Archive for the ‘Congress’ Category
David Dayen writes in The Intercept:
Companies that provide investment advice have been vigorously fighting a proposed Department of Labor rule that would formally require investment advisors for retirement plans to operate in the best interest of their clients — instead of ripping them off with products that earn bigger profits.
Investment advisors have claimed this would be disastrous for their businesses and would leave retail investors with no assistance in navigating the financial markets.
But behind the scenes, in earnings calls with their own shareholders, these same companies are downplaying the impact of the rule, reassuring that they could easily handle the changes.
This contradiction was revealed in a letter from Senator Elizabeth Warren and Congressman Elijah Cummings made public Thursday. The letter highlights four companies with investment advisory units, contrasting their public and private statements, and implicitly raising the question: Are they lying to the Department of Labor, or to their shareholders?
For example, in a letter to the Labor Department last July, Jackson National Life Insurance Company president James Sopha called the proposal “bad for investors and for America,” and said that “it will be very difficult, if not impossible for financial professionals and firms to comply with the requirements.”
But in a call with shareholders, the CEO of Jackson’s parent company, Prudential U.K., said that the company would “build whatever product is appropriate… and adapt faster and more effectively than competitors.”
The lawmakers note in their letter that public companies are required by law to accurately report material information to shareholders. The Securities and Exchange Commission routinely charges companies with delivering misleading information on earnings calls. Pharmacy chain CVS Caremark, for example, paid $20 million for doing so in 2014. Citigroup paid $75 million for the offense in 2010.
Here’s another example: Dennis Glass, CEO of Lincoln National, told the Labor Department in a comment letter that their rule was “so burdensome and unworkable that financial advisors and firms would not be able to use it.”
But he told shareholders that “Lincoln, because of our scale, broad set of product offerings and strong and diverse distribution franchises with a proven ability to pivot in response to market or regulated changes… will therefore be able to navigate through whatever comes down the road.” He added, “we don’t see this as a significant hurdle for continuing to grow our business.”
Glass’s company and other are pouring millions of lobbying dollars into opposing the rule. President Obama’s Council of Economic Advisersestimates that “conflicted” advice costs individual investors $17 billion a year in retirement savings.
Warren and Cummings also include contradictory comments from the leaders of Prudential Financial and Transamerica Corporation. . .
Another reason people support Bernie: Obama Celebrates Nine Years of Doing Nothing About Money in Politics
In too many areas establishiment politicians do nothing when facing the problem of the adverse effects of oligarchy in the US. Obama has carefully hired Wall Street protectors as Wall Street regulators, and the outright fraud practiced by Wall Street—proven fraud, that led to criminal actions and large fines and settlements—did not put a single person in prison: there was zero accountability of those responsible for what happened. And Obaa similarly talked about the importance of the issue of money in politics, but then never took a single small step to solve the problem. Jon Schwarz writes in The Intercept:
President Barack Obama returned to Springfield, Illinois, on Wednesday, nine years to the day after he kicked off his first presidential campaign there, and, just like in 2007, spoke passionately about his desire to reduce the influence of big money in politics.
In 2007, Obama said, “The cynics, and the lobbyists, and the special interests [have] turned our government into a game only they can afford to play. … They think they own this government, but we’re here today to take it back.”
On Wednesday, Obama told the Illinois legislature, “We have to reduce the corrosive influence of money in our politics that makes people feel like the system is rigged.”
This time, of course, Obama is president and could actually do something about it. There are many actions he could take on his own, without approval from Congress or the courts. In particular, he could issue an executive order requiring federal contractors to disclose any “dark money” contributions to politically active nonprofits.
Obama did mention dark money in his speech, saying that it “drowns out ordinary voices.”
He also mentioned the general concept of taking presidential action on his own, but only for comedic value: “I don’t pretend to have all the answers. … If I did I would have already done them through executive action! That was just a joke, guys.”
Activists have delivered over 1 million signatures to the White House demanding that Obama sign an executive order on dark money. A similar petition set up via the White House website’s system passed the 100,000 signatory threshold requiring the Obama administration to respond.
The White House recently posted a desultory answer to the petition that quotes Obama as saying that “We have to reduce the influence of money in our politics” — but doesn’t acknowledge the petition’s demand that Obama, not “we,” take specific action. Kurt Walters, campaign manager at Rootstrikers and one of the petition’s organizers, called the response “offensive to the millions of Americans demanding an end to secret money influencing elections.”
In retrospect, Obama’s speech nine years ago was full of foreshadowing. “I understand the skepticism,” he said. “After all, every four years, candidates from both parties make similar promises. … But too many times, after the election is over, and the confetti is swept away, all those promises fade from memory, and the lobbyists and the special interests move in, and people turn away, disappointed as before, left to struggle on their own.”
This is the sort of thing that drives liberals to Bernie Sanders: Bernie wants to attack the problem, Hillary seems to want to push it around her plate but do nothing about it, much like Obama.
Won’t even look at it. It’s hard to have any respect for minds that are so closed. The NY Times article by Jackie Calmes notes:
Mr. Enzi and the chairman of the House Budget Committee, Representative Tom Price of Georgia, jointly announced days ago that they would not invite Mr. Obama’s budget director, Shaun Donovan, to testify before their panels – a break with a tradition dating to the start of the modern budget process in 1975 and a snub that captured the hostility facing Mr. Obama’s remaining agenda.
Sofia Tesfaye writes in Salon:
When President Obama released his administration’s final budget request on Tuesday morning, it was an even more futile exercise than in years past. After outlining the policy priorities of his final year in office during last month’s State of the Union and releasing a series of previews of his proposals for the last couple of weeks, Congressional Republicans had already decided they didn’t have to bother to do their job and review the budget before outright rejecting it.
In a break with a 41-year-old tradition dating back to the start of the modern budget process in 1975, the Republican chairmen of the House and Senate budget committees announced last week that they wouldn’t bother to host the president’s budget director, Shaun Donovan, to present the president’s entire budget in a hearing before Congress.
“Nothing in the president’s prior budgets — none of which have ever balanced — has shown that the Obama Administration has any real interest in actually solving our fiscal challenges or saving critical programs like Medicare and Social Security from insolvency,” House Budget Committee Chairman Tom Price (R-Ga.) wrote last week. “Rather than spend time on a proposal that, if anything like this Administration’s previous budgets, will double down on the same failed policies that have led to the worst economic recovery in modern times, Congress should continue our work on building a budget that balances and that will foster a healthy economy.”
Obama’s budget includes $19 billion for a broad new cybersecurity initiative, a $10-a-barrel fee on oil, and $1 billion for a cancer “moonshot” program led by Vice President Joe Biden.
Even before the president released his budget on Tuesday, however, Senate Budget Committee Chairman Mike Enzi (R-Wyo.), had echoed his lower chamber colleague’s sentiments to wholly reject it without consideration, arguing that “instead of hearing from an administration unconcerned with our $19 trillion in debt, we should focus on how to reform America’s broken budget process and restore the trust of hardworking taxpayers.”
Congressional Democrats, of course, are fuming over the Republicans’ displays of boastful intractability they describe as “disrespectful to the committee members, the public and the president.”
Vermont Independent and Democratic presidential candidate Bernie Sanders, who has ruffled some feathers on Capitol Hill with his denouncement of Hillary Clinton’s congressional support as “the establishment,” lead Senate Democrats in railing against the Republicans’ breach of decorum today after their counterparts in the House decried the GOP’s move earlier this week.
“The president’s budget is more than a political document; it is a compilation of the opinions of experts throughout the government,” Sanders, the ranking member of the Senate Budget Committee, wrote in a letter with his Democratic colleagues (and Angus King) to Sen. Enzi. Sanders and the Senate Democrats said they were “disappointed” and “dismayed” with the Republicans’ behavior.
Going a step further than Sanders and the Senate Democrats, House Minority Leader Nancy Pelosi, (D-Calif.), blasted Rep. Price, saying . . .
The CEO of the American Red Cross is a walking disaster. I’ve blogged before about what she’s done to the organization and on why no one should ever contribute any money at all to the American Red Cross, who wastes the money on her salary and on PR done to raise more money. Here’s today’s story by Justin Elliott in ProPublica:
The American Red Cross has failed to answer a congressman’s questions about deep cuts the charity has made to staff and local offices.
Rep. Bennie Thompson, the ranking member of the House homeland security committee, sent the charity a long list of questions after ProPublica recently revealed the cuts and detailed how they have eroded the Red Cross’ ability to respond to even modest disasters.
Red Cross CEO Gail McGovern responded in a letter late last month that she has tried to lower “the costs of delivering our services to the public — without diminishing the services themselves — and we believe we have achieved that goal.”
But McGovern did not answer basic questions about the cuts, including how many actual chapter offices she has closed.
Today there are around 250 Red Cross chapters compared to 700 when McGovern was hired in 2008. But the charity has never said which chapter offices were closed and which were merely folded into a larger regional chapter.
McGovern also ignored Thompson’s question about how many emergency planners have told the Red Cross they are no longer incorporating the charity in their response plans.
As we reported, some local officials as well as former Red Cross staffers say the charity can no longer be relied on to respond to disasters.
Thompson, who has been pushing for more oversight of the Red Cross, told ProPublica that he is “troubled” by the lack of answers.
“While I appreciate the Red Cross’ submission of a response to my December letter, I am troubled that questions were ignored and some of the responses provided were inconsistent with information from numerous media reports,” Thompson said in a statement. “I will continue my oversight of the Red Cross and will not stop until all questions are answered, and I am assured that the Red Cross is in the position to effectively carry out its mission in all communities across the United States.”
Asked about the charity’s failure to answer the congressman’s questions, a Red Cross spokesperson declined to comment.
The charity, which an official role in responding to disasters, has a history of avoiding outside scrutiny. . .
Elizabeth Drew reviews some relevant books in the NY Review of Books:
2013 Report Card for America’s Infrastructure
by the American Society of Civil Engineers
available at infrastructurereportcard.org
Rust: The Longest War
by Jonathan Waldman
Simon and Schuster, 288 pp., $26.95
Move: Putting America’s Infrastructure Back in the Lead
by Rosabeth Moss Kanter
Norton, 325 pp., $26.95
The Road Taken: The History and Future of America’s Infrastructure
by Henry Petroski
Bloomsbury, 322 pp., $28.00
Lights Out: A Cyberattack, A Nation Unprepared, Surviving the Aftermath
by Ted Koppel
Crown, 279 pp., $26.00
It would be helpful if there were another word for “infrastructure”: it’s such an earnest and passive word for the blood vessels of this country, the crucial conveyors and connections that get us from here to there (or not) and the ports that facilitate our trade (or don’t), as well as the carriers of information, in particular broadband (if one is connected to it), and other unreliable structures. The word “crisis” is also overused, applied to the unimportant as well as the crucial. But this country has an infrastructure crisis.
The near-total failure of our political institutions to invest for the future, eschewing what doesn’t yield the quick payoff, political and physical, has left us with hopelessly clogged traffic, at risk of being on a bridge that collapses, or on a train that flies off defective rails, or with rusted pipes carrying our drinking water. Broadband is our new interstate highway system, but not everyone has access to it—a division largely based on class. Depending on the measurement used, the United States ranks from fourteenth to thirtieth among all nations in its investments in infrastructure. The wealthiest nation on earth is nowhere near the top.
Congress’s approval last December of a five-year bill to spend $305 billion to improve the nation’s highway system occasioned much self-congratulation that the lawmakers actually got something done. But with an increase in the gasoline tax politically off-limits, the means for paying for it are dubious and uncertain. This was the longest-term highway bill passed since 1998 and the thirty-fifth extension of an authorization of highway construction since 2005. Some of the extensions of the highway program approved by Congress lasted for only three months. The previous extension was for just over three weeks. Such practices don’t allow for much planning of the construction or repair of highways and bridges and mass transit systems.
Our political myopia has put us in actual physical danger as we go about the mundane business of getting about. We let essential structures and facilities deteriorate or go unbuilt. A politician is more likely get in trouble with constituents for spending federal money than for not spending federal money. Moreover, as a rule Washington politicians, whether in office for two or four or six years, aren’t keen on spending for something that doesn’t have a near-term payoff—perhaps a structure that they can dedicate and even get their names inscribed on.
The water pipes underneath the White House are said to still be made of wood, as are some others in the nation’s capital and some cities across the country. We admire Japan’s and France’s “bullet trains” that get people to their destination with remarkable efficiency, but many other nations have them as well, including Russia, Turkey, and Uzbekistan. A friend of mine recently rode on the Turkish bullet train and noted that the coffee in his full cup didn’t spill. Last year, Japan demonstrated its new maglev train, which, using electromagnets, levitates above the tracks, and can go about an amazing 375 miles per hour, making it the fastest train in the world. The fastest commercially used maglev, in Shanghai, goes up to 288 miles per hour. But the United States hasn’t a single system that meets all the criteria of high-speed rail. President Obama has proposed a system of high-speed railroads, which has gone nowhere in Congress.
When it comes to providing the essentials of a modern society, it has to be said that we’re a backward country. California Governor Jerry Brown, a longtime visionary, has initiated the building of a high-speed rail system between Los Angeles and San Francisco; one high-speed rail system scheduled to come into service soon to carry people between the wealthy cities of Dallas and Houston will be privately financed. (Shopping and business made easier.) But not many communities have the means to build their own train.
Every four years, the American Society of Civil Engineers (ASCE) conducts a study of where the United States stands in providing needed infrastructure in various sectors. Though the organization obviously has an interest in the creation of more construction jobs, its analyses, based as they are on information from other studies, are taken seriously by nonpartisan experts in the field. In the ASCE’s most recent report card, issued in 2013, the combined sectors received an overall grade of D+. In the various sectors, the grades were: aviation, D; bridges, C+; inland waterways, D–; ports, C; rail, C+; roads, D; mass transit, D; schools, D; hazardous waste, D; drinking water, D. No sector received an A. That none of the infrastructure categories received an F is hardly grounds for celebration.
The ASCE says that the estimated need of support for America’s infrastructure by 2020 is $3.6 trillion. Total spending at current levels is estimated by the ASCE to be $253 billion annually and estimated spending between 2013 and 2020, before passage of the highway bill, is estimated at $2 trillion, leaving us $1.6 trillion short.
We watched in horror in August 2007 when during the evening rush hour a bridge in Minneapolis over the Mississippi River collapsed, killing thirteen people and injuring another 145. In Washington State in 2013 a bridge with two cars on it collapsed. TheASCE’s 2013 report card said that one in nine bridges was structurally deficient; that as of 2013 the average age of the nation’s 607,380 bridges was forty-two years, while the Federal Highway Administration estimates that “more than 30 percent of existing bridges have exceeded their fifty-year design life.” According to the ASCE, to have safe bridges by 2028, the US needs to invest $20.5 billion per year, but current spending annually on bridges is $12.8 billion.
As for aviation, the report said, “The national cost of airport congestion and delays was almost $22 billion in 2012.” Inland waterways, which get little attention, are, the ASCEsays, “the hidden backbone of our freight network,” carrying “the equivalent of about 51 million truck trips each year.” But the waterways haven’t been updated since the 1950s and because half of the locks, according to the ASCE, are over fifty years old, barges have to be stopped for hours each day, “preventing goods from getting to market and driving up costs.”
As for ports, critical to the US as a trading nation, a few have been built by private investment through port authorities—some of these, as has been apparent in New Jersey, can get enmeshed in petty local politics; but dredging to accommodate large vessels is paid for in large part by the federal government and federal spending for that has decreased.
The recently enacted highway bill will make only a dent in the needed roadway construction. According to the ASCE, 42 percent of American major urban highways remain congested, costing the US economy roughly $101 billion in wasted time and fuel annually. As of 2013, the report said, 32 percent of America’s major roads were “in poor or mediocre condition.” As a result of congestion, according to the ASCE, Americans wasted 1.9 billion gallons of gasoline and an average of thirty-four hours in 2010, and the cost to the US economy of wasted fuel was $101 billion. But the mass transit we now have far from makes up for the road conditions, and isn’t available to an estimated 45 percent of American households; millions more have inadequate mass transit systems. The report said that “deficient and deteriorating transit systems cost the US economy $90 billion in 2010.” At the time of the report, the Federal Transit Administration estimated a backlog of nearly $78 billion in maintaining mass transit.
Perhaps a step forward was taken in . . .
What we see is a country in decline, the US moving in the direction of a third-world country with terrible infrastructure, widespread poverty, and an enormously wealthy controlling elite that treats their own country as a colony to exploited.
UPDATE: It occurs to me that such third-world countries, like the US, have a heavy emphasis on security, in their case to protect the elite, not the people, who are often victims of the security services: a strong military, police forces without accountability, even death squads, which fortunately the US so far lacks.
Zach Carter reports at Huffington Post:
In a scorching speech from the Senate floor on Wednesday, Sen. Elizabeth Warren (D-Mass.) said the American criminal justice system is rigged in favor of the wealthy, and condemned new legislation that would make it harder to prosecute bank fraud.
“There are two legal systems,” Warren said. “One for the rich and powerful, and one for everyone else.”
Warren’s office issued a report earlier this week documenting 20 cases in which federal officials had enough evidence against corporate malfeasance to issue fines. In most of the cases, companies were not even required to admit guilt. In only one case did a corporate offender go to jail — Massey Energy CEO Don Blankenship, who received a 3-month sentence over a mine disaster that killed 29 people.
“It’s not equal justice when a kid gets thrown in jail for stealing a car, while a CEO gets a huge raise when his company steals billions,” Warren said. “It’s not equal justice when someone hooked on opioids gets locked up for buying pills on the street, but bank executives get off scot-free for laundering nearly a billion dollars of drug cartel money.”
“One legal system is for big companies, for the wealthy and the powerful. In this legal system, government officials fret about unintended consequences if they are too tough.” But in the second legal system, Warren said, “government enforcement isn’t timid.”
“Just ask the families of Sandra Bland, Freddie Gray and Michael Brown about how aggressive [police and prosecutors] are,” Warren said.
WATCH Warren’s remarks in the video below.
Warren said it is time for Congress to pass criminal justice reform easing the severe sentences for nonviolent offenses. And she called out Republicans for demanding a new amendment that would impose broad “mens rea” reform that would bar prosecutors from pursuing a wide array of corporate offenses, including gross negligence by CEOs.
“Republican politicians love to say they’re tough on crime,” Warren said. “They love to talk about personal responsibility and accountability — when they’re back home in their districts. But right here in Washington they are pushing to make it even easier for corporate criminals to escape justice. …That is shameful.”
Billionaire Republican donors Charles and David Koch have been pushing for the corporate crime relief amendment. . .
Continue reading. Video at the link.
And it’s worse than you think. Later in the article:
Warren also railed against a House bill scheduled for a vote on Thursday that would strip prosecutors of the authority to pursue an array of bank fraud cases in which the bank actually commits a crime. Instead, under the bill, prosecutors would only be able to address cases in which the bank is a victim of the crime.
Jenna McLaughlin reports in The Intercept:
The House Judiciary Committee will hold its first hearing next week on two of the NSA spying programs revealed by whistleblower Edward Snowden that vacuum up domestic content despite being ostensibly targeted at foreigners: PRISM and Upstream.
But, to the great consternation of 26 government accountability groups who wrote an angry letter to committee leaders on Wednesday, the public is not invited. The entire hearing is classified, and closed.
Section 702 of the Foreign Intelligence Surveillance Amendments Act of 2008, which has been cited as the legal authority for those two programs, lapses next year.
The debate over whether to reauthorize it is expected to be the most substantive public examination of the NSA’s surveillance regime since Congress’s decision to end NSA’s collection of bulk metadata of U.S. phone calls.
Kicking off that debate with a closed hearing sets the wrong tone, groups including openthegovernment.org and the ACLU wrote in their letter. “[I]t continues the excessive secrecy that has contributed to the surveillance abuses we have seen in recent years and to their adverse effects upon both our civil liberties and economic growth.”
The authors of the letter reminded the committee that discussions over the original passage of the FISA Amendments Act in 2008 “happened largely in open session,” and that matters of national security are often discussed in open hearings, with classified briefings reserved for specific questions.
Specifically, they wrote, “In the case of Section 702 implementation oversight, a completely closed hearing is unnecessary to provide members with an adequate understanding of how the law is currently implemented by the executive branch and whether that exceeds Congress’ original intent. ”
The two programs that run under Section 702 vacuum up hundreds of millions of online messages and voice communications including emails, Skype calls, and Facebook messages, that involve “targeted” suspects overseas and the people they talk to. PRISM gets the data from companies like Google, Apple and Yahoo. Upstream siphons it off from major Internet cables owned by the big telecom companies.
The programs accidentally sweep up American communications, too—how many, we still don’t know. And once those communications are in the database, the NSA can search them without a warrant. . .
It’s dismaying to see the US government move more and more to secrecy, keeping information from the public that in theory the government serves.