Congressional hypocrites investigate Wikileaks while soliciting whistleblowers

Darrell Issa
The Irony-impaired Darrell Issa (R-CA) (Photo by Gage Skidmore on Flickr)

House Oversight Chairman Darrell Issa (R-CA) launched a new website this week soliciting government whistleblowers.  The site is looking for anonymous tips to locate government waste, abuse, and fraud.

Meanwhile, Issa has also promised to investigate Wikileaks, which has been the largest source of whistleblown tips for government waste, abuse, and fraud in recent history.

Issa said his committee would investigate WikiLeaks because it wanted “to get that right so the diplomats can do their job with confidence and people can talk to our government with confidence”.

However, in recognition of the probable lack of any existing laws with which to prosecute a foreign news organization for publishing leaked government information, he suggested the new Congress would have to pass legislation to try to prevent “similar acts of whistleblowing”.  Issa even calls it whistleblowing in both contexts.

This is not a case of one Congressional hand not knowing what the other is doing.  Both of these plans came from the same office within a couple weeks of each other.  Apparently, with absolutely no recognition of the inherent irony.

As debt ceiling nears the House floor, will USA hit the wall?

Treasury Secretary Tim Geithner sent a letter to Congress last week in which he laid out the dire economic consequences should the debt ceiling not get raised in the next month or so.  This alarm was not shared by The Economist, who pointed out that the Treasury Department still has several cards it could play to keep us from colliding with the ceiling until about August.  Piling on, Moody’s made noises this week that if Uncle Sam doesn’t get his debt under control, he might lose his most favorable AAA credit rating.  Meanwhile, House Republicans are demanding they will not entertain raising the ceiling unless they get significant spending reductions.  And for good measure, add to the mix a new poll showing 71% of the public is opposed to raising the debt ceiling.

Does your brain hurt yet?  It should.  The likelihood is that the 71% public opposition to raising the ceiling is rooted in trying to simplify this mess in your aching brain down to the notion that more debt is a bad thing.  While there’s truth to that, constraining the debt ceiling may be the wrong lever to use to achieve that objective.

Projected 2011 Cash flow
The helpful table from Lou Crandall of Wrightson ICAP shows that in every month this year, projected cash receipts comfortably exceed interest payments

First, let’s be clear about something.  Debt ceiling or not, the USA is extremely unlikely to default on its debt.  The impact of default would make the 2008 economy crash look like a minor hiccup.  The ensuing global catastrophe would hurt currency values as well as lending rates across the private and public sectors, and would leave a permanent scar on the US economy.  Avoiding default merely means paying off our existing debt on schedule and not borrowing over our limit.  As the chart to the left shows, keeping pace with our interest payments given our projected income isn’t at all unreasonable.  But it does mean the federal budget will need to shave about $1.5 trillion from its planned spending this year.  That’s not a haircut as much as an amputation, and without any anesthetic.

This brings us to Moody’s concern.  While some are citing the threat to our credit rating as evidence we need to stop borrowing and pay off our debt, the reality is much less draconian.  Moody’s would be quite content if we just looked like we had a plan for eventually paying off our debt.  However, they note that we are saddled with escalating medical costs, unfunded military adventures, deteriorating infrastructure, and a political body who adamantly refuses to raise additional revenue through taxes.  They are merely pointing out that this is not a sustainable path—and they are absolutely correct.

The common thread here is that we need a solid believable plan to get our debt under control.  It doesn’t need to eliminate the current debt or even reduce future borrowing.  We just need to walk a plausible path that leads to eventual stability.

Is the GOP helping then by using the ceiling as a lever to reduce spending?  Does capping the debt ceiling help us get on that financial yellow brick road?  Not really.  Refusing to move the ceiling is like calling the bank to have them reduce your credit limit because you can’t control your spending.  Yes, it forces you to not spend more, but it also causes the bank to rethink your credit worthiness.  That may result in higher interest rates and/or your inability to get credit when you really do need it.

If Congress refuses to move the ceiling, our creditors will take that as a bad sign with regard to our ability to manage our finances.  It won’t matter that we don’t default.  It will still negatively impact the rates we pay to finance our current debt.  And because almost all rates in the private sector are tied to T-bills, the higher rates will ripple into the rates paid by individuals and businesses as well.  This helps no one, except maybe the Chinese and others holding our debt.

Getting our federal finances in order is essential, but the debt ceiling is the wrong tool to get that done.

Patriot Act up for renewal and no one notices

4th Amendment Comic
Comic by Electronic Frontier Foundation on Flickr

On January 5th, Rep. Mike Rogers (R-MI) introduced a bill to add yet another year to the soon to be expiring Patriot Act.  This would extend it until February of 2012, and passage is likely to happen with little debate or contention.  If passed, this would be the second time the Obama administration has punted on campaign promises to roll back excessive surveillance measures allowed under the act passed in the wake of 9/11.

When the Patriot Act was first signed in 2001, it was billed as a temporary measure required because of the extreme circumstances created by the terrorist threat.  The fear from its opponents was that executive power, once given, is seldom relinquished.  In retrospect, that fear appears well founded.  Not only has Obama not given the power back, but he has continued to abuse it to spy on citizens without due process.

In 2007, candidate Obama said during his Presidency there would be “no more National Security Letters to spy on citizens who are not suspected of a crime” because “that is not who we are, and it is not what is necessary to defeat the terrorists.”  The hope that he’ll make good on that statement is seeming pretty audacious.

Palin had nothing to gain from apology

Sarah Palin
Sarah Palin in her America's Enduring Strength video

Sarah Palin released her “America’s Enduring Strength” video today in response to the media reaction to the of shooting of Rep. Giffords and others in Tuscon, AZ. Palin is suitably sympathetic in the seven minute monologue, but is decidedly unapologetic for her rhetoric. Not surprisingly, the political left and right are having dramatically different reactions to her message.

While most everyone in the mainstream seems to agree there is no direct link between Palin and the mentally unstable shooter, Palin feels understandably attacked in the media aftermath.  There is ample basis for discussion over whether or not the violent and gun-based language and imagery used by Palin and other politicians and pundits is potentially inciting violent actions by the fringe elements of society.  And it’s understandable why the Arizona shooting has been the catalyst for bringing up the topic of the lack of civility in our political discourse.  But the fact remains that there is no traceable connection between this incident and anybody’s political rhetoric.  Palin defends that point, and strikes back at those who would try to pin any wrongdoing on her or the right in general.

Ezra Klein makes the eloquent case on the left for why Palin missed an opportunity.

Imagine if Palin had come out and said, “My initial response was to defend the fact that I had never condoned such violence, and never would. But the fact is, if I in any way contributed to an unhealthy political climate, I have to be more careful and deliberate in my public language rather than merely sharpen my defenses.” That would’ve been leadership: It would have made her critics look small, and it would’ve made her look big. Those who doubted whether Palin could rise to an occasion that called for more than sharp partisanship would’ve been silenced.

The right’s reaction is typified by fellow Examiner Lori Calabrese.

In a climate of hate, Palin rose above her critics with a beautifully written address that spoke to us as a nation and,although, Palin struck back at her critics, she didn’t further divide our great nation, yet called for unity and defended the rights and freedoms that make America exceptional.

I don’t know about you, but I saw something different in Sarah Palin. She leaped into the leadership role of the Republican party with her statement, while other GOP hopefuls have either remained quiet on the issue or proved that they don’t have the grapefruits to lead our nation. Palin defends our rights spelled out in The Constitution addressing the fact that a member of Congress went so far as to announce that he would propose a law that would criminalize speech he found offensive.

What Klein and others on the left are not owning up to is that while Palin may have made a few points with a more apologetic message, it would not ultimately have changed any of their minds about Palin.  Meanwhile, an apology would have inflamed her supporters who expect her to stand firm, refuse to compromise, and take no prisoners.  She had everything to lose by appearing to kowtow to the accusations of culpability, and nothing to gain.  However, staying true to her “don’t retreat, reload” mantra, she struck back at her accusers.  In doing so, she reinforced her credibility with her loyal base, and acted about like everyone else expected her to act.

All indications are that strategically this was the appropriate message for her to release.  Whether you loved it or hated it, she gets credit for being smart enough to recognize there is little she’s going to do that would persuade those who have already written her off to give her a second look.

Cuomo’s property tax cap is an ugly solution

Andrew Cuomo
Cuomo advocates for a property tax cap in NY (Photo by Michael Nagle-Getty Images)

New York Gov. Andrew Cuomo has made a 2% property-tax cap a centerpiece of his new administration.  The state’s local taxes are now 79 percent above the national average, making them the highest among the 50 states.  Residents and businesses alike agree something has to be done.  However, there remains great debate on whether or not a tax cap is the best solution.

At first blush, the cap would seem to address the most direct cause of the financial pain.  Taxes are high and continue to rise in excess of the rate of inflation.  Stop that.  But considered from the municipality’s point of view, this constrains revenue, but not spending.

There should be a relationship between revenue and spending, but for counties, towns, and school districts in New York many programs are mandated by the state or the federal government. Mandates include special education, which at more than $24,000 per student is far more expensive in New York than in most other states.  And lawmakers have added 257 additional requirements to federal disabilities laws, according to the Citizens Budget Commission.  Further, school and municipal retirement and health insurance programs are set up by the state, but paid for locally.

This means that much of the spending is not under the control of the governments whose revenue has just been capped.  Local communities cannot run in deficit, meaning that non-mandated spending must be cut or the state must start providing funding for the mandates it has issued.  If the state doesn’t step up, expect layoffs of teachers, firemen, and police.  Road and sidewalk maintenance will be curtailed.  Playgrounds, community centers, and other popular local services and facilities will suffer.

The bet is that the dysfunctional NY state legislature won’t allow the local communities to suffer and will approve state spending to cover mandates.  But this is the same legislature who must pass the property tax cap.  In essence, they would be approving a tax cap in an effort to force themselves to approve paying for mandates.  Wouldn’t a sane body just deal with the mandates rather than trying to hold itself hostage?

Complicating this matter is Cuomo’s proposal that a 60% majority of local voters could pass a resolution to exceed the cap.  The likely result being that relatively affluent communities would opt to maintain the schools and community programs in their area, while less economically able areas would have to suffer the loss of services.  So the legislative bet is really that Albany will step in to prevent the economic suffering in the poorer regions of the state.  Given Albany’s history, there will be long odds on that wager.

It may well be that the property tax cap is the only program Cuomo can get passed.  The legislature has ignored the mandate problem for decades, and there’s no reason to believe they will act without some sort of leverage.  This may be the best tool available.  But citizens should be aware that while it sounds like a tax cap is in their best interests, the real objective is to create local pain such that Albany can be spurred to action.  If they act, they will be rescuing you from themselves—a result they are completely capable of doing without making you suffer in the first place.