Progressive Breakfast: Tax Cut Battle Lines Drawn, Campaign for America’s Future, July 28, 2010, by Bill Scher, used with permission, quoted verbatim:

Battle Lines Drawn On Bush Tax Cuts

President Obama and House Minority Leader Boehner, square off in White House over Bush tax cuts for the wealthy. NYT: “Mr. Obama vowed that Democrats would extend current income tax rates except for the wealthiest taxpayers. But Representative John A. Boehner … said the tax cuts should be extended for everyone … [The President] reminded Mr. Boehner … that the tax cuts’ architects purposely left the deficit problem to a future administration … ‘I wasn’t there,’ Mr. Boehner quickly countered. ‘I didn’t structure that deal.’ The room briefly went quiet as participants seemed to ponder that statement from a legislator first elected in 1990.”

Joan McCarter of Daily Kos reports new poll showing large majorities oppose extending the Bush tax cuts: “Even 40 percent of Republicans say they should be allowed to expire–19 percent say repeal them just for the wealthy, and 21 percent for everyone. That suggests that 40 percent of Republicans, who have been hearing the deficit hysteria since Barack Obama took office, are smarter than your average congressional Republican or deficit peacock.”

Matthew Yglesias looks at the Bush tax cut policies and asks “Where was the growth?”: “…the era during which Bush’s tax policies prevailed was the first in which median household income declined… the worst peak-to-peak economic performance ever, followed immediately by the worst recession since World War II.”

Some House Dems consider breaking with President on permanent extension of middle-class tax cut. The Hill: “While the White House has pushed for making the middle-class tax cuts permanent, Democrats in the House are looking at other options, including temporary extensions that would last more than a year,  according to an aide to House Majority Leader Steny Hoyer (D-Md.) … Senate Finance Committee Chairman Max Baucus (D-Mont.), who is crafting legislation that will extend the tax breaks, has backed Obama’s policy of extending the middle-class cuts permanently … Sen. Ron Wyden (D-Ore.), has also said he’s open to a temporary extension that could set the stage for [broader] tax reform…”

Dodd Cautions Against Avoiding Senate Confirm For Warren

Sen. Dodd argues against appointing Warren without Senate confirmation. TPMDC quotes: “Recess appointments. No, no, no … You’ve heard the Republicans talking about repealing this bill … One of the first efforts they’d need would be to repeal this agency. If it’s not set up and running, the case against it becomes easier. So you want an established entity, as quickly as you can, with credible leadership. And if you don’t have that then you leave it vulnerable to the attacks.”

Rortybomb piles on “Megan McArdle’s Hack Post on Elizabeth Warren’s Scholarship”: “Megan opens her critique by saying that there’s a massive bias in the data sample [from a major Warren study] implied by the low response rate of 20%. A commenter politely responds that the response rate is 50% … Megan then says she meant the interview rate … But notice how Megan just keeps on going. This is one of the major planks of her argument, that the sample is corrupted, and when someone points out that what she stated was factually incorrect she just changing the terms and keeps on going as if she what she wrote wasn’t wrong.”

Prez Push For Small Biz

President prods GOP to pass help for small biz. W. Post quotes: “We shouldn’t let America’s small businesses be held hostage to partisan politics.” President to meet with small biz owners at a NJ sub shop to push bill reports The Hill.

Deal on small biz bill may come soon, allowing for consideration of GOP amendments. CQ: “Unable to advance the legislation without at least one GOP vote, Democrats appeared ready late Tuesday to meet Republican demands, with some limitations. To force action, they released a new substitute amendment and filed cloture on the amendment and the bill. But an amendment deal looks like the only way to ensure passage and dispose of the issue this week.”

W. Post Harold Meyerson’s tackles the problem of profitable companies that are still killing jobs: “Across-the-board business tax cuts make no sense when business is already sitting on oceans of cash. Targeted tax cuts and credits for strategic investment and hiring within the United States, on the other hand, make excellent sense … Another source of jobs would be public, and public-private, investment in infrastructure … A U.S. infrastructure investment bank … could leverage significant private capital to begin America’s rebuilding, though the idea has encountered rough sledding in (surprise) the Senate.”

“Single Stimulus Program That GOP Wanted To Eliminate Has Created Hundreds Of Thousands Of Jobs,” reports Wonk Room’s Pata Garofalo: “…House Republicans launched a gimmicky website called ‘YouCut,’ which allows people to vote on which item, from a pre-determined list, they would nix from the federal budget … The very first YouCut ‘winner’ was the Temporary Assistance for Needy Families Emergency Contingency Fund … In fact, it is on pace to help 240,000 unemployed individuals find jobs by the end of September.”

Scaled-Back Senate Energy Bill Still Sparks Conflict

The Hill rounds up reactions to Senate energy bill: “The electric car provisions drew cheers Tuesday from the Electrification Coalition, while the Alliance to Save Energy applauded the Home Star program that provides consumer rebates for efficiency overhauls, claiming it will create 168,000 jobs over two years. But giant ethanol producer Poet called the lack of ethanol incentives a ‘missed opportunity’ in a statement Tuesday. And the environmental group Earthworks is worried about the push for more use of natural gas … The American Petroleum Institute … bashed provisions that remove the cap on companies’ liability for damages from offshore spills.”

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Obstructionist conservatives opposing lifting liability cap on oil companies in spill bill. The Hill: “The Senate Democrats’ bill would retroactively lift a $75 million spill liability cap for oil and gas producers — leaving no cap at all. That unlimited liability ‘will be a very significant issue, not just for Republicans,’ [GOP Sen. Lisa] Murkowski said.”

“Surprise” push for electric cars. TNR’s Brad Plumer: “… it’s a tiny bill—the total cost comes to around $15 billion. And it won’t do all that much for the environment: …. the only significant surprise is the electric-car section … It calls on the Energy Department to create a national plan for deploying electric vehicles. It allows electricity to count as an alternative vehicle fuel. It provides grants to local communities that set up their own plug-in networks.”

President says new energy bill is only a step towards broader climate protection and clean energy jobs bill. AFP quotes: ” I want to emphasize it’s only the first step and I intend to keep pushing for broader reform, including climate legislation … We should be developing those renewable-energy resources and creating those high-wage, high-skill jobs right here in the United States of America … That’s what comprehensive energy and climate reform would do, and that’s why I intend to keep pushing this issue forward.”

WH leaves door open to revisiting carbon cap in House-Senate conference committee. The Hill quotes Press Sec. Robert Gibbs: “I don’t think the bill is essentially dead for the year … The House passed a very strong and very comprehensive energy bill last year. The Senate is going to take up a version that is more scaled down, but still has some important aspects … Once a bill passes each house, it doesn’t close the door to having some sort of conference.”

Coal-state Dem Sen. Rockefeller may try to add temporarily block on EPA from regulating greenhouse gases. The Hill: “…he’s mulling whether to try and add his bill that blocks EPA climate change rules as an amendment to energy and oil spill legislation heading for the Senate floor.”

Coal-state House Dems that voted for carbon cap compromise not thrilled with Senate inaction, prepare to defend. Politico: “‘[VA Rep.] Rick [Boucher] took on his own party to protect coal jobs in the energy bill,’ a narrator says in a new ad unveiled last week … Freshman Rep. Thomas Perriello, who won his Charlottesville, Va.-based district in 2008 by fewer than 800 votes, said he made the right decision. ‘The issue of energy independence is much more important than my reelection,’ Perriello said. ‘But every day the Senate doesn’t act, we get our butts kicked by China.’ … Gene Karpinski, president of the League of Conservation Voters, said his group will be airing ads as Election Day approaches, thanking House Democrats for their vote on the climate legislation while also going after its opponents…”

Reid insists there are not 60 votes for stronger renewable electricity standards. The Hill quotes: “I know there are some people saying that, but I’d like them to give me the names, and I’ll be happy to check them off.”

NRDC’s John Walke, in Grist, says an attack on clean air protections is brewing in the Senate: “NRDC has obtained a copy of amendments that Senator George Voinovich (R-Ohio) appears poised to lodge next week in the Senate Environment Committee … The amendments repeal, delay, and significantly weaken clean air safeguards that reduce power plant emissions of nitrogen oxides and sulfur dioxide (pollutants that cause smog and soot), as well as toxic mercury, arsenic, lead, hydrogen cyanide, and other acid gases. The Voinovich amendments represent a complete rewrite of bipartisan legislation to strengthen the Clean Air Act cosponsored by Sens. Thomas Carper (D-Del.) and Lamar Alexander (R-Tenn.) [which] could be brought to a vote in the Senate Environment Committee next week.”

State Dept. delays decision on Canadian tar sands pipeline. NYT: “The department provided no timeline for completion of the environmental assessment, but at the least, a decision on the permit would be delayed until the end of this year.”

Damage To Gulf Not Yet Known

Understanding Gulf gusher damage will take damage, no need to rush and cut off claims. McClatchy: “Some of the economic consequences of the Gulf of Mexico oil spill may take years to identify, and BP’s compensation fund should be flexible enough to account for long-term losses, a panel of experts from Alaska’s Exxon Valdez tanker spill told a Senate committee Tuesday … The collapse of the herring fishery, for example, couldn’t be fully anticipated until nearly a decade after 11 million gallons of oil spilled into the sound…”

Mother Jones’ Kate Sheppard casts natural gas as the invisible villain in the Gulf disaster: “…the leaked gas could dramatically change the chemistry of the Gulf. When natural gas is present, certain bacteria that digest it flourish out of control and can quickly deplete the oxygen in the surrounding waters, creating ‘dead zones’ where little can exist.”

Expanded Gulf gusher criminal probe. W. Post: “While it was known that investigators are examining potential violations of environmental laws, it is now clear that they are also looking into whether company officials made false statements to regulators, obstructed justice or falsified test results for devices such as the rig’s failed blowout preventer … One emerging line of inquiry, sources said, is whether inspectors for the Minerals Management Service … went easy on the companies in exchange for money or other inducements.”

PreOrder Robert Reich’s new Book Aftershock: The Next Economy and America’s Future, Due out September 21, 2010

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State Budget Crunch Risks Nearly 500,000 Jobs

HuffPo’s Arthur Delaney reports that state and local governments are ready to fire 481,000 state workers: “The National League of Cities, the National Association of Counties, and the U.S. Conference of Mayors found that 270 local governments planned to collectively lay off 8.6 percent of their workforce from the previous fiscal year to the next one.”

GOP blockage of Medicaid aid crushing state budgets. AFL-CIO’s Mike Hall: “A new report from the National Conference of State Legislatures (NCSL) … shows that at least 25 states assumed an extension of the enhanced FMAP [Medicaid] funding for their 2011 budgets. Without it, according to the report, budget gaps could grow by more than $12 billion in the current fiscal year and as much as $72 billion next fiscal year, forcing cuts in vital services and jobs to make up for the shortfalls.”

Health Care Reform Kicking In Despite Attacks

AFL-CIO’s Mike Hall says that having failed to kill health care reform, insurers are now working to weaken it: “After spending tens of millions trying to kill the new health care reform law, the nation’s big health insurance companies now, says Sen. Jay Rockefeller (D-W.Va.), are: ‘sparing no expense to weaken this new law and the protection it promises to America’s consumers.’ According to a new report by the coalition Health Care for America Now (HCAN), big insurers are trying to gut proposed new rules that require they spend a certain amount of premium dollars on actual medical care, not wasteful administration, marketing or executive pay and bonuses.”

Health care law already sparking reforms among doctors. LAT: “… many independent providers across the country are racing to mold themselves into the kind of coordinated teams held up as models for improving care … Three of San Antonio’s hospital systems are competing to form alliances with local doctors who are giving up their private fee-for-service practices in exchange for paid positions on a hospital’s team. Healthcare experts have long argued that such a unified approach to medical care offers the best hope for improving quality and saving money.”

Despite conservative demagoguery, Texas is carrying out health reform. NYT: “Obama administration officials, while noting the incongruity, said they had been impressed that politically antagonistic states like Texas were complying with, and taking full advantage of, the new law. The Texas Department of Insurance, for instance, has applied for a planning grant to create a more muscular process for reviewing proposed premium increases, a White House priority.”

GOP Filibusters Campaign Finance Transparency For Corporations

Democrats vow to keep pushing campaign finance transparency legislation after GOP filibuster. The Hill: “…Schumer promised that Democrats would hold additional cloture votes until the legislation passes … Asked by The Hill if he is open to making changes to the bill, the New York senator replied, ‘Yes.’ … Political experts have said the bill needs to be signed into law by August in order to affect the 2010 election. If the Senate passes a version with Schumer’s changes, it would need to be reconciled with the House version. And the House is scheduled to adjourn Friday for the summer recess.”

King Coal ready to use Supreme Court ruling to spend big on election campaigns. Lexington Herald-Leader: “Several major coal companies hope to use newly loosened campaign-finance laws to pool their money and defeat Democratic congressional candidates they consider ‘anti-coal,’ including U.S. Senate nominee Jack Conway and U.S. Rep. Ben Chandler in Kentucky. The companies hope to create a politically active nonprofit under Section 527 of the Internal Revenue Code, so they won’t have to publicly disclose their activities…’With the recent Supreme Court ruling, we are in a position to be able to take corporate positions that were not previously available in allowing our voices to be heard,’ wrote Roger Nicholson, senior vice president and general counsel at International Coal Group…”

Push For Filibuster Reform Hits Dem Resistance

Ezra Klein explains how to end filibuster with 51 votes: “The so-called ‘constitutional option,’ which is being pushed particularly hard by Sen. Tom Udall, but is increasingly being seen as a viable path forward by his colleagues. The constitutional option gets its name from Article I, Section V of the Constitution, which states that “Each House may determine the Rules of its Proceedings.” … Because stopping the Senate from considering its own rules would be unconstitutional, the chair can rule against the filibuster, and the Senate could then move to change its rules on a majority vote. One caveat: Many people, including Udall himself, believe this has to happen at the beginning of a new Congress, then Congress is considered to have acquiesced to the previous Congress’s rules … This is not a radical theory, or a partisan one: Both Richard Nixon, then the vice president and thus the president of the Senate, and Robert Byrd, then majority leader and considered the greatest parliamentarian to ever walk the chamber, have argued in favor of the constitutional option.”

But there may not be 51 votes. The Hill: “Five Senate Democrats have said they will not support a lowering of the 60-vote bar necessary to pass legislation. Another four lawmakers say they are wary about such a change and would be hesitant to support it. A 10th Democrat, Sen. Carl Levin (D-Mich.), said he would support changing the rule on filibusters of motions to begin debate on legislation, but not necessarily the 60-vote threshold needed to bring up a final vote on bills.”

Breakfast Sides

Paul Krugman shreds Mort Zuckerman’s claim the President hold antipathy for business: “… the only actual example of Obama’s alleged demonization of business that Zuckerman offers [is] essentially a mini-Breitbart, a quote taken out of context to make it seem as if Obama was saying something he wasn’t. That’s typical of the whole argument.”

Government intervention averted Great Depression, finds new economic report from Alan Binder and Mark Zandi. NYT: “…the economists argue that without the Wall Street bailout, the bank stress tests, the emergency lending and asset purchases by the Federal Reserve, and the Obama administration’s fiscal stimulus program, the nation’s gross domestic product would be about 6.5 percent lower … there would be about 8.5 million fewer jobs … and the economy would be experiencing deflation.”

Twenty years after its passage, Alternet’s Sarah Jaffe recounts how the Americans with Disabilities Act did the impossible: “Against all the odds, thousands of people with all manner of special challenges showed they were more than able to do the seemingly impossible. They forced a foot-dragging Congress to pass and a Republican President to sign the most significant civil rights legislation in 20 years. And every time we find a a step replaced by a slope — we have them to thank … Are the rest of us ready to get over our disabled way of thinking about what’s possible?”

House subcmte backs F-35 engine over Pentagon’s request. CQ: “‘I don’t know what more we can say or do to make clear that this is something we don’t want, we don’t need and we can’t afford,’ said Pentagon spokesman Geoff Morrell.”

IMF softens stance on China currency. Reuters: “The International Monetary Fund has chosen not to call the yuan ‘substantially’ undervalued, a move that recognizes China’s efforts to free up its exchange rate and avoids friction with an increasingly influential shareholder … [former IMFer Eswar] Prasad said IMF economists reckoned the yuan was still between 5 percent and 27 percent undervalued depending on the methodologies used.

Bill Scher is the online editor for Campaign for America’s Future. In addition to his blogging there, he has his own blog at LiberalOasis.com. I’m also the author of Wait! Don’t Move to Canada: A Stay-and-Fight Strategy to Win Back America, a contributor to The Huffington Post and Bloggingheads.tv, and a fellow of the Commonweal Institute.

See Geithner Dismisses Concerns on Letting Tax Cuts Expire, The New York Times, July 25, 2010, by Ginger Thompson, excerpt quoted verbatim:

WASHINGTON — Treasury Secretary Timothy F. Geithner pressed the case on Sunday for letting Bush-era tax cuts for the wealthiest Americans expire later this year.

In appearances on two television programs, Mr. Geithner said that letting tax cuts expire for those who make $250,000 a year or more would affect 2 percent to 3 percent of all Americans. He dismissed concerns that the move could push a teetering economy back into recession and argued that it would demonstrate America’s commitment to addressing its trillion-dollar budget deficit.

On “This Week” on ABC, he said, “We think that’s the responsible thing to do because we need to make sure we can show the world” that America is “willing as a country now to start to make some progress bringing down our long-term deficits.”

Mr. Geithner added, “I do not believe it will affect growth.”

Most Republicans and some Democrats in Congress strongly disagree and have pledged to launch an all-out effort to extend the tax cuts for people of all incomes. The cuts were passed under President George W. Bush in 2001 and 2003. Supporters of extending the cuts for everyone argue that raising taxes on any group, particularly one considered crucial for creating jobs, could endanger a precarious economic recovery.

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Battle Looms in Washington Over Expiring Bush Tax Cuts, © The New York Times, July 24, 2010, by David M. Herszenhorn, excerpt quoted verbatim:

WASHINGTON — An epic fight is brewing over what Congress and President Obama should do about the expiring Bush tax cuts, with such substantial economic and political consequences that it could shape the fall elections and fiscal policy for years to come.

Democratic leaders, including Mr. Obama, say they are intent on letting the tax cuts for the wealthy expire as scheduled at the end of this year. But they have pledged to continue the lower tax rates for individuals earning less than $200,000 and families earning less than $250,000 — what Democrats call the middle class.

Most Republicans want to extend the tax cuts for everyone, and some Democrats agree, saying it would be unwise to raise taxes on anyone while the economy remains weak. If no action is taken, taxes on income, dividends, capital gains and estates would all rise.

The issue has generated little public attention this year as Congress grappled with health care, financial regulation, energy, a Supreme Court nomination and other divisive topics. But it will move to the top of the agenda when lawmakers return to Washington in September from their summer recess, just as the midterm campaign gets under way in earnest. In recent days, intense discussions have begun at the Capitol.

Beyond the implications for family checkbooks, the tax fight will serve as a proxy for the bigger political clashes of the year, including the size of government and the best way of handling the tepid economic recovery.

“It has enormous ramifications for the fall and clearly will be one of the dominant issues,” said Senator Ron Wyden, Democrat of Oregon. “This is code for the role of the federal government, the debate over the size of government and the priorities of the nation.”

At a closed-door meeting of the Senate Finance Committee on Thursday, participants said Democrats were clearly divided while Republicans wanted assurances that any bill would be developed openly, allowing them to propose amendments. In a sign of how combustible the issue could be, Senator Max Baucus, a Montana Democrat and the committee’s chairman, has so far refused to make that commitment.

Both parties are still charting strategy, but some lawmakers, Congressional aides and administration officials said Democrats must try to pass a bill before the election and not wait for a lame-duck session. “You can’t play chicken with this much of the tax system,” said a senior Republican Senate aide, who spoke on the condition of anonymity given the sensitivity of even the timing of the debate.

If no tax legislation is passed, all the major tax reductions passed under President George W. Bush in 2001 and 2003 will expire, with rates reverting overnight on Dec. 31. The top marginal income tax rate, for example, would go back to 39.6 percent from 35 percent now, with corresponding increases in rates for lower income brackets.

Given the partisan gridlock of recent months, there is a chance that the battle could go down to the last minute, or even — in the face of a stalemate — that the tax cuts could be allowed to expire completely, a development that Republicans are already heralding ominously as the largest tax increase in history and that lawmakers in both parties say could be the worst outcome.

From both political and policy perspectives, the tax issue is dizzyingly complex, and even some of Washington’s most grizzled legislative operatives say they cannot predict the outcome.

Some liberals want Mr. Obama to keep his promise to raise taxes on the rich, and the White House’s budget forecasts rely heavily on rolling the top income tax rates back to their pre-2001 levels. Some fiscal hawks warn that extending the tax cuts would add more than $2 trillion to the federal budget deficits at a time when the national debt is becoming an economic concern and a political issue. Political economists are fiercely divided.

So are Democrats. In recent days, fiscal conservatives like Senators Kent Conrad of North Dakota and Evan Bayh of Indiana expressed support for extending the tax cuts at all income levels, at least temporarily.

Senior administration officials said there was no interest in such a plan at the White House, which intends to have Treasury Secretary Timothy F. Geithner lead an effort to make the case that continuing tax breaks for the rich will not help lift the economy, but eliminating them will help reduce the deficit. ….

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Obama to progressives: ‘Keep up the fight’, The Raw Story, July 24, 2010, by Sahil Kapur, used with permission, quoted verbatim. Thanks to The Raw Story for permission to republish their works on an ongoing basis:

LAS VEGAS – President Barack Obama appeared in a surprise videotaped message at the Netroots Nation conference to thank the slew of progressive media and activists for helping advance a new agenda and urged them to “keep up the fight” ahead of the November elections.

“Thanks,” he told the crowd on Saturday, “for helping to change America for better.

“We’re moving America forward,” Obama said, invoking the stimulus package, hate-crimes legislation, health care reform, financial reform and various other initiatives. “When we’ve come this far, we can’t afford to slide backwards.”

The president received applause at various points during the speech, particularly while mentioning his legislative accomplishments and the turn to more progressive policies since the Bush administration.

While admitting that he understands why some believe “change hasn’t come fast enough,” he urged liberals to “keep making your voices heard; to keep holding me accountable; to keep up the fight.”

Admitting that much work is left to be done in achieving a more progressive America, Obama characterized November as a choice “between going back to the failed policies that got us into this mess, and moving forward with policies that are leading us out.”

“Change is hard,” he said. “But if we’ve learned anything these past 18 months, it’s that change is possible. It’s possible when folks like you remember the fundamental truth of our democracy — it’s that change doesn’t come from the top down, it comes from the bottom up. It comes from the netroots, from the grassroots.

“We’ve done it before, we can do it again,” Obama added. “Let’s finish what we’ve started.”

Enthusiastic at times, the gathering of thousands of liberals at the conference has also expressed agitation and restlessness towards what they describe as the sluggish pace of progressive change since the 2008 election.

Obama was introduced by House Speaker Nancy Pelosi (D-CA), who appeared in person for a lengthy question and answer session about a wide range of issues.

The following video, Obama’s address, was uploaded to YouTube by NetrootsNationVideo. (while we are having video difficulties for unknown reasons here at Evans Liberal Politics, we present Obama’s address (YouTube video) as an audio recording for our readers).

"President Obama Addresses Netroots Nation, 2010,", The President makes a stirring address remotely to the Netroots Nation Conference, 2010 — 3:48

Comment by Evans Liberal Politics owner Paul Evans: I have to really echo Rachel Maddow’s tribute to the President here, and thank him for addressing Netroots Nation and encouraging liberals and progressive with this encouraging and stirring address. As the President said, "change in America doesn’t come from the top down. It comes from the bottom up. It comes from the Netroots. The grassroots. From every American who loves their country and believes they can make a difference. We’ve done it before. We can do it again. Let’s finish what we’ve started. Thank you so much." Are you enouraged?

Iraq Withdrawal? Obama and Clinton Expanding US Paramilitary Force in Iraq, The Nation, July 22, 2010, by Jeremy Scahill, excerpt quoted verbatim:

UPDATE: In Iraq today, three private security contractors were killed in a rocket attack on Baghdad’s Green Zone. All of them were employees of Triple Canopy, the security company hired by the Obama administration to take over much of Blackwater’s work in Iraq. Another fifteen people were wounded in the attack. The dead included two Ugandans and a Peruvian. The attack highlights the inevitable consequences of an emerging Obama administration policy wherein more contractors are going to be deployed to Iraq and many of them will be so-called third country nationals like those killed in today’s attack. The coming surge in contractors in Iraq is being done under the auspices of the State Department’s diplomatic security division, which was massively expanded under the Bush administration paving the way for the Department’s almost total reliance on private contractors for security in Iraq, Afghanistan and elsewhere.

As a candidate for president, Senator Hillary Clinton vowed to ban the use of private security contractors, which she referred to as mercenaries. “These private security contractors have been reckless and have compromised our mission in Iraq,” Clinton said in February 2008. “The time to show these contractors the door is long past due.” Clinton was one of only two senators to sponsor legislation to ban these companies. Fast forward to the present and Secretary of State Hillary Clinton is presiding over what is shaping up to be a radical expansion of a private, US-funded paramilitary force that will operate in Iraq for the foreseeable future–the very type of force Clinton once claimed she opposed.

The State Department is asking Congress to approve funds to more than double the number of private security contractors in Iraq with a State Department official testifying in June at a hearing of the Wartime Contracting Commission that the Department wants “between 6,000 and 7,000 security contractors.” The Department also has asked the Pentagon for twenty-four Blackhawk helicopters, fifty Mine-Resistant Ambush-Protected (MRAP) vehicles and other military equipment. “After the departure of U.S. Forces [from Iraq], we will continue to have a critical need for logistical and life support of a magnitude and scale of complexity that is unprecedented in the history of the Department of State,” wrote Patrick Kennedy, under secretary of state for management, in an April letter to the Pentagon. “And to keep our people secure, Diplomatic Security requires certain items of equipment that are only available from the military.”

What is unfolding is the face of President Obama’s scaled-down, rebranded mini-occupation of Iraq. Under the terms of the Status of Forces agreement, all US forces are supposed to be out of Iraq by the end of 2011. Using private forces is a backdoor way of continuing a substantial US presence under the cover of “diplomatic security.” The kind of paramilitary force that Obama and Clinton are trying to build in Iraq is, in large part, a byproduct of the monstrous colonial fortress the United States calls its embassy in Baghdad and other facilities the US will maintain throughout Iraq after the “withdrawal.” The State Department plans to operate five “Enduring Presence Posts” at current US military bases in Basrah, Diyala, Erbil, Kirkuk and Ninewa. The State Department has indicated that more sites may be created in the future, which would increase the demand for private forces. The US embassy in Baghdad is the size of Vatican City, comprised of twenty-one buildings on a 104-acres of land on the Tigris River.

In making their case to Congress and the Defense Department for the expansion of a private paramilitary force in Iraq, State Department officials have developed what they call a “lost functionality” list of fourteen security-related tasks that the military currently perform in Iraq that would become the responsibility of the State Department as US forces draw down. ….

Read the full article here.

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Most Americans think Palestinians must recognize Israel’s right to exist, Haaretz, June 23, 2009, by Haaretz service and Natasha Mozgovaya. This is old news but it is important and we wanted to republish it in the public interest:

Eighty-one percent of American voters agree that Palestinian leaders must recognize Israel’s right to exist as part of a Middle East peace agreement, according to a new survey by U.S. polling company Rasmussen Reports published Tuesday.

The national telephone survey found that just seven percent disagree that recognition of Israel should be a requirement for peace, while 12 percent are not sure.

But only 27 percent believe it is somewhat likely that Palestinian leaders will agree to recognize Israel’s right to exist, the poll found.

There is less support from American voters for requiring Israel to accept the creation of a Palestinian state. Fifty-seven percent of voters say Israel should be required to do so as part of a regional peace agreement, and 20 percent oppose such a requirement.

Forty-eight percent of respondents to the Rasmussen poll said U.S. President Barack Obama’s Middle Eastern policy is about right, but 35% said he is not supportive enough of Israel and 10% said he is too supportive.

Obama has called on Israel and the Palestinians to acknowledge each other’s existence, while also pushing Israel to freeze settlement construction in the West Bank.

Following Obama’s June 4 speech to the Muslim world in Cairo, 32% of American voters now think that relationship will improve in the next year, while 28% believe it will get worse, according to the poll.

Forty-nine percent of respondents said the United States should help Israel if it decides to attack Iran over the latter’s nuclear weapon facilities.

Commentary: Israel and Palestine recognizing each other’s right to exist as part of a regional peace settlement seems to us to be a no brainer. The problem is that, de facto, there are two Palestines. De facto, Gaza is in the control of Hamas and Hamas still calls for the destruction of Israel. This must change if there is to be any hope for peace. Equally, Israel must give up any ambition it has to attack Iran over that nation’s nuclear ambitions, which is a real and probably a growing threat in the region. Also equally, Israel really need to lift it’s terribly oppressive blockade of Gaza in favor of a more humane and reasonable stance. Pray, if you will, that these two nations and peoples might quit their hateful ways, that Israel might give up it’s blockade of the Gaza strip, and that peace might reign in a region soaked in the blood of two generations of its people. May God have mercy on the suffering people of this region.

We are “in good hands” when it comes to President Obama’s even-handed policy in the region. For the first time, pressure is being applied to Israel to stop it’s destruction of Palestinian housing and to reign in the growth of its settlements. This seems to us a necessary first step and needed show of good faith on Israel’s part, and we applaud the President for manfully standing up to the Israel lobby in supporting peace in the region on fair and (almost) equal terms. At the same time, Washington needs to make this even clearer to Israel, which remains dependent on our support. Nonetheless, America is and always will be a friend of Israel. It’s just that we need to be a friend to the suffering Palestinian people, as well. ~ Evans Liberal Politics owner Paul Evans.

See 81% Say Palestinians Must Recognize Israel’s Right To Exist As Part of Any Peace Agreement, Rasmussen, June 23, 2009, by Rasmussen Reports.

See Letters: Hamas must recognize Israel’s right to exist, Mass Live, June 20, 2010, by "The Republican Editorials"

Although it is probably propoganda, Palwatch.org shows that Israel has some basis for it’s anti-Palestinian paranoia: see Denying Israel’s right to exist PA depicts a world without Israel, Palwatch.org, no date given.

On the other side of the coin, see On “Israel’s Right to Exist”, IslamOnline.net, January 10, 2008, by John Whitbeck, International lawyer.

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Nation editor: Obama ‘feeding zealots’ by not standing up to right-wing media, The Raw Story, July 23, 2010, by David Edwards and Daniel Tencer, used with permission, quoted verbatim:

The Shirley Sherrod controversy has shown that the White House needs to stand up to conservative media attacks, or risk “feeding the zealots” in America’s political debate, says the editor and publisher of a leading progressive magazine.

The Nation editor Katrina vanden Heuvel told NBC’s Today Show Friday that the Obama administration needs to “get a spine.”

“This White House needs to institute procedures, as President Obama said, and get a spine because it is feeding the zealots of our system by not standing tall and confronting the forces of hate and fear in a country that has a lot of economic pain,” vanden Heuvel said.

She described the controversy as “a testing moment for America … Are we going to be an America that learns from Shirley Sherrod’s tale of reconciliation, overcoming prejudice? … Are we going to be a media system which is vetting and upholding standards, or are we going to be bullied as a country by a right wing media which peddles fears and slanders to, really, destroy President Obama’s presidency?”

Host Matt Lauer interrupted vanden Heuvel to point out that “in the past it’s worked in both directions. Biased media is nothing new.”

Vanden Heuvel responded by saying the issue wasn’t about media bias, but media credibility. It’s about “the mainstream media — with a few exceptions in this case — accepting Andrew Breitbart, a journalist who’s known to have no credibility.”

Watch a relevant video is from NBC’s Today Show, broadcast July 23, 2010, here.

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Obama says USDA “jumped the gun” on Sherrod ouster, Reuters, July 22, 2010, by Patricia Zengerle, quoted verbatim:

(Reuters) – Agriculture Secretary Tom Vilsack rushed to judgment when he dismissed a former government official over racism allegations, U.S. President Barack Obama said in an interview on Thursday.

“He jumped the gun, partly because we now live in this media culture where something goes up on YouTube or a blog and everybody scrambles,” Obama said in an interview on ABC’s “Good Morning America” that will be broadcast on Friday.

Obama called former Agriculture Department official Shirley Sherrod on Thursday and expressed his regret about the events that led to her resignation this week.

Sherrod, who is black, has said her bosses pushed her to quit after conservative media repeatedly broadcast a tape that seemed to show her saying she had discriminated against a white farmer because of his race.

It was later found the tape had been edited to misrepresent Sherrod’s remarks at a meeting of the National Association for the Advancement of Colored People civil rights group. She had in fact said race should not matter.

In his interview, Obama said he had instructed his administration to learn from the circumstances surrounding Sherrod’s ouster.

“I’ve told my team and I told my agencies that we have to make sure that we’re focusing on doing the right thing instead of what looks to be politically necessary at that very moment,” Obama said.

“We have to take our time and, and think these issues through.”

The U.S. leader spoke to Sherrod for seven minutes, the White House said in a statement.

“The president told Ms. Sherrod that this misfortune can present an opportunity for her to continue her hard work on behalf of those in need, and he hopes that she will do so,” it said.

On Wednesday, Vilsack publicly apologized and the department offered Sherrod another job.

The White House said Obama had emphasized that Vilsack was sincere in his apology and his efforts to rid the Agriculture Department of discrimination.

(Reporting by Patricia Zengerle, editing by Paul Simao)

See Politico editor: It’s the NAACP’s fault Breitbart attacked Sherrod, Daily Kos, July 22, 2010, by Jed Lewison.

See ACORN and Sherrod: Do the traditional media have integrity and honor?, Daily Kos, July 22, 2010, by Laurence Lewis.

See Breitbart offers a correction, Daily Kos, July 22, 2010, by Barbara Morrill, excerpt quoted verbatim:

Andrew Breitbart has finally updated the article that led to the firing of Shirley Sherrod. Still found under the title of, “Video Proof: The NAACP Rewards Racism,” Breitbart has added:

“While Ms. Sherrod made the remarks captured in the first video featured in this post while she held a federally appointed position, the story she tells refers to actions she took before she held that federal position,” the correction reads.

And now you have the whole story. Thanks, Andrew.

See Van Jones is talking now, Daily Kos, July 23, 2010, by Meteor Blades.

Links Courtesy of Progressive Blog Digest: "Sigh. Now we have sit through another of those Beltway Bubblies that’s all about how the Obama admin didn’t “handle” something properly, and not about the underlying fact of deceptive video editing and irresponsible journalism":

http://www.talkingpointsmemo.com/archives/2010/07/shame_on_obama.php

http://voices.washingtonpost.com/plum-line/2010/07/a_question_for_the_press_corps.html

http://www.washingtonmonthly.com/archives/individual/2010_07/024853.php

http://www.politico.com/news/stories/0710/40117.html

Who leaked? http://www.theatlantic.com/politics/archive/2010/07/white-house-concerned-about-meeting-leak/60213/

It’s the NAACP’s fault: http://www.dailykos.com/storyonly/2010/7/22/886700/-Politico-editor:-Its-the-NAACPs-fault-Breitbart-attacked-Sherrod. This is overkill as we already covered this one.

Remember ACORN? http://www.dailykos.com/storyonly/2010/7/22/886542/-ACORN-and-Sherrod:-Do-the-traditional-media-have-integrity-and-honor. ditto.

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Obama Reacts Cautiously to Hopeful BP Test Results, &#169 The New York Times, July 16, 2010, by Campbell Robertson and Henry Fountain:

NEW ORLEANS — BP said on Friday the early test results on its recently capped undersea well were heartening and there were no signs of fresh oil leaks, as the stricken well in the Gulf of Mexico held tight overnight and into the morning.

Kent Wells, a senior vice president at BP, told reporters on a conference call that the pressure inside the well had built up steadily, as engineers had hoped it would, and that engineers would continue to perform different analyses and scour video feeds from cameras to look for any underground leaks.

In Washington, President Obama hailed the development but cautioned against concluding that the corner had been turned, noting that it was still possible for there to be complications that “could be even more catastrophic” than the original leak.

Appearing in the Rose Garden before taking off for a long weekend in Maine, Mr. Obama said he and the government were staying on top of the problem and that all decisions would be based on science, “not based on PR, not based on politics.” The final solution, he noted, will be the relief wells expected to be complete next month, and then after that attention still needs to be paid to the cleanup and compensation.

“The new cap is good news,” he said. “Either we will be able to use it to stop the flow or we will be able to use it to capture almost all the oil until the relief well is done.” But he added: “It’s important that we don’t get ahead of ourselves here. One of the problems with having the camera down there is that when the oil stops gushing, everybody feels like we’re done, and we’re not.”

Mr. Obama said he planned to go back down to the region in the next several weeks and stressed again that “BP is going to be paying for the damage that it’s caused.”

Mr. Wells said that BP would take steps to resume the drilling of a relief well, which officials hope will provide a permanent solution to plugging the runaway well, which has belched millions of gallons of crude oil into the Gulf of Mexico since a fatal explosion and fire sank a drilling rig in April.

The oil stopped flowing from the well around 2:25 p.m. Thursday when the last of several valves was closed on a cap that the company installed at the top of the well last week, Mr. Wells said. Earlier in the week, Mr. Wells said that the longer the test continued, the better, because it would indicate that the pressure inside the well was holding and that the well bore was intact. On Friday morning, the live video feeds from nearly a mile undersea showed no burbling geyser of oil and gas — only cloudy blue waters and white specks floating across the screen.

Read the full article, here.

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How the Sneaky Hands of the Big Banks Are Working Overtime to Rip You off, AlterNet, July 15, 2010, by Zach Carter, quoted verbatim:

The economy is crumbling and consumers are in trouble. So banks are hitting them with $38 billion a year in deceptive fees.

After living through the Great Financial Crash of 2008, just about everybody recognizes that megabanks screwed the economy hard and were rewarded with big bailouts, which further screwed over, well, everybody, in the name of banker bonuses. But Big Finance has been waging its war on the middle class for decades, and many of its most destructive practices don’t actually put the financial system in jeopardy. These tactics work because they are so effectively predatory. Banks gouge consumers and get rich—they don’t create risks for the financial system, because they result in pure, risk-free profit, converting hard-earned middle-class wages into quick and easy bonuses.

One of the most pernicious of these predatory practices is the overdraft fee. It’s one of the biggest revenue streams for banking behemoths today. In 2009, banks reaped over $38 billion in overdraft fees from their own customers, while posting a total combined profit of just $12.5 billion. Without overdrafts, many banks would have scored massive losses last year, and possibly gone under. Instead, they booked epic bonuses.

It can come as a huge shock to get hit with a rash of overdraft fees. You open a bank statement to find that you are not only broke, but deep in the hole thanks to several $30 or $40 charges. Your first reaction is shame. How could I have let this happen? But looking into the ways that banks conduct their overdrafts, you come to realize that you’ve simply been scammed.

“It abuses consumers and sucks money out of the economy that goes beyond any contribution to society that finance provides,” says Rep. Brad Miller, D-N.C. “Overdraft fees are one of the worst abuses. For people living paycheck to paycheck, they have a serious effect on their everyday lives.”

Banks are actively deceiving their own customers. According to an FDIC study, 75 percent of all banks don’t even tell people they’ve been automatically enrolled in “overdraft protection” programs. Many consumers don’t even realize that their accounts are subject to these charges—they assume that anything that puts them past zero will simply be denied.

It gets much worse. Once banks realized that overdraft fees could be a real cash cow, they developed “fee-harvesting” software, which reorganizes the order of your checking transactions to maximize the number of overdraft fees for the bank. In other lines of financial business, this is called “backdating,” and it’s considered “fraud.”

How the Scam Works

Say you’ve got $100 in your checking account, and you decide to pay some bills and run some errands. You spend $30 on gas and another $20 on your water bill. Later, you head to the grocery store and spend $81—oops!—on groceries. Banks, of course, could notify you that your $81 purchase was going to send you over the edge and result in an overdraft fee. They don’t, because they don’t want to risk that you’ll deny the purchase and reject the fee.

But in addition to neglecting this safeguard, the bank automatically processes your $81 purchase ahead of your previous charges. As a result, you do not get hit with one unwanted overdraft fee for your groceries—you get hit with three, because your costliest purchase was processed before the others—even though you made the cheaper purchases first.

“Overdrafts are a classic example of a potentially useful idea where the industry ends up going totally overboard,” says Raj Date, a former Deutsche Bank executive who currently heads the Cambridge Winter Center for Financial Institutions Policy. “When you step back and ask, as a reasonable business person, would any customer want their fees to be itemized such that their fees would be maximized? No. No customer would ever want it.”

This is not how banks are supposed to operate. They’re supposed to fuel sustainable, healthy economic activity. That was, in fact, the rationale behind bailing them out. As President Obama said in April 2009: “The truth is that a dollar of capital in a bank can actually result in eight or ten dollars of loans to families and businesses.”

Needless to say, that lending didn’t happen. In a series of monthly reports, the U.S. Treasury Department noted that bank lending to small businesses fell dramatically from April 2009 through January 2010. After months of bad stats, Treasury simply stopped keeping track of the numbers altogether. The FDIC still tracks those numbers, and they don’t look good. As Shahien Nasiripour has noted, the latest figures show small business lending down 4 percent from last year’s already dismal levels, putting it lower even than early 2009, before the stimulus package kicked in.

Instead of supporting the economy, banks are making their money with cheap-shot fees, risky proprietary trading and secretive derivatives deals. It’s worked, in a sense. By “earning” their way back to health, the nation’s largest banks are at a much lower risk of collapse now than when Obama took office. But those earnings have not been good for the economy, as we were promised they would be.

“It’s not good from a societal sense, but from a banking industry perspective, it’s just a recognition of reality,” says banking analyst Nancy Bush of NAB Research. Bush is a Wall Street veteran who supports overdraft programs, but acknowledges they indicate economic trouble. Banks have discovered a way to make money off of people without any money. When everybody’s broke, that’s a much less risky enterprise than lending to businesses that could use the funds to create jobs, but might default due to bad economic conditions. Banking analysts like Bush are charged with holding management teams accountable to their shareholders, and these fees are good for profits, which mean shareholders are getting what they want.

But this is the exact opposite of what anybody but a shareholder would want a bank to be doing. We don’t want banks to be kicking society when it’s down, we want banks to be helping us get back on our feet.

Setting The Banks Straight

Agencies have been voicing concerns about overdraft fees for years. The FDIC published a damning study on the practice in 2008, and the Federal Reserve began issuing warnings to the banking industry about unfair overdraft programs in 2004. But up until 2004, overdrafts were generally viewed as a form of short-term credit—the bank is basically lending the consumer money that is paid back with interest. But the interest rates are so egregiously predatory — the average overdraft fee amounts to 1,067 to 3,520 percent (PDF), according to the FDIC — that they simply would not be tolerated if regulators had to think of them as loans.

So the banking lobby scored a tremendous coup in 2004 when it convinced the Fed that these were not “loans” but “fees,” and therefore not subject to traditional consumer protections. The Fed warned that banks needed to change their marketing so that consumers wouldn’t think of overdrafts as loans, but didn’t require any changes in the way the programs actually operated.

Even this reclassification scheme wasn’t enough for Wall Street, which managed to violate even the much weaker consumer protection rules on fees 335 times a year, according to a report by the Government Accountability Office. The GAO also found that consumers who went to an actual bank branch were unlikely to be able to obtain information about basic overdraft terms and conditions, much less comprehensive information about how their checking accounts could be gamed.

The Fed is offering another weak response to the overdraft insanity today. By mid-August, the Fed will require consumers to “opt-in” to overdraft programs, instead of being automatically enrolled without their consent. It’s a step forward that will likely limit some of the overdraft profits banks currently enjoy. But it will not require that the programs be fundamentally changed. It will not cap the amount of the fees charged, or the number of fees charged, nor will it require consumers to be notified when a purchase or withdrawal will result in a fee. Banks will take a modest hit from the new rules as consumers choose to back out of the program—but the fundamentally obscene business model will remain.

A more promising development comes from the Wall Street reform bill. A new Consumer Financial Protection Bureau (CFPB) will take over nearly all of the consumer protection rules currently written and enforced by the Fed and the OCC (Rep. Miller was instrumental in getting strong consumer protection through the House). An aggressive director could write strong rules prohibiting abuses, so there is a great deal riding — $38 billion a year, in fact– on who President Obama appoints to the post. Right now the front-runner is Harvard University Law School professor Elizabeth Warren. Warren came up with the idea for a CFPB years ago, and has proven herself to be a strong reformist voice of reason as chair of the Congressional Oversight Panel for the Troubled Asset Relief Program. She deserves the post.

But without strong leadership, the banking swindles will continue. If recent history is any guide, there are few others in Washington, D.C. willing to take a stand for citizens when the banking industry comes to pillage our pocketbooks.

Zach Carter is an economics editor at AlterNet. He writes a weekly blog on the economy for the Media Consortium and his work has appeared in the Nation, Mother Jones, the American Prospect and Salon.

See Tell Your Story: Bad Banks – PNC A Pattern of Systematic Fraud?, Evans Liberal Politics, June 16, 2010, by Paul Evans, for my own horror story about just how badly one liberal politics website owner got ripped off, partly with overdraft fees (16 in a one week period), and horror stories from around the web about just how badly former National City customers with PNC bank have been hurt.

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