For Obama’s Global Vision, Daunting Problems

By MARK LANDLER and MARK MAZZETTI, NYT

WASHINGTON — President Obama, in one of his most significant speeches since taking office, did not simply declare an end to the post-9/11 era on Thursday. He also offered a vision of America’s role in the world that he hopes could be one of his lasting legacies.

It is an ambitious vision — one that eschews a muscle-bound foreign policy, dominated by the military and intelligence services, in favor of energetic diplomacy, foreign aid and a more measured response to terrorism. But it is fraught with risks, and hostage to forces that are often out of the president’s control.

From the grinding civil war in Syria and the extremist threat in Yemen to the toxic American relationship with Pakistan and the withdrawal of American troops from Afghanistan with no clear sense of what comes afterward, there are a multitude of hurdles to Mr. Obama’s goal of taking America off “perpetual war footing.”

One of the most daunting is a sprawling wartime bureaucracy that, after nearly a dozen years, has amassed great influence and has powerful supporters on Capitol Hill. It will be difficult to roll back what has been a gradual militarization of American foreign policy, even in an era of budget cuts for the Pentagon.

States’ Policies on Health Care Exclude Some of the Poorest

By ROBERT PEAR, NYT

WASHINGTON — The refusal by about half the states to expand Medicaid will leave millions of poor people ineligible for government-subsidized health insurance under President Obama’s health care law even as many others with higher incomes receive federal subsidies to buy insurance.

Starting next month, the administration and its allies will conduct a nationwide campaign encouraging Americans to take advantage of new high-quality affordable insurance options. But those options will be unavailable to some of the neediest people in states like Texas, Florida, Kansas, Alabama, Louisiana, Mississippi and Georgia, which are refusing to expand Medicaid.

More than half of all people without health insurance live in states that are not planning to expand Medicaid.

People in those states who have incomes from the poverty level up to four times that amount ($11,490 to $45,960 a year for an individual) can get federal tax credits to subsidize the purchase of private health insurance. But many people below the poverty line will be unable to get tax credits, Medicaid or other help with health insurance.

(More here.)

We need to rethink the utility model

Shutterstock

Utilities vs. rooftop solar: What the fight is about

By David Roberts, Grist

The conflict between electric utilities and distributed energy — mainly rooftop solar panels — is heating up. It’s heating up so much that people are writing about electric utility regulation, the most tedious, inscrutable subject this side of corporate tax law. The popular scrutiny is long overdue. So buckle up. We’re getting into it.

I wrote about the fight a while back — “solar panels could destroy U.S. utilities, according to U.S. utilities ” — but it’s worth taking a closer look at what’s under dispute. Some bits are unavoidably wonky and technical, but it’s important to understand exactly what’s happening. This is a pivotal issue, a trial run for many such struggles to come.

There’s a short-term problem and a long-term problem. The former is about how electricity rates are structured, specifically how utilities compensate (or don’t) customers who generate power with rooftop solar PV panels. The latter is about developing an entirely new business model for utilities, one that aligns their financial interests with the spread of distributed energy. The danger is that fighting over the former could delay solving the latter.

Today, let’s dig into the fight at hand. It’s about utility rates, specifically “net metering,” yet another nerdy green term no one understands. I will endeavor to make clear what it is and why the fight over it is so damn interesting and exciting. Exciting, I tell you! Wake up!

(More here.)

On becoming Irish

The Corporate Tax Dodge

By STEVEN RATTNER, NYT

WHILE a Senate report detailing Apple’s aggressive tax sheltering of billions of dollars of overseas income grabbed headlines this week, little notice was paid to a surreptitious thrust at tax minimization that was announced at nearly the same moment.

In a news release, the American drug maker Actavis announced that it would spend $5 billion to acquire Warner Chilcott, an Irish pharmaceuticals company less than half its size.

Buried in the fifth paragraph of the release was the curious tidbit that the new company would be incorporated in Ireland, even though the far larger acquirer was based in Parsippany, N.J.

The reason? By escaping American shores, Actavis expects to reduce its effective tax rate from about 28 percent to 17 percent, a potential savings of tens of millions of dollars per year for the company and a still larger hit to the United States Treasury.

Actavis is hardly alone in fleeing to lower-tax countries. For example, Eaton Corporation, a diversified power management company based for nearly a century in Cleveland, also became an “Irish company” when it acquired Cooper Industries last year.

(More here.)

Western world seems overtaken by economic defeatism

Japan the Model

By PAUL KRUGMAN, NYT

A generation ago, Japan was widely admired — and feared — as an economic paragon. Business best sellers put samurai warriors on their covers, promising to teach you the secrets of Japanese management; thrillers by the likes of Michael Crichton portrayed Japanese corporations as unstoppable juggernauts rapidly consolidating their domination of world markets.

Then Japan fell into a seemingly endless slump, and most of the world lost interest. The main exceptions were a relative handful of economists, a group that happened to include Ben Bernanke, now the chairman of the Federal Reserve, and yours truly. These Japan-obsessed economists viewed the island nation’s economic troubles, not as a demonstration of Japanese incompetence, but as an omen for all of us. If one big, wealthy, politically stable country could stumble so badly, they wondered, couldn’t much the same thing happen to other such countries?

Sure enough, it both could and did. These days we are, in economic terms, all Japanese — which is why the ongoing economic experiment in the country that started it all is so important, not just for Japan, but for the world.

In a sense, the really remarkable thing about “Abenomics” — the sharp turn toward monetary and fiscal stimulus adopted by the government of Prime Minster Shinzo Abe — is that nobody else in the advanced world is trying anything similar. In fact, the Western world seems overtaken by economic defeatism.

(More here.)

NYT Editorial Board: In Thursday's speech, Obama did pretty good

The End of the Perpetual War

By THE EDITORIAL BOARD, NYT

President Obama’s speech on Thursday was the most important statement on counterterrorism policy since the 2001 attacks, a momentous turning point in post-9/11 America. For the first time, a president stated clearly and unequivocally that the state of perpetual warfare that began nearly 12 years ago is unsustainable for a democracy and must come to an end in the not-too-distant future.

“Our systematic effort to dismantle terrorist organizations must continue,” Mr. Obama said in the speech at the National Defense University. “But this war, like all wars, must end. That’s what history advises. It’s what our democracy demands.”

As frustratingly late as it was — much of what Mr. Obama said should have been said years ago — there is no underestimating the importance of that statement. Mr. Obama and his predecessor, President George W. Bush, used the state of war that began with the authorization to invade Afghanistan and go after Al Qaeda and others who planned the Sept. 11 attacks to justify extraordinary acts like indefinite detention without charges and the targeted killing of terrorist suspects.

While there are some, particularly the more hawkish Congressional Republicans, who say this war should essentially last forever, Mr. Obama told the world that the United States must return to a state in which counterterrorism is handled, as it always was before 2001, primarily by law enforcement and the intelligence agencies. That shift is essential to preserving the democratic system and rule of law for which the United States is fighting, and for repairing its badly damaged global image.

(More here.)

C.I.A. to Focus More on Spying, a Difficult Shift

By MARK MAZZETTI, NYT

WASHINGTON — For more than seven years, Mike — a lean, chain-smoking officer at the Central Intelligence Agency’s headquarters in Virginia — has managed the agency’s deadly campaign of armed drone strikes. As the head of the C.I.A.’s Counterterrorism Center, Mike wielded tremendous power in hundreds of decisions over who lived and died in far-off lands.

But under a new plan outlined by the Obama administration on Thursday, the Counterterrorism Center over time would cease to be the hub of America’s targeted killing operations in Pakistan, Yemen and other places where presidents might choose to wage war in the future. Already, the C.I.A.’s director, John O. Brennan, has passed over Mike, an undercover officer whose full name is being withheld, for a promotion to run the agency’s clandestine service.

It is a sign that Mr. Brennan is trying to shift the C.I.A.’s focus back toward traditional spying and strategic analysis, but that is not an easy task.

Arguably, no agency has changed more in the years since the Sept. 11, 2001, attacks than the C.I.A., and no agency could be affected more by the new direction of the secret wars laid out by American officials on Thursday.

(More here.)

Hunger Games: The conservative plan to starve government has paid off with the IRS scandal

BY NOAM SCHEIBER, TNR

The more we learn about the IRS vetting of conservative groups, the less it looks like an abuse of power than something much more mundane—a beleaguered agency with too few resources to handle its work-load.

As The New York Times reported this past weekend, the IRS division that oversees tax-exempt groups was chronically understaffed and overwhelmed even before a surge in applications from political groups in 2010. Once the dodgy applications started piling up (dodgy because political groups that don’t reveal their donors aren’t supposed to get tax exemptions), it’s not surprising that the IRS cut corners, adopting search terms like “patriot” to help flag the conservative groups who were largely behind the increase. This was insensitive and inexcusable—a real crime against political correctness. But it was the kind of mistake people make when they’re overworked, not on a witch hunt.

And yet, when you take a step back from the IRS scandal, there does appear to be something slightly sinister going on. Except that the scheming is on the right and not the left. Since the Republican House takeover in 2010, conservatives have laid the groundwork for a cynical two-step: First, squeeze funding for government programs, making it harder for civil servants to do their jobs. Then, when the inevitable screw-up comes, use it as further justification for cuts. Against this backdrop, the IRS scandal looks like only the latest step in the conservative long-game.

(More here.)

Minnesota, Others Move to Raise Revenue as Cuts Remain Popular Elsewhere

States' Rift on Taxes Widens 

By MARK PETERS, WSJ

Minnesota's move to raise $2.1 billion in new taxes, largely from the wealthy, to fund government programs puts it among a handful of states controlled by Democrats that are adopting more liberal fiscal policies at a time when many Republican-dominated statehouses are pushing to cut taxes.

The Minnesota tax package, which Gov. Mark Dayton signed into law Thursday, aims to raise the revenue largely for expanding early-childhood education programs and freezing tuitions at state universities, as well as closing the state's budget deficit and funding some jobs initiatives and property-tax refunds.

The measure was backed by the Democratic-Farmer-Labor Party, which holds control of both legislative chambers and the governor's office in Minnesota for the first time in more than two decades. The legislative session, which ended this week, also saw the passage of measures legalizing same-sex marriage and expanding union-organizing powers over the steady objection of Republican lawmakers.

"It is just what government should be doing, and just what Republicans refuse to acknowledge government should be doing," Mr. Dayton said of the tax plan.

(More here.)

The wrong party is angry and the wrong party is complacent

Why Obama’s Scandals Won’t Lead to Reform

By Ezra Klein - Bloomberg, May 22, 2013

Put aside the politics, and the question of who-knew-what-when. There are two policy problems highlighted by the controversies at the Internal Revenue Service and the Department of Justice. The first is the growth of 501(c)(4) groups into vehicles for anonymous and unlimited political spending. The second is the Barack Obama administration’s overzealous prosecution of leaks.

Unfortunately, for those who would like to see these policy problems resolved, the wrong party is angry about them and the wrong party is complacent.

Republicans support unlimited, anonymous political spending by 501(c)(4) groups. Likewise, they support vigorous prosecution of national security leaks. But trumping such policy beliefs, for the moment, is an overriding political imperative: Republicans want a scandal to take down the White House, or at least to damage Obama’s standing.

Democrats, by contrast, loathe the growth of partisan 501(c)(4) groups. They’re also more skeptical of claims that national security concerns override the news media’s right to report. But rather than use the IRS scandal as an opportunity to reform the rules for political groups, or to propose legislation to protect journalists from the Justice Department’s overreach, there’s a real chance Democrats might rally around the White House and try to move past these scandals as quickly as possible.

(More here.)

Another Franks — not Barney — tees off

Abortion After 20 Weeks

By ANDREW ROSENTHAL, NYT

On the list of treasured Republican pastimes, trying to outlaw abortion and imposing a right-wing agenda on the District of Columbia (which is heavily Democratic and lacks any representation in Congress) both rank high.

So it must have given Rep. Trent Franks of Arizona special pleasure to combine those hobbies by introducing a bill to ban abortion in D.C. after 20 weeks. But why stop there? Late last week, according to Think Progress, Mr. Franks said that the Kermit Gosnell trial “compelled him to amend his bill so it applies to women across the country.” On Wednesday he held a press conference, dominated by men, naturally, to promote his bold proposal.

Mr. Franks’ bill ignores the central principle of the Supreme Court’s Roe v. Wade decision, which is that women have a constitutional right to terminate a pregnancy before “viability.” For 40 years, that date has been set roughly at 24 weeks — not because that number sounded good to a random lawmaker, but because that’s when scientists say a fetus has a good chance of survival outside of the womb.

The 24-week rule, however, has been under heavy assault recently by anti-abortion forces, who have managed to get several states to pass laws moving the line to 20 weeks or earlier. That’s just one step in the direction of their not-so-secret ultimate aim: to ban abortions entirely.

(More here.)

In case you were wondering, dollars for lobbying pays off — well, duh!

Kill Bill

By THOMAS B. EDSALL NYT

United Republic, a liberal-leaning campaign finance reform organization dedicated to reducing the influence of money in American politics, recently produced a striking graphic that illustrates how corporate America wins huge breaks from Congress at very little cost.

According to statistics United Republic assembled, the prescription drug industry spent $116 million lobbying for legislation to prevent Medicare from bargaining down drug prices — legislation that enabled drug companies to make an additional $90 billion annually. That amounts to an extraordinary 77,500 percent return on investment. Oil companies, in turn, had a return on investment of 5,900 percent, and multinational companies, 22,000 percent.

While the general public may be angered by these reports, the lobbying industry loves them: what could be better publicity for attracting new clients? For example, the Carmen Group, a Washington lobbying firm, boasted on its Web site that for every dollar it collected in fees, clients got $100 in benefits.

Many studies demonstrate the profitability of lobbying. A Sunlight Foundation analysis of 200 corporations found that companies investing heavily in lobbying paid lower tax federal rates. According to Sunlight, seven of the eight companies that invested the most in lobbying between 2007 and 2009 (Figure 2) saw their tax rates lowered, and six of the eight saw rate declines of at least seven percentage points. In contrast, the median tax rate decline among all 200 companies was 0.6 percentage points:

(More here.)

On IRS issue, senior White House aides were focused on shielding Obama

By Philip Rucker and Juliet Eilperin, WashPost, Published: May 22

As soon as White House counsel Kathryn Ruemmler heard about an upcoming inspector general’s report on the Internal Revenue Service, she knew she had a problem.

The notice Ruemmler saw on April 24 gave her a thumbnail sketch of a disturbing finding: that the IRS had improperly targeted tea party and other conservative groups. She shared the news with White House Chief of Staff Denis McDonough and other senior White House aides, who all recognized the danger of the findings.

But they agreed that it would be best not to share it with President Obama until the independent audit was completed and made public, in part to protect him from even the appearance of trying to influence an investigation.

This account of how the White House tried to deal with the IRS inquiry — based on documents, public statements and interviews with multiple senior officials, including one directly involved in the discussions — shows how carefully Obama’s top aides were trying to shield him from any second-term scandal that might swamp his agenda or, worse, jeopardize his presidency.

(More here.)

The Morning Plum: Republicans struggle to connect IRS scandal to Obama

By Greg Sargent, WashPost, Updated: May 23, 2013

Republicans are working overtime to connect the IRS scandal to President Obama. Theoretically, this task should be made more difficult by the lack of evidence of any such connection. In practice, it’s not dissuading Republicans in the slightest from drawing that link. John Boehner claims it is “inconceivable” that Obama didn’t know about the IRS targeting of conservative groups.

In that context, don’t miss today’s big Post piece documenting the behind-the-scenes moves by the Obama administration as it dealt with the news of the impending inspector general’s audit. The piece reports that White House counsel Kathryn Ruemmler, having learned of the pending audit’s damaging details, shared the news with chief of staff Denis McDonough and other White House aides. They all decided not to tell the president about the audit until it was completed and publicly released, “in part to protect him from even the appearance of trying to influence an investigation.” And it turns out that this is exactly what they should have done:

In the IRS case, many prominent Washington lawyers say Ruemmler made the sensible legal call. She protected her client — Obama — by distancing him from a politically sensitive problem and ensuring that he could not be accused of meddling in an inquiry.

In addition, one senior administration official said, Ruemmler at the time did not know key facts: How extensive was the IRS’s targeting? How many and which employees were involved? Did they target only conservative groups and was the effort politically motivated? And were those groups’ applications for tax-exempt status denied or delayed?

(More here.)

More blather on the IRS mess

Just Say No (Special Prosecutor)

by Michael Tomasky, The Daily Beast, May 23, 2013 4:45 AM EDT

Naming a special prosecutor would destroy Obama’s presidency

Now that we’ve been through the first round of hearings on the IRS matter, it’s apparent that there are a few things Barack Obama should do. Yes, he should move to fire Lois Lerner. I wrote on May 13, the day of the press conference at which he first addressed the matter, that he should vow that some heads would roll. He should also—and this won’t placate the right; far from it, in fact, but so be it—explain to the American people the reasons this controversy is being overblown. But there is one thing that he absolutely must not do, and that is pay the least bit of attention to these calls for a special prosecutor. That will be the end, either literal or metaphorical, of his presidency, because of the ceaseless bad faith of the people trying to elevate this thing to Watergate proportions. Just say no, and say it firmly.

In substantive terms, this “scandal” consists of bureaucratic bungling, and apparently really stupid bureaucratic political tone deafness. But a conspiracy organized from the White House? Please. The Treasury Department Inspector General report that came out May 14 said that of the 296 “potential political cases” reviewed up through December 2012, the dispositions were as follows: 108 applications approved, 28 withdrawn, 160 left open for a lengthy period of time, and zero denied. That’s right. Zero. Now, you could say that there’s a problem with those 160, and I wouldn’t deny it. Something was broken, something needs fixed. Everyone acknowledges that. But what sort of conspiracy to silence Tea Party groups ends up denying zero of their applications? It’s an absurd claim.

Now we get to the politics. Darrell Issa claims election-season cover-up. But he knew about the IG probe in the summer of 2012, and then received a letter in July confirming it. So one aspect of this that greatly confuses me is why Issa didn’t go public with his accusations then. His spokesman, whom I emailed over the weekend, told me that it was because Issa kept asking the IG for more information, but the IG didn’t give any. Fair enough. But that still strikes me as an unusual degree of discretion on Issa’s part. He needed to know all the details before going public with something that might have helped his party’s presidential candidate in a pretty big way? If that’s the case, he is an unusual Republican indeed.

(More here.)

Allowed to play by a different set of rules

Push on corporate tax rules goes global

By Howard Schneider, WashPost, Published: May 22

A global effort to tighten corporate tax rules is gaining momentum as politicians in Europe and the United States take aim at American tech giants whose savvy use of international tax laws has provoked a public backlash.

A day after a U.S. Senate report slammed Apple’s use of Irish regulations to minimize payments to the U.S. government, European heads of state said they hoped for quick action from an international effort to change rules that let companies shelter profits.

Pushed by British Prime Minister David Cameron, who has faced public outrage over the low taxes paid in his country by companies such as Amazon.com and Starbucks, the effort is moving quickly in European nations caught in an era of slow growth and painful austerity. Officials said they are driven not just by a hunt for revenue but also by the political difficulty of justifying to smaller businesses or homeowners why the world’s most sophisticated companies are allowed to play by a seemingly different set of rules.

“We are in an unprecedented economic crisis,” European Council President Herman Van Rompuy said Wednesday after European leaders endorsed plans to move ahead with information sharing and other steps to try to make companies pay more corporate tax. “We have to act because it is fair. . . . The economic crisis makes the difference.”

(More here.)

What Tim Cook learned from Steve Jobs

Here Comes the Sun

By JOE NOCERA, NYT

Among the many things Tim Cook apparently learned at the knee of Steve Jobs, during his long tenure as Apple’s No. 2, was how to create a “reality distortion field.” Or so it would appear after watching Cook, now Apple’s chief executive, testify on Tuesday at a Senate hearing on the company’s tax avoidance schemes.

Jobs was so persuasive that he could claim the sun was setting when it was actually rising, and everyone would nod in agreement. On Tuesday, despite the overwhelming evidence presented by the Senate Permanent Subcommittee on Investigations that Apple engaged in dubious tax avoidance gimmicks, Cook claimed that Apple never resorted to tax gimmickry. Even though the company appears to pay about 10 percent of its pretax income in taxes — when the federal corporate tax rate is 35 percent — Cook said, “We pay all the taxes we owe — every single dollar.” He added that Apple had never shifted any of its American profits to an offshore tax haven when, in fact, that is basically what it has done, routing tens of billions in pretax profits to a shell corporation in Ireland that exists solely to avoid taxes in the United States. He even said that the low taxes Apple pays overseas is on the profits of its overseas sales. Not to put too fine a point on it, but this was a flat-out lie.

In other words, Cook spent Tuesday claiming that the sun was setting when it was actually rising, and, predictably, by the time the hearing had ended, most of the senators were agreeing with him. Senator John McCain, the committee’s ranking Republican, who had earlier labeled Apple “a tax avoider,” was soon swooning over Apple’s “incredible legacy.”

Indeed, Apple’s fabulous success over the past decade or so — its creation of the iPads and iPhones that the world lusts over — is a large part of the reason it always gets the benefit of the doubt, whether deserved or not. Two years ago, when David Kocieniewski of The Times reported on General Electric’s tax-avoidance prowess, a storm of protest resulted. Last year, however, when Kocieniewski and Charles Duhigg wrote about Apple’s tax avoidance schemes as part of a series about the company that won a Pulitzer Prize, it was greeted mainly with yawns. Nobody really wants to hear anything bad about Apple.

(More here.)

Of cooks, waiters, butlers, housekeepers, governesses, maids, valets, baby sitters and more

Somebody Did Something

By GAIL COLLINS, NYT

Whenever the world of Washington seems hopeless, someone will point out that the Senate Judiciary Committee did a good job on immigration reform.

That’s it? Yeah, pretty much.

Immigration reform has been the 2013 bipartisan bright spot in the Senate, unless you were really moved by the day they voted to debate gun control before killing all the gun control plans. The committee members cheerfully plowed through 300-odd proposed amendments, while taking turns telling which country their great-grandfather came from. There was, of course, a lot of disagreement, although almost everybody seemed to enjoy slapping down ideas offered by Senator Jeff Sessions of Alabama.

Mainstream Republicans have been super-energized to do immigration reform ever since the Hispanic vote went against them in the last election. Democracy does work. If somebody came up with a dramatic poll showing that all the people with diabetes, asthma and chronic back problems had voted against Mitt Romney, there would no longer be a problem getting funding for health care reform.

High points in the committee’s long slog toward passage included a proposal from Tea Party icon Mike Lee of Utah to exempt employers of “cooks, waiters, butlers, housekeepers, governesses, maids, valets, baby sitters, janitors, laundresses, furnacemen, caretakers, handymen, gardeners, footmen, grooms, and chauffeurs of automobiles for family use” from checking to make sure their help had the proper legal status. It didn’t go anywhere, but if you happen to run into Lee, feel free to say: “The butler did it.”

(More here.)

Uncle Tom for lieutenant governor or true GOP future?

Blacks, Conservatives and Plantations

By CHARLES M. BLOW, NYT

Why do Republicans keep endorsing the most extreme and hyperbolic African-American voices — those intent on comparing blacks who support the Democratic candidates to slaves? That idea, which only a black person could invoke without being castigated for the flagrant racial overtones, is a trope to which an increasingly homogeneous Republican Party seems to subscribe.

The most recent example of this is E.W. Jackson, who last weekend became the Virginia Republicans’ candidate for lieutenant governor in the state.

In a video posted to YouTube in 2012 titled “Bishop E.W. Jackson Message to Black Christians,” Jackson says:

“It is time to end the slavish devotion to the Democrat party. They have insulted us, used us and manipulated us. They have saturated the black community with ridiculous lies: ‘Unless we support the Democrat party, we will be returned to slavery. We will be robbed of voting rights. The Martin Luther King holiday will be repealed.’ They think we’re stupid and these lies will hold us captive while they violate everything we believe as Christians.”

(More here.)

Reforms underway at State; how about CIA?

The C.I.A.’s Part in Benghazi

By THE EDITORIAL BOARD, NYT

Throughout months of Republican “investigation” into the tragedy in Benghazi, Libya, on Sept. 11 last year, the Central Intelligence Agency has escaped the scrutiny and partisan bashing aimed at the State Department and the White House. But we now know that the C.I.A., and not the State Department or the White House, originated the talking points that Republicans (wrongly) insisted were proof of a scandal. It was more central to the American presence in Benghazi than the State Department, and more responsible for security there.

The C.I.A.’s role needs to be examined to understand what happened and how to better protect Americans.

Republicans have mostly fixated on the talking points that were the basis of comments made by Susan Rice, the ambassador to the United Nations, on television the Sunday after Ambassador J. Christopher Stevens and three other Americans were killed. She said the siege seemed to have been a spontaneous protest hijacked by extremists, not a planned terrorist attack. Within days, Republicans in Congress were calling for her head. They later claimed the C.I.A. wanted to tell the truth but Ms. Rice and the administration cared only about protecting President Obama.

Under pressure, the White House has since released e-mails describing the interagency machinations behind the talking points, which David Petraeus, then the C.I.A. director, initiated at the request of Representative C.A. Dutch Ruppersberger, the senior Democrat on the House Intelligence Committee. As Karen DeYoung and Scott Wilson reported in The Washington Post on Wednesday, the e-mails show that Mr. Petraeus was critical to producing talking points “favorable to his image and his agency.”

(More here.)

Luxembourg’s retreat from banking secrecy

Europe Pushes to Shed Stigma of a Tax Haven

By ANDREW HIGGINS, NYT

LUXEMBOURG — It was a blunt and unsettling message for a country whose opaque banks have sucked in hundreds of billions of euros from abroad and whose national motto — “We want to remain what we are” — is a credo of dogged resistance to change.

“Nothing is as it was before,” Prime Minister Jean-Claude Juncker told Parliament last month, explaining why, after years of resistance, Luxembourg had decided to start sharing information with foreign tax authorities about the money stashed in its banks. “Not everything has changed, but lots of things have changed. Other changes are necessary, or everything will change.”

The attention this week on the ability of Apple and other prominent American corporations to avoid corporate taxes through offshore tax arrangements obscures a perhaps more significant development, highlighted by Luxembourg’s abrupt retreat from banking secrecy: the relentless pressures being piled on opaque money centers around the world amid a sweeping global assault on tax evasion and the secrecy that enables it.

“Bank secrecy is a relic of the past,” said Algirdas Semeta, the European Union’s senior official responsible for tax issues. “Soon we will see the death of bank secrecy around the world.”

(More here.)

Where breaking and entering is a skill for sale

Hackers Find China Is Land of Opportunity

By EDWARD WONG, NYT

BEIJING — Name a target anywhere in China, an official at a state-owned company boasted recently, and his crack staff will break into that person’s computer, download the contents of the hard drive, record the keystrokes and monitor cellphone communications, too.

Pitches like that, from a salesman for Nanjing Xhunter Software, were not uncommon at a crowded trade show this month that brought together Chinese law enforcement officials and entrepreneurs eager to win government contracts for police equipment and services.

“We can physically locate anyone who spreads a rumor on the Internet,” said the salesman, whose company’s services include monitoring online postings and pinpointing who has been saying what about whom.

The culture of hacking in China is not confined to top-secret military compounds where hackers carry out orders to pilfer data from foreign governments and corporations. Hacking thrives across official, corporate and criminal worlds. Whether it is used to break into private networks, track online dissent back to its source or steal trade secrets, hacking is openly discussed and even promoted at trade shows, inside university classrooms and on Internet forums.

(More here.)

Obama, in a Shift, to Limit Targets of Drone Strikes

By CHARLIE SAVAGE and PETER BAKER, NYT

WASHINGTON — President Obama plans to open a new phase in the nation’s long struggle with terrorism on Thursday by restricting the use of unmanned drone strikes that have been at the heart of his national security strategy and shifting control of them away from the C.I.A. to the military.

In his first major speech on counterterrorism of his second term, Mr. Obama hopes to refocus the epic conflict that has defined American priorities since the attacks of Sept. 11, 2001, and even foresees an unspecified day when the so-called war on terror might all but end, according to people briefed on White House plans.

As part of the shift in approach, the administration on Wednesday formally acknowledged for the first time that it had killed four American citizens in drone strikes outside the battlefields of Afghanistan and Iraq, arguing that its actions were justified by the danger to the United States. Mr. Obama approved providing new information to Congress and the public about the rules governing his attacks on Al Qaeda and its allies.

A new classified policy guidance signed by Mr. Obama will sharply curtail the instances when unmanned aircraft can be used to attack in places that are not overt war zones, countries like Pakistan, Yemen and Somalia. The rules will impose the same standard for strikes on foreign enemies now used only for American citizens deemed to be terrorists.

(More here.)

How stupid laws create administrative chaos

Sympathy for the IRS

By Clive Crook - Bloomberg, May 21, 2013

Much to my surprise, I find myself sympathizing with the Internal Revenue Service. Tenderness toward that agency isn’t my default position. I’m a British expat living in the U.S., with retirement savings locked up in the U.K. and other cross-border entanglements -- these small complications have sometimes caused my dealings with tax professionals to displace landscape photography as my main and most expensive pastime. Say “IRS” to me and watch my teeth grind.

On the other hand, I used to be a civil servant, so I also understand how stupid laws can create administrative chaos. The more I read about the scandal of the IRS and its scrutiny of conservative groups seeking tax-exempt status, the more convinced I am that the blame for this mess -- just like the blame for my having to put down my tripod -- lies almost entirely with Congress.

Plainly, if IRS officials were systematically discriminating against conservative groups with the aim of harassing or suppressing them, that’s outrageous, not to mention criminal. If this was going on at the direction or with the knowledge of the White House, then the scandal rises, of course, to Watergate proportions. But there’s no evidence of any such system or conspiracy, and the idea seems improbable. What we do have, though, are tax laws so complex, and so muddled with the regulation of political spending, that straightforward enforcement is almost impossible.
Big Mistake

The rules controlling tax-exempt status for any kind of nonprofit group are bewildering enough (if you have a few days to kill, try making sense of the IRS’s nontechnical guide to the issue). Yet the intersection of these rules with equally arcane U.S. campaign-finance laws raises the problem to a whole other level. Congress made the really big mistake in all this by mixing the two. Administration of the tax code should be kept separate from regulation of money in politics.

(More here.)

Balance in the Media

Source: University of California Museum of Paleontology and American Institute of Biological Sciences

Republicans natter about 'I' word

Senator: Obama will soon be facing impeachment calls

Tom Maertens
May 22, 2013

Mitt Romney first politicized the Sept. 11 terrorist attack on the U.S. Consulate in Benghazi, Libya, only hours after the event, by claiming the president sympathized with terrorists.

Sen. James Inhofe, R-Okla., called Benghazi the “most egregious cover-up in American history” and predicted that Obama will soon be facing impeachment calls. Similar views were expressed by Michele Bachmann and by Mike Huckabee, who asserted that “this president will not fill out his full term.”

A PPP poll found that 41 percent of Republicans, echoing the Fox News/talk radio frenzy, think Benghazi is the biggest political scandal in history.

Rep. Steve King, Iowa Republican, agreed, saying that Benghazi is 10 times bigger than the Watergate and Iran-Contra scandals put together.

That’s nonsense. Watergate was about Nixon running a burglary ring out of the White House, for which he was forced to resign. Sixty nine people were charged with crimes and forty-eight went to prison, including two of Nixon’s attorneys general (Mitchell and Kleindienst), his chief of staff (Haldeman), along with Erlichman, Colson, Liddy, Magruder, and others.

Iran-Contra was about Reagan illegally trading weapons to Iran for American hostages and lying about it. He then illegally diverted the proceeds to the murderous Contras in Nicaragua and lied about that too. Presidential historian Richard Reeves has calculated that 138 Reagan administration officials were indicted for various offenses, making his administration the most corrupt in U.S. history.

Among those convicted were his Secretary of Defense (Caspar Weinberger), two National Security Advisors (MacFarlane and Poindexter), his chief of staff (Michael Deaver), Oliver North, and others, most of whom were pardoned by George H.W. Bush.

Most of the convictions were for lying, perjury and obstructing justice in an attempt to cover up criminal activity by the president.

Benghazi, in contrast, is a manufactured scandal over press talking points drafted by committee, which Republicans later misrepresented to the press.

Some are arguing that Obama, Clinton or somebody is guilty of a crime for “allowing” the attack on the consulate.

By that standard, Reagan would be guilty for the three attacks on U.S. facilities just in Lebanon: a suicide truck bomber attacked the U.S. Embassy in Beirut on April 18, 1983, killing 63 people including 17 Americans; another suicide bomber detonated a truck full of explosives at a U.S. Marine barracks in Beirut on Oct. 23, 1983, killing 241 U.S. Marines and injuring more than 100 others; a third truck bomber attacked the U.S. Embassy in Beirut again on Sept. 20, 1984, killing 24 people.

In addition, a suicide attack on the American embassy in Kuwait on Dec. 12, 1983, killed five people and injured more than 80 others.

No one talked of impeaching Reagan for “allowing” three attacks in Lebanon in less than 18 months, but then, this was back when Republicans blamed the perpetrators for attacks, not the other party.

If terrorist attacks constitute impeachable offenses, what about the bizarre invasion Reagan engineered in 1983 and his belligerent “evil empire” rhetoric that almost provoked a nuclear war?

Nineteen Americans died and 119 were wounded in his unilateral invasion of Grenada, a member of the British Commonwealth with Queen Elizabeth as its sovereign, another slap at Britain and Thatcher after Reagan’s refusal to support them in the Falklands war. The U.N. condemned the invasion, 108-9.

The nuclear crisis, in November 1983, resulted from a military exercise (Abel Archer) that simulated a nuclear attack on the Soviet Union. Russian participants confirm that Moscow believed that a bellicose Reagan had ordered a nuclear attack and they came within minutes of launching a “counterattack.” (See “Soviet War Scare 1983,” The History Channel.)

Watergate and Iran-Contra involved probable “high crimes and misdemeanors” by the president — impeachable offenses. Benghazi involves no such thing, and nothing approaching Reagan’s dangerous, costly foreign policy blunders.

As for the congressional hearings, they are becoming a scandal in themselves, as the Republican sideshow alters emails and exploits the Benghazi tragedy in order to raise campaign funds. The National Republican Congressional Committee recently boasted that its Clinton/Benghazi fundraising page was the most successful in its history.

Under Bush, there were violent attacks on American embassies in Yemen, Pakistan, Saudi Arabia, India and Turkey, and American diplomats were murdered in Pakistan and Sudan. There were no congressional investigations of those attacks.

What we are really seeing is an expansion of Romney’s ignominious effort to exploit the attack for electoral purposes, to now include discrediting Hillary Clinton and delegitimizing Obama.

(Also published in The Mankato Free Press.)

Frac sand mining study: Benefits blowin' in the wind?

Officials should investigate costs, benefits of frac mining, report says

by Stephanie Hemphill, Minnesota Public Radio
May 15, 2013

ST. PAUL, Minn. — Local officials should ask in-depth questions about costs and benefits when they consider whether to permit a frac sand mine, according to findings in a report released Wednesday by the Minneapolis-based Institute of Agriculture and Trade Policy.

The study, conducted by Thomas Power, a retired University of Montana economist and an expert on the economics of mining, concluded that the economic effects of silica sand production used in mining is likely to be quite small.

Drawing from data collected by the federal government and the state of Wisconsin, production could create about 2,300 jobs, but that's less than one percent of total employment statewide. The frac sand region creates about the same number of jobs in all categories every two months, Power said.

(More here.)

IRS gave progressive groups same scrutiny as conservative groups

The Latest Lie: IRS Targeted Conservatives

By Dave Johnson, Crooks & Liars

Remember the video of the guy in the "pimp costume" who got advice from ACORN employees on how to run his prostitution ring? Turns out the whole story was just a lie, a doctored-video smear job on an important organization. The guy never wore a "pimp costume" and the real, undoctored videos showed that ACORN employees did nothing wrong. But a lie travels around the world before the corporate media bothers to check the facts. The "news" media blasted the story everywhere, and Congress was so outraged they forced ACORN to close its doors. And here we are again.

The corporate media is blasting out the story that the IRS "targeted conservative groups." Some in the media say there was "IRS harassment of conservative groups." Some of the media are going so far as claiming that conservative groups were "audited."

This story that is being repeated and treated as "true" is just not what happened at all. It is one more right-wing victimization fable, repeated endlessly until the public has no choice except to believe it.

Conservative Groups Were Not "Targeted," "Singled Out" Or Anything Else

You are hearing that conservative groups were "targeted." What you are not hearing is that progressive groups were also "targeted." So were groups that are not progressive or conservative.

(More here.)

Disarming Senators, Apple Chief Eases Tax Tensions

By NELSON D. SCHWARTZ and BRIAN X. CHEN, NYT

WASHINGTON — Timothy Cook came to the lion’s den on Capitol Hill on Tuesday, prepared to face down lawmakers furious over evidence that Apple, the famous company he runs, had avoided paying billions in taxes. By the time Mr. Cook walked out, the big cats on a Senate committee were practically eating out of his hand.

Even the panel’s fiery chairman, Senator Carl Levin of Michigan, after blasting Apple for creating “ghost companies” that diverted billions of tax dollars from American coffers and caused needy seniors to go without meals, had some kind words for Mr. Cook and his company.

“We love the iPhone and the iPad,” Mr. Levin said, going on to commend Mr. Cook and two other executives for voluntarily appearing before the Senate Permanent Committee on Investigations. “I know it’s not easy to come in front of a spotlight but it’s important for us.”

Other senators seemed even more mollified by Mr. Cook’s low-key performance.

Senator John McCain, the senior Republican on the panel, who had earlier criticized Apple “as among America’s largest tax avoiders,” took pains to modulate his message. “You managed to change the world, which is an incredible legacy for Apple,”he told Mr. Cook.

(More here.)

For U.S. Companies, Money ‘Offshore’ Means Manhattan

By DAVID KOCIENIEWSKI, NYT

Like some of the nation’s prominent chief executives, Apple’s Timothy D. Cook has a simple proposal to help spur the economy and encourage corporate tax compliance: give American companies a tax break to bring to the United States untaxed profits parked overseas.

But much of that money is already home.

Multinationals based in the United States now hold more than $1.6 trillion in cash classified as “permanently invested overseas.” These funds will face the 35 percent federal corporate tax only if it is returned to the country.

In the convoluted world of corporate tax accounting however, simple concepts like “overseas” and “returned to the country” are not as simple as they appear.

Apple’s $102 billion in offshore profits is actually managed by one of its wholly owned subsidiaries in Reno, Nev., according to the Senate report on the company’s tax avoidance. The money is tracked by Apple company bookkeepers in Austin, Tex. What’s more, the funds are held in bank accounts in New York.

(More here.)

The true costs of frac sand mining

New report raises concerns about expansion of frac sand mines in Minnesota and Wisconsin

By Andrew Ranallo
Published May 15, 2013

ST. PAUL – The true economic impact of frac sand mining may fall short of industry claims promising sustained prosperity and economic opportunity, says a first-of-its-kind expert report to be released Wednesday, May 15. By using currently available economic data, The Economic Benefits and Costs of Frac-Sand Mining in West Central Wisconsin offers a full, unbiased analysis of costs and benefits for communities affected by frac sand mining. The report concludes by offering a list of questions to be considered that can help rural towns in Wisconsin and Minnesota effectively evaluate benefits and costs of frac sand mining for their community. As frac-sand mining legislation is being considered in Minnesota, including taxes to benefit the state and conservation measures to protect the environment, the report offers data to supplement the often overly optimistic economic projections from mining companies that often ignore costs and minimize environmental risks.

When drilling for oil or natural gas is impractical due to geological factors, hydraulic fracturing (or “fracking”) is an increasingly popular alternative for oil and gas companies. Fracking involves injecting materials (often sand) into rock formations, opening them and allowing resources to be extracted. Wisconsin and Minnesota have has substantial deposits of sand with the perfect properties for fracking—also known as “frac sand.” As oil and gas companies increasingly turn to fracking, the demand for frac sand has boomed.

(Continued here. For an excellent take on the personal costs of frac sand mining, view the documentary "The Price of Sand".)

Study: The 'wing-nuttier' you are, the less you know about both sides of the issues

How to Humble a Wing Nut

By Cass R. Sunstein - Bloomberg, May 20, 2013

There is no standard definition of the all-important term “wing nut,” so let’s provide one. A wing nut is someone who has a dogmatic commitment to an extreme political view (“wing”) that is false and at least a bit crazy (“nut”).

A wing nut might believe that George W. Bush is a fascist, that Barack Obama is a socialist, that big banks run the Department of the Treasury or that the U.S. intervened in Libya because of oil.

When wing nuts encounter people with whom they disagree, they immediately impugn their opponents’ motivations. Whatever their religion, they are devout Manicheans, dividing their fellow citizens into the forces of light and the forces of darkness.

Wing nuts have a lot of fellow travelers -- people who don’t fit the definition, yet who are similarly dogmatic and whose views, though not really crazy, aren’t exactly evidence-based. You can be a wing nut on a particular issue without being a wing nut in general. Most human beings can hear the voice, at least on occasion, of their inner wing nut.

The good news is that wing nuts usually don’t matter. The bad news is that they influence people who do. Sadly, more information often fails to correct people’s misunderstandings. In fact, it can backfire and entrench them. Can anything be done?

(More here.)

Will Republicans Screw Up Again? Some Are Already Overreaching

By Stuart Rothenberg, RollCall, posted at 2:16 p.m. on May 20

Some Republicans are so excited at the thought of multiple controversies dogging the White House over the next few months (or longer) that they are already foaming at the mouth.

For example, on his syndicated radio show late last week, former Arkansas Gov. Mike Huckabee compared reports of the IRS targeting conservative groups seeking tax-exempt status to what happened in Nazi Germany.

And, of course, you knew that some conservatives and Republicans (such as Glenn Beck, Oklahoma Sen. James M. Inhofe and Minnesota Rep. Michele Bachmann) couldn’t resist mentioning the “I” word — impeachment — almost immediately as they struggled to show their anger and contempt for President Barack Obama and his administration.

But Republicans ought to remember that they have seen this movie before, and the ending was not what they hoped for or expected.

(More here.)

One downside of testing for cancer susceptibility

The Outrageous Cost of a Gene Test

By DAVID B. AGUS, NYT

LOS ANGELES — ANGELINA JOLIE’S revelation that she had had a preventive double mastectomy was eloquent and brave. She had learned that she inherited a faulty copy of a gene, BRCA1, that put her at high risk for invasive breast cancer as well as ovarian cancer. Now women everywhere are asking: Should I get the same test? What will it cost?

Only one in about 400 women carry mutations to BRCA1 or to a related gene BRCA2, though such hereditary defects are implicated in between 5 percent and 10 percent of all breast cancers. The majority of the 230,000 cases of breast cancer diagnosed annually in the United States are not related to these genes. But if you’re that one in 400 women, you’d want to know so you could make informed decisions about your health care.

Unlike routine tests for diabetes or high cholesterol, however, the BRCA gene evaluation — performed by only one company in the United States, Myriad Genetics — is phenomenally expensive, with a “list price” close to $4,000 when a related genomic-rearrangement test is included in the analysis, which oncologists typically recommend.

The question is why? Today, molecular scientists like me can sequence all of an individual’s genes — at least 20,000 of them — for about $1,000. About five cents per gene.

(More here.)

GOP attempts at muckraking not affecting public's view of the president

Obama’s rating steady in face of controversies, likely buoyed by rising economic hopes

By Jon Cohen and Dan Balz, WashPost, Published: May 20

Majorities of Americans believe that the Internal Revenue Service deliberately harassed conservative groups by targeting them for special scrutiny and say that the Obama administration is trying to cover up important details about the terrorist attack in Benghazi, Libya, that killed four Americans last year.

But a new Washington Post-ABC News poll also finds that allegations of impropriety related to the controversies have yet to affect President Obama’s political standing.

The president’s approval rating, at 51 percent positive and 44 percent negative, has remained steady in the face of fresh disclosures about the IRS, the Benghazi attack and the Justice Department’s secret collection of telephone records of Associated Press journalists as part of a leak investigation.

A bare majority of Americans say they believe that Obama is focused on issues that are important to them personally; just 33 percent think so of congressional Republicans. Brighter assessments of the economy may be one reason that the president has been able to weather controversies. For the first time since the 100-day mark of Obama’s first term, most say they are optimistic about the direction of the economy. More than half, 56 percent, say the economy is on the mend, the most to say so in polls since 2009.

(More here.)

A battle that will never end: the government vs. the press

Stop the Leaks

By WILLIAM P. BARR, JAMIE S. GORELICK and KENNETH L. WAINSTEIN, NYT

WASHINGTON — FOLLOWING the disclosure that the Justice Department obtained the telephone records of Associated Press journalists, The A.P. and other news organizations have sharply criticized the action as investigative overreaching and unwarranted interference with the ability of journalists to report on government operations.

As former Justice Department officials who served in the three administrations preceding President Obama’s, we are worried that the criticism of the decision to subpoena telephone toll records of A.P. journalists in an important leak investigation sends the wrong message to the government officials who are responsible for our national security.

While neither we nor the critics know the circumstances behind the prosecutors’ decision to issue this subpoena, we do know from the government’s public disclosures that the prosecutors were right to investigate this leak vigorously. The leak — which resulted in a May 2012 article by The A.P. about the disruption of a Yemen-based terrorist plot to bomb an airliner — significantly damaged our national security.

The United States and its allies were trying to locate a master bomb builder affiliated with Al Qaeda in the Arabian Peninsula, a group that was extremely difficult to penetrate. After considerable effort and danger, an agent was inserted inside the group. Although that agent succeeded in foiling one serious bombing plot against the United States, he was rendered ineffective once his existence was disclosed.

(More here.)