Tag: Politics and Policy

All Your Credit Card Statement Are Belong To Us

The Saturday before Saddam Hussein was captured, President Bush signed into law the Intelligence Authorization Act of Fiscal Year 2004. Tucked away in this legislation is language allowing the FBI to collect any citizen's financial information without judicial review or meaningful Congressional oversight. Pour yourself a cup of coffee and read Section 374 of the law for details. This means that an FBI agent can draft a "national security letter" (NSL) and, as if by magic, get "financial information," which is newly defined to include your transactions with stock brokers, travel agents, jewelry stores, the U.S. Post Office, casinos, and real estate agents, and car dealerships. The support for this provision was predicated on an urgent need for the FBI to get this information. This is difficult to understand, since the FBI already has the power to get this information under Section 215 of the Patriot Act. Strangely, the FBI claims that it has never used the this power. So what's going on here? Why give them this power when they're not using the power they already have? The answer is that the FBI doesn't want to use Section 215 of the Patriot Act. The FBI is finding these NSLs much more useful. NSLs don't require the approval of the FISA court and the minimal oversight that provides. NSLs are practically immune from Congressional oversight. They're also completely opaque to the public: for example, EPIC filed an FOIA request for the list of NSLs that have been issued, and here's what they got: a six page list, entirely redacted with black marker. Many news services and web sites have characterized this surreptitious change as an expansion of the FBI's power -- which is a terrible mistake. The FBI has been able to get these records all along. What they wanted, instead, is to exercise this power without any oversight, criticism, scrutiny or transparency. Essentially: Congress willingly surrendered its resposibility to hold the FBI accountable.

Treasury’s Snow Starts the Crazy Talk

Treasury Secretary Paul O'NeillJohn W. Snow predicts that there will be two million new jobs before the election. "I would stake my reputation on employment growth happening before Christmas," Snow said. That forecast flies in the face of every meaningful analysis in both the public and private sectors. You might even call his prediction optimistic... or maybe "irrational". But it gets worse. Later in the same interview, he predicts that interest rates would rise, despite the Fed's insistence that interest rates would stay low for "a considerable period of time." Yes, it's always a good idea for the Treasury to second-guess the Fed. Snow apparently got a strongly-worded memo about that: he walked it back the next day. What is it with the unscripted Treasury Secretaries?

Another Tax Cut?

There are rumors going around that Bush will propose another tax cut next year, which is not coincidentally an election year. Roll Call quotes a "White House insider", who says that Bush aides hope the new plan with cause "Democrats

Iraqi Debt Coming to a Head

The NYT fronts with news that the U.S. Coalition Provisional Authority is going to give up some power in order to attract donors to the cause of Iraqi reconstruction. We'll leave the "I told you so" work to others. Instead we'll focus on the discussion of debt: $120 billion dollars, in addition to "tens of billions" in unpaid war reparations. The NYT says the World Bank and international funds aren't going to pony up the loans until that debt is settled. We wondered about this just a few days ago. Much of the debt is owed to France, Germany and Russia, who will almost certainly demand a debt payment plan before they begin participating in any reconstruction effort. It's possible the the United States will flex its muscle and force a default to prevent these nations from being paid: Iraq accumulated this debt by breaking the UN embargo, after all. On the other hand, a default would damage the already stuttering Iraqi economy, and the United States would be cutting off its nose to spite its face. That makes a default unlikely. Instead, the debt will be restructured. This isn't much better. Ideally, Iraq would arrange to pay the interest on the debt until it is back on its feet -- like getting a forbearance on your student loan. That won't happen, though: again, the gang from Bretton Woods wants to see that debt reduced before they make any meaningful loans. This dovetails into last week's spat in the U.S. Congress over a bill offering Iraq $20 billion in aid -- a number of Republican Senators mutinied, and demanded that half that amount be converted into a loan. This makes good political sense for the Senators: with cutbacks everywhere in the U.S. budgets, it's hard to sell a massive foreign aid package to constituents. Unfortunately, a loan would mean exacerbating Iraq's debt problem. That means that Iraq will almost certainly have to start paying off its debts -- and it will be a terrible burden. "But what about all that oil," you ask? Iraqi oil won't close the gap -- the UN has $1 billion in contracts under the oil-for-food program, and the infrastructure just can't handle the required output. The World Bank itself issued an assessment document, acknowledging "it is currently not possible to predict offsetting expenditures on principal and interest payments on Iraq's very sizeable external debt." Someone has to put down their gun, or Iraq will not get the money it needs. This should make the upcoming donor summit in Madrid very interesting.

The Craven Rep. Mica

From the "Do As I Say, Not As I Do" Dept.:

House Aviation panel chairman [John] Mica, scrambling to pass a proposal allowing privatization of some air-traffic control towers, tells Republicans he would exempt those in their states in exchange for votes. "I have a bill to pass," he says; the proposal is in a larger bill reauthorizing the Federal Aviation Administration. Democrats aren't given the same offer: "They want to scuttle the bill," a Mica aide says.
Thanks to WaPo and CalPundit.

Where’s the Old Iraqi Debt?

A brief, rhetorical question: what will happen to the foreign debt accumulated by Iraq during the sanctions? There are millions of dollars owed to Russia, France and Germany. Why aren't they staying more engaged in the reconstruction process, since that would ostensibly ensure they get a seat during the debt renegotiation? Why isn't Washington holding that money over their heads to get more cooperation? With all the talk about the $87 billion we're spending, why hasn't there been more coverage on these questions?

Medical Malpractice Reform in the Senate

There's apparently a problem with medical malpractice insurance. It has become so expensive to get malpractice insurance that some doctors are being forced to move their practices elsewhere. The medical associations blame exhorbitant jury awards. The trial lawyer associations say the awards are fair -- after all, they're decided by a jury and judge. Republicans are eager for tort reform in general, and medical malpractice reform is to be a big part of that. That might explain why Majority Leader Bill Frist is introducing a Republican plan into the Senate, even though he doesn't have the 60 votes he needs avoid a filibuster.