it. “As long as these young people are determined to be part of this great nation, I am determined to fight for them to call America home,” said Senator Richard J. Durbin of Illinois, the bill’s main champion.

Senator Robert Menendez of New Jersey, another sponsor, said Latinos would remember in the elections in 2012 how senators had voted.

“This is a vote that will not soon be forgotten by a community that is growing not just in size, but also in power and political awareness,” Mr. Menendez said.

Yet much pressure on the administration may come from immigrant organizations. Despite their illegal status, several hundred immigrant students watched the vote in the Senate gallery. Afterward, they held a somber prayer vigil in the basement of the Capitol, but moved on to a news conference that turned into a pep rally.

“They did not defeat us, they ignited our fire,” said Alina Cortes, a 19-year-old Mexican-born immigrant from Texas who lacks legal status. A self-described conservative Republican, she campaigned for the student bill, saying she hoped to join the Marine Corps.

The movement has been driven by thousands of students who “came out” to reveal that they did not have legal status, and to recount their academic achievements and the barriers they faced. Now that their status is public, they have nowhere to hide. Meanwhile, an estimated 65,000 illegal immigrants are graduating from high school each year.

“We have woken up,” said Carlos Saavedra, national coordinator of the United We Dream Network, a student group. “We are going to go around the country letting everybody know who stands with us and who stood against us.”

    Immigration Vote Leaves Obama’s Policy in Disarray, NYT, 18.12.2010, http://www.nytimes.com/2010/12/19/us/politics/19dream.html

Senate Blocks Bill for Young Illegal Immigrants

December 18, 2010
The New York Times
By DAVID M. HERSZENHORN

The Senate on Saturday blocked a bill that would have created a path to citizenship for certain young illegal immigrants who came to the United States as children, completed two years of college or military service and met other requirements, including passing a criminal background check.

The vote by 55-41 in favor of the bill, which is known as the Dream Act, effectively kills it for this year, and its fate is uncertain. The measure needed the support of 60 senators to cut off a filibuster and bring it to the floor.

Supporters said they were heartened that the measure won the backing of a majority of the Senate. They said they would continue to press for it, either on its own or as part of a wide immigration overhaul that some Democrats hope to undertake next year and believe could be an area of cooperation with Republicans, who will control a majority in the House

Most immediately, the measure would have helped grant legal status to hundreds of thousands of illegal immigrant students and recent graduates whose lives are severely restricted though many have lived in the United States for nearly their entire lives.

Young Hispanic men and women filled the spectator galleries of the Senate, many of them wearing graduation caps and tassels in a symbol of their support for the bill. They held hands in a prayerful gesture as the clerk called the roll and many looked stricken as its defeat was announced.

President Obama had personally lobbied lawmakers in support the bill. But Democrats were not able to hold ranks.

Five Democrats joined Republicans in opposing the bill. They were Democratic Senators Max Baucus of Montana, Kay Hagan of North Carolina, Ben Nelson of Nebraska, Mark Pryor of Arkansas and Jon Tester of Montana.

And three Republicans joined the balance of Democrats in favor of it: Robert Bennett of Utah, Richard Lugar of Indiana, and Lisa Murkowski of Alaska.

Mr. Obama, in a statement, called the outcome “incredibly disappointing” and said that he would continue fighting to win approval of the bill.

“It is not only the right thing to do for talented young people who seek to serve a country they know as their own, it is the right thing for the United States of America,” Mr. Obama said. “Our nation is enriched by their talents and would benefit from the success of their efforts.”

“The Dream Act is important to our economic competitiveness, military readiness, and law enforcement efforts,” he said, adding, “It is disappointing that common sense did not prevail today but my administration will note give up.”

In a floor speech, Senator Richard J. Durbin, Democrat of Illinois, a main champion of the Dream act, urged a yes vote. “I want to make it clear to my colleagues, you won’t get many chances in the United States Senate, in the course of your career, to face clear votes on the issue of justice,” he said.

“Thousands of children in American who live in the shadows and dream of greatness,” he said. “They are children who have been raised in this country. They stand in the classrooms and pledge allegiance to our flag. They sing our ‘Star-Spangled Banner’ as our national anthem. They believe in their heart of hearts this is home. This is the only country they have ever known.”

At a news conference after the vote, Senator Michael Bennet, Democrat of Colorado and a former superintendent of the Denver school system, said he was thinking about all the students he knew there, as he cast his vote in favor of the bill.

“Please don’t have up,” Mr. Bennet said. “Don’t be disappointed because we couldn’t get our act together.”

But opponents of the measure said it was too broad and would grant amnesty to illegal immigrants.

“As part of this legislative session there has been no serious movement to do anything that would improve the grievous situation of illegality at our border,” said Senator Jeff Sessions, Republican of Alabama. “Leaders in Washington have not only tolerate lawlessness but, in fact, our policies have encouraged it.”

Mr. Sessions added, “This bill is a law that at its fundamental core is a reward for illegal activity.”

Ms. Murkowski, in a statement, chastised Democrats for bringing the bill to the floor when it was “doomed to fail” but said that she broke with most Republicans because the legislation was important.

“I support the goal of the Dream Act which is to enable children who were brought to the United States by their parents to earn citizenship through service in the armed forces or pursuit of higher education,” Ms. Murkowski said. “ I do not believe that children are to blame for the decision of their parents to enter or remain in the United States unlawfully. The reality is that many of these children regard America as the only country they ever knew. Some were not even told that they were unlawfully in the United States until it came time for them to apply for college. America should provide these young people with the opportunity to pursue the American dream. They have much to offer America if given the chance.”

Ms. Murkowski also expressed an openness to dealing with the wider immigration issue. “ I firmly believe that Congress needs to embrace the wider immigration question, starting with securing our borders, and I plan to work with my colleagues on this issue in the new Congress,” she said.

    Senate Blocks Bill for Young Illegal Immigrants, NYT, 18.12.2010, http://www.nytimes.com/2010/12/19/us/politics/19immig.html

Repeal of ‘Don’t Ask, Don’t Tell’ Advances

December 18, 2010
The New York Times
By CARL HULSE

WASHINGTON — Capping a 17-year political struggle, the Senate on Saturday cleared the way for repealing the Pentagon’s ban on gay men and lesbians serving openly in the military.

By a vote of 63 to 33, with six Republicans joining Democrats, the Senate acted to cut off debate on a measure that would let President Obama declare an end to the Clinton-era policy, known as “don’t ask, don’t tell,” which allows gay members of the armed forces to serve only if they keep their sexual orientation a secret. The vote indicated that there was easily enough support to push the measure to final passage.

“By ending ‘Don’t Ask, Don’t Tell,’ no longer will our nation be denied the service of thousands of patriotic Americans forced to leave the military, despite years of exemplary performance, because they happen to be gay,” Mr. Obama said in a statement after the cloture vote. “And no longer will many thousands more be asked to live a lie in order to serve the country they love.”

The vote put Congress at the brink of a historic moment that some equated with the decision to end racial segregation in the military. It followed a review by the Pentagon that found little concern in the military about ending the ban and that was backed by Pentagon officials as a better alternative to a court-ordered end.

Backers of the repeal said it was long past time to end what they saw as a discriminatory practice that cost valuable personnel and forced troops to lie to serve their country.

“I don’t care who you love,” Senator Ron Wyden, Democrat of Oregon, said as the debate opened. “If you love this country enough to risk your life for it, you shouldn’t have to hide who you are.”

Mr. Wyden showed up for the Senate vote despite saying on Friday that he would be unable to do so because he would be undergoing final tests before his scheduled surgery for prostate cancer on Monday.

The vote came in the final days of the 111th Congress as Democrats sought to force through a final few priorities before they turn over control of the House of Representatives to the Republicans in January and see their clout in the Senate diminished.

It represented a significant victory for the White House, Congressional advocates of lifting the ban and activists who have pushed for years to end the Pentagon policy created in 1993 under the Clinton administration as a compromise effort to end the practice of banning gay men and lesbians entirely from military service. Activists said it represented an emotional moment for members of the gay community nationwide.

Opponents of lifting the ban said the change could harm the unit cohesion that is essential to effective military operations, particularly in combat, and deter some Americans from enlisting or pursuing a career in the military. They noted that despite support for repealing the ban from Defense Secretary Robert M. Gates and Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, other military commanders have warned that changing the practice would prove disruptive.

“This isn’t broke,” Senator James M. Inhofe, Republican of Oklahoma, said of about the policy. “It is working very well.”

Other Republicans said that while the policy might be need to changed at some point, Congress should not intrude on the issue now when American troops are fighting overseas.

“In the middle of a military conflict, is not the time to do it,” said Senator Saxby Chambliss, Republican of Georgia.

The vote to lift the ban came after the Senate blocked — and effectively killed for this year — a measure that would have allowed some younger illegal immigrants to gain legal status by attending college or serving in the military.

Backers of that measure, known as the Dream Act, said it would have aided those who, through no fault of their own, were brought into the country illegally by their parents. But opponents said the initiative had the potential for fraud and amounted to a path to amnesty. The vote was 55 to 41, five votes short of the 60 necessary for the measure to advance.

Only a week ago, the effort to repeal the “don’t ask, don’t tell” policy seemed to be dead and in danger of fading for at least two years with Republicans about to take control of the House. The provision eliminating the ban was initially included in a broader Pentagon policy bill, and Republican backers of repeal had refused to join in cutting off a filibuster against the underlying bill because of objections over the ability to debate the measure.

In a last-ditch effort, Senator Joseph I. Lieberman, independent of Connecticut, and Senator Susan Collins, Republican of Maine, encouraged Democratic Congressional leaders to instead pursue a vote on simply repealing the ban. The House passed the measure earlier in the week.

The Senate must take a second vote to approve the repeal and send it to President Obama for his signature. The repeal would not take effect for at least 60 days while some other procedural steps are taken. In addition the bill requires the defense secretary to determine that policies are in place to carry out the repeal “consistent with military standards for readiness, effectiveness, unit cohesion, and recruiting and retention.”

Mr. Lieberman said the ban undermined the integrity of the military by forcing troops to lie. He said 14,000 members of the armed forces had been forced to leave the ranks under the policy.

“What a waste,” he said.

The fight erupted in the early days of President Bill Clinton’s administration and has been a roiling political issue ever since. Mr. Obama endorsed repeal in his own campaign and advocates saw the current Congress as their best opportunity for ending the ban. Dozens of advocates of ending the ban — including one wounded in combat before being forced from the military — watched from the Senate gallery as the debate took place.

Senator Carl Levin, the Michigan Democrat who is chairman of the Armed Services Committee, dismissed Republican complaints that Democrats were trying to race through the repeal to satisfy their political supporters.

“I’m not here for partisan reasons,” Mr. Levin said. “I’m here because men and women wearing the uniform of the United States who are gay and lesbian have died for this country, because gay and lesbian men and women wearing the uniform of this country have their lives on the line right now.”

    Repeal of ‘Don’t Ask, Don’t Tell’ Advances, NYT, 18.10.2010, http://www.nytimes.com/2010/12/19/us/politics/19cong.html

The Senate Stands for Injustice

December 9, 2010
The New York Times

On one of the most shameful days in the modern history of the Senate, the Republican minority on Thursday prevented a vote to allow gay and lesbian soldiers to serve openly in the military of the United States. They chose to filibuster a vital defense bill because it also banned discrimination in the military ranks. And in an unrelated but no less callous move, they blocked consideration of help for tens of thousands of emergency workers and volunteers who became ill from the ground zero cleanup after the attacks of Sept. 11, 2001.

The senators who stood in the way of these measures must answer to the thousands of gay and lesbian soldiers who must live a lie in order to serve, or drop out. They must answer to the civilians who will not serve their country when some Americans are banned from doing so for an absurd reason, and to the military leaders who all but pleaded with them to end this unjust policy. They must answer to the workers who thought they were aiding their country by cleaning up ground zero.

The Senate majority leader, Harry Reid, said that he would allow another vote on repealing the military’s “don’t ask, don’t tell” policy in a free-standing bill later this month. That long shot is likely to be the final test of whether the Republicans are interested in allowing military equality.

Republicans wanted extra days of debate, demanding the right to amend the defense bill that contained the repeal provision, and essentially killing the bill without quite admitting to it by suffocating it of time. Mr. Reid said he had concluded that they had no intention of repealing the repressive measure, so he called for a vote.

The outcome was three votes short of the 60 needed to break the filibuster. Only one Republican, Susan Collins of Maine, voted to end the filibuster. Two Republicans who said they would vote for repeal, Lisa Murkowski of Alaska and Scott Brown of Massachusetts, voted the other way, as did one Democrat, Joe Manchin of West Virginia. Ms. Murkowski and Mr. Brown stuck with a Republican pledge to support no other measures until the tax-cut deal had been dealt with.

Mr. Reid will undoubtedly be second-guessed on his decision to call for a vote, but given the other-worldly logic of a lame-duck session, it is hard to fault his hard-bitten calculation of the Republicans’ intentions. Senator Carl Levin of Michigan, the chairman of the Armed Services Committee, said that if debate on the 850-page defense bill did not begin this week, there would be no time to finish it in the remaining few days of the session.

The defense bill would also have raised pay for soldiers, improved their medical care and provided troops in Iraq and Afghanistan with additional equipment and support. It would be the first time in 48 years that Congress did not approve such a bill — all because of an irrational prejudice against gay men and lesbians.

The filibuster on $7.4 billion in medical care and compensation for the workers at ground zero will be harrowing for the tens of thousands who labored tirelessly for weeks and eventually had to seek care under a patchwork of temporary medical and research programs in the city. These police, firefighters and waves of citizen volunteers need ongoing care for illnesses being traced to the toxic fumes, dust and smoke at ground zero.

In the House, Democrats also took a wrongheaded vote to ban transfers of prisoners from Guantánamo Bay, Cuba, to detention facilities in the United States. Attorney General Eric Holder Jr. has urged the Senate to strip the provision from the final bill.

Another measure of overdue justice — the Dream Act, which would empower the innocent children of illegal immigrants with education and public service opportunity — barely survived a Republican filibuster in the Senate after being tabled by proponents hoping to drum up support in coming days. There is little sign of encouragement, however, for that good cause or others as the 111th Congress expires in the grip of Senate Republicans demeaning public service as an exercise of naysaying.

    The Senate Stands for Injustice, NYT, 9.12.2010, http://www.nytimes.com/2010/12/10/opinion/10fri1.html

Voting for an Odious Tax Deal

December 7, 2010
The New York Times

Liberal Democrats are in revolt at the tax deal that President Obama struck with Republicans on Monday, and it is not hard to understand why. By temporarily extending income tax breaks for the richest Americans, and cutting estate taxes for the ultrawealthy, the deal will redistribute billions of dollars from job creation to people who do not need the money.

But the Democrats should vote for this deal, because it is the only one they are going to get. Mr. Obama made that case — strongly — on Tuesday, summoning an eloquence that is often elusive, as it was on Monday when he first announced the deal. Without this bargain, income taxes on the middle class would rise. Unemployment insurance for millions of Americans would expire. And many other important tax breaks for low- and middle-income workers — including a 2 percent payroll tax cut and college tuition credits — would not be possible.

If angry Democrats blow up the deal, they will be left vainly groping for something better in a new Congress where they will have far less influence than they have now. The middle class and the unemployed would be seriously hurt.

The president, and particularly Congressional Democrats, might not be in this bind if they had fought harder against the high-end tax cuts before the midterm elections. But that moment has passed. The real responsibility for what’s wrong with the tax deal lies with Republicans. They coldly insisted on the high-end tax cuts at all costs, no matter the pain they might inflict further down the income ladder or what staggering cost they might impose in years to come.

President Obama was right to use the metaphor of hostage-taking to describe the Republicans’ tactics. Using the parliamentary rules of the Senate, 42 Republican senators threatened to raise middle-class taxes if Democrats let tax cuts expire on the richest 2 percent of Americans. That left the White House and the Democrats little room to maneuver. “I think it’s tempting not to negotiate with hostage-takers, unless the hostage gets harmed,” Mr. Obama said at his news conference on Tuesday.

Some of the provisions won by the president could act as a new stimulus to the economy, particularly the extension of the unemployment benefits for 13 months and the cut to the payroll tax, though the full stimulative effect is uncertain. The cut only applies to wages and salaries up to $106,800 — people who really need it.

There remains much to dislike in the package, including the pressure that its deficit spending will create to cut important programs in the years to come. Mr. Obama was clearly not thrilled at the compromises he had to make, and neither are we. But at least he acted in what he believed are the best interests of the country.

When are the Republicans going to step up and do the same? There is no legitimate national interest in opposing the New Start nuclear arms treaty with the Russians, which most military and foreign leaders agree would make the world a safer place. There is no legitimate national interest in clinging to the discrimination against gay members of the military, which the Pentagon’s leaders want to end. There will be no sound economic reason to make the tax cuts for the top 2 percent of taxpayers permanent in two years.

The only reason for Republican recalcitrance on these issues is to deny the Democrats an accomplishment, to stymie Mr. Obama’s re-election and appeal to the most retrograde elements of the party’s base.

President Obama will face a liberal whirlwind for the compromise he made on taxes. It is time for Republicans to show that they are strong enough to take on their base for their country’s benefit.

    Voting for an Odious Tax Deal, NYT, 8.12.2010, http://www.nytimes.com/2010/12/08/opinion/08wed1.html

Senate Republicans Threaten Tax Dispute Blockade

December 1, 2010
The New York Times
By DAVID M. HERSZENHORN

WASHINGTON — Not even 24 hours after President Obama met with senior Republican Congressional leaders and expressed hopes for a “new dialogue,” renewed partisan fury engulfed the Senate on Wednesday, as Republicans threatened to block any legislation until a deal is reached to extend the expiring Bush-era tax cuts, potentially derailing the Democrats’ busy end-of-year agenda.

The blunt threat was made in a letter to the majority leader, Harry Reid of Nevada, and signed by all 42 Senate Republicans. And it was reiterated by the Republican leader, Mitch McConnell of Kentucky, in a speech in which he accused Democratic leaders and Mr. Obama of ignoring the midterm election results.

The move put Democrats in a vise and sharply heightened tensions on Capitol Hill, where administration officials and senior lawmakers from both the House and Senate opened the first round of talks in hopes of reaching an accord on the expiring tax cuts. Officials reported no progress in those talks, and the Senate Republicans’ threat suggested they had little appetite for compromise.

If Congress does not act by the end of the year, the lower rates expire for everyone, an outcome neither side wants.

The Republican maneuver came just as Senate Democrats seemed within reach of the votes needed to authorize repeal of the military’s “don’t ask, don’t tell” policy on gay service members. The Republican blockade stalls debate on the military policy bill containing the repeal language, and it casts a long shadow over numerous bills awaiting action in Congress, including efforts to extend jobless benefits for millions of Americans about to lose them.

It also complicates the chances of ratification of the New Start arms treaty with Russia that is a major priority for the White House, and it could prevent Mr. Reid from fulfilling a major promise of his re-election campaign, to try again to pass a bill that would create a path to citizenship for some illegal immigrants brought to the United States as children.

“For the past two years, Democrat leaders in Washington have spent virtually all their time ticking off items on the liberal wish list while they’ve had the chance,” Mr. McConnell said. “Here we are, just a few weeks left in the session, and they’re still at it. Last month, the American people issued their verdict on the Democrats’ priorities. Democrats have responded by doubling down.”

Mr. McConnell’s announcement of an all-out blockade came just a day after he applauded Senator Christopher R. Dodd, the retiring Connecticut Democrat, for a farewell address in which Mr. Dodd called for greater civility and cooperation among lawmakers. His announcement drew howls of anger from Democrats who said it was just the latest evidence of Republican obstructionism.

To emphasize their point, Democrats went to the floor and attempted to bring up numerous bills, including a measure to extend jobless benefits and a measure to promote clean energy. On behalf of his colleagues, Senator John Barrasso, Republican of Wyoming, repeatedly voiced objections, blocking the bills and prompting a furious speech by Senator Claire McCaskill, Democrat of Missouri.

“If anybody’s been paying attention, they would understand that our friends across the aisle have been blocking everything, including motherhood and apple pie for the last year,” Ms. McCaskill said. She derided Mr. Barrasso for accusing the Democrats of engaging in theater. “Theater is having 42 senators say we will not participate unless you do what we want to do today,” she said. “That’s theater.”

Ms. McCaskill added, “What you are seeing on this side right now is a healthy dose of indignation on behalf of the American people that are hurting.”

Senate Republicans said they would even block a major food safety bill that the Senate adopted just on Tuesday but must be voted on again because of a parliamentary glitch. The food safety measure, which strengthens the Food and Drug Administration in an effort to prevent unsafe foods from reaching grocery stores and restaurant, was approved by a vote of 73 to 25, with 15 Republicans joining Democrats in support.

Under normal circumstances, the Senate might simply reapprove the bill by unanimous agreement, bypassing the need even for a formal roll call vote. But Republicans said they would block any effort to take up the bill again before the tax issue was resolved. And even then, they said, they will force Mr. Reid to spend the better part of a week cycling through procedural votes just to get the measure back on the floor.

If Republicans had any worry about being seen as uncooperative, they did not show it. Mr. Barrasso coolly objected to the Democrats’ efforts to bring up other bills, often saying he knew little about what the Democrats were trying to do.

“What I do know,” Mr. Barrasso said, “is 42 senators from this side of the aisle have signed a letter, a letter to say that what we ought to do and what we need to do is to find a way to fund the government and prevent a tax hike on every American come Jan. 1.”

Mr. Obama tried to put a positive spin on the day’s developments, saying he did not think Mr. McConnell’s threat broke the spirit of bipartisanship that the president expressed after his meeting with Republican Congressional leaders on Tuesday.

“Nobody wants to see taxes on middle-class families go up starting Jan. 1, and so there’s going to be some lingering politics that have to work themselves out in all the caucuses, Democrat and Republican,” Mr. Obama said. “But at the end of the day, I think that people of good will can come together.”

Mr. Obama and senior Democratic Congressional leaders want to let the tax cuts expire on annual income above $250,000 for couples and $200,000 for individuals, while continuing the lower rates on income below those amounts. The Democrats’ plan would add roughly $3 trillion to the deficit over the next 10 years. The Republicans want to extend all of the lower rates, which would add about $4 trillion to the deficit over the next decade.

Democrats had hoped to put political pressure on Republicans by portraying them as fighting to maintain tax breaks even for millionaires and billionaires. But the Republicans pushed Democrats against a wall, making it clear that if they did not quickly agree to extend all of the lower rates, they risked accomplishing nothing else before the end of the year, when they lose their majority in the House.

    Senate Republicans Threaten Tax Dispute Blockade, NYT, 1.12.2010,http://www.nytimes.com/2010/12/02/us/politics/02cong.html

Energy and the Lame Duck

November 22, 2010
The New York Times

This Congress’s record on energy and environmental issues is shameful. The Senate, paralyzed by Republican opposition and indifferent Democratic leadership, could not muster the 60 votes to pass legislation to reduce carbon emissions. It even failed to respond to the gulf oil spill.

The next Congress is sure to be worse. The Democratic majority in the Senate will be smaller. And the House — which has led the way in recent years — and its committees will be dominated by Republicans who are loudly skeptical about the science behind climate change and determined to cripple President Obama’s authority to use regulation to tackle the problem.

There is little chance of a major breakthrough in Congress’s remaining weeks, but it is still possible to get some important legislation through.

One bill worth pressing is a creative measure with bipartisan support in both houses that would ramp up the use of natural gas in heavy-duty trucks and create a pilot program for building a network of recharging stations for electric vehicles. Converting trucks to natural gas could save 1.2 million barrels of oil by 2035; electric cars could eventually be a real game-changer.

The bill would spend $5.5 billion over 10 years in tax credits and other incentives to encourage manufacturers to produce natural gas vehicles and companies and consumers to buy them. The bill would also encourage research and development on electric cars. It would be paid with a small increase in the per-barrel fee oil companies pay into the oil spill liability fund. Oil companies are screaming, even though it would mean a tiny, one-thirteenth-of-a-cent increase in the price of a gallon of gasoline. Big Oil should not be allowed to kill off this bill.

Both houses must also renew tax subsidies for renewable energy sources like wind and solar power. Unless Congress acts, they will expire at year-end. Here, the big enemy is sloth, not any special interest.

Renewable energy sources are not yet ready to compete with cheaper and dirtier fuels like coal, oil and natural gas. But there has been real progress in recent years, and past experience shows that when the tax credits are allowed to expire, investors disappear.

Then there is the oil spill bill, languishing in the Senate. A series of reports in recent weeks have highlighted a host of failures by both industry and regulators.

Like the House version, a Senate bill would require the oil industry to adopt new safety measures on deep-water rigs and would also upgrade training of rig workers and government inspectors. It would mandate independent inspections of drilling operations and reorganize government agencies, with a goal of ending, at last, the conflicts of interest that led the Interior Department to fast-track drilling projects at the expense of safety.

The department has issued rules that seek many of these same ends, but Congressional action would give the force of law to reforms that could be reversed by future administrations.

This does not relieve the White House and the Democrats of the responsibility to press forward with broader legislation to combat climate change. The threat is too big to allow the ideologues and professional skeptics to stop the country from doing what it needs to do. Even so, there is time in the remaining weeks of the lame-duck session to take small but still important steps.

    Energy and the Lame Duck, NYT, 22.11.2010, http://www.nytimes.com/2010/11/23/opinion/23tues1.html

Black and Republican and Back in Congress

November 5, 2010
The New York Times
By JENNIFER STEINHAUER

WASHINGTON — For the first time in over a decade, the incoming class of Congress will include two black Republicans, both of whom rode the Tea Party wave to victory while playing down their race.

One of them, Allen West, a retired lieutenant colonel in the Army, prevailed in a tough fight in a South Florida district. The other, Tim Scott, is the first black Republican to be elected to the House of Representatives from South Carolina in over a century. They will be the first black Republicans in Congress since J. C. Watts of Oklahoma retired in 2003.

“I did not want to run as a black candidate; I did not want to run as a military candidate,” Mr. West said in a telephone interview. “I wanted to run as an American candidate and win the respect of the people.”

While the number of African-Americans in Congress has steadily increased since the civil rights era, black Republicans have been nearly as rare as quetzal birds.

For Mr. Watts, a former college quarterback, the job came with a significant spotlight and significant challenges — as an African-American he was a minority among Republicans, and as a Republican he was a minority among blacks on Capitol Hill. While his time in office overlapped the tenure of another black Republican, Gary A. Franks, who represented a Connecticut district from 1991 until 1997, Mr. Watts is in the one who came to represent the perks and travails of his position.

“I was smart enough to not allow Republicans to compel me to play the role of the ‘black Republican,’ ” Mr. Watts said in a telephone interview. “But I never felt compelled to ignore real issues of the black community either.”

He did not join the Congressional Black Caucus because it was dominated by Democrats, he said, a decision that Mr. West said was a mistake that he would not repeat.

“I think you need to have competing voices in that body,” Mr. West said. “I think that is important.” (Mr. Scott has not decided if he will join the caucus.)

African-Americans found a place in Congress in the latter decades of the 19th century, particularly during the Reconstruction period after the Civil War, when 16 black men served, all of them Republicans. The first was Hiram R. Revels, of Mississippi, who was in the Senate from 1870 to 1871. Joseph H. Rainey from South Carolina was the first black member of the House, serving from 1870 to 1879, according to Congressional Quarterly’s “Guide to U.S. Elections.”

There were no blacks in Congress from 1900 to 1929, but since then, their numbers have increased bit by bit, especially after the civil rights movement, this time with Democrats leading the way, a reflection of the changed dynamics of each party and the shifts of power in state legislatures. Of all the blacks ever to serve in Congress, 98 have been Democrats and 27 have been Republicans; there are 42 African-American members in the current lame-duck Congress.

The yield of black Republican winners on Tuesday was small considering that 32 African-Americans ran in Republican primaries this year. “If two is the highest number of black Republicans to win since Reconstruction, it’s hard to call that a breakthrough,” said Tavis Smiley, a prominent talk show host who has repeatedly criticized Republicans as not doing enough to court black voters.

Mr. Scott and Mr. West represent the more conservative wing of their party — each had some Tea Party backing, including the support of Sarah Palin — but followed different paths to Congress.

Mr. Scott, who was born in North Charleston, S.C., grew up poor with a single mother until a Chick-fil-A franchise owner took him on as a protégé, he said, and imbued him with conservative principles. “Coming from a single-parent household and almost flunking out of high school,” Mr. Scott said, “my hope is I will take that experience and help people bring out the best that they can be.”

Mr. Scott, 45, was elected to the Charleston County Council in 1995 and the South Carolina House of Representatives in 2008. In the Congressional primary, this year he defeated both Carroll Campbell III, the son of a former South Carolina governor, and, in a runoff, Paul Thurmond, the son of former Senator Strom Thurmond, to take the seat in the First Congressional District, which hugs the South Carolina coast.

Mr. West, 49, has never held public office. Born and raised in a military family in Atlanta, he rose to battalion commander in Iraq. His 22-year military career came to an end during the war when he was relieved of his command after using a gun to coerce information from an Iraqi police officer during an interrogation. After retiring from the military in 2004, he moved to Florida, taught high school for a year and then went to Afghanistan as an adviser to the Afghan army.

John Thrasher, the chairman of the Florida Republican Party, said Mr. West won the battle to represent the 22nd Congressional District, which includes the coast of South Florida, because “he’s a great American patriot that resonated with people.”

“His opponent was Pelosi-Obama liberal,” Mr. Thrasher added, “and Allen gave them a different understanding of how government could be.”

Mr. West said he was more surprised that he won as a Republican in a district carried by the Democratic presidential nominee three elections in a row than as an African-American in a district with a white majority. But, he added, “I am honored to be first black Republican congressman from the state of Florida since Reconstruction. There is a historic aspect of it.”

Kitty Bennett contributed reporting.

    Black and Republican and Back in Congress, NYT, 5.11.2010, http://www.nytimes.com/2010/11/06/us/politics/06house.html

For G.O.P., Big Ambitions Face Daunting Obstacles

November 4, 2010
The New York Times
By JACKIE CALMES

WASHINGTON — Republican leaders in Congress are preparing to take power in two months with ambitious and sometimes contradictory goals for economic and fiscal policies, leaving little common ground with President Obama and much uncertainty about the potential impact on the nation’s problems.

Republicans are standing by their campaign vows to slash spending for domestic programs immediately by at least one-fifth — $100 billion in a single year — even as many mainstream economists say such deep cuts could further strain the economy and should await its full recovery. Republicans also say they will try to deny money to put Mr. Obama’s new health care law into effect, though they have not made clear what they would do to make up the cost savings that would be lost if they succeeded in repealing the law.

In policy documents, including a blueprint this week from Representative Eric Cantor, the likely Republican majority leader in the new Congress, the party has made clear that its main proposals for creating jobs are to cut regulations and taxes — in particular to make the Bush-era tax cuts permanent for all incomes. Extending the tax cuts, however, would add nearly $4 trillion to the debt by 2020, and hundreds of billions more in interest owed for the additional government borrowing, greatly complicating another Republican goal: balancing the budget.

With the Bush tax rates due to expire Dec. 31, that fight between Republicans and Mr. Obama, who favors extending the rates only for income below $250,000, will play out in Congress’s lame-duck session this month. On Thursday, the White House served notice that Mr. Obama, who a day earlier signaled a willingness to compromise, would not sign on to any deal making permanent the lower rates for income above $250,000.

“The president does not believe, and I think would not accept, permanently extending the upper-end tax cuts,” said his press secretary, Robert Gibbs.

The two sides could settle for something less than a permanent extension of the top rates, Mr. Gibbs suggested. Democrats say they might agree to a one- or two-year increase, and longer for the middle-income rates.

But Republicans say they will insist that, whatever the duration, all rates must be extended in tandem — the easier to extend them together again in the future. Both sides recognize that, politically, Republicans would have a harder time in the future trying to extend only the rates that benefited the richest Americans, about 2 percent of taxpayers.

Republicans’ pledge to “defund” the health care law portends another battle. Mr. Obama could veto such legislation, though Republicans could package such moves in larger bills he wants, making a veto problematic. It is unclear whether federal agencies could perhaps reprogram money intended for other purposes to make up for any money blocked by Congress.

Mr. Obama and Republicans appear to agree on one thing: a continued moratorium on spending earmarks, which are the designations in each year’s budget bills for projects sought by individual lawmakers for their constituents or for special interests.

The blueprint circulated by Mr. Cantor, of Virginia, to incoming Republicans endorsed the moratorium. Mr. Obama quickly agreed on Wednesday, saying, “That’s something I think we can — we can work on together.”

But eliminating all earmarks would hardly dent annual deficits. In the 2006 fiscal year, when Republicans last controlled Congress, they approved nearly 10,000 earmarks, a record; the $29 billion cost was about 11 percent of the year’s deficit. But now deficits are much larger, swollen by the recession.

In Republicans’ overall policy statements, they have not specified exactly how they would fulfill the promise to cut more than $100 billion from the budget for domestic discretionary programs. That would be the largest reduction in such spending from one year to the next since it began to be tracked in 1962.

Once they take control of the House in January, however, Republicans will have to begin work on their alternative to the annual budget Mr. Obama will outline soon after Congress convenes, an exercise that will test Republicans’ unity once the scale of such reductions sinks in for them, for their allies among business lobbyists and for constituents back home.

“Neither party dealt with this in the campaign, particularly with asking the middle class to face up to what costs it may have to bear,” said C. Eugene Steuerle, an economist at the Urban Institute and a Treasury official in the Reagan administration.

Mr. Obama and Congressional Democrats also have promised to work to reduce projected deficits, lest they inflate the already high federal debt to an unsustainable level. But Democrats do not favor major spending reductions until the economy recovers, perhaps by 2012, and even then they would not consider anything near the $100 billion in one-year cuts that Representative John A. Boehner of Ohio, the House speaker-in-waiting, has proposed.

“To have cuts that deep — cutting nondefense spending on average by a fifth — will require deep cuts in programs that most Americans think are very important,” said James R. Horney, the director of federal fiscal policy at the liberal-leaning Center on Budget and Policy Priorities.

Reductions inevitably would hit education, the national parks, health research and the Federal Bureau of Investigation, just to name a few, Mr. Horney said. “And if you start saying you’re going to protect certain popular programs,” he said, “then the cuts in everything else become really draconian.”

The cuts in discretionary programs would not apply to the so-called entitlement programs — chiefly Medicare, Medicaid and Social Security — whose rising costs, along with inadequate tax revenues, are driving the deficit projections.

Domestic discretionary programs account for about 15 percent of the annual budget, a portion that is not growing. Entitlement programs are 40 percent and national security spending 23 percent; both are expanding.

Mr. Cantor, in his document to other Republicans this week, has acknowledged that the debt problem could not be solved without reining in the growth of the entitlement programs. But he said that would be hard to do because Mr. Obama and Congressional Democrats “have made it abundantly clear that they will attack anyone who puts forward a plan that even tries to begin a conversation about the tough choices that are needed.”

Yet Republicans have done the same. In campaigns this year, they assailed incumbent Democrats for voting to slash Medicare as part of the new health care law, though the projected reductions save money through insurance changes, not reductions in basic Medicare benefits.

Republicans have promised to offset any new spending with additional spending cuts. They have not said they would require such offsetting savings for new tax cuts. Mr. Obama signed a pay-as-you-go law that applies to new spending and tax cuts, but Republicans in Congress could seek a vote to waive it.

    For G.O.P., Big Ambitions Face Daunting Obstacles, NYT, 4.11.2010, http://www.nytimes.com/2010/11/05/us/politics/05policy.html

How Obama Saved Capitalism and Lost the Midterms

November 2, 2010
11:59 pm
The New York Times
By TIMOTHY EGAN

Timothy Egan on American politics and life, as seen from the West.

If I were one of the big corporate donors who bankrolled the Republican tide that carried into office more than 50 new Republicans in the House, I would be wary of what you just bought.

For no matter your view of President Obama, he effectively saved capitalism. And for that, he paid a terrible political price.

Suppose you had $100,000 to invest on the day Barack Obama was inaugurated. Why bet on a liberal Democrat? Here’s why: the presidency of George W. Bush produced the worst stock market decline of any president in history. The net worth of American households collapsed as Bush slipped away. And if you needed a loan to buy a house or stay in business, private sector borrowing was dead when he handed over power.

As of election day, Nov. 2, 2010, your $100,000 was worth about $177,000 if invested strictly in the NASDAQ average for the entirety of the Obama administration, and $148,000 if bet on the Standard & Poors 500 major companies. This works out to returns of 77 percent and 48 percent.

But markets, though forward-looking, are not considered accurate measurements of the economy, and the Great Recession skewed the Bush numbers. O.K. How about looking at the big financial institutions that keep the motors of capitalism running — banks and auto companies?

The banking system was resuscitated by $700 billion in bailouts started by Bush (a fact unknown by a majority of Americans), and finished by Obama, with help from the Federal Reserve. It worked. The government is expected to break even on a risky bet to stabilize the global free market system. Had Obama followed the populist instincts of many in his party, the underpinnings of big capitalism could have collapsed. He did this without nationalizing banks, as other Democrats had urged.

Saving the American auto industry, which has been a huge drag on Obama’s political capital, is a monumental achievement that few appreciate, unless you live in Michigan. After getting their taxpayer lifeline from Obama, both General Motors and Chrysler are now making money by making cars. New plants are even scheduled to open. More than 1 million jobs would have disappeared had the domestic auto sector been liquidated.

“An apology is due Barack Obama,” wrote The Economist, which had opposed the $86 billion auto bailout. As for Government Motors: after emerging from bankruptcy, it will go public with a new stock offering in just a few weeks, and the United States government, with its 60 percent share of common stock, stands to make a profit. Yes, an industry was saved, and the government will probably make money on the deal — one of Obama’s signature economic successes.

Interest rates are at record lows. Corporate profits are lighting up boardrooms; it is one of the best years for earnings in a decade.

All of the above is good for capitalism, and should end any serious-minded discussion about Obama the socialist. But more than anything, the fact that the president took on the structural flaws of a broken free enterprise system instead of focusing on things that the average voter could understand explains why his party was routed on Tuesday. Obama got on the wrong side of voter anxiety in a decade of diminished fortunes.

“We have done things that people don’t even know about,” Obama told Jon Stewart. Certainly. The three signature accomplishments of his first two years — a health care law that will make life easier for millions of people, financial reform that attempts to level the playing field with Wall Street, and the $814 billion stimulus package — have all been recast as big government blunders, rejected by the emerging majority.

But each of them, in its way, should strengthen the system. The health law will hold costs down, while giving millions the chance at getting care, according to the nonpartisan Congressional Budget Office. Financial reform seeks to prevent the kind of meltdown that caused the global economic collapse. And the stimulus, though it drastically raised the deficit, saved about 3 million jobs, again according to the CBO. It also gave a majority of taxpayers a one-time cut — even if 90 percent of Americans don’t know that, either.

Of course, nobody gets credit for preventing a plane crash. “It could have been much worse!” is not a rallying cry. And, more telling, despite a meager uptick in job growth this year, the unemployment rate rose from 7.6 percent in the month Obama took office to 9.6 today.

Billions of profits, windfalls in the stock market, a stable banking system — but no jobs.

Of course, the big money interests who benefited from Obama’s initiatives have shown no appreciation. Obama, as a senator, voted against the initial bailout of AIG, the reckless insurance giant. As president, he extended them treasury loans at a time when economists said he must — or risk further meltdown. Their response was to give themselves $165 million in executive bonuses, and funnel money to Republicans this year.

Money flows one way, to power, now held by the party that promises tax cuts and deregulation — which should please big business even more.

President Franklin Roosevelt also saved capitalism, in part by a bank “holiday” in 1933, at a time when the free enterprise system had failed. Unlike Obama, he was rewarded with midterm gains for his own party because a majority liked where he was taking the country. The bank holiday was incidental to a larger public works campaign.

Obama can recast himself as the consumer’s best friend, and welcome the animus of Wall Street. He should hector the companies sitting on piles of cash but not hiring new workers. For those who do hire, and create new jobs, he can offer tax incentives. He should finger the financial giants for refusing to clean up their own mess in the foreclosure crisis. He should point to the long overdue protections for credit card holders that came with reform.

And he should veto, veto, veto any bill that attempts to roll back some of the basic protections for people against the institutions that have so much control over their lives – insurance companies, Wall Street and big oil.

They will whine a fierce storm, the manipulators of great wealth. A war on business, they will claim. Not even close. Obama saved them, and the biggest cost was to him.

    How Obama Saved Capitalism and Lost the Midterms, NYT, 2.11.2010, http://opinionator.blogs.nytimes.com/2010/11/02/how-obama-saved-capitalism-and-lost-the-midterms/

G.O.P. Captures House, but Not Senate

November 2, 2010
The New York Times
By JEFF ZELENY

Republicans captured control of the House of Representatives on Tuesday and expanded their voice in the Senate, riding a wave of voter discontent as they dealt a setback to President Obama just two years after his triumphal victory.

A Republican resurgence, propelled by deep economic worries and a forceful opposition to the Democratic agenda of health care and government spending, delivered defeats to House Democrats from the Northeast to the South and across the Midwest. The tide swept aside dozens of lawmakers, regardless of their seniority or their voting records, upending the balance of power for the second half of Mr. Obama’s term.

But Senator Harry Reid of Nevada, the Democratic leader, narrowly prevailed and his party hung onto control by winning hard-fought contests in California, Delaware, Connecticut and West Virginia. Republicans picked up at least six Democratic seats, including the one formerly held by Mr. Obama, and the party will welcome Marco Rubio of Florida and Rand Paul of Kentucky to their ranks, two candidates who were initially shunned by the establishment but beloved by the Tea Party movement.

“The American people’s voice was heard at the ballot box,” said Representative John A. Boehner of Ohio, who is positioned to become the next speaker of the House. “We have real work to do, and this is not the time for celebration.”

The president, who watched the election returns with a small set of advisers at the White House, called Mr. Boehner shortly after midnight to offer his congratulations and to talk about the way forward as Washington prepares for divided government. Republicans won at least 56 seats, not including those from some Western states where ballots were still being counted, surpassing the 52 seats the party won in the sweep of 1994.

The most expensive midterm election campaign in the nation’s history, fueled by a raft of contributions from outside interest groups and millions in donations to candidates in both parties, played out across a wide battleground that stretched from Alaska to Maine. The Republican tide swept into statehouse races, too, with Democrats poised to lose the majority of governorships, particularly those in key presidential swing states, like Ohio, where Gov. Ted Strickland was defeated.

One after another, once-unassailable Democrats like Senator Russ Feingold of Wisconsin, Representatives Ike Skelton of Missouri, John Spratt of South Carolina, Rick Boucher of Virginia and Chet Edwards of Texas fell to little-known Republican challengers.

“Voters sent a message that change has not happened fast enough,” said Tim Kaine, chairman of the Democratic National Committee.

Republicans did not achieve a perfect evening, losing races in several states they had once hoped to win, including the Senate contests in Delaware and Connecticut, because some candidates supported by the Tea Party movement knocked out establishment candidates to win their nominations. But they did score notable victories in some tight races, like Pat Toomey’s Senate run in Pennsylvania.

Senator Reid said in a speech that he was “more determined than ever” after his victory. “I know what it’s like to get back on your feet.”

The outcome on Tuesday was nothing short of a remarkable comeback for Republicans two years after they suffered a crushing defeat in the White House and four years after Democrats swept control of the House and Senate. It places the party back in the driver’s seat in terms of policy, posing new challenges to Mr. Obama as he faces a tough two years in his term, but also for Republicans — led by Mr. Boehner — as he suddenly finds himself in a position of responsibility, rather than being simply the outsider.

In the House, Republicans found victories in most corners of the country, including five seats in Pennsylvania, five in Ohio, at least three in Florida, Illinois and Virginia and two in Georgia. Democrats braced for the prospect of historic defeats, more than the 39 seats the Republicans needed to win control. Republicans reached their majority by taking seats east of the Mississippi even before late results flowed in from farther West.

Throughout the evening, in race after race, Republican challengers defeated Democratic incumbents, despite being at significant fund-raising disadvantages. Republican-oriented independent groups invariably came to the rescue, helping level of the playing field, including in Florida’s 24th Congressional District, in which Sandy Adams defeated Representative Suzanne Kosmas; Virginia’s 9th Congressional District, where Mr. Boucher, a 14-term incumbent, lost to Morgan Griffith; and Texas’s 17th Congressional District, in which Mr. Edwards, who was seeking his 11th term, succumbed to Bill Flores.

Democrats argued that the Republican triumph was far from complete, particularly in the Senate, pointing to the preservation of Mr. Reid and other races. In Delaware, Chris Coons defeated Christine O’Donnell, whose candidacy became a symbol of the unorthodox political candidates swept onto the ballot in Republican primary contests. In West Virginia, Gov. Joe Manchin III, a Democrat, triumphed over an insurgent Republican rival to fill the seat held for a half-century by Senator Robert C. Byrd. And in California, Senator Barbara Boxer overcame a vigorous challenge from Carly Fiorina, a Republican.

But Democrats conceded that their plans to increase voter turnout did not meet expectations, party strategists said, and extraordinary efforts that Mr. Obama made in the final days of the campaign appeared to have borne little fruit.

The president flew to Charlottesville, Va., on Friday evening, for instance, in hopes of rallying Democrats to support Representative Tom Perriello, a freshman who supported every piece of the administration’s agenda, but he was defeated despite the president’s appeals to Democrats in a state that he carried two years ago.

In governors’ races, Republicans won several contests in the nation’s middle. They held onto governorships in Texas, Nebraska and South Dakota, and had seized seats now occupied by Democrats in Tennessee, Michigan and Kansas. Sam Brownback, a United States Senator and Republican, easily took the Kansas post that Mark Parkinson, a former Republican turned Democrat, is leaving behind.

Though Democrats, who before the election held 26 governors’ seats compared to 24 for the Republicans, were expected to face losses, there were also bright spots. In New York, Attorney General Andrew M. Cuomo easily defeated the Republican, Carl P. Paladino, even as Republicans were expected to pick up seats in the state legislature and the congressional delegation. In Massachusetts, Gov. Deval Patrick won a second term.

As the election results rolled in, with Republicans picking up victories shortly after polls closed in states across the South, East and the Midwest, the House speaker, Nancy Pelosi, and other party leaders made urgent appeals through television interviews that there was still time for voters in other states to cast their ballots.

But the mood in Democratic quarters was glum, with few early signs of optimism in House or Senate races that were called early in the evening. Surveys that were conducted with voters across the country also provided little sense of hope for Democrats, with Republicans gaining a majority of independents, college-educated people and suburbanites — all groups that were part of the coalition of voters who supported Mr. Obama two years ago.

“We’ve come to take our government back,” Mr. Paul told cheering supporters who gathered in Bowling Green, Ky. “They say that the U.S. Senate is the world’s most deliberative body. I’m going to ask them to deliberate on this: The American people are unhappy with what’s going on in Washington.”

The election was a referendum on President Obama and the Democratic agenda, according to interviews with voters that were conducted for the National Election Pool, a consortium of television networks and The Associated Press, with a wide majority of the electorate saying that the country was seriously off track. Nearly nine in 10 voters said they were worried about the economy and about 4 in 10 said their family’s situation had worsened in the last two years.

The surveys found that voters were even more dissatisfied with Congress now than they were in 2006, when Democrats reclaimed control from the Republicans. Preliminary results also indicated an electorate far more conservative than four years ago, a sign of stronger turnout by people leaning toward Republicans.

Most voters said they believed Mr. Obama’s policies would hurt the country in the long run, rather than help it, and a large share of voters said they supported the Tea Party movement, which has backed insurgent candidates all across the country.

The Republican winds began blowing back in January when Democrats lost the seat long held by Senator Edward M. Kennedy of Massachusetts, with the victory of Scott P. Brown serving as a motivating force for the budding Tea Party movement and a burst of inspiration for Republican candidates across the country to step forward and challenge Democrats everywhere.

On Tuesday, the president did not leave the grounds of the White House, taking a respite from days of campaigning across the country, so he could meet with a circle of top advisers to plot a way forward for his administration and his own looming re-election campaign. The White House said Mr. Obama would hold a news conference on Wednesday to address the governing challenges that await the new Congress.

“My hope is that I can cooperate with Republicans,” Mr. Obama said in a radio interview on Tuesday. “But obviously, the kinds of compromises that will be made depends on what Capitol Hill looks like — who’s in charge.”

But even as the president was poised to offer a fresh commitment to bipartisanship, he spent the final hours of the midterm campaign trying to persuade Democrats in key states to take time to vote. From the Oval Office, Mr. Obama conducted one radio interview after another, urging black voters in particular to help preserve the party’s majority and his agenda.

“How well I’m able to move my agenda forward over the next couple of years is going to depend on folks back home having my back,” Mr. Obama said in an interview with the Chicago radio station WGCI, in which he made an unsuccessful appeal for voters to keep his former Senate seat in Democratic hands.

There was little Democratic terrain across the country that seemed immune to Republican encroachment, with many of the most competitive races being waged in states that Mr. Obama carried strongly only two years ago. From the president’s home state of Illinois to neighboring Iowa, Wisconsin, Indiana and Ohio — all places that were kind to the Democratic ticket in 2008 — Republicans worked aggressively to find new opportunities.

For all the drama surrounding the final day of the midterm campaign, more than 19 million Americans had voted before Tuesday, a trend that has grown with each election cycle over the last decade, as 32 states now offer a way for voters to practice democracy in far more convenient ways than simply waiting in line on Election Day.

Megan Thee-Brenan, David M. Herszenhorn and Michael Luo contributed reporting.

    G.O.P. Captures House, but Not Senate, NYT, 2.11.2010, http://www.nytimes.com/2010/11/03/us/politics/03elect.html

The Senate and the Spill

September 26, 2010
The New York Times

The Coast Guard’s announcement a week ago that BP’s runaway Macondo well in the Gulf of Mexico was “effectively dead” brought a collective sigh of relief from the company, the citizens of the Gulf Coast and President Obama — indeed from anyone who for nearly five harrowing months had been transfixed by one of the worst environmental disasters in American history.

Unfortunately, it may also have given the politically paralyzed United States Senate one more excuse not to move forward on a controversial but necessary bill that would build on the lessons of the gulf and make offshore drilling safer in the future.

The House has already passed such a bill. It would be irresponsible of the Senate not to do likewise. The Senate has not distinguished itself on environmental issues over the last two years, failing even to vote on comprehensive energy and climate legislation that the House had passed. The least it can do is muster a meaningful response to the spill.

Harry Reid, the Senate majority leader, has in hand an honorable bill that is the product of endless hearings by several committees and could be quickly brought to the floor. Like the House bill, it would tighten environmental safeguards and reorganize the agency at the Interior Department that oversees drilling in order to eliminate the conflicts of interest that allowed BP to manipulate the system and short-circuit regulatory reviews.

Like the House bill, it would also require companies to furnish more detailed response plans before receiving permits to drill, and would eliminate the $75 million liability cap for companies responsible for a spill. That cap is moot in BP’s case, since the company has already agreed to pay $20 billion in damage claims. But lifting the cap would provide a powerful incentive to other companies to behave responsibly.

As an added fillip, both bills would provide long-term financing (from oil company fees) for the Land and Water Conservation Fund, the government’s main program for acquiring open space.

With so much to like, what’s the holdup? Senator Mary Landrieu, a Democrat from Louisiana, complains that lifting the liability cap would discourage smaller drillers without deep pockets that could be bankrupted by a single accident. Surely this can be resolved with compromise language providing for a sliding scale.

The real reason — no surprise here — is intense opposition from the oil companies and their allies in both parties who claim, without persuasive evidence, that the new rules, fees and penalties would raise costs, inhibit domestic production and increase American dependence on foreign oil. The Senate should ignore these complaints, pass a bill and then move forward to a conference with the House.

If it doesn’t, voters should hold it accountable. Congress cannot undo the effects of the spill. But it can ensure a safer future.

    The Senate and the Spill, NYT, 26.9.2010, http://www.nytimes.com/2010/09/27/opinion/27mon1.html

Military Equality Goes Astray

September 21, 2010
The New York Times

The best chance this year to repeal the irrational ban on openly gay members of the military slipped away Tuesday, thanks to the buildup of acrimony and mistrust in the United States Senate.

Republicans, with the aid of two Arkansas Democrats, unanimously voted to filibuster the Pentagon’s financing authorization bill, largely because Democrats had included in it a provision to end the military’s “don’t ask, don’t tell” policy.

Another vote to end the policy could come again in the lame-duck session in December, but now there is also a chance it will be put off until next year, when the political landscape on Capitol Hill could be even more hostile to gay and lesbian soldiers.

The decision also means an end, for now, to another worthy proposal that was attached to the Pentagon bill: the Dream Act, which permits military service and higher education — as well as a chance for citizenship — for young people whose parents brought them to this country as children without proper documentation.

Republicans said the inclusion of both items in the defense bill was a blatant political attempt by Senator Harry Reid, the Democratic leader, to bolster his chances for re-election by invigorating the party’s base. This is, in fact, an election year, but the debate over the military’s discrimination policy has gone on for years, and the looming balloting does not absolve Congress of the duty to address this denial of a fundamental American right.

No evidence has been found that open service by gay and lesbian soldiers would harm the military; in fact, a federal judge recently found the opposite. The policy has led to critical troop shortages by forcing out more than 13,000 qualified service members over the last 16 years, according to the judge, Virginia Phillips.

A Pentagon study now under way may help guide the implementation of a nondiscrimination policy, but it is unlikely to change the basic facts of the question.

President Obama, the House and a majority of senators clearly support an end to “don’t ask, don’t tell,” but that, of course, is insufficient in the upside-down world of today’s Senate, where 40 members can block anything.

The two parties clashed on the number of amendments that Republicans could offer. Republicans wanted to add dozens of amendments, an obvious delaying tactic, while Democrats tried to block all but their own amendments. In an earlier time, the two sides might have reached an agreement on a limited number of amendments, but not in this Senate, and certainly not right before this election, when everyone’s blood is up even more than usual.

If the military’s unjust policy is not repealed in the lame-duck session, there is another way out. The Obama administration can choose not to appeal Judge Phillips’s ruling that the policy is unconstitutional, and simply stop ejecting soldiers.

But that would simply enable lawmakers who want to shirk their responsibility. History will hold to account every member of Congress who refused to end this blatant injustice.

    Military Equality Goes Astray, NYT, 21.9.2010, http://www.nytimes.com/2010/09/22/opinion/22wed1.html

A Filibuster Fix

August 27, 2010
The New York Times
By NORMAN ORNSTEIN

Washington

AFTER months of debate, Senate Democrats this summer broke a Republican filibuster against a bill to extend unemployment benefits. But the Republicans insisted on applying a technicality in the Senate rules that allowed for 30 more hours of floor time after a successful vote to end debate. As a result, the bill — with its desperately needed and overdue benefits for more than 2 million unemployed Americans — was pointlessly delayed a few days more.

The Senate, once the place for slow and careful deliberation, has been overtaken by a culture of obstructionism. The filibuster, once rare, is now so common that it has inverted majority rule, allowing the minority party to block, or at least delay, whatever legislation it wants to oppose. Without reform, the filibuster threatens to bring the Senate to a halt.

It is easy to forget that the widespread use of the filibuster is a recent development. From the 1920s to the 1950s, the average was about one vote to end debate, also known as a cloture motion, a year; even in the 1960s, at the height of the civil rights debates, there were only about three a year.

The number of cloture motions jumped to three a month during the partisan battles of the 1990s. But it is the last decade that has seen the filibuster become a regular part of Senate life: there was about one cloture motion a week between 2000 and 2008, and in the current Congress there have been 117 — more than two a week.

Even though there might be several motions for cloture for each filibuster, there clearly has been a remarkable increase in the use of what is meant to be the Congressional equivalent of a nuclear weapon.

Filibusters aren’t just more numerous; they’re more mundane, too. Consider an earlier bill to extend unemployment benefits, passed in late 2009. It faced two filibusters — despite bipartisan backing and its eventual passage by a 98-0 margin. A bill that should have zipped through in a few days took four weeks, including seven days of floor debate. Or take the nomination of Judge Barbara Milano Keenan to the United States Court of Appeals for the Fourth Circuit: she, too, faced a filibuster, even though she was later confirmed 99 to 0.

Part of the problem lies with today’s partisan culture, in which blocking the other party takes priority over passing legislation or confirming candidates to key positions. And part of the problem lies with changes in Senate practices during the 1970s, which allowed the minority to filibuster a piece of legislation without holding up other items of business.

But the biggest factor is the nature of the filibuster itself. Senate rules put the onus on the majority for ending a debate, regardless of how frivolous the filibuster might be.

If the majority leader wants to end a debate, he or she first calls for unanimous consent for cloture, basically a voice vote from all the senators present in the chamber. But if even one member of the filibustering minority is present to object to the motion, the majority leader has to hold a roll call vote. If the majority leader can’t round up the necessary 60 votes, the debate continues.

Getting at least 60 senators on the floor several times a week is no mean feat given travel schedules, illnesses and campaign obligations. The most recent debate over extending unemployment benefits, for example, took so long in part because the death of Senator Robert Byrd, a Democrat from West Virginia, left the majority with only 59 votes for cloture. The filibuster was brought to an end only after West Virginia’s governor appointed a replacement.

True, the filibuster has its benefits: it gives the minority party the power to block hasty legislation and force a debate on what it considers matters of national significance. So how can the Senate reform the filibuster to preserve its usefulness but prevent its abuse?

For starters, the Senate could replace the majority’s responsibility to end debate with the minority’s responsibility to keep it going. It would work like this: for the first four weeks of debate, the Senate would operate under the old rules, in which the majority has to find enough senators to vote for cloture. Once that time has elapsed, the debate would automatically end unless the minority could assemble 40 senators to continue it.

An even better step would be to return to the old “Mr. Smith Goes to Washington” model — in which a filibuster means that the Senate has to stop everything and debate around the clock — by allowing a motion requiring 40 votes to continue debate every three hours while the chamber is in continuous session. That way it is the minority that has to grab cots and mattresses and be prepared to take to the floor night and day to keep their filibuster alive.

Under such a rule, a sufficiently passionate minority could still preserve the Senate’s traditions and force an extended debate on legislation. But frivolous and obstructionist misuse of the filibuster would be a thing of the past.


Norman Ornstein is a resident scholar at the American Enterprise Institute and a co-author of “The Broken Branch: How Congress Is Failing America and How to Get It Back on Track.”

    A Filibuster Fix, NYT, 27.8.2010, http://www.nytimes.com/2010/08/28/opinion/28ornstein.html

Kagan Joins Supreme Court After 63-37 Vote in Senate

August 5, 2010
The New York Times
By CARL HULSE

WASHINGTON — The Senate confirmed Elena Kagan to a seat on the Supreme Court on Thursday, giving President Obama his second appointment to the court in a year and a victory over Republicans who sharply challenged her credentials and record.

Ms. Kagan, who is set to be sworn in Saturday as the newest member of the court, was approved by a vote of 63 to 37 after hearings and floor debate that showcased the competing views of Democrats and Republicans about the court but exposed no significant stumbling blocks to her confirmation.

In welcoming the Senate action, Mr. Obama said he expected that Ms. Kagan would be a strong addition to the court because she “understands that the law isn’t just an abstraction or an intellectual exercise.”

“She knows that the Supreme Court’s decisions shape not just the character of our democracy, but the circumstances of our daily lives,” the president said.

Ms. Kagan, the former dean of the Harvard Law School, a legal adviser in the Clinton administration and solicitor general in the Obama White House, becomes the fourth woman to serve on the court. She will join two other women currently serving, including Justice Sonia Sotomayor, who was confirmed almost exactly a year ago, and Justice Ruth Bader Ginsburg. She will be the only justice on the court not to have served previously as a judge.

At age 50, the New York native could have a long tenure, but her confirmation is not seen as immediately altering the current closely divided ideological makeup of the court, which is often split 5 to 4 on major decisions. She succeeds Justice John Paul Stevens, the leader of the court’s liberal bloc, who is retiring.

“Her qualifications, intelligence, temperament and judgment will make her a worthy successor to Justice John Paul Stevens,” said Senator Patrick J. Leahy, Democrat of Vermont and chairman of the Judiciary Committee.

The court she is joining has grown more assertive in placing a conservative stamp on decisions under Chief Justice John G. Roberts Jr., and is likely to confront an array of divisive issues in coming years, like same-sex marriage, immigration and the federal government’s role in health care.

Among the cases she is expected to sit in on when the new term starts in October are two major First Amendment clashes: one involving California’s attempts to limit the sale of violent video games to minors, the other on the free speech rights of protesters at military funerals.

Because of her role as solicitor general in the Obama administration, Ms. Kagan has already identified 11 cases on the docket for the next term in which she would disqualify herself because she had worked on them for the White House. One concerns the privacy rights of scientists and engineers at the Jet Propulsion Laboratory who object to federal background checks.

In the final vote, 5 Republicans joined 56 Democrats and 2 independents in supporting the nomination; 36 Republicans and one Democrat, Senator Ben Nelson of Nebraska, opposed her. In a sign of the import of the moment, senators formally recorded their votes from their desks.

The partisan divide over the nomination illustrated the increasing political polarization of fights over Supreme Court nominees, who in years past were backed by both parties in the absence of some disqualifying factor. Ms. Kagan received fewer Republican votes than Justice Sotomayor, who was supported by nine Republicans in her 68-to-31 confirmation on Aug. 6, 2009. Democrats balked at Samuel A. Alito Jr., nominated by President George W. Bush, with only four endorsing him in a 58-to-42 vote in January 2006.

Most Senate Republicans challenged Ms. Kagan’s nomination until the end, asserting that she lacked sufficient experience and had unfairly stigmatized the military by supporting a bar on recruiters at Harvard Law over the military’s policy against allowing gay men and lesbians to serve openly. They said her record in both Democratic administrations and her strong ties to Mr. Obama suggested that she would try to imprint her own political values and those of the president on court decisions.

“Whether it’s small-claims court or the Supreme Court, Americans expect politics to end at the courtroom door,” said Senator Mitch McConnell of Kentucky, the Republican leader. “Nothing in Elena Kagan’s record suggests that her politics will stop there.”

Republicans said the need to interpret the Constitution strictly was, in their view, reaffirmed by this week’s federal court ruling against California’s voter-imposed ban on same-sex marriage, a case considered likely to eventually reach the Supreme Court.

Senator Jeff Sessions of Alabama, the senior Republican on the Judiciary Committee, warned that the American public would “not forgive the Senate if we further expose our Constitution to revision and rewrite by judicial fiat to advance what President Obama says is a broader vision of what America should be.”

But Democrats described the new justice as a brilliant legal scholar who would broaden the outlook of the court.

“When it opens this fall, three women — a full third of the bench — will preside together for the first time,” Senator Harry Reid, the Nevada Democrat and majority leader, said. “That’s really progress.”

Mr. Obama called Ms. Kagan’s confirmation “a sign of progress that I relish not just as a father who wants limitless possibilities for my two daughters, but as an American proud that our Supreme Court will be more inclusive, more representative and more reflective of us as a people than ever before.”

Ms. Kagan has never been a judge and her previous courtroom experience was limited — she argued her first case before the Supreme Court last year — leading some Republicans to cite her lack of time on the bench as a chief factor in their opposition. They included Senator Scott Brown, a Massachusetts Republican, who announced Thursday that he would oppose the nomination of the woman he introduced at her confirmation hearings.

“When it comes to the Supreme Court, experience matters,” he said in a statement.

Democrats dismissed that argument, with Senator Christopher J. Dodd of Connecticut noting that more than one-third of the 111 Americans who have served on the court were not previously judges, including former Chief Justice William H. Rehnquist, whose tenure was highly regarded by many Republicans.

“I would therefore submit to my colleagues that there are other important measures of the quality of a Supreme Court nominee besides the depth of his or her experience on the bench,” Mr. Dodd said.

    Kagan Joins Supreme Court After 63-37 Vote in Senate, NYT, 5.8.2010, http://www.nytimes.com/2010/08/06/us/politics/06kagan.html

Senate Clears Way for $26 Billion in State Aid

August 4, 2010
The New York Times
By DAVID M. HERSZENHORN

WASHINGTON — The Senate on Wednesday cleared the way for a $26 billion package of aid to states and school districts, and the House speaker, Nancy Pelosi, said she would summon members from their summer recess to grant final approval to the bill.

The measure had been hung up by partisan wrangling between Democrats, who said it was necessary to avert layoffs of teachers and cutbacks in services by strapped states, and Republicans, who objected to another round of government spending and characterized it as a political payoff to unions.

The procedural vote in the Senate was 61 to 38, with the Maine Republicans, Susan Collins and Olympia J. Snowe, joining Democrats in support of ending debate. The Senate is set for a final vote on Thursday before adjourning for its recess.

The vote quickly prompted calls for the House, which adjourned last Friday, to return to Washington. And in a Twitter message Wednesday, Ms. Pelosi said lawmakers would reconvene next week to approve the bill and send it to President Obama.

The legislation would provide $10 billion to retain teachers who might otherwise lose jobs to cutbacks, and an additional $16 billion to help states struggling to close budget deficits.

While the move will interrupt summer campaigning, the vote will give Democrats a concrete accomplishment that they can trumpet at a time when unemployment remains high. Republicans, in turn, immediately criticized the bill as catering to teachers’ unions and another example of irresponsible spending by Democrats.

Mr. Obama praised the Senate’s action, saying in a statement that it would save teacher jobs and ensure “cash-strapped states can get the relief they need.”

“We had a choice,” said Rahm Emanuel, the White House chief of staff. “Either teachers could be in the classroom or they could be on the unemployment lines.”

The House had approved money to save teacher jobs as part of an emergency war spending bill. But the Senate rejected it.

Some senators complained that the House bill had cut some of Mr. Obama’s signature education initiatives, including about $500 million from the competitive grant program called Race to the Top.

The cost of the Senate bill is fully paid with other spending cuts and a provision to close a tax loophole.

House Republicans criticized the Senate measure.

“Democrats would be better off listening to their constituents, who are asking, ‘Where are the jobs?’ rather than returning to Washington, D.C., to vote for more tax hikes and special-interest bailouts,” said Michael Steel, a spokesman for Representative John A. Boehner of Ohio, the Republican leader.

Many governors have been clamoring for help for their states.

The $16.1 billion in aid to states would increase the federal contribution toward Medicaid costs, allowing states to shift money elsewhere.

“We saved people’s jobs,” the Senate majority leader, Harry Reid of Nevada, said after the vote. “The bill,” he added, “keeps hundreds of thousands of teachers, firefighters, policemen and other civil employees from being fired or laid off.”

Republican leaders said that the aid had too many strings attached, and that what Democrats called a tax “loophole” would amount to a nearly $10 billion tax increase on multinational corporations.

“Washington needs to take care of its own fiscal mess, not deepen it by bailing out the states,” said the Senate Republican leader, Mitch McConnell of Kentucky.

Senator Judd Gregg, Republican of New Hampshire, said the bill was a sop to organized labor. “It’s to pay off education unions,” he said.

Democrats said the measure would save as many as 140,000 teaching jobs.

While returning to the Capitol would disrupt campaign activities — August is a busy month to shoot commercials and raise money — it could also help Democrats avoid cantankerous town-hall-style meetings with constituents.

Several lawmakers also planned to be on international fact-finding trips, and it was unclear if everyone could make it back to Washington.

In her Twitter message, Ms. Pelosi said that duty called. “I will be calling the House back into session early next week to save teachers’ jobs and help seniors & children,” she wrote.


Jeff Zeleny contributed reporting.

    Senate Clears Way for $26 Billion in State Aid, NYT, 4.8.2010, http://www.nytimes.com/2010/08/05/us/politics/05spend.html

Senate Gives Final Approval to Jobless Benefits

July 21, 2010
The New York Times
By CARL HULSE

WASHINGTON – The Senate gave final approval Wednesday evening to legislation providing added unemployment benefits through November to millions of Americans who have been out of work for six months or more, ending a politically charged fight.

After beating back a last round of Republican challenges, the Senate voted 59 to 39 to send the $34 billion unemployment measure to the House, where quick approval was expected as early as Thursday so the measure could be signed into law by President Obama.

Democrats were harsh in their criticism of Republicans who held up the unemployment money by refusing to vote for it unless some way was found to keep the costs from being added to the deficit. They noted that Republicans have not applied that same standard to tax cuts for the most affluent Americans.

“I wish they had that same sense of worry and outrage about the deficit when they were giving tax breaks, hundreds of billions of dollars to very wealthy Americans, hundreds of billions of dollars year after year after year to the wealthy Americans,” Senator Robert P. Casey Jr., Democrat of Pennsylvania, said.

Republicans said the deficit has reached crisis proportions meriting tougher action by Congress, which they said should be able to find a way to distribute unemployment aid without adding to the deficit.

“Hard times require hard decisions,” Senator Tom Coburn, Republican of Oklahoma, said. “What we are seeing is the easy way out.”

The legislation provides unemployment pay for those who have exhausted their standard 26 weeks of aid. Those out of work can qualify for up to 99 weeks of benefits in some states. The money has been caught up in a political fight since the end of May, causing more than 2 million people to see their jobless checks dry up, with millions more in danger of having their benefits run out if the money was not approved.

Democrats were able to break the impasse Tuesday with the arrival of Carte Goodwin, the new Democratic senator from West Virginia, who provided the key 60th vote to break the filibuster. Even though passage of the measure was assured Tuesday, Republicans used their procedural power to delay a final vote until Wednesday evening while they forced Democrats to vote on a series of politically tinged proposals on immigration and estate taxes that had no chance of being approved.

Democrats said the Republican tactics showed insensitivity to Americans who were in need of the money. Republicans said that Democrats, despite their complaints about timing, did not keep the House in session Wednesday to vote after the Senate approval since Democrats wanted to attend a gala fundraiser. Democrats called that criticism unwarranted since it was Republicans who had dragged out the issue over several days.

    Senate Gives Final Approval to Jobless Benefits, NYT, 21.7.2010, http://www.nytimes.com/2010/07/22/us/politics/22jobs.html

Congress Passes Financial Reform

July 15, 2010
The New York Times

There was more than enough in the financial reform bill — now on its way to President Obama — to merit broad support. Yet, for Thursday’s final Senate vote on the bill, 60 to 39, just three Republicans joined 57 Democrats to support reform. In the House, only three Republicans voted for the bill when it passed that chamber in June, 237 to 192.

Republican opponents would have you believe that lack of bipartisanship was evidence of the bill’s unworthiness, but the margin of victory was really about partisan politics and not the bill’s content. That made the vote an even greater victory for Mr. Obama, who has had to fight for every inch of progress against entrenched Republicans (who have been willing to deny unemployment benefits to millions of Americans rather than cooperate with Democrats on anything).

As was the case with last year’s economic stimulus and this year’s health care overhaul, Republican opposition to the bill was primarily an attempt to drag down Mr. Obama by killing any legislative accomplishment.

When that effort was headed for failure, Republican leaders disparaged the bill on ideological grounds. On Thursday, Senator Mitch McConnell of Kentucky, the Republican leader, lashed out at what he called a “government-driven solution,” while the senior Republican on the banking committee, Richard Shelby of Alabama, bemoaned “vast new bureaucracies.”

Those are convenient and time-tested bugaboos to campaign by, but they ignore the urgent needs the bill addresses, and its achievements. Those include resolution procedures to help ensure that shareholders and creditors — not taxpayers — bear the losses when big financial institutions fail; new capital requirements for banks and other curbs to help quell speculative excess, including the regulation of derivatives and restrictions on proprietary trading.

To get all that, the bill had to withstand a lobbying juggernaut. Since January 2009, the financial sector has spent nearly $600 million to weaken reform, according to the Center for Responsive Politics. The lobbyists notched some victories, to be sure, mainly in the defeat of reforms that would have broken up large banks and done more to constrain risk-taking throughout the financial system.

But they also lost, especially on consumer protection. The new consumer financial protection bureau established in the bill is a milestone, not only for its intent and power to rectify lending abuses, but because it will institutionalize the insight that the safety and soundness of banks cannot — and should not — be measured by profitability alone, but by the impact that bank practices ultimately may have on consumers.

Having earned this victory, the Obama White House and the bill’s Congressional supporters still have another fight ahead of them — over implementing the bill. The legislation requires regulators to write hundreds of rules and conduct dozens of studies, a process that occurs largely outside of public view.

Complicating public trust in the process is the fact that some of the regulatory bodies — the Federal Reserve comes most prominently to mind — are still run by the same people who were blind-eyed as the financial crisis developed. And because the implementation phase is labor- and resource-intensive, public-interest groups, including consumer and investor advocates, will be outmatched by the financial lobby. Congress will have to be unceasingly vigilant during the rule-making to ensure that resulting regulations reflect lawmakers’ intent and the public’s needs.

The administration also must supply top-level fire power, and use the president’s bully pulpit, to guarantee that the bill’s promise is fulfilled.

Supporters of this much-needed financial reform bill took a well-earned bow on Thursday. Now they have to get back to work.

    Congress Passes Financial Reform, NYT, 15.7.2010, http://www.nytimes.com/2010/07/16/opinion/16fri1.html

Financial Oversight Bill Signals Shift on Deregulation

July 15, 2010
The New York Times
By BINYAMIN APPELBAUM and DAVID M. HERSZENHORN

WASHINGTON — Congress approved a sweeping expansion of federal financial regulation on Thursday, reflecting a renewed mistrust of financial markets after decades in which Washington stood back from Wall Street with wide-eyed admiration.

The bill, heavily promoted by President Obama and Congressional Democrats as a response to the 2008 financial crisis, cleared the Senate by a vote of 60 to 39, largely along party lines, after weeks of wrangling that allowed Democrats to pick up the three Republican votes to ensure passage.

The vote was the culmination of nearly two years of fierce lobbying and intense debate over the appropriate response to the financial excesses that dragged the nation into the worst recession since the Great Depression.

The result is a catalog of repairs and additions to the rusted infrastructure of a regulatory system that has failed to keep up with the expanding scope and complexity of modern finance.

The bill subjects more financial companies to federal oversight, regulates many derivatives contracts, and creates a panel to detect risks to the financial system along with a consumer protection regulator. It leaves a vast number of details for regulators to work out, inevitably setting off another round of battles that could last for years.

Over the last half-century, as traders and lenders increasingly drove the nation’s economic growth, politicians of both parties scrambled to get out of the way, passing a series of landmark bills that allowed financial companies to become larger, less transparent and more profitable.

Usury laws were set aside. Banks were allowed to expand across state lines, sell insurance, trade securities. The government watched and did nothing as the bulk of financial activity moved into a parallel universe of private investment funds, unregulated lenders and black markets like derivatives trading.

That era of hands-off optimism was gaveled to an end on Thursday as the Senate gave final approval to a bill that reasserts the importance of federal supervision of financial transactions.

“The financial industry is central to our nation’s ability to grow, to prosper, to compete and to innovate. This reform will foster that innovation, not hamper it,” Mr. Obama said Thursday. “Unless your business model depends on cutting corners or bilking your customers, you have nothing to fear.”

The White House said Mr. Obama would sign the legislation next week.

Democrats, who celebrated with high fives and handshakes as the bill was packed in a blue box for delivery to the White House, argue that the government’s expanded role will improve the stability of the financial system without sapping its vitality. But that project faces considerable challenges. Many investors have withdrawn from markets like commercial paper that were once seen as safe. Lenders have lost faith in borrowers. Politicians and central bankers are struggling to repair economies and restore the flow of credit.

Even the bill’s political luster no longer seems certain. Despite public anger at Wall Street, the vast majority of Republicans opposed the bill with loud confidence, betting ahead of hotly contested midterm elections that the public dislikes government even more.

Senator Richard Shelby, Republican of Alabama, described the bill as “a 2,300-page legislative monster.”

“It creates vast new bureaucracies with little accountability and seriously, I believe, undermines the competitiveness of the American economy,” Mr. Shelby said on the Senate floor before the final vote. “Unfortunately, the bill does very little to make our system safer.”

The three Republicans who voted in favor were New England moderates, Olympia J. Snowe and Susan Collins of Maine and Scott Brown of Massachusetts. The one Democratic holdout was Russ Feingold of Wisconsin, who said he voted against the bill because it was not tough enough.

The bill expands federal banking and securities regulation from its focus on banks and public markets, subjecting a wider range of financial companies to government oversight, and imposing regulation for the first time on “black markets” like the enormous trade in credit derivatives.

It creates a council of federal regulators, led by the Treasury secretary, to coordinate the detection of risks to the financial system, and it provides new powers to constrain and even dismantle troubled companies.

It also creates a powerful new regulator, appointed by the president, to protect consumers of financial products, which will be housed in the Federal Reserve. The first visible result may come in about two years, the deadline for the consumer regulator to create a simplified disclosure form for mortgage loans.

Officials are already working to prepare for the expansion of government, including finding buildings in Washington to house the new agencies.

The rhythms of Washington have long dictated that crises beget legislation, but Democrats insisted Thursday that these changes also represented a long-overdue response to the evolution of the financial industry.

“This is a public sector response to transformative changes in the private sector,” said Representative Barney Frank, Democrat of Massachusetts and a crucial author of the legislation. “You have to have rules that allow you to continue to get the benefit of the innovation but curtail abuses.”

Democrats divided initially over how to pursue that goal. Some pushed to break apart large banks and curtail risky kinds of trading. Others sought a grander overhaul of federal regulation. The administration’s approach, which prevailed, instead is focused on giving existing regulators additional powers in the hope that they will produce better results.

The legislation is painted in broad strokes, so like actors handed a script, those regulators have broad leeway to shape its meaning and its impact.

“This is a framework that has the potential to be as modern as the markets, but its efficacy will certainly depend upon the judgments that regulators make,” said Lawrence H. Summers, the president’s chief economic adviser.

The legislation, for example, requires many derivatives to be traded through clearinghouses, a form of insurance for the traders, and it requires traders to disclose pricing data to encourage competition. But regulators will decide which derivatives, and how long traders can wait to disclose pricing information.

The administration can shape that process through the appointment of new leaders for the various agencies. The Senate held confirmation hearings on Thursday for three nominees to the Fed’s board of governors. In addition to appointing a new consumer regulator, the president will nominate a new comptroller of the currency, responsible for regulating national banks.

The same groups that fought to shape the legislation — bankers and business groups, consumer advocates and trade unions — already have turned their attention to the rule-making process, seeking a second chance to influence outcomes. Much of the work must be completed over the next two years, but the bill sets some deadlines more than a decade from now.

Senator Christopher J. Dodd of Connecticut, who as banking committee chairman was a main architect of the legislation, said its success ultimately would depend on regulators’ performance.

“We can’t legislate wisdom or passion. We can’t legislate competency. All we can do is create the structures and hope that good people will be appointed who will attract other good people,” Mr. Dodd said.

Mr. Dodd said he would hold hearings beginning in September to check up on that work before he retires at the end of the year.

The legislation will be carried out mostly by the same federal workers who were on duty as the financial system collapsed. The new consumer bureau, for example, mostly will be staffed with employees transferred from the consumer divisions of the existing banking regulators, which have been excoriated by Congress and other critics for failing to protect borrowers from obvious and widespread abuses.

Administration officials said they were confident that providing new leaders for those employees and granting them new powers, would produce better results.

    Financial Oversight Bill Signals Shift on Deregulation, NYT, 15.7.2010, http://www.nytimes.com/2010/07/16/business/16regulate.html

Obama to Bypass Senate to Name Health Official

July 6, 2010
The New York Times
By ROBERT PEAR

WASHINGTON — President Obama will bypass Congress and appoint Dr. Donald M. Berwick, a health policy expert, to run Medicare and Medicaid, the White House said Tuesday.

Dan Pfeiffer, the White House communications director, said the “recess appointment” was needed to carry out the new health care law. The law calls for huge changes in the two programs, which together insure nearly one-third of all Americans.

Mr. Pfeiffer said the president would appoint Dr. Berwick on Wednesday. Mr. Obama decided to act because “many Republicans in Congress have made it clear in recent weeks that they were going to stall the nomination as long as they could, solely to score political points,” Mr. Pfeiffer said.

As a recess appointee, Dr. Berwick will have all the powers of a permanent appointee. But under the Constitution, his appointment will expire at the end of the next session of Congress, in late 2011.

In April, Mr. Obama nominated Dr. Berwick to be administrator of the Centers for Medicare and Medicaid Services. The agency has been without a permanent administrator since October 2006.

The recess appointment was somewhat unusual because the Senate is in recess for less than two weeks and senators were still waiting for Dr. Berwick to submit responses to some of their requests for information. No confirmation hearing has been held or scheduled.

Although hospital executives who have worked with Dr. Berwick describe him as a visionary, inspiring leader, he would have faced a long, difficult struggle to win Senate confirmation.

The president’s action will give the administration a strong voice to defend provisions of the new law that have come under almost daily attack from Republicans in Congress and in political campaigns around the country.

Dr. Berwick, a pediatrician, is president and co-founder of the Institute for Healthcare Improvement, a nonprofit organization in Cambridge, Mass. He is also a professor at Harvard Medical School and the Harvard School of Public Health.

Republicans have used the nomination to revive their arguments against the new health care law, which they see as a potent issue in this fall’s elections.

In two decades as a professor of health policy and as a prolific writer, Dr. Berwick has championed the interests of patients and consumers. At the same time, he has spoken of the need to ration health care and cap spending, has supported efforts to “reduce the total supply of high-technology medical and surgical care” and has expressed great admiration for the British health care system.

Under the new law, Medicare will be a testing ground for many innovations that reward high-quality care and penalize providers of poor care. The law will expand Medicaid to cover 16 million more people with low incomes.

Senator Pat Roberts, Republican of Kansas, said that, far from trying to delay a confirmation hearing, Republicans had wanted a forum where Dr. Berwick could explain his views.

“This recess appointment proves the Obama administration did not have the support of a majority of Democrats and Republicans in the Senate and sought to evade a hearing,” Mr. Roberts said.

But Ronald F. Pollack, executive director of Families USA, a liberal-leaning consumer group, welcomed the appointment, saying “it augurs well for the implementation of health care reform.”

One of Dr. Berwick’s first tasks will be to work with Congress to avert a 21 percent cut in Medicare payments to doctors, scheduled to occur late this year.

The American Medical Association has praised Dr. Berwick, saying he is “widely known and respected” for his efforts to improve the quality and safety of care. But cuts in Medicare payments could damage the quality of care and prompt doctors to turn away new Medicare patients, doctors say.

    Obama to Bypass Senate to Name Health Official, NYT, 6.7.2010, http://www.nytimes.com/2010/07/07/health/policy/07recess.html

Senator Robert Byrd Dies At 92

June 28, 2010
Filed at 11:07 a.m. ET
The New York Times
By REUTERS

WASHINGTON (Reuters) - U.S. Senator Robert Byrd, who evolved from a segregationist to a civil rights advocate in becoming the longest serving member ever of the Congress, died on Monday.

First elected to Congress in 1952, Byrd was 92.

His death is not expected to have any immediate impact on the Democrats' 59-41 control of the Senate. West Virginia Governor Joe Manchin is virtually certain to appoint a fellow Democrat to succeed Byrd, whose current term expires in 2012.

But Senate tributes may delay efforts to win final congressional approval for landmark financial regulation reform, initially set for this week.

Democratic aides remained hopeful they could muster the 60 Senate votes needed either from within their own ranks or from Republicans wary to be seen siding with Wall Street.

Byrd helped shape much of the nation's history and served with a dozen U.S. presidents. He died peacefully at Inova Fairfax Hospital outside of Washington, D.C., said his spokesman, Jesse Jacobs. Byrd was hospitalized last week with what doctors believed was a heat-related illness.

"I love to serve. I love the Senate. If I could live another 100 years, I'd like to continue in the Senate," Byrd, who kept a copy of the U.S. Constitution in his breast pocket, said in a 2006 interview with Reuters.

Senator Jay Rockefeller, also of West Virginia, said: "Senator Byrd came from humble beginnings in the southern coalfields ... and triumphantly rose to the heights of power in America. But he never forgot where he came from nor who he represented, and he never abused that power for his own gain."

Senate Republican leader Mitch McConnell said Byrd will be remembered "for his fighter's spirit, his abiding faith and for the many times he recalled the Senate to its purposes."

Byrd was first elected to the House of Representatives in 1952, and served six years in that chamber before moving to the Senate. His early campaigns were punctuated by his skills as a bluegrass fiddler that helped draw big and enthusiastic crowds for the self-described West Virginia "hillbilly."

With his old-fashioned courtliness, Byrd was a defender of the Senate's traditions and over the years held most of its key positions, including Democratic leader from 1977 to 1988 and later as the top Democrat on the powerful Appropriations Committee.

Byrd was an early and eloquent opponent of the Iraq war, which began in 2003 with popular support but within a few years was widely condemned. He also warned against a buildup of U.S. troops in Afghanistan.

'SENATE'S MAN'

He worked with and challenged presidents, Democrats and Republicans alike, and reminded all of them of Congress' responsibility to check their power.

"I'm not any president's man. I'm a Senate's man," Byrd told Reuters in the 2006 interview.

During his more than half century in Congress, America changed dramatically and so did Byrd.

"When I got here, I was to the right of Barry Goldwater," Byrd told Reuters, referring to a conservative Republican senator and failed 1964 presidential candidate. "I moved more to the center."

In the early 1940s, before being elected to Congress, Byrd belonged to the Ku Klux Klan, a membership that he attributed to a youthful mistake.

"It has emerged throughout my life to haunt and embarrass me and has taught me in a very graphic way what one major mistake can do to one's life, career and reputation," Byrd wrote in a 1987 memoir, "Robert C. Byrd: Child of the Appalachian Coalfields."

In Congress, Byrd, who denounced civil rights leader Martin Luther King as a "self-seeking rabble rouser," eventually became a leading backer of civil rights.

Of the record-setting 18,500-plus Senate votes Byrd cast, he said his biggest regret was opposing the 1964 Civil Rights Act, a landmark law that brought down barriers for black Americans.

He said his views changed most dramatically after his teenage grandson was killed in a 1982 traffic accident that Byrd said put him in a deep emotional valley.

"The death of my grandson caused me to stop and think," Byrd said. "I came to realize that black people love their children as much as I do mine."

'BILLION DOLLAR INDUSTRY'

In West Virginia, Byrd was revered for his ability to deliver federal dollars to his poor state to build roads, schools and hospitals.

Critics called him the "Prince of Pork," but constituents crowned him as "West Virginian of the 20th Century."

"I want to be West Virginia's billion dollar industry," Byrd declared in 1990. He succeeded.

In 2000 he won passage of a bill that took import duties paid by foreign firms and transferred them to U.S. corporations. The Byrd Amendment, reviled abroad, was aimed at helping ailing steel companies in West Virginia and other states.

He also was a long-time champion of his state's coal industry, drawing the frequent ire of environmentalists, but later became more conscious of environmental damage and shortcomings in worker safety.

Byrd was born Cornelius Calvin Sale Jr. on November 20, 1917, in North Carolina and was sent to live with relatives in West Virginia after his mother died in the 1918 flu pandemic.

His new family renamed him and Byrd grew up desperately poor in the West Virginia coal fields. Unable to afford college, he worked as a meat cutter during the Great Depression and later as a welder building ships during World War Two.

Byrd married his high school sweetheart, Erma Ora James, in 1936. They had two daughters and six grandchildren.

"For two hillbillies -- that is what we are, two hillbillies -- from West Virginia, it has been an exciting and wild ride," Byrd said in a Senate speech marking their 65th anniversary. She died in March 2006.

Byrd set the record for congressional longevity on November 17, 2009.

On that day, Byrd said, "My only regret is that my beloved wife, companion and confidant, my dear Erma, is not here with me. I know that she is looking down from the heavens smiling at me and saying, 'Congratulations my dear Robert -- but don't let it go to your head.'"

    Senator Robert Byrd Dies At 92, NYT, 28.6.2010, http://www.nytimes.com/reuters/2010/06/28/news/news-us-usa-congress-byrd.html

On Finance Reform Bill, Lobbying Shifts to Regulations

June 26, 2010
The New York Times
By BINYAMIN APPELBAUM

WASHINGTON — Well before Congress reached agreement on the details of its financial overhaul legislation, industry lobbyists and consumer advocates started preparing for the next battle: influencing the creation of several hundred new rules and regulations.

The bill, completed early Friday and expected to come up for a final vote this week, is basically a 2,000-page missive to federal agencies, instructing regulators to address subjects ranging from derivatives trading to document retention. But it is notably short on specifics, giving regulators significant power to determine its impact — and giving partisans on both sides a second chance to influence the outcome.

The much-debated prohibition on banks investing their own money, for example, leaves it up to regulators to set the exact boundaries. Lobbyists for Goldman Sachs, Citigroup and other large banks already are pressing to exclude some kinds of lucrative trading from that definition.

Regulators are charged with deciding how much money banks have to set aside against unexpected losses, so the Financial Services Roundtable, which represents large financial companies, and other banking groups have been making a case to the regulators that squeezing too hard would hurt the economy.

Consumer groups, meanwhile, are mobilizing to make sure that regulators deliver on promised protections for borrowers and investors. They worry that the shift from Capitol Hill to the offices of regulators could put the groups at a disadvantage.

“It’s out of the public eye, so a natural advantage that we benefit from — public outrage — we lose that a little,” said Cristina Martin Firvida, a lobbyist for AARP, which advocates for older Americans. “We know there’s still a lot here left to do.”

The legislation is intended to expand federal oversight of the financial industry to police risks to the broader economy and to protect consumers of financial products. It would also impose federal regulations for the first time on the trading of derivatives, the complex financial instruments that can be used to make large bets. But Brett P. Barragate, a partner in the financial institutions practice at the law firm Jones Day, estimated that Congress had fixed in place no more than 25 percent of the details of that vast expansion.

“Congress is doing this in broad strokes,” said Scott Talbott, a lobbyist for the Financial Services Roundtable. “Where the rubber meets the road is the regulatory process.”

President Obama hopes to sign the bill into law by the Fourth of July. In his weekly address on Saturday, Mr. Obama said, “I urge Congress to take us over the finish line, and send me a reform bill I can sign into law, so we can empower our people with consumer protections, and help prevent a financial crisis like this from ever happening again.”

His signature will start the clock on dozens of deadlines embedded in the legislation for regulators from a host of agencies, including the Federal Reserve, the Securities and Exchange Commission and the Federal Deposit Insurance Corporation, to make those decisions.

Interest groups have been preparing for months. When the Consumer Bankers Association convened its annual meeting in early June, there was still plenty of time to lobby Congress. But the group’s president, Richard Hunt, told his board that the group should shift its focus to the rule-making process. The board voted to increase the group’s budget and staff.

“Now we hope to have a good give and take with the regulators on the best interests of the consumer and the industry,” said Mr. Hunt.

Shaping regulations is a different game than shaping legislation. Political considerations carry less weight. Instead, regulators crave data that can be used to justify decisions.

Consider the new restrictions on the fees that merchants must pay to banks when customers swipe debit cards. The Nilson Report, a trade publication, estimated that last year, those fees averaged 1.63 percent of the transaction amount.

The legislation directs the Federal Reserve to cap those fees at a level that is “reasonable and proportional” to the cost of processing transactions. It gives the Fed nine months to gather data and decide.

Trade groups for retailers, which want a lower cap, and banks, which want a higher one, are standing by to weigh in.

“We have the data ready and we have the right people ready to go to the Fed, and we’ve had an ongoing dialogue with the Fed,” said John Emling, a lobbyist for the Retail Industry Leaders Association.

The debit card regulations are unusual, however, in pitting the interests of two industries against each other. Many more of the new regulations pit the interests of consumer groups against financial companies.

Historically, industry groups have dominated these information wars, plying regulators with exhaustive studies and detailed analyses of the options at hand. Trade groups have more money and more people, and they often produce and control the relevant information about their business and customers.

Seeking an equalizer, the AARP decided several months ago to begin preparing research that could be presented to regulators on several parts of the bill that it favored. The group was gambling that the provisions — like a requirement that investment brokers act in the interest of their clients — would end up in the final bill.

“We took a risk,” said Ms. Firvida, the group’s government affairs director for financial issues. “Success will depend on how much quality information is in front of the rule makers.”

The legislation would hand consumer groups a series of important victories, most notably the creation of a consumer protection bureau inside the Federal Reserve. But Ms. Firvida and others said there could be a sharp distinction between the authorities granted by the legislation and the results.

Affected companies are nervous as well and are banding together. In the immediate aftermath of the financial crisis, trade groups lost members as banks cut back on spending. That trend has now reversed. The Consumer Bankers Association has added seven members in recent months, bringing its total to 60.

Mr. Hunt, the group’s president, said its role was expanding in direct response to the plan to create the consumer protection bureau, which would focus on regulating his membership.

“The entire financial services industry understands that what happens in Washington affects them,” he said. “It’s something other industries found out many years ago, and we’re finding it out now.”

In a recent letter to the Treasury secretary, Timothy F. Geithner, the American Bankers Association estimated that banks had been hit with 50 new or expanded federal regulations in the last two years. A single example, the credit card bill that passed Congress last year, landed on the desks of bankers as 252 pages of new regulations.

And that count does not include the impact of the new legislation. “It’s a massive compliance burden,” said Edward L. Yingling, the group’s president. “And there is going to be massive uncertainty in the financial industry about how all of this will play out.”

One clear consequence is a surge in the demand for lawyers with expertise in financial regulation, particularly those who have worked for regulatory agencies. Most of the major trade groups are hiring lawyers. The major banks say they are employing more, too.

“I don’t know that there has been a bill that has touched as many different substantive areas as this one,” said A. Patrick Doyle, a partner at Arnold & Porter who has worked on financial issues for three decades. “Clearly there’s going to be a lot of work.”

The surge in hiring has sent a joke bouncing around Washington: Congress finally passed a jobs bill — full employment for lawyers.

    On Finance Reform Bill, Lobbying Shifts to Regulations, NYT, 26.6.2010, http://www.nytimes.com/2010/06/27/business/27regulate.html

In Deal, New Authority Over Wall Street

June 25, 2010
The New York Times
By EDWARD WYATT and DAVID M. HERSZENHORN

WASHINGTON — An overhaul of the nation’s financial regulatory system, reached after an all-night Congressional horse-trading session, will vastly expand the authority of the federal government over Wall Street in a bid to curb the free-wheeling culture that led to the near collapse of the world economy in 2008.

The deal between House and Senate negotiators, sealed just before sunrise on Friday, imposes new rules on some of the riskiest business practices and exotic investment instruments. It also levies hefty fees on the financial services industry, essentially forcing big banks and hedge funds to pay the projected $20 billion, five-year cost of the new oversight that they will face. And it empowers regulators to liquidate failing financial companies, fundamentally altering the balance between government and industry.

But after weeks of intense lobbying and months of debate, Congress in the end stopped short of prohibiting some of the practices that led to the crisis two years ago, betting instead that a newly empowered regulatory regime can rein in the big financial players without shackling the markets and drying up the flow of credit to businesses.

“We are poised to pass the toughest financial reform since the ones we created in the aftermath of the Great Depression,” President Obama said on the South Lawn of the White House, before leaving for the Group of 20 meeting in Toronto, where he was expected to press other nations to tighten their financial rules.

Democrats predicted that the full Congress would approve the legislation next week and that they would meet their goal of sending the bill to Mr. Obama for his signature by the Fourth of July.

The financial industry won some important victories, even if they face significantly heightened regulation. They fought off some of the toughest restrictions on their ability to invest their own funds. Most significantly, they thwarted an attempt to make them give up their highly profitable derivatives trading desks. And big lobbying fights remain in the future, when regulators begin the nitty-gritty task of turning complex, sometimes vague laws into real-world rules for these businesses to follow.

Industry analysts predicted that banks would most likely adapt easily to the new regulatory framework and thrive. As a result, bank stocks were mostly higher Friday, prompting some skeptics to question if the legislation, in fact, would be tough enough to rein in the industry and prevent future shocks to the economy as a result of bad gambling.

Even architects of the bill acknowledged that it might take the next financial crisis to truly determine the effectiveness of the changes.

On Friday morning, after a 20-hour final negotiating session, lawmakers, Congressional aides, lobbyists and the banking industry were still sorting through the legislative rubble of a frantic night of deal-making, edits and adjustments that left even some of those who worked most closely on the bill confused about exactly how some of the final details turned out. At points in the debates, lawmakers seemed to have trouble following their own deliberations.

“Can somebody explain to me what’s in Tier 1 capital?” Representative Melvin L. Watt, Democrat of North Carolina, pleaded, referring to the core measure of a bank’s financial strength. “I just don’t have enough knowledge in this area.”

The White House’s desire to get a bill before the Fourth of July break drove the day. At 11 p.m. Thursday, Representative Barney Frank, Democrat of Massachusetts and chairman of the Financial Services Committee who presided over the conference proceedings, began to show signs of impatience. When the senior Republican on the committee, Representative Spencer Bachus of Alabama, asked for another minute to finish a statement, Mr. Frank cut him off. “I would object to that,” he snapped. “Not at 11 o’clock at night.”

As midnight turned to early morning, lawmakers cast rapid-fire votes on amendments hastily scrawled in the margins of rejected proposals. With C-Span carrying the proceedings live, the last half-hour of the session featured sometimes confused lawmakers repeatedly asking about what happened to various proposed amendments.

While the televised proceedings at times provided a remarkable window into the minutiae of legislating, many of the deals to complete the bill were cut outside the conference room, in private discussions between Democratic lawmakers and the Obama administration, with some of Washington’s most influential lobbyists trying to weigh in as best they could.

One major bank on Friday scrambled to figure out what happened to six words that to its surprise and dismay were apparently cut from an amendment on proprietary trading, potentially posing a threat to its business.

The final bill vastly expands the regulatory powers of the Federal Reserve and establishes a systemic risk council of high-ranking officials, led by the Treasury secretary, to detect potential threats to the overall financial system. It creates a new consumer financial protection bureau, and widens the purview of the Securities and Exchange Commission to broaden regulation of hedge funds and credit rating agencies.

The measure restricts the ability of banks to invest and trade for their own accounts — a provision known as the Volcker Rule, for its chief proponent, Paul A. Volcker, the former Federal Reserve chairman — and creates a tight new regulatory framework for derivatives, the complex financial instruments that were at the heart of the 2008 crisis.

But in a late-hour compromise, the bill does not include the tough restrictions on derivatives trading championed by Senator Blanche L. Lincoln, Democrat of Arkansas, which would have forced banks to jettison their most lucrative dealings in this area.

Instead, in a deal negotiated between Mrs. Lincoln and a bloc of House members called the New Democrat Coalition, banks will be required to segregate their dealings only in the riskiest categories of derivatives, including the highly structured products like credit-default swaps based on bundles of mortgage loans, and in certain types of derivatives that are based on commodities that banks are already prohibited from investing in, like precious metals, agricultural products and energy.

But derivatives that have clear business purposes like helping manufacturing companies to hedge against the cost of raw materials or swings in foreign exchange rates would continue to be allowed. And nonfinancial corporations would be allowed to set up their own financial affiliates to create and trade derivatives related to their businesses.

The derivatives deal also headed off a last-minute rebellion by some New York lawmakers concerned about the effect of Mrs. Lincoln’s proposal on Wall Street businesses.

“We wanted to make sure we didn’t drive all the derivative business out of New York,” said Representative Gregory W. Meeks, a Democrat from Queens, who served on the conference committee.

The bill also does not include some of the more draconian proposals debated in recent months, including re-establishing a firewall between commercial and investment banking. And the nation’s auto dealers won exemption from oversight by the new consumer protection bureau, which will regulate most consumer lending.

Some business groups angrily denounced the final product, saying it was ill-conceived and would have unintended consequences harmful to the economy.

“Far from effective reform, this legislation includes provisions totally unrelated to the financial crisis which may disrupt America’s fragile economic recovery and increase instability and risk,” said John J. Castellani, president of the Business Roundtable, which represents chief executives of top American companies.

The conference report approved Friday is subject to approval by both chambers of Congress, a process that is expected to begin on Tuesday with action by the House and then by the Senate — where 60 votes will be required to end debate.

The vote in the conference committee was on party lines, with Democrats in favor and Republicans opposed. House conferees voted 20 to 11 to approve the bill and Senate conferees voted 7 to 5.

Republicans repeatedly complained that the bill would do nothing to tighten regulation of the government-sponsored mortgage companies, Fannie Mae and Freddie Mac, which were at the heart of much of the housing crisis.

Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the banking committee who with Mr. Frank led the negotiations, said the bill would prevent the corporate bailouts required in 2008 and allow the United States to become a global leader in financial regulation, potentially providing decades of stability.

“Never again will we face the kind of bailout situation as we did in the fall of 2008 where a $700 billion check will have to be written,” Mr. Dodd said in an interview. But he acknowledged that the effectiveness of the legislation would be learned only over time.

“I don’t have the kind of ego that would tell you we have absolutely solved these problems,” he said. “We won’t know until we face the next economic crisis.”

Republicans, however, warned that the bill would extend the reach of government too far.

At one point during debate over whether banks should be allowed to trade for their own profit, Representative Jeb Hensarling, Republican of Texas, asked what the issue had to do with the financial crisis. “How much riskier is proprietary trading than investment in certain forms of residential real estate?” Mr. Hensarling asked.

“If we’re not going to bail them out with taxpayer money, what they do with their money is their business.”

He said, adding: “This is one more occasion where we see something in the bill that did not have a causal role in the crisis.”

While regulatory bills often get watered down as they grind through the legislative process and interest groups and industry press for changes, the financial bill mostly gained strength as the debate lengthened and lawmakers seized on public frustration that rich financial institutions, recently bailed out by taxpayers, showed no signs of curtailing their risky practices or their outsize pay packages.


Raymond Hernandez and Binyamin Appelbaum contributed reporting.

    In Deal, New Authority Over Wall Street, NYT, 25.6.2010, http://www.nytimes.com/2010/06/26/us/politics/26regulate.html

Congress Defends the Big Guys

June 19, 2010
The New York Times

In the first week of talks over a financial regulatory reform bill, Democratic lawmakers — in some cases with apparent White House backing — have been defeating or delaying reforms to protect individual investors. Instead, they are catering to corporate interests that prefer the status quo — and write big campaign checks.

At its most basic, this bill is supposed to restore stability and fairness to the markets and give Americans some confidence that their efforts to save and invest will not be undone — over and over again — by the destructive excesses of banks and corporations.

Those goals are being undermined by cynical maneuvers. Here is the damage assessment:

COOKING THE BOOKS. A majority of Senate negotiators, including two Democrats, approved a bad provision from the House version of the bill to exempt most publicly traded companies (those worth less than $75 million) from an antifraud auditing requirement in the Sarbanes-Oxley law, passed in 2002 after the Enron debacle. The argument is that the audits are too burdensome, but research shows that they reduce errors and fraud, and that refinements to the law from 2007 have made them less onerous. The upshot is that a bill that is supposed to be about strengthening regulation would instead end a safeguard against financial fraud.

KEEPING CORPORATE BOARDS SAFE FOR CRONIES. Both versions of the reform bill clarified the authority of the Securities and Exchange Commission to make it easier for shareholders to nominate corporate directors. The clarification is useful, because the S.E.C. has been threatened with lawsuits from industry-supported groups if it writes new nomination rules. The reform would give shareholders a chance to shake up boards that have become rubber stamps for management decisions.

Then, last week, Senator Christopher Dodd gutted the Senate version, with the reported encouragement of the White House. He proposed that shareholders must hold an ownership stake of at least 5 percent to nominate a director, a level that would be exceedingly difficult to reach. As such, his proposal would effectively kill shareholders’ ability to more efficiently influence boards.

House and Senate negotiators have not yet reached a decision. The correct approach is to allow the S.E.C. to write and enforce the rules as it sees fit.

SHORTCHANGING THE S.E.C. The Senate’s version of reform would allow the S.E.C. to finance itself through fees it already imposes on securities transactions and corporate filings, rather than having Congress decide its budget each year. The House was on board with the idea. Self funding would help ensure adequate resources.

But lawmakers who stand to lose control of the S.E.C. budget have objected, leading some of them to seek a deal that would somehow retain the power of Congressional appropriators. In the best interests of the S.E.C. and investors, supporters of self funding, including Senator Charles Schumer of New York, need to hang tough.

Among the other unresolved issues is a long overdue reform to require brokers who give investment advice to act in their clients’ best interest. The House version is in favor of imposing a fiduciary duty; the Senate version lamely calls for a study and other delays.

If lawmakers are unwilling to enact fundamental investor protections, there is little hope that they will act boldly on far-reaching structural reforms, like curbing banks’ risky involvement in derivatives dealmaking and establishing a strong new regulator for consumer financial protection.

    Congress Defends the Big Guys, NYT, 19.6.2010, http://www.nytimes.com/2010/06/20/opinion/20sun1.html

Obama's Greenhouse Gas Rules Survive Senate Vote

June 11, 2010
The New York Times
By THE ASSOCIATED PRESS
Filed at 1:53 a.m. ET

WASHINGTON (AP) -- In a boost for the president on global warming, the Senate on Thursday rejected a challenge to Obama administration rules aimed at cutting greenhouse gas emissions from power plants and other big polluters.

The defeated resolution would have denied the Environmental Protection Agency the authority to move ahead with the rules, crafted under the federal Clean Air Act. With President Barack Obama's broader clean energy legislation struggling to gain a foothold in the Senate, the vote took on greater significance as a signal of where lawmakers stand on dealing with climate change.

''If ever there was a vote to find out whose side you are on, this is it,'' said Sen. Barbara Boxer, D-Calif., chairman of the Environment and Public Works Committee.

The vote was 53-47 to stop the Senate from moving forward on the Republican-led effort to restrain the EPA.

Sen. Joe Lieberman, I-Conn., predicted the vote would ''increase momentum to adopt comprehensive energy and climate legislation this year.''

But Obama still needs 60 votes to advance his energy agenda, and Democrats don't have them yet. Sen. James Inhofe, R-Okla., said the vote made clear that a majority in the Senate back either a delay or an outright ban on ''the Obama EPA's job-killing, global warming agenda.''

Republicans, and the six Democrats who voted with them to advance the resolution, said Congress, not bureaucrats, should be in charge of writing climate change policy. They said the EPA rules would drive up energy costs and kill jobs.

But Democrats, referring frequently to the Gulf oil spill, said it made no sense to undermine efforts to curtail greenhouse gas emissions and reduce dependence on oil and other fossil fuels.

The effort to block the rules ''is an attempt to bury our heads in the sand and ignore reality,'' said Sen. Tom Udall, D-N.M.

Obama said the vote was another reminder of the need to pass legislation to reduce the country's reliance on oil. The White House had issued a veto threat this week, saying the resolution would block efforts to cut pollution that could harm people's health and well-being.

''Today the Senate chose to move America forward, towards that clean energy economy -- not backward to the same failed policies that have left our nation increasingly dependent on foreign oil,'' he said.

The EPA crafted standards on greenhouse gas emissions by big polluters after the Supreme Court ruled that those emissions could be considered a danger to human health and thus could be regulated under the Clean Air Act. The rules are to go into effect next January.

The poor chances of the anti-EPA measure overcoming a veto and becoming law did not deter fierce debate.

Senate Republican leader Mitch McConnell of Kentucky called the new regulations a ''blatant power grab by the administration and the EPA.'' With a broad energy bill unlikely to pass this year, ''the administration has shifted course and is now trying to get done through the back door what they haven't been able to get done through the front door,'' he said.

But Senate Majority Leader Harry Reid, D-Nev., called the blocking measure, ''a great big gift to big oil'' that would ''increase pollution, increase our dependence on foreign oil and stall our efforts to create jobs'' in clean energy.

White House press secretary Robert Gibbs said Thursday that he anticipated the Senate taking up a broader energy bill in the next several weeks ''and hopefully we can get something done before Congress adjourns this year.''

The sponsor of Thursday's resolution, Republican Sen. Lisa Murkowski of oil-rich Alaska, said her intent was to protect the authority of Congress, not the interests of the oil industry. ''It should be up to us to set the policy of this country, not unelected bureaucrats within an agency,'' she said.

Her Democratic allies used similar arguments. ''The regulatory approach is the wrong way to promote renewable energy and clean energy jobs in Arkansas and the rest of the country,'' said Sen. Blanche Lincoln of Arkansas, who faces a difficult re-election campaign this summer.

Sen. Jim Webb, D-Va., who opposed the resolution, agreed that Congress should not cede its authority to the executive branch but expressed concern the measure would reverse progress made in such areas as vehicle emissions. He said he supported a bill that would suspend EPA's regulation of greenhouse gases from stationary sources for two years.

Murkowski, too, said Congress should be working harder to come up with an energy bill. The issue was whether a consensus was possible this year.

''Here's the real rub,'' said Sen. Lindsey Graham, a South Carolina Republican who has worked with Democrats on possible energy legislation. ''If we stop them (the rules), are we going to do anything?''

''This is going to be the great hypocrisy test,'' said Sen. John Kerry, D-Mass., cosponsor of a major clean energy proposal. He asked whether those demanding that Congress act first would actually vote for change.

There were other disputes about the consequences of the Murkowski resolution. EPA Administrator Lisa Jackson and the White House said the resolution would force the EPA to rescind the standards for emissions from future-model cars and light trucks it came up with earlier this year with the Transportation Department. The result, she said, would be a need for the country to consume an extra 455 million barrels of oil.

Murkowski and others countered that Transportation has long been able to set fuel efficiency standards without the help of the EPA.

Jackson also denied the argument of critics that the EPA rules would impose devastating costs on small businesses and farmers, resulting in major job losses. The EPA added a provision that exempts small sources of pollution from the regulations for six years.

------

The bill is S.J. Res. 26.

Online:

Congress: http://thomas.loc.gov.

    Obama's Greenhouse Gas Rules Survive Senate Vote, 11.6.2010, http://www.nytimes.com/aponline/2010/06/11/us/politics/AP-US-Greenhouse-Gases.html

The Spill and Energy Bill

June 4, 2010
The New York Times

The nation’s political leaders have had a lot to say in recent years about America’s addiction to fossil fuels and the need to find cleaner, more climate-friendly alternatives. In recent weeks, they have had a lot to say about the Gulf of Mexico oil spill. On Wednesday, President Obama put them together.

In a speech at Carnegie Mellon University, he invoked the spill to pound on Congress about its duty to pass a comprehensive energy bill that addresses oil dependency and global warming. The House has passed such a bill, but a companion measure in the Senate languishes, hostage to solid Republican opposition, exaggerated fears about its costs and timidity on the part of the Democratic leadership. “I will work with anyone from either party to get this done,” he said.

Mr. Obama’s task is to follow up that vow with action. We are not optimistic that his implacable Republican opposition will work with him on anything. But perhaps the spreading nightmare on the waters of the gulf will get a few to break with the party line.

The Senate bill is far from perfect. It coddles the coal companies, and its provisions for off-shore drilling will now have to be revised or at least tightened up with multiple safeguards. But for the first time, the bill would set a price on carbon-dioxide emissions, which are now dumped without penalty into the atmosphere. This is an essential prerequisite for shifting private and public investment to cleaner energy sources.

The oil savings would be substantial. According to a new study by the Peter G. Peterson Institute for International Economics, the bill’s mandates for alternative fuels and more efficient vehicles would reduce oil imports one-third by 2035.

But instead of embracing this positive bill, the Senate is expected to vote soon on a measure that would move the country in exactly the wrong direction — a resolution sponsored by Lisa Murkowski, the Alaska Republican, that would undercut the government’s authority to regulate greenhouse gases and reduce the anticipated oil savings from the tough new fuel economy standards the White House announced last April.

As this page has noted before, persuading the Senate to act is not only a matter of leadership, but a matter of international obligation. At the Copenhagen climate conference in December, Mr. Obama committed the United States to a 17 percent reduction in greenhouse gases by 2020 — the minimum that scientists believe necessary to begin steering the world away from the worst impacts of a warming planet.

Delivering on that pledge is even more urgent now than it was then. As he demonstrated at Carnegie Mellon, Mr. Obama knows how to hit all the right notes rhetorically. Passing a comprehensive bill would be good for the economy, by creating new jobs; good for the environment, by reducing emissions; and good for national security, by reducing our dependence on unstable oil-producing countries. The president’s task now is to convert that rhetorical fervor into actual, filibuster-proof votes.

    The Spill and Energy Bill, NYT, 4.6.2010, http://www.nytimes.com/2010/06/05/opinion/05sat1.html

Currently in Vogue: Ringing the Deficit Alarm

May 28, 2010
The New York Times
By CARL HULSE

WASHINGTON — Deficits finally matter.

After years of citing national security, social necessity and economic crisis as sufficient justification to pass costly legislation without paying for it, members of Congress are getting cold feet about continually adding to the national vat of red ink.

In the House, the leadership was forced this week to jettison popular health insurance subsidies and cut a major tax-and-spending measure in half in a desperate effort to round up votes from moderate and conservative Democrats. In the Senate, 26 Republican senators balked at an emergency war funding bill — an almost unthinkable position for them in the past — complaining that it was bloated and irresponsible.

Both measures ultimately passed as Congress made a messy pre-Memorial Day exit. But lawmakers say they appear to have reached a turning point when it comes to routine deficit spending. The new attitude could reshape the way Congress does its fiscal business the rest of this year and into the future, and potentially constrain President Obama and Democrats as they pursue their agenda.

Democrats are already ducking demands that they produce a budget for 2011, well aware that it would be very difficult to balance the conflicting interests of liberal lawmakers pushing for more spending and the centrists and fiscal conservatives who want cuts.

It is likely that Democrats will also punt on most of the major spending bills for the year, preferring to hold federal agencies at their current levels rather than get into a pre-election fiscal fight. There is mounting resistance to reflexively extending jobless pay for the long-term unemployed, and other initiatives, like a $23 billion plan to prevent public school teacher layoffs, face serious challenges.

The reasons for the new deficit sensibilities are both substantive and politically driven. A growing number of House and Senate members see both the annual deficits and the accumulated federal debt — hovering now at the $13 trillion threshold — as time bombs for future generations, the unexploded remnants of a lavish spending spree engaged in by both parties over the past decade.

At the same time, Republicans have stirred up their core voters and made inroads with independents by accusing Democrats of profligacy since they took charge. The success of the attacks has not been lost on Democrats, who are hearing it regularly from their constituents back home. Republicans, who share blame for the deficits the government ran when they were in power and in particular for the increase in the national debt from the tax cuts and spending increases they passed under former President George W. Bush, are also under pressure to show they have changed their ways as well if they hope to win over the Tea Party set.

It adds up to serious new reluctance to be free with federal dollars.

The House fight over the package of safety-net spending, tax breaks for businesses and individuals and tax increases on corporations and wealthy investors was illustrative. A major Democratic priority, it began the week as a nearly $200 billion catchall measure that would have added about $134 billion to the deficit.

Facing a rank-and-file revolt, Democratic leaders began trimming the measure, first by limiting the length of coverage for some of the more costly programs and saving more than $40 billion. It was not enough. Lacking the necessary votes entering Thursday evening, Democrats sliced the bill again, eliminating health insurance subsidies for the unemployed and health care aid to states — saving $30 billion or so and getting the deficit impact down to $54 billion.

The measure then passed 215 to 204, with 34 mainly moderate and conservative Democrats joining 170 Republicans in opposing the bill.

“We have to stop spending money we don’t have,” said Representative Jim Cooper, a Tennessee Democrat who voted against the bill. “I hope deficit reduction fever is catching.”

While the struggle in rounding up the votes resulted in a cut in the bill’s price tag, the House delay was costly in another sense. With the bill stalled in the House, the Senate packed up and left for recess without considering it. As a result, the extension of unemployment benefits will have to wait at least a week, and some Americans relying on jobless pay could see their checks delayed.

The Senate found itself in a deficit fight of its own, though the outcome was never in doubt. The $60 billion war funding measure the Senate passed late Thursday was certain to be approved given its importance to the Pentagon and military operations in Afghanistan and Iraq.

But Senator Tom Coburn, Republican of Oklahoma, criticized his colleagues for pushing it through without finding spending cuts elsewhere to pay for it, and he was joined by 25 colleagues in opposing it.

“Are we in denial in this body?” asked Senator Jeff Sessions, Republican of Alabama and another opponent. “Do we think it’s just business as usual, that we can just continue to spend, spend, spend and borrow, borrow, borrow?”

Republicans are eager to blame Democrats. But Democrats note that it was Republicans who initially chose not to pay for wars in Iraq and Afghanistan, initiated a series of major tax cuts and started a new Medicare drug benefit that ran up the deficit before Democrats ever took the wheel.

“The people who set the fire are now the ones calling the fire department,” said Representative Richard E. Neal, Democrat of Massachusetts.

In any event, the deficit alarm has been sounded and lawmakers are responding. Whether it is too late for them remains to be seen.

This article has been revised to reflect the following correction:

Correction: May 28, 2010

Due to an editing error, an earlier version of this article misstated vote totals in the House. A measure to extend unemployment benefits passed by a vote of 215 to 204, not 245 to 171. A measure to prevent a cut in Medicare payments passed with a vote of 245 to 171, not 245 to 177.

        Currently in Vogue: Ringing the Deficit Alarm, NYT, 28.5.2010, http://www.nytimes.com/2010/05/29/us/politics/29deficit.html

Financial Reform

May 21, 2010
The New York Times

After all the revelations about predatory lenders, bankers who bet against their clients and speculative booms and busts, it should be clear that weak regulation is a recipe for disaster. And open and transparent markets, with clear roles for regulators, are essential to the nation’s financial health.

So it was good news that, despite all the bank lobbying and all the Republican posturing, the Senate finally passed a financial reform bill on Thursday.

Whether it will fix the system is still not known. In many ways, the bill has moved closer to what is needed. But when House and Senate leaders meet in coming days to negotiate a final bill, they need to correct several deficiencies and omissions.

The political battle also is far from over. When the stock market sank on Thursday, hours before the final vote, opponents rushed to declare that that was because even the possibility of reform was destabilizing. The market rose again on Friday. The rhetoric didn’t stop.

Here is what needs to be addressed:

RISKY BUSINESS It was never going to be easy to rein in the multitrillion-dollar market in unregulated derivatives. The Senate bill went further than the House version in requiring most derivatives to be traded on exchanges and to be processed, or cleared, through a third party to guarantee payment in the case of default.

It still has a gaping loophole: regulators have no clear legal authority to stop or undo a derivatives deal that has not been properly cleared and exchange-traded. The House bill gives regulators more authority, but a final bill needs clear rules, with clear enforcement.

The Senate bill also waters down the “Volcker rule.” As proposed by President Obama, the rule would bar banks from making market trades for their own accounts and from owning hedge funds and private equity funds. The Senate calls for a study and a needlessly long implementation process. The House version — which was passed before the Volcker rule was proposed — only gives regulators the discretion to curb risky trading. The final bill should implement the Volcker rule without delay.

TOO BIG TO FAIL Both the House and Senate bills establish “resolution” procedures for dismantling firms if their failure threatens the system. The goal is to establish in law that stockholders and unsecured creditors — not taxpayers — will bear the losses of a failure.

The resolution power in the Senate bill is weaker than the House bill because it does not require banks to pay in advance to help cover the operational costs of dismantling a big institution. (The House bill would create a $150 billion fund.) By making banks pay for the risks they create, a resolution fund could also perform the important function of encouraging them to curtail their riskiest activities.

PROTECTING CONSUMERS AND INVESTORS Consumers of financial products would gain protections in both bills against deceptive lending and other credit abuses. Both are marred — though in different ways — by exceptions to the new rules, and by restrictions on the new consumer agency’s independence and rule-making authority. The final bill should establish an independent agency with full rule-making and enforcement powers.

The House bill imposes a fiduciary duty on brokers who give investment advice. The Senate bill does not. (Without that, brokers have leeway to pitch investments intended to boost their own or their firms’ profits, exposing investors to misleading pitches and overly expensive products.) After all that investors have suffered, it would be unconscionable not to include this provision.

All these reforms are essential for protecting investors, restoring confidence in the financial markets and ensuring that another meltdown does not happen. Congress still has work to do.

    Financial Reform, NYT, 21.5.2010, http://www.nytimes.com/2010/05/22/opinion/22sat1.html

Senate Passes Broader Rules for Overseeing Wall Street

May 20, 2010
The New York Times
By DAVID M. HERSZENHORN

WASHINGTON — The Senate on Thursday approved a far-reaching financial regulatory bill, putting Congress on the brink of approving a broad expansion of government oversight of the increasingly complex banking system and financial markets.

The legislation is intended to prevent a repeat of the 2008 crisis, but also reshapes the role of numerous federal agencies and vastly empowers the Federal Reserve in an attempt to predict and contain future debacles.

The vote was 59 to 39, with four Republicans joining the Democratic majority in favor of the bill. Two Democrats opposed the measure, saying it was still not tough enough.

Democratic Congressional leaders and the Obama administration must now work to combine the Senate measure with a version approved by the House in December, a process that is expected to take several weeks.

While there are important differences — notably a Senate provision that would force big banks to spin off some of their most lucrative derivatives business into separate subsidiaries — the bills are broadly similar, and it is virtually certain that Congress will adopt the most sweeping regulatory overhaul since the aftermath of the Great Depression.

“It’s a choice between learning from the mistakes of the past or letting it happen again,” the majority leader, Harry Reid of Nevada, said after the vote. “For those who wanted to protect Wall Street, it didn’t work.”

The bill seeks to curb abusive lending, particularly in the mortgage industry, and to ensure that troubled companies, no matter how big or complex, can be liquidated at no cost to taxpayers. And it would create a “financial stability oversight council” to coordinate efforts to identify risks to the financial system. It would also establish new rules on the trading of derivatives and require hedge funds and most other private equity companies to register for regulation with the Securities and Exchange Commission.

Passage of the bill would be a signature achievement for the White House, nearly on par with the recently enacted health care law. President Obama, speaking in the Rose Garden on Thursday afternoon, declared victory over the financial industry and “hordes of lobbyists” that he said had tried to kill the legislation.

“The recession we’re emerging from was primarily caused by a lack of responsibility and accountability from Wall Street to Washington,” Mr. Obama said, adding, “That’s why I made passage of Wall Street reform one of my top priorities as president, so that a crisis like this does not happen again.”

The president also signaled that he would take a strong hand in developing the final bill, which could mean changes to the restrictive derivatives provisions the Senate measure includes and Wall Street opposes. It is also likely that the administration will try to remove an exemption in the House bill that would shield auto dealers from oversight by a new consumer protection agency. Earlier, Mr. Obama had criticized the provision as a “special loophole” that would hurt car buyers.

As the Senate neared a final vote, Senator Sam Brownback, Republican of Kansas, withdrew an amendment to put a similar exemption for auto dealers into the Senate bill.

Mr. Brownback’s move had the effect of killing an amendment by Senators Jeff Merkley, Democrat of Oregon, and Carl Levin, Democrat of Michigan, to tighten language barring banks from proprietary trading, or playing the markets with their own money — a restriction generally known as the Volcker rule for the former Fed chairman Paul A. Volcker, who proposed the idea. Congressional Republican leaders, adopting an election-year strategy of opposing initiatives supported by the Obama administration, voiced loud criticism of the legislation while trying to insist that they still wanted tougher policing of Wall Street.

But while Republicans criticized the bill in mostly political terms, arguing that it was an example of Democrats’ trying to expand the scope of government, some experts have warned that the bill, by focusing too much on the causes of a past crisis, still leaves the financial system vulnerable to a major collapse.

The Senate bill, sponsored primarily by Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the banking committee, would seek to curb abusive lending by creating a powerful Bureau of Consumer Protection within the Federal Reserve to oversee nearly all consumer financial products.

In response to the huge bailouts in 2008, the bill seeks to ensure that troubled companies, no matter how big or complex, can be liquidated at no cost to taxpayers. It would empower regulators to seize failing companies, break them apart and sell off the assets, potentially wiping out shareholders and creditors.

To coordinate efforts to identify risks to the financial system, the bill would create a “financial stability oversight council” composed of the Treasury secretary, the chairman of the Federal Reserve, the comptroller of the currency, the director of the new consumer financial protection bureau, the heads of the Securities and Exchange Commission and the Federal Deposit Insurance Corporation, the director of the Federal Housing Finance Agency and an independent appointee of the president.

The bill would touch virtually every aspect of the financial industry, imposing, for instance, a thicket of rules for the trading of derivatives, the complex instruments at the center of the 2008 crisis.

With limited exceptions, derivatives would have to be traded on a public exchange and cleared through a third party.

And, under a provision written by Senator Blanche L. Lincoln, Democrat of Arkansas, some of the biggest banks would be forced to spin off their trading in swaps, the most lucrative part of the derivatives business, into separate subsidiaries, or be denied access to the Fed’s emergency lending window.

The banks oppose that provision, and the administration has also said that it sees no benefit.

Concern about the derivatives provisions also led Senator Maria Cantwell, Democrat of Washington, to vote against the bill, saying it still included a dangerous loophole that would undermine efforts to regulate derivative trades. Senator Russ Feingold of Wisconsin was the other Democrat to oppose the measure.

The four Republicans to support the bill were Senators Susan Collins and Olympia J. Snowe of Maine; Scott Brown, the freshman from Massachusetts; and Charles E. Grassley of Iowa, who is up for re-election this year.

Among the differences between the House and Senate bills is the inclusion in the House measure of a $150 billion fund, to be financed by a fee on big banks, to help pay for liquidation of failing financial companies.

The administration opposes the fund, which it says it believes could hamper its ability to deal with a more costly collapse of a financial company. Republicans demanded that a similar $50 billion fund be removed from the Senate bill because they said it would encourage future bailouts of failed financial companies.

There are numerous other differences. For instance, the House bill addresses the consumer protection goals by establishing a stand-alone agency that would be subject to annual budget appropriations by Congress. The Senate bill establishes its consumer protection bureau within the Federal Reserve, limiting future Congressional oversight.

Lawmakers said that the bills would be reconciled in a formal conference proceeding, possibly televised.


Edward Wyatt contributed reporting.

    Senate Passes Broader Rules for Overseeing Wall Street, NYT, 20.5.2010, http://www.nytimes.com/2010/05/21/business/21regulate.html

A Bad Bet on Carbon

May 12, 2010
The New York Times
By ROBERT BRYCE

Washington

ON Wednesday, John Kerry and Joseph Lieberman introduced their long-awaited Senate energy bill, which includes incentives of $2 billion per year for carbon capture and sequestration, the technology that removes carbon dioxide from the smokestack at power plants and forces it into underground storage. This significant allocation would come on top of the $2.4 billion for carbon capture projects that appeared in last year’s stimulus package.

That’s a lot of money for a technology whose adoption faces three potentially insurmountable hurdles: it greatly reduces the output of power plants; pipeline capacity to move the newly captured carbon dioxide is woefully insufficient; and the volume of waste material is staggering. Lawmakers should stop perpetuating the hope that the technology can help make huge cuts in the United States’ carbon dioxide emissions.

Let’s take the first problem. Capturing carbon dioxide from the flue gas of a coal-fired electric generation plant is an energy-intensive process. Analysts estimate that capturing the carbon dioxide cuts the output of a typical plant by as much as 28 percent.

Given that the global energy sector is already straining to meet booming demand for electricity, it’s hard to believe that the United States, or any other country that relies on coal-fired generation, will agree to reduce the output of its coal-fired plants by almost a third in order to attempt carbon capture and sequestration.

Here’s the second problem. The Pacific Northwest National Laboratory has estimated that up to 23,000 miles of new pipeline will be needed to carry the captured carbon dioxide to the still-undesignated underground sequestration sites. That doesn’t sound like much when you consider that America’s gas pipeline system sprawls over some 2.3 million miles. But those natural gas pipelines carry a valuable, marketable, useful commodity.

By contrast, carbon dioxide is a worthless waste product, so taxpayers would likely end up shouldering most of the cost. Yes, some of that waste gas could be used for enhanced oil recovery projects; flooding depleted oil reservoirs with carbon dioxide is a proven technology that can increase production and extend the life of existing oilfields. But the process would be useful in only a limited number of oilfields — probably less than 10 percent of the waste carbon dioxide captured from coal-fired power plants could actually be injected into American oilfields.

The third, and most vexing, problem has to do with scale. In 2009, carbon dioxide emissions in the United States totaled 5.4 billion tons. Let’s assume that policymakers want to use carbon capture to get rid of half of those emissions — say, 3 billion tons per year. That works out to about 8.2 million tons of carbon dioxide per day, which would have to be collected and compressed to about 1,000 pounds per square inch (that compressed volume of carbon dioxide would be roughly equivalent to the volume of daily global oil production).

In other words, we would need to find an underground location (or locations) able to swallow a volume equal to the contents of 41 oil supertankers each day, 365 days a year.

There will also be considerable public resistance to carbon dioxide pipelines and sequestration projects — local outcry has already stalled proposed carbon capture projects in Germany and Denmark. The fact is, few landowners are eager to have pipelines built across their property. And because of the possibility of deadly leaks, few people will to want to live near a pipeline or an underground storage cavern. This leads to the obvious question: which members of the House and Senate are going to volunteer their states to be dumping grounds for all that carbon dioxide?

For some, carbon capture and sequestration will remain the Holy Grail of carbon-reduction strategies. But before Congress throws yet more money at the procedure, lawmakers need to take a closer look at the issues that hamstring nearly every new energy-related technology: cost and scale.

Robert Bryce, a senior fellow at the Manhattan Institute, is the author, most recently, of “Power Hungry: The Myths of ‘Green’ Energy and the Real Fuels of the Future.”

    A Bad Bet on Carbon, NYT, 13.5.2010,  http://www.nytimes.com/2010/05/13/opinion/13bryce.html

Senate Gets a Climate and Energy Bill, Modified by a Gulf Spill That Still Grows

May 12, 2010
The New York Times
By JOHN M. BRODER

WASHINGTON — The long delayed and much amended Senate plan to deal with global warming and energy was unveiled on Wednesday to considerable fanfare but uncertain prospects.

After nearly eight months of negotiations with lawmakers and interest groups, Senators John Kerry, Democrat of Massachusetts, and Joseph I. Lieberman, independent of Connecticut, produced a 987-page bill that tries to limit climate-altering emissions, reduce oil imports and create millions of new energy-related jobs.

The sponsors rewrote the section on offshore oil drilling in recent days to reflect mounting concern over the oil spill in the Gulf of Mexico, raising new hurdles for any future drilling off the Atlantic and Pacific coasts while allowing it to proceed off Louisiana, Texas and Alaska.

Mr. Kerry said the United States was crippled by a broken energy policy and falling behind in the global race for leadership in clean-energy technology.

“We’re threatened by the impacts of a changing climate,” he said in a packed Senate hearing room. “And right now, as one of the worst oil spills in our nation’s history washes onto our shores, no one can doubt how urgently we need a new energy policy in this country. Now is the time to take action.”

It may be difficult, however, for him to persuade the Senate to act. The country is nervously watching efforts to halt the gulf spill, the Senate is torn by deep partisan hostility and the public is uncertain whether the benefits of combating global warming are worth the costs. There is also no assurance that the bill will break through the crowded Senate calendar to reach the floor this year.

No Republicans have stepped forward to support the two senators’ efforts.

President Obama endorsed the proposal.

“Americans know what’s at stake by continuing our dependence on fossil fuels,” Mr. Obama said Wednesday. “But the challenges we face — underscored by the immense tragedy in the Gulf of Mexico — are reason to redouble our efforts to reform our nation’s energy policies. For too long, Washington has kicked this challenge to the next generation. This time, the status quo is no longer acceptable to Americans.”

He called on the Senate to move ahead so that a final bill could be enacted this year.

One of the central elements of the Senate bill — incentives to increase domestic offshore oil production — was changed in the aftermath of the explosion and fire on the Deepwater Horizon drilling rig in the gulf on April 20, which left an undersea well leaking oil. Instead of providing for a broad expansion of offshore drilling, the measure would have the effect of sharply limiting oil operations off the Atlantic and Pacific coasts by giving states the right to veto any drilling plan that could cause environmental or economic harm.

The original oil drilling provision was drafted in part by Senator Lindsey Graham, Republican of South Carolina, a supporter of expanded drilling and an important envoy to other Republicans. Mr. Graham had been a partner in drawing up the climate legislation, but he dropped out of the effort last week over the problems raised by the gulf spill and an unrelated dispute with the Senate leadership over immigration.

Mr. Graham said Wednesday that while he agreed with many of the goals of his former partners, he did not think that the Senate was likely to act this year.

“The problems created by the historic oil spill in the gulf, along with the uncertainty of immigration politics, have made it extremely difficult for transformational legislation in the area of energy and climate to garner bipartisan support at this time,” he said.

The Kerry-Lieberman proposal would treat each major sector of the economy differently, while providing something for every major energy interest: loan guarantees for nuclear plant operators, incentives for use of natural gas in transportation, exemptions from emissions caps for heavy industry, generous pollution permits for utilities for years, modest carbon dioxide limits for oil refiners and substantial refunds for consumers.

The bill’s overall goal is to reduce greenhouse-gas emissions by 17 percent (compared with 2005 levels) by 2020, and by 83 percent by 2050. The targets match those in a House bill passed last year and in the Obama administration’s announced policy goal.

There is no economywide cap-and-trade system like that in the House measure, but electric utilities will face limits on their greenhouse-gas emissions and a market will be established to allow them to trade pollution permits. The leader of the main utility industry trade group, Thomas R. Kuhn of the Edison Electric Institute, stood with Mr. Kerry and Mr. Lieberman on Wednesday and endorsed their bill.

The oil industry will have to buy emissions permits, based loosely on the price set in the utility-trading markets. It is expected they will pass along added costs to consumers in the form of higher fuel prices. The American Petroleum Institute said it was withholding judgment until the measure’s effects on the oil and gas industry could be analyzed. Some oil companies, however, including BP and ConocoPhillips, have indicated their support.

It cannot yet be known whether the concessions and compromises embodied in the bill will let it attract the 60 votes needed to thwart a filibuster.

Some environmental advocates were involved in drafting the bill and were highly supportive. But other environmentalists said the bill did not go far enough and offered too many concessions to win industry support.

The United States Chamber of Commerce, whose support was avidly courted, refused to endorse the measure, calling it a “work in progress” that may prove too costly to business.

    Senate Gets a Climate and Energy Bill, Modified by a Gulf Spill That Still Grows, NYT, 12.5.2010, http://www.nytimes.com/2010/05/13/science/earth/13climate.html

While the Senate Fiddles

May 13, 2010
The New York Times

You don’t have to look far for proof that this country must cut its dependence on fossil fuels and develop cleaner sources of energy.

It can be found in the oil-slicked Gulf of Mexico. It can be found in China’s aggressive efforts to win the global competition for green technologies and green jobs. And, most urgently, it can be found in the inexorable math of accumulating greenhouse gas emissions.

And where is the Senate? After a year of talking, utterly nowhere. Paralyzed by partisanship, hobbled by indifferent leadership, it is unable to muster a majority (much less a filibuster-proof 60 votes) for even a modest energy and climate bill.

Senators John Kerry and Joseph Lieberman presented a good but far from perfect bill on Wednesday that would at least point the country in the right direction. For the first time, it would set a price on carbon emissions that are now dumped without penalty into the atmosphere. A price signal is an essential prerequisite for reducing emissions and for shifting American industry to cleaner, less polluting sources of energy.

The measure would also invest widely in low-carbon technologies, renewable fuels, more efficient vehicles and mass transit.

The two senators (originally three, until Lindsey Graham jumped ship) have worked hard to fashion a worthy companion to a similar measure passed by the House in June of last year. They deserve thanks. Yet the bill has no chance unless President Obama steps up.

Mr. Obama pledged to “engage” with the Senate to pass a comprehensive energy and climate bill “this year.” This was one of those ticket-punching statements that isn’t going to change any minds. What he should have said is that he is going to hammer on the Senate until it does what this country needs.

Mr. Kerry and Mr. Lieberman doled out all sorts of rewards to various industries to bring them aboard, and the bill has been endorsed by several big power producers, including Duke Energy. But Republicans remain unanimously opposed and Democrats from industrial states are not enthusiastic.

Getting the Senate to act is not just a matter of leadership for Mr. Obama. It is also a matter of honor and sound science. At the Copenhagen climate conference in December, the president — who did much to rescue that meeting from failure — committed this country to a 17 percent reduction in greenhouse gas emissions by 2020.

That is the target in the Senate bill and the bare minimum that scientists believe is necessary to get the United States on track toward reducing its emissions by 80 percent by midcentury — which it must do to help the world avoid the worst impacts of a warming planet.

Despite industry pressure, the bill preserves much of the Environmental Protection Agency’s regulatory authority to reduce emissions from power plants. And on Thursday, the agency issued a rule saying that it planned to address only the biggest emitters. But while the E.P.A.’s authority is important, Congress must still act. A broad market-based scheme would be much more effective than a patchwork of regulations.

The United States is the world’s second-largest emitter of greenhouse gases after China. Until America moves seriously to control emissions, the big developing countries will not do so. As Mr. Obama knows well, all senators like to imagine themselves as world leaders. Well, here’s his chance, and their chance, to lead.

    While the Senate Fiddles, NYT, 13.5.2010, http://www.nytimes.com/2010/05/14/opinion/14fri1.html

President Signs Bill to Extend Jobless Aid

April 15, 2010
The New York Times
By CARL HULSE

WASHINGTON — Congress on Thursday approved legislation that would keep unemployment checks flowing to jobless Americans, and President Obama immediately signed it.

After the Senate resolved a stubborn impasse, deciding the $18 billion cost of the measure could be added to the deficit, the House quickly followed with approval of the measure on a bipartisan vote of 289 to 112.

The measure, which would continue added unemployment benefits and other expired federal programs through May, will restore aid to thousands of Americans who had exhausted their benefits or whose eligibility was expiring. The legislation means that those out of work can receive up to 99 weeks of unemployment pay in some states. It will restore benefits to anyone who may have lost pay during a two-week interruption in the program.

In the Senate, three Republicans joined Democrats in shutting off debate on the legislation that also continues health insurance subsidies for those out of work. In the House, 49 Republicans joined 240 Democrats in backing the measure. Joining Democrats in the vote of 59 to 38 in support of the bill were Republican Senators George V. Voinovich of Ohio and Susan Collins and Olympia J. Snowe of Maine.

Congressional Republicans argued that the spending cuts should be made in other federal programs to cover the costs of the measure, which Representative Kevin Brady, Republican of Texas, characterized as up to 17 months of unemployment “courtesy of the federal taxpayer.”

“What unemployed workers really want are jobs and paychecks, not almost two years of unemployment checks and more debt for our country,” he said.

Democrats said that many out of work Americans were unable to find jobs and that delaying what for some is their sole income in a political fight over spending was unconscionable. They say the money should be treated as an emergency expense.

“Holding unemployed Americans, hundreds of thousands of them, hostage to score what some think may be political points I think is reprehensible,” said Representative Sander M. Levin, Democrat of Michigan.

Democrats hope to use the next few weeks to negotiate legislation to provide the added unemployment aid and other benefits through the end of the year so that they can avoid what has become a recurring fight over the handling of the costs of the program. The legislation also provided temporary extension of the federal flood insurance program and averted a 21 percent cut in doctor fees paid by Medicare.

    President Signs Bill to Extend Jobless Aid, NYT, 15.4.2010, http://www.nytimes.com/2010/04/16/us/politics/16cong.html

Senate Votes 70-28 to Approve $15 Billion Jobs Bill

February 24, 2010
The New York Times
By CARL HULSE

WASHINGTON — The Senate today easily approved a $15 billion Democratic plan to try to spur job creation, as lawmakers hastened to demonstrate that they were taking steps to improve the nation’s employment picture.

The vote was 70 to 28. Thirteen Republicans joined 55 Democrats and two independents voting in favor.

The measure would give employers a temporary exemption from payroll taxes for newly hired workers who had been unemployed for 60 days or more. It also seeks to spur spending on public works projects and to encourage business investment by accelerating tax write-offs.

Though modest in scope, the bill was hailed by Democrats as evidence that after months of impasse, Republicans and Democrats can find some consensus on pressing domestic issues.

“For the first time in a long time, we have a bill that is supported by both Democrats and Republicans,” said Senator Charles E. Schumer of New York, the No. 3 Democrat in the Senate and a co-author of the main provision on payroll taxes.

The measure now goes to the House, where Democratic leaders have indicated they will try to move it rapidly to the president’s desk.

Before approving the measure, Democrats had to beat back a procedural objection: Some Republicans argued that the measure violated budget rules because, by shifting as much as $20 billion into highway projects, it added to the federal deficit. But Democrats said the money was due to be repaid later and would not expand the deficit.

Though the objection was overridden, it left Republicans accusing Democrats of breaking budget enforcement rules just weeks after they were put in place.

Senator Scott Brown, the newly elected Republican from Massachusetts, played a key role in advancing the legislation. He joined with Democrats on one of his first major votes.

“This jobs bill is far from perfect, and ideally would include deeper and broader tax cuts,” Mr. Brown said in a statement. He said if the measure is changed substantially in the House and returns “to the Senate full of pork, waste, fraud and abuse, I reserve the right to vote against it.”

The push behind the relatively modest package of tax breaks for employers who hire the unemployed and aid for public works projects is a sign that, even as Democrats continue to press for a broad health care overhaul, they are also working to notch more incremental accomplishments as they try to build a record for the November elections.

“We have a jobs agenda, not a jobs bill,” Senator Harry Reid of Nevada, the majority leader, said. “We’re going to have more votes, and create more jobs.”

    Senate Votes 70-28 to Approve $15 Billion Jobs Bill, NYT, 25.2.2010, http://www.nytimes.com/2010/02/25/us/politics/25jobs.html

Obama’s Plan for Health Bill Largely Follows Senate Version

February 23, 2010
The New York Times
By SHERYL GAY STOLBERG and DAVID M. HERSZENHORN

WASHINGTON — President Obama began what may be his final push to win enactment of a health care overhaul, laying out a legislative blueprint on Monday that seeks to unify House and Senate Democrats but makes no big new concessions to Republicans.

Mr. Obama’s plan, which the White House said would cost $950 billion over a decade, sticks largely to the version passed by the Senate in December but addresses some of the main concerns of House leaders who are demanding more help for the middle class.

Mr. Obama’s proposal — the first time the president has provided a detailed road map for what he wants a health overhaul to look like — is the opening act to a week of high drama that will culminate on Thursday, when the president convenes Democrats and Republicans at an all-day televised health care “summit” at Blair House. The White House is hoping the session can jump start the stalled health bill.

“We view this as the opening bid for the health meeting,” Dan Pfeiffer, Mr. Obama’s communications director, told reporters Monday morning, adding, “We took our best shot at bridging the differences.”

But among Republicans leaders, the initial reaction was negative. Representative John A. Boehner of Ohio, the House minority leader, said that Mr. Obama had “crippled the credibility” of Thursday’s meeting by proposing “the same massive government takeover of health care.”

Even Democrats took a wait-and-see attitude; House leaders did not immediately embrace the plan but instead scheduled a caucus meting for Monday. And the Congressional math is daunting for the administration. Mr. Obama has lost the 60-vote supermajority that allowed him to win passage of a bill in the Senate, which means he would either have to attract Republican support or push the bill through with a simple majority using the complex parliamentary maneuver known as reconciliation — a route that the White House pointedly did not rule out on Monday.

In the House, he needs 217 votes (the number is ordinarily 218, but two seats are vacant) — a number that could be difficult to muster, especially because Mr. Obama’s bill does not include the tighter restrictions on funding for abortion favored by abortion opponents among House Democrats.

The bill is intended to achieve Mr. Obama’s broad goals of expanding coverage to the uninsured while driving down health premiums and imposing what the White House calls “common sense rules of the road” for insurers, including ending the unpopular practice of discriminating against people with pre-existing conditions. It would offer more money to help cash-strapped states pay for Medicaid over a four-year period, and, in a nod to concerns among the elderly, end the unpopular “donut hole” in the Medicare prescription drug program.

The measure is posted on the White House Web site.

The White House projects that the bill would extend coverage to 31 million people who are currently uninsured, at a cost over 10 years of $950 billion — more than the $871 billion the Senate would have spent, but less than the $1.05 trillion for the version passed by the House. The administration estimates that its plan would reduce the federal deficit by $100 billion over the next 10 years — and about $1 trillion over the second decade — by cutting spending and reining in waste and fraud.

But the measure has not yet been evaluated by the non-partisan Congressional Budget Office, and White House officials said they were open to adjusting it if it cost substantially more than they have estimated.

In many respects, Mr. Obama’s measure looks much like the version the Senate passed on Christmas Eve — and indeed, senior White House officials acknowledged on a morning conference call that they had used the Senate bill as a template. But there are several critical differences that appear designed to appeal to House Democrats, who have voiced deep concerns about the Senate measure and its effects on the middle class.

To begin with, Mr. Obama would eliminate a controversial special deal for Nebraska — widely derided by Republicans as the “cornhusker kickback” — that called for the federal government to pay the full cost of a Medicaid expansion for that state. Instead, the White House would help all states absorb the cost of the Medicaid expansion from 2014, when it begins, until 2017.

And while the president adopts the Senate’s proposed excise tax on high-cost, employer sponsored insurance plans, Mr. Obama makes some crucial adjustments based on an agreement reached in January with organized labor leaders, while also trying to avoid the appearance of special treatment for unions. Most crucially, the president would delay imposing the tax until 2018 for all policies, not just for health benefits provided through collectively-bargained union contracts.

One unanswered question is whether the White House will attempt to push the bill through Congress using reconciliation, ordinarily reserved for budget bills. The procedure enables legislation to pass on a simple majority vote, but sharply restricts a bill’s language to provisions that have a direct impact on federal spending and revenues.

Mr. Pfeiffer suggested that is the route the White House would take in the event of a Republican filibuster. “The president expects and believes the American people deserve an up or down vote on health reform,” he said, “and our proposal is designed to give ourselves maximum flexibility to insure that, if the opposition decides to take the extraordinary step of filibustering health reform.”

In one sense, the release of the bill marks an extraordinary reversal for a president who has long said he would leave legislating to the legislators. Mr. Obama made clear from the outset of the health care debate that he would not follow the footsteps of the last Democratic president, Bill Clinton, who presented Congress with a sweeping health care proposal — only to see it fall flat on Capitol Hill.

Instead, Mr. Obama left it to Congress to produce its own measure. But after months of work, the House and Senate have been unable to close the gap between their bills. So the president, who had promised to post a Democratic measure on the Internet 72 hours in advance of Thursday’s health care meeting, was forced to take matters into his own hands.

Like the Senate version, Mr. Obama’s bill does not include a so-called public option, a government-backed insurance plan to compete with the private sector.

And the bill offers the Senate’s less restrictive language on abortion; it does not include the so-called “Stupak amendment,” which would bar insurers from offering abortion coverage to anyone buying a policy with a federal subsidy. The absence of the Stupak provision, named for Representative Bart Stupak, the conservative Michigan Democrat, could complicate matters for Mr. Obama in the House, where conservatives, led by Mr. Stupak, are adamant that the provision be included.

Mr. Obama largely adopted the Senate’s approach to paying for the legislation, including a proposed increase in the Medicare payroll tax for individuals earning more than $200,000 a year and for couples earning more than $250,000.

He opted for the Senate’s proposal to create state-based insurance exchanges, or marketplaces, rather than a single national exchange as proposed by the House. Many House Democrats worry that state exchanges would create uneven results by allowing states with lax insurance regulations to continue a hands-off approach.

And Mr. Obama adopted the Senate’s proposal to set a uniform eligibility threshold for Medicaid at 133 percent of the federal poverty level. The House had proposed setting eligibility at 150 percent of the poverty level.

House Democratic leaders, including Speaker Nancy Pelosi, had expressed serious concerns that, under the Senate bill, the subsidies provided to help moderate-income Americans afford private insurance would not be sufficient to make coverage affordable.

The Senate had provided somewhat less generous subsidies than the House for individuals and families earning below 300 percent of the federal poverty level or rough $66,150 for a family of four, while the House bill had been less generous to those earning between $66,150 and $88,200.

Mr. Obama generally favored the Senate’s approach, but made a stab at compromise by proposing larger federal subsidies than the Senate bill did for Americans in two income categories — those earning between 133 percent and 200 percent of the poverty level, or roughly $33, 075 to $44,100 for a family of four, and those earning between 300 and 400 percent of the poverty level, or $66,150 to $88,200 for a family of four.

Still, some rank-and-file lawmakers are likely to raise concerns that working-class families will still find it difficult to afford health benefits.

Under the president’s plan, a family earning about $88,000 a year would pay no more than 9.5 percent of income toward annual health insurance premiums, or about $8,380, not including out-of-pocket costs, such as co-payments or deductibles.

Under the Senate bill, such a family could have paid $8,643 a year in premiums and under the House bill as much as $10,584 a year.

Under the president’s plan, a family earning $22,050 would have to pay $441 in annual premium costs compare to $331 under the House bill. And a family earning $33,100 would have to pay up to $1,324 a year in premiums under Mr. Obama’s plan, compared to a maximum of $993 under the House bill.

    Obama’s Plan for Health Bill Largely Follows Senate Version, NYT, 23.2.2010, http://www.nytimes.com/2010/02/23/health/policy/23health.html

Democrats Reel as Senator Says No to 3rd Term

February 16, 2010
The New York Times
By ADAM NAGOURNEY

WASHINGTON — Senator Evan Bayh of Indiana announced on Monday that he would not seek re-election, sending a wave of distress over his fellow Democrats and focusing new attention on the view that unyielding partisanship had left Congress all but paralyzed.

Mr. Bayh, a centrist and the son of a former senator, used the announcement that he would not seek a third term to lambaste a Senate that he described as frozen by partisan politics and incapable of passing even basic legislation.

“For some time, I have had a growing conviction that Congress is not operating as it should,” Mr. Bayh said. “There is too much partisanship and not enough progress — too much narrow ideology and not enough practical problem-solving. Even at a time of enormous challenge, the people’s business is not being done.”

Mr. Bayh’s decision staggered Democrats. It was the latest in a series of setbacks that illustrate just how far the party’s fortunes have fallen since President Obama came to office more than a year ago, sweeping big majorities into the House and Senate with him. Mr. Bayh stepped aside despite personal entreaties from Mr. Obama and his chief of staff, Rahm Emanuel, White House officials said.

Mr. Bayh was on the short list of candidates Mr. Obama considered for vice president before settling on Joseph R. Biden Jr. He was among the most prominent of moderate Democrats in Congress, but has been increasingly isolated over the past year as he has warned Democratic Congressional leaders that the push for big-ticket and expensive legislation was scaring off independent voters.

Although Indiana is considered a Republican-leaning state, Mr. Obama won it in 2008, and Mr. Bayh, 54, who served two terms as governor and won election to the Senate with more than 60 percent of the vote in each of his races, appeared to be in a good position to win a third term. His retirement greatly increases the chances of a Republican victory there, analysts from both parties said.

Even after the loss last month of the seat that had been held by Senator Edward M. Kennedy of Massachusetts, Democrats control the Senate by a margin of 59 to 41, leaving Republicans still facing long odds in their effort to win a majority. And Mr. Bayh, in an interview, argued that Democrats could hold on to his seat, noting that Republicans face a contested primary.

Still, Mr. Bayh’s exit darkens what already was a bleak election map for Senate Democrats. Because of retirements, Democrats face tough odds in retaining seats in Colorado, Delaware, Illinois, North Dakota and now Indiana. Democratic incumbents face tough going in Arkansas and Nevada. Republicans, though, have their own problems as they struggle to hold on to seats left open by retirements in Kentucky, Missouri, New Hampshire and Ohio.

What was most striking about Mr. Bayh’s announcement was the deep disillusionment he expressed with his place of employment, a feeling reflected in recent polls. In a New York Times/CBS News poll last week, 75 percent of respondents said they disapproved of the job Congress was doing; just 8 percent said members of Congress deserved re-election. Mr. Bayh pointed to the partisan standoff over efforts to create a commission to address the mounting national debt. Republicans blocked an effort pushed by Mr. Obama to create a bipartisan commission by legislation, with seven Republicans who had co-sponsored such an approach announcing they would vote against it.

In an interview, Mr. Bayh said he was startled at how much the Senate had changed since he arrived in 1998, and even more since his father, Birch Bayh, served in the Senate, from 1963 to 1981.

“This is colored by having observed the Senate in my father’s day,” Mr. Bayh said. “It wasn’t perfect; they had politics back then, too. But there was much more friendship across the aisles, and there was a greater willingness to put politics aside for the welfare of the country. I just don’t see that now.”

“In my father’s day, you legislated for four years and campaigned for two; now it’s full time. The politics never stops,” he said. “My bottom line is that there are a lot of really good people trapped in a dysfunctional system desperately in need of reform.”

Mr. Bayh was seen by fellow Democrats as someone who was not particularly happy with life in the Senate or very active there on a daily basis. He often popped in for votes and was quickly gone, and was known to make time for the school and sports events of his children. He only occasionally gave floor speeches.

Though Mr. Bayh had been considering his political future for some time, the timing of the announcement caught many top Democrats off guard. He did not inform Mr. Obama or other top party leaders of the timing of his decision, one associate said, so they would not make further efforts to talk him out of it; the office of Senator Harry Reid of Nevada, the Democratic leader, first learned of the decision from news accounts.

Until now, every indication was that Mr. Bayh was proceeding with the race this fall. He had collected the necessary petitions to be placed on the ballot and they were due to be filed at noon on Tuesday. Democrats had coordinated an extended campaign to release damaging political information about the Republican who had emerged as Mr. Bayh’s main threat, Daniel R. Coats, a former senator.

Mr. Bayh had already hired some campaign workers, and his campaign account had more than $13 million on hand.

Two Democratic House members from Indiana, Baron P. Hill and Brad Ellsworth, quickly emerged as likely candidates to fill the vacancy. A third possibility was Jonathan Weinzapfel, the mayor of Evansville, Democratic officials said

Democrats say that since no party candidate is likely to raise enough signatures to qualify for the ballot by the deadline on Friday, the state party will be allowed to select its Senate candidate. But Republicans are challenging that interpretation and said they were exploring their legal options to deny Democrats a candidate if no one meets the filing deadline.

On the Republican side, Mr. Coats faces a primary challenge from John Hostettler, a former member of Congress, and others. Representative Mike Pence, a conservative Republican who was the top choice of many Washington Republicans, announced earlier that he would not run and restated that intention on Monday.

Carl Hulse and Jeff Zeleny contributed reporting.

    Democrats Reel as Senator Says No to 3rd Term, NYT, 16.2.2010, http://www.nytimes.com/2010/02/16/us/politics/16bayh.html

Senate Takes Up Bernanke’s Confirmation

January 29, 2010
The New York Times
By SEWELL CHAN

WASHINGTON — The Senate started on Thursday to debate Ben S. Bernanke’s confirmation to a second term as chairman of the Federal Reserve Board, rendering a verdict on his leadership — and, indirectly, that of the Obama administration — during the financial crisis.

The Senate was expected to take a crucial vote on a motion by Richard J. Durbin of Illinois, the No. 2 Democrat in the Senate, to cut off debate. Democratic leaders believe they have the 60 votes needed to overcome a threatened filibuster, but they will need support from both parties, as opposition to Mr. Bernanke has emerged from the left and the right.

If the motion to end debate is passed, a second vote to confirm Mr. Bernanke, which requires only a simple majority, could also take place on Thursday. His four-year term as chairman expires on Sunday.

Opposition to Mr. Bernanke has come from senators at both ends of the political spectrum. Liberal Democrats like Barbara Boxer of California, Russell D. Feingold of Wisconsin and Tom Harkin of Iowa assailed the Fed’s failures to regulate banks while they made reckless loans, while conservative Republicans like Jim DeMint of South Carolina, John McCain of Arizona and David Vitter of Louisiana are angered by the Fed’s failure to forestall the financial crisis and the exceptional broadening of its powers beyond its traditional domain of monetary policy.

As the debate started, even Mr. Bernanke’s supporters were cautious in their comments.

“The status quo at the Fed is not acceptable, and the nation needs a central bank that is proactive in addressing concerns at our financial institutions,” said Senator Tim Johnson, Democrat of South Dakota, who said he would vote to confirm.

Senator Richard C. Shelby of Alabama, the top Republican on the Banking Committee, recited a litany of charges against Mr. Bernanke, insisting that the Senate “hold accountable those regulators whose poor oversight of our financial institutions and markets” produced the economic crisis.

Mr. Shelby said it would be “short-sighted and wrong” of Congress to renew Mr. Bernanke’s term out of fear of how the markets would react.

“Considerable economic devastation occurred as a result of Chairman Bernanke’s loose monetary policy and weak regulatory oversight,” Mr. Shelby said. “If we don’t hold Chairman Bernanke accountable, what precedent are we setting for future regulators?”

“I intend to do my job,” he said “and vote no on the confirmation of Ben Bernanke.”

Both sides have called for a fresh start.

“In order to create a new Wall Street, we need a new Fed,” Senator Bernard Sanders, a Vermont independent who caucuses with the Democrats and has been one of Mr. Bernanke’s fiercest critics, said in a floor speech on Thursday. “And we need a Fed chairman who is going to provide new leadership. The same-old, same-old is not going to work.”

Mr. Sanders asked: “While Wall Street became converted into the largest gambling casino in the history of the world, where was Mr. Bernanke and the Fed, whose job is to protect the safety and soundness of our financial institutions? They weren’t there.”

Mr. Sanders said the Fed had failed to make it easier for small and medium-sized businesses to obtain credit — a criticism that was also made by the Senate majority leader, Harry Reid, who offered only a tepid endorsement of Mr. Bernanke last week.

Mr. Bernanke, 56, is likely to receive more “no” votes than any nominee for Fed chairman since Paul A. Volcker was confirmed to a second term, by a vote of 84 to 16, in 1983.

Like Mr. Bernanke, who was appointed chairman by President George W. Bush and nominated to a second term by President Obama last August, Mr. Volcker had been named by a president from one party (Jimmy Carter), backed by a president from another (Ronald Reagan) and led the central bank through a brutal recession (1979-1982).

But unlike Mr. Volcker, Mr. Bernanke has presided over a fundamental shift in the Fed’s role and visibility. The central bank’s role in bailing out financial giants like the American International Group, its huge purchases of troubled assets and the doubling of its balance sheet in two years have no precedent.

Allan H. Meltzer, a professor of political economy at Carnegie Mellon University and an authority on the central bank’s history, said much of the anger at the Fed was justified.

“The public thinks the Fed bailed out Wall Street, the automobile companies and A.I.G. and hasn’t done much for them,” he said.

He said the Fed had brought some of its problems upon itself through erratic conduct as the financial crisis emerged in 2008.

“Bernanke has given up almost all the independence the Fed ever had, because he has been engaged in fiscal policy,” Professor Meltzer said. “Can you think of another central bank in the developed world that has half its balance sheet in mortgages? Would Paul Volcker have done that? Not on your life.”

Mr. Bernanke and other Fed officials have said that their interventions, while unprecedented, were crucial in helping the Treasury to avert an even more crippling economic meltdown.

    Senate Takes Up Bernanke’s Confirmation, NYT, 29.1.2010, http://www.nytimes.com/2010/01/29/business/economy/29fed.html

Senate Votes to Raise Debt Ceiling

January 28, 2010
Filed at 12:38 p.m. ET
The New York Times
By REUTERS

WASHINGTON (Reuters) - The U.S. Senate Thursday voted narrowly to increase the government's borrowing authority to $14.3 trillion, which would allow the Treasury Department to continue servicing the country's spiraling national debt through most of 2010.

The 60 to 40 vote, along party lines, allows the Democratic-led chamber to avoid approving another unpopular increase before the November congressional elections. The House of Representatives must also approve the hike before President Barack Obama can sign it into law.

Congress must periodically raise the legal limit for the government's borrowing, and the Treasury Department is expected within weeks to exceed the current $12.4 trillion limit set in December.

Failure to raise the limit would roil financial markets, but lawmakers are never eager to sign off on a measure that allows the government to dig itself further into debt.

Democrats who control both chambers of Congress face a growing public backlash over the aggressive spending measures they have taken to stimulate economic growth during the worst recession in 70 years.

The government spent a record $1.4 trillion more than it collected in the past fiscal year, and the nonpartisan Congressional Budget Office forecasts a similar $1.35 trillion deficit for the current fiscal year, which ends Sept. 30.

    Senate Votes to Raise Debt Ceiling, NYT, 28.1.2010, http://www.nytimes.com/reuters/2010/01/28/us/politics-usa-congress-debt.html

Charles Mathias, Former U.S. Senator, Dies at 87

January 26, 2010
The New York Times
By ADAM CLYMER

Charles McC. Mathias, a former United States senator from Maryland who as a liberal Republican clashed with the Nixon and Reagan administrations and who was called “the conscience of the Senate” by its Democratic leader, Mike Mansfield, died Monday at his home in Chevy Chase, Md. He was 87.

The cause was complications of Parkinson’s disease, said Ann Pincus, a family spokeswoman.

Civil rights legislation engaged Mr. Mathias throughout his Washington career, which included four terms in the House of Representatives, from 1961 to 1969, and three terms in the Senate before he retired in 1987.

Mr. Mathias, who was known as Mac, played a major role in drafting the 1964 Civil Rights Act as a subordinate to Republican leaders who provided the margin of victory in the House. He was a key supporter of later measures on voting and housing and of efforts to thwart Reagan administration efforts to roll back those victories.

Mr. Mathias won his first race for the House in 1960, criticizing his opponent as someone who voted with the liberal group Americans for Democratic Action. But his own voting record showed agreement with the organization’s positions 57 percent of the time in his House years and 69 percent in the Senate.

Still, he resisted labels. “I’m not all that liberal,” he told The Washington Post in 1974. “In fact, in some respects I’m conservative. A while ago I introduced a bill preserving the guarantees of the Bill of Rights by prohibiting warrantless wiretaps. I suppose they’ll say it’s another liberal effort, but it’s as conservative as you can get. It’s conserving the Constitution.”

However he described them, his votes, his vocal unhappiness with the growing conservatism of the Republican Party and his lack of support for Ronald Reagan cost him leadership positions. In 1979, Senator Strom Thurmond maneuvered to block Mr. Mathias from becoming senior Republican on the Judiciary Committee; Mr. Mathias instead got the gavel at the far less powerful Rules and Administration Committee.

His Senate colleague for many years, Paul Sarbanes, Democrat of Maryland, said Monday that while Mr. Mathias’s “most intense critics were within his own party,” nevertheless “Mac commanded enormous respect on both sides of the aisle.”

Mr. Mansfield’s accolade came in a debate on campaign finance legislation on Dec. 21, 1973. Mr. Mathias advocated public financing of campaigns and ceilings on contributions (measures enacted the next year). He said that in his 1974 campaign he would reject cash contributions, take no more than $100 from any individual, report every contribution and expenditure and voluntarily abide by spending ceilings passed by the Senate.

“I commend him for the example,” Mr. Mansfield said, adding, “He has become the conscience of the Senate.”

Mr. Mathias won re-election in 1974 with 57 percent of the vote in what was otherwise a year of Democratic landslides.

His first election, to the Senate had been closer, as he defeated Daniel Brewster, a Democratic incumbent who was a friend and former classmate at the University of Maryland Law School. Mr. Brewster had been an usher at Mr. Mathias’s wedding in 1958, and Mr. Mathias had been godfather to Mr. Brewster’s son.

It was a tough campaign, with Mr. Mathias calling his friend a “messenger boy” for labor and a mouthpiece for the Johnson administration. Mr. Mathias won with 48 percent of the vote in a three-way race. The next day he and his son Robert, then 7, drove to visit Mr. Brewster.

“He went to shake hands and move on with their friendship,” Robert Mathias said Monday. In a 1972 bribery trial, Mr. Mathias testified for Mr. Brewster as a character witness.

Mr. Mathias had praise for President Richard M. Nixon early in his administration but later tangled with the White House, opposing its “Southern strategy” to slow school desegregation and supporting legislation to curtail the war in Vietnam. He also opposed two of the administration’s Supreme Court nominations.

That led to hostility in the White House and talk of trying to run someone against Mr. Mathias. But by 1973, Watergate had enfeebled the administration and Nixon called for Mr. Mathias’s re-election, saying they shared “a commitment to good government.” Mr. Mathias had demanded that Nixon reveal the truth about Watergate.

Besides civil rights, Mr. Mathias worked at strengthening ties with Europe and supported legislation that cleaned up the Chesapeake Bay and gave home rule to the District of Columbia.

After leaving the Senate, Mr. Mathias practiced law in Washington. Besides his son Robert, he is survived by his wife, Ann Bradford Mathias; another son, Charles; two grandchildren; a sister, Theresa Mathias Michel, and a brother, Edward.

Charles McCurdy Mathias was born on July 24, 1922, in Frederick, Md. After entering Haverford College, he left in 1942 to enlist in the Navy, which sent him to Yale and Columbia before commissioning him as an ensign in 1944, the year Haverford awarded him a bachelor’s degree. He served in the Philippines and in the occupation of Japan before earning his law degree at Maryland.

Mr. Mathias flirted with the idea of an independent presidential run in 1976. In a 1974 campaign speech he quoted Burke’s 1774 letter to the Electors of Bristol: “Your representative owes you, not his industry only, but his judgment; and he betrays instead of serving you if he sacrifices it to your opinion.”

After the applause, he added wryly, “I would point out that Edmund Burke was defeated at the next election.”

Then he insisted, “But it was still the right answer.”

    Charles Mathias, Former U.S. Senator, Dies at 87, NYT, 26.1.2010, http://www.nytimes.com/2010/01/26/us/politics/26mathias.html