Sen. Richard Shelby and the horrible hold

Posted By Annie Lowrey

The big news in Washington -- aside from Snowpocalpyse Part II/#snOMG/Snowmageddon 2/panic caused by relatively common weather -- comes from the office of Sen. Richard Shelby, Republican of Alabama.

Yesterday, TPM reported, Shelby slapped a hold on all of Obama's nominees pending in Congress. Every last one. Why? Pork. Shelby is angry that two appropriations -- one for an air-to-air refueling program and one for a new FBI lab -- haven't come his state's way just yet.

The political maneuver and its optics are laughably terrible. On the Hill, everyone is talking about obstructionism, the deficit, and cutting government spending -- and yet, Shelby decided to go for the nuclear option on nominees over two pet projects. It's a gift to Obama, really, and Democrats are taking advantage. White House Press Secretary Robert Gibbs was unsparing in slamming Shelby during today's press conference.  Democrats will hit this hard for weeks now.

Shelby's maneuever hypothetically could push Majority Leader Sen. Harry Reid to call the Alabama senator's bluff. Reid could bring the nominees onto the floor and force Republicans to filibuster them. Republicans would have to band together, all 41 of them, to prevent the nominees from being voted upon and confirmed. It would likely be a good political moment for Democrats. But it would cost precious floor time, delaying Obama's policy agenda further. The whole scenario is highly unlikely, especially because Republican leadership was reportedly not in the loop with Shelby's drastic plan

And Republicans would likely have objected to it -- particularly because of Shelby's holds on national security nominees. Generally, diplomatic, national security, intelligence, and military appointmees aren't hit with senatorial holds without good, good reason. But Shelby's blanket hold, he says, applies to all of the scores of nominees working through the congressional process.

His office released a statement today saying, "Sen. Shelby has placed holds on several pending nominees due to unaddressed national security concerns" -- arguing that the projects he wants fast-tracked are vital to the homeland.

This is, well, not true. What is true that the number of security and diplomatic appointees left unconfirmed does no good for the government or the people -- a point Reid made on the floor this week, when he bashed senate holds on three intelligence nominees -- all highly vetted and entirely non-controversial candidates. 

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Stephen Colbert wags his finger at Foreign Policy

Posted By Annie Lowrey

For FP contributor Jeff Stein spoiling a surprise in former CIA operative John Kiriakou's upcoming book. Our bad, Colbert.

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Forget debt, let's talk rice

Posted By Annie Lowrey

David Roodman of the Center for Global Development has a thoughtful response to my blog post (responding in turn to his initial post) on the growing calls to cancel Haiti's debt.

To summarize, David and I are discussing whether debt relief for Haiti is A) a good thing and B) should be a priority -- we agree on A (yes) and disagree somewhat on B. David argues that debt payments aren't going to be an issue in the foreseeable future, and that countries like Venezuela shouldn't get points for relieving relatively small sums of debt -- particularly if they aren't also providing significant aid, which is more important in the near and medium term. I say there's a short window in which to ask for countries to throw in the kitchen sink, so why not, particularly given debt's historical choke-hold on Haiti and given that three or ten years from now, Haiti will still be poor and in debt. Lots of others have good commentary on the subject, including Daniel Altman and Alex Tabarrok.

Ultimately, I still believe there's room and reason to ask for debt forgiveness -- if not now, then when? But it made me wonder about aid effectiveness -- if you're giving x dollars of aid, what provides the maximum benefit: debt forgiveness, direct governmental grants, funding specific programs, ending agricultural subsidies?

Development economists, of course, research this question, well, exhaustively. And the answer? It's now always clear -- or, there's no general rule. Academically, a dollar of debt relief is worth more than a dollar of granted aid. In reality, the level of indebtedness, degree of governmental corruption, relevant economic fundamentals, and the entities doing the lending all matter considerably.

But there's consensus on what other countries can be doing, should be doing, and are doing now. Haiti needs material support (water, batteries, medical supplies, etc.) and cash aid. But the United States, especially, should also think about remittances and immigration. Here, Michael Clemens and Amanda Taub argue for giving Haitians temporary protected status in the States. In the longer term, the United States might consider taking a close look not just at debt, but also at rice.

No, really, cancel Haiti's debt

Posted By Annie Lowrey

Over at the Center for Global Development's blog, David Roodman argues that calls to cancel Haiti's debt (currently around $1.25 billion) are misguided.

The question is whether to go further than debt service suspension, to drop Haiti's debt outright, as non-governmental organizations, members of Congress, and others have demanded. Actually, the practical question for citizens, officials, politicians, campaigners, and other players is whether to push for that. On a few days' reflection, I say no. I would go so far as to describe such pressure as harmful.

Why? For starters, the benefits of debt relief over the next few years, however done, will be tiny.... IDB debt is already costing Haiti nothing. Roughly half the remaining debt service is payable to Taiwan and Venezuela, which may be less susceptible to campaigning from western officials and non-governmental organizations (NGOs). In play then, is perhaps as little as $25 million over the next three years.

He includes this image to illustrate the point:

Roodman ultimately argues not that it wouldn't be a good thing to cancel Haiti's debt, but that it is unwise to advocate for it: The world should focus on grant-making on a massive scale, rather than debt forgiveness on a rather small one. He writes:

I fear that calls to cancel Haiti's debt are the old shoes of political activism. They make superficial sense. They feel good. But they will hardly help Haiti recover from the quake. And in a crisis, if you're not helping, you're in the way. I hope that the politicians and activists responding with vigor and sincerity to this crisis will act also with the gravity it demands.

To a certain extent, I agree with him. I can't imagine anyone expecting Haiti's government to repay any time soon, nor will it be able to do so. Massive donations will benefit Haiti much more than small-scale debt forgiveness. Still, I think debt forgiveness is a worthy goal.

For one, Roodman's fear that international governments and institutions might neglect aid for debt relief seems misplaced. For instance, Christine Lagarde, finance minister of France, arranged not just for the Paris Club to rush its debt-forgiveness program, but also for France to up its donation to the country. Institutions and governments are likeliest to take dramatic measures to help Haiti now, rather than three years from now, when the country will still be in a horrible spot but international interest will have waned. The opportunity in this crisis exists now.

This is precisely the point the New York Times' editorial made today: "Three weeks after Haiti's earthquake, the search for survivors has been called off, the TV crews are trickling home, and the celebrity telethon is over -- usual signs that the floodwaters of compassion will be ebbing soon."

Furthermore, I think Roodman underplays the impact of debt payments on Haitian government spending. Sure, aid and remittances will dwarf debt payments next year. But why should the country have to worry about them at all -- ever, even 10 years from now, when Haiti will likely be stable and poor?

I made another chart from data from Haiti's budget. (The Port-au-Prince government, it turns out, posts its budget documents online.) Last year, it shows, Haiti spent around $37 million servicing its debt. (I looked up the numbers in Haitian Gourdes, and performed a current-day currency conversion -- note that the currency has cratered recently.) That's more than the government spent, say, on agriculture -- despite the fact that a massive proportion of Haitians are subsistence farmers. It's more than it spent on its ministry of tourism, despite the fact that tourists once posed the best way for Haiti to bolster its economy in the short term. Had Haiti not had to repay external debt, it could have boosted its education budget by nearly a third.

Haiti's debts remain significant. Moreover, it has garnered new ones, including a $100 million emergency loan from the IMF -- which comes with strings attached, including, for instance, a requirement to freeze government-employee pay. The country's debt has been a millstone around its neck for too long. It has a horrible history of economically encumbering the country. Why, with the outpouring still ongoing, though not for long, let that legacy remain?

Obama's Prime Minister's Questions

Posted By Annie Lowrey

Former British Prime Minister Tony Blair was often magisterial during Prime Minister's Questions, when, as the head of the Labour Party, he would face off against a respectful Tory political adversary, rebutting and opining and arguing and deploying wit before Parliament and the British public.

Today, not so much. Blair faced the Chilcot Inquiry, intense questioning over Britain's decision to partner with the George W. Bush administration and invade Iraq in 2003. The Guardian's Jackie Ashley writes:

The body language said it all. Tony Blair began his day at the Chilcot inquiry visibly strained, even shaking, according to one television channel, which focused on his hands. There was none of the easy charm that we remember from his days as prime minister and he meekly accepted the constant interruptions from the panel, who started off determined not let him drone on for too long.

Across the pond, Barack Obama unexpectedly held his own version of PMQ. During a planned visit to a Republican retreat in Baltimore, Obama not only addressed the assembled members of the House, but answered questions -- and it got feisty. Here's one exchange Obama had with Rep. Jeb Hensarling of Texas.

OBAMA: Jim (sic), I know there's a question in there somewhere, because you're making a whole bunch of assertions, half of which I disagree with. [LAUGHTER] And I'm having to sit here listening to them. At some point, I know you're going to let me answer....

HENSARLING: That's the question.

You are soon to submit a new budget, Mr. President. Will that new budget, like your old budget, triple the national debt and continue to take us down the path of increasing the cost of government to almost 25 percent of our economy? That's the question, Mr. President.

OBAMA: All right. Jim (sic), with all due respect, I've just got to take this last question as an example of how it's very hard to have the kind of bipartisan work that we're going to do, because the whole question was structured as a talking point for running -- running a campaign.

The full video is here and the transcript here -- and it's worth watching and/or reading.

MANDEL NGAN/AFP/Getty Images

Bernanke confirmed for second term as Fed chair

Posted By Annie Lowrey

Ben Bernanke is just one easy vote away from winning a second term as the chairman of the Federal Reserve. (Meaning Janet Yellen doesn't need to pack her bags.) 

Opposition to Bernanke had been brewing since last spring, steeling in the last few weeks as a string of high-profile senators -- Republicans and Democrats, among them Barbara Boxer and John McCain -- said they opposed giving the Princeton academic another term at the helm of the world's most important central bank. 

To explain the nuts and bolts of the process: Several senators had threatened to filibuster Bernanke, preventing the chamber from calling an up-down vote to confirm him. Bernanke's nomination just cleared the high supermajority hurdle to end that debate, with 77 senators voting to get the motion onto the floor. Now, Bernanke needs 51 senators to say yes, which they're planning to do this afternoon.

In the final speech of debate on the nomination, Sen. Chris Dodd said, "This is not some assistant undersecretary of some other agency. This is the central bank chairman of the most important central bank in the world. [Reconfirming Bernanke] is a critically important component in continuing our path to economic recovery." Sen. Jim DeMint is now tweeting his disapproval. 

Shouldn't be going on for too much longer, but interested readers can watch the Senate floor live on C-SPAN here.

Update: Bernanke was confirmed, 70-30.

Chip Somodevilla

That's the banner finding of this poll released today in the Miami Herald, via Ben Smith. The poll paints a picture of a devastated Haitian-American community, which numbers around 530,000 and is centered in Southern Florida. Other statistics: 

  • Three out of five said they lost a loved one in the earthquake, which killed approximately 200,000
  • Two out of three said they would be willing to return to Haiti temporarily to help in the reconstruction
  • The U.S. government and United Nations received high approval ratings for their disaster relief efforts
  • Two in three disapproved of the way the Haitian government handled the disaster (though, to be fair, it was completely destroyed in the quake)
  • Four in five have already sent money, and a vast majority say they would adopt an orphaned Haitian child

As Michael Clemens argues in this Foreign Policy article, and as the Haitian-American community has been vocally advocating, the best way for the United States to help Haiti isn't just to provide sustained aid for rebuilding. It is to allow more Haitians to immigrate and to send remittances back to the devastated nation.

David Friedman/Getty Images

Senate v. House of Lords

Posted By Annie Lowrey

Today, on Fox News Radio (via The Hill), Rep. James Clyburn, the House majority whip, let loose with some nasty words for the upper half of the U.S. bicameral legislature: "[Senators] tend to see themselves as a House of Lords and they don't seem to understand that those of us that go out there every two years stay in touch with the American people. We tend to respond to them a little better."

It's an easy statement to sympathize with. In the past year, the majority-rules House has seemed a paragon of populist efficiency, passing cap and trade and the health care bills with relative ease -- before the Senate's long horse-trading process winnowed public support for the latter, and before the Democrats lost their 60th Senate seat and thus their ability to stop Republican filibusters.

But it left me thinking -- if only the Senate were like the House of Lords!

At the very least, Britain realized that the institution was anti-democratic and unpopular -- and reformed it, diminishing its power and changing its crusty composition. Parliament has progressively reduced the number of hereditary peers, the land-owning barons of old, replacing them with life peers appointed for career excellence. Plus, in the future, Parliament will likely start making peers elected. (See the composition of the House of Lords here.)

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January/February 2010