U.S. Congress

The elimination of the F-22 from the defense funding bill passed by the House yesterday was billed as a major victory for President Obama and Defense Secretary Gates, as this list compiled by the AP shows, the House still managed to fund quite a few expensive programs that nobody at the White House or Department of Defense had asked for:

VH-71 presidential helicopter — Obama recommended just $85 million for program termination costs after the troubled helicopter received $835 million this year. The House provided $400 million, drawing a White House veto threat.

F-35 alternative engine — The House provided $560 million for the alternative engine; Obama proposed "zeroing out" the second engine project and threatens a veto if the final bill would "seriously disrupt" the overall F-35 program.

C-17 cargo jets — Obama wants to kill the program and requested only $91 million to shut down the production line. Congress funded eight planes in this year's war funding bill; the House bill provides $674 million for three more planes.

Kinetic Energy Interceptor — Obama requested no funding for the Kinetic Energy Interceptor, aimed at shooting down enemy ballistic missiles during their boost and early mid-course phases of flight. The House provided $80 million.

The idea of spending an addition $400 million for a presidential helicopted that the president doesn't want is obscene enough, but there's plenty more pork to go around, as Jeffrey Smith of the Washington Post wrote yesterday:

Although President Obama has repeatedly criticized earmarks, the White House statement of policy on the House bill obliquely criticized only "programs that fund narrowly focused activities." No mention was made of items such as a proposed $8 million Defense Department grant Murtha inserted for Argon ST, a Pennsylvania military contractor that has contributed $35,200 to him in the past four years, or of a $5 million grant Rep. C.W. Bill Young (R-Fla.) inserted for DRS Technologies, a Florida contractor that has contributed $46,350 to Young during that period, according to Taxpayers for Common Sense.

The White House criticized the addition of $80 million for the Kinetic Energy Interceptor program, which Gates and other Pentagon officials have said is technically troubled, behind schedule, and billions of dollars over budget. But Northrop Grumman, the principal contractor, is building a technology center in Murtha's district that would bring 150 related jobs, and Murtha's subcommittee sought its continuation as a way "to recoup the technology," according to an appropriations staff member, who was not authorized to speak on the record.

As Taxpayers for Common Sense notes, another contractor on the KEI is Kuchera Defense Systems, a contractor tied to Murtha that was raided by the FBI several months ago.

The Center for Defense Information's Winslow Wheeler, who predicted on FP back in April that Gates' efforts at procurement reform wouldn't address the underlying flaws in the process gave an interview with Military.com yesterday, in which he described the situation the U.S. Armed Forces now finds itself in as a consequence of out-of-control "Murthaism:" (my emphasis)

We have today, a World War II high in spending in inflation-adjusted dollars, but we now have the smallest army, the smallest navy, and smallest air force we've ever had since the end of World War II and the inventory for major systems is on average older than its ever been before. We're now at a totally outrageous 20 years per tactical aircraft. And training rates are below what they were during the so-called "hollow years" of the Carter administration.... More money has, quite literally, made our defenses worse.

South Carolina Senator Jim DeMint says the armed ouster of Honduran President Manuel Zelaya is no more a coup than Al Franken's recent Minnesota Senate victory:

Well...yes, they would have been exactly the same if the Minnesota national guard had broken into Norm Coleman's bedroom in the middle of the night and put him on a plane to Wisconsin. 

(Hat tip: UN Dispatch)

The Wall Street Journal leads with a great investigative piece on the overseas trips of members of U.S. congress. The travel tab, charged to the taxpayer, has increased ten-fold since 1995 -- and many trips are of, well, dubious importance to U.S. citizens. Money quote:

Last summer, Rep. Brian Baird (D., Wash.) took a four-day trip to the Galápagos Islands with his wife, four other lawmakers and their family members. The lawmakers spent $22,000 on meals and hotels, records show. Mr. Baird, a member of the House Science Committee, said the trip was to learn about global warming.

On the first day, lawmakers toured a breeding center for giant tortoise and land iguanas before dining with scientists, according to an itinerary for the trip. The next morning, lawmakers headed to the Galápagos National Park while their family members had the option of hiking, swimming or shopping. That afternoon, the group boarded a boat to visit a sea-lion colony and search for white-tip sharks.

Mr. Baird didn't respond to a request for comment.

Reporting on the launch of the new congressional "sovereignty caucus," a group of GOP senators opposed to international law and institutions, David Weigel writes about how the confirmation battle over Harold Koh could set the stage for a confrontation over the long-debated Law of the Sea treaty and a few others:

While Republicans and conservative activists were disappointed by the confirmation of Koh, the long delay leading up to the vote and its relative closeness — 65 to 31 to end debate on the nomination and 62-35 to confirm him — have boosted their hopes of successfully battling treaties that they characterize as threats to American rights and national interests. Treaties need the votes of 67 senators to be ratified, and can gum up the business of the Senate for weeks if they become flash points for controversy. The Convention on the Rights of the Child, for example, has convinced Rep. Pete Hoekstra (R-Mich.) — a member of the House Sovereignty Caucus — to introduce a Constitutional amendment protecting the right of American parents to discipline their children and send them to religious schools.

Those hopes are likely to be tested at least twice this year. According to staffers for the Senate Foreign Relations Committee, the United Nations Convention on the Law of the Sea, or the Law of the Sea Treaty — a 1982 treaty that governs the right of countries to use the oceans — could be reintroduced next month. And President Obama is in Russia this week in part to move forward the Comprehensive Nuclear-Test-Ban Treaty, the 1996 agreement on weapons testing that was rejected by the Senate in 1999, when the upper chamber contained 55 Republicans and 45 Democrats. Of the 16 treaties that the State Department included on its priority list in a May 11 letter to the committee, both sides agree that these two will be the first to face full votes. And both sides agree that the Koh vote provided a good idea of the support these treaties might command from a very skeptical Senate Republican conference.

“The vote against Harold Koh is probably the minimum vote against both of those treaties,” said John Bolton, who served as U.S. ambassador to the United Nations under George W. Bush, and who has been a forceful critic of both treaties. “I think that a lot of Republicans, whether they agreed or disagreed with Koh’s views, basically agreed that president had the right to appoint his own team. Whether they would also support these treaties, given their concerns about national sovereignty, is another question.”

Commander James Kraska of the Naval War College made the case for Law of the Sea on FP back in February, arguing that by holding up ratification, congress is only aiding China's efforts to unilaterally redefine international law. Law of the Sea is just one of those issues doomed by the fact that not that many people care about it, but those who, care about it a lot. 

Methinks Pakistan's president needs to fire his PR advisors:

The first audience for the pitch was Congress, as President Asif Ali Zardari of Pakistan met privately for 90 minutes with members of the House Foreign Affairs Committee. [...]

Mr. Zardari’s presentation ... left some members confused and disappointed, according to a person who attended the meeting. He said little about how the Pakistani government planned to regain momentum in the fight against the militants. And when he asked for financial assistance, he likened it to the government’s bailout of the troubled insurance giant, American International Group.

Today, U.S. Treasury Secretary Timothy Geithner and President Barack Obama laid out a plan to create and enforce stricter tax regulations for U.S. corporations. Obama's opening salvo from the presser:

Most Americans meet their responsibilities because they understand that it's an obligation of citizenship...and yet, even as most American citizens and businesses meet these responsibilities, there are others who are shirking theirs. 

He went on to describe the U.S. tax code as "full of corporate loopholes that [make] it perfectly legal for companies to avoid paying their fair share."

That's right. He was talking about "tax havens": not just countries in which major U.S. corporations hide from U.S. taxes, but a big fat open season sign for fire and brimstone metaphors and sword of Damocles swinging. Democratic speechwriters must adore tax havens. They're like the Newt Gingrich of tax policy: always there to beat up.

Rhetorical fury aside, tax havens really do allow U.S. companies to shore up a whole lot of money, money which Obama hopes to use to revamp the U.S.'s healthcare system, among other things. Interesting factoids from the Treasury release: 

• In 2004, the most recent year for which data is available, U.S. multinational corporations paid about $16 billion of U.S. tax on approximately $700 billion of foreign active earnings -- an effective U.S. tax rate of about 2.3 percent
• A January 2009 GAO report found that of the 100 largest U.S. corporations, 83 have subsidiaries in tax havens.
• In the Cayman Islands, one address alone houses 18,857 corporations, very few of which have a physical presence in the islands.
• Nearly one-third of all foreign profits reported by U.S. corporations in 2003 came from just three small, low-tax countries: Bermuda, the Netherlands, and Ireland.

The closing of three major tax haven loopholes should garner $190 billion in tax revenue for the government in the next ten years. 

Another big beneficiary of the changes? Lobbyists. Corporate America isn't going to like this -- and they're going to pay a lot of money to see the repeal of these changes.  

Again, very, very bad news for the U.S. economy: after contracting at a 6.3 percent annual rate in the final quarter of 2008, it contracted at a 6.1 percent rate in the first quarter of 2009.

That means the economy shrank 2.6 percent compared with last year's first quarter. It's a point-and-a-half higher annualized rate than economists predicted. 

What's most worrisome is that the recession isn't easing at all, yet -- there's no real bottom there. We aren't close to talking about the economy growing again. We're still waiting for it to shrink less quickly. 

The only green shoots: economists believe that inventory and production are so anemic that any rise in demand will force businesses to grow -- that would be a good thing. And consumer spending rose 2.2 percent. 

One question. The Wall Street Journal reports, "Federal government spending decreased 4.0%, after rising in the fourth quarter by 7.0%. State and local government outlays fell 3.9%, after going down by 2.0% in the fourth quarter."

Even with cuts in military spending, shouldn't that number go up? 

CQ's Jeff Stein writes, in an explosive story today, that California Representative Jane Harman was recorded on an NSA wiretap telling a suspected Israeli agent that she would intervene on behalf of American Israeli Public Affairs Committee officials, who were being charged with espionage:

Harman was recorded saying she would “waddle into” the AIPAC case “if you think it’ll make a difference,” according to two former senior national security officials familiar with the NSA transcript.

In exchange for Harman’s help, the sources said, the suspected Israeli agent pledged to help lobby Nancy Pelosi , D-Calif., then-House minority leader, to appoint Harman chair of the Intelligence Committee after the 2006 elections, which the Democrats were heavily favored to win.

Seemingly wary of what she had just agreed to, according to an official who read the NSA transcript, Harman hung up after saying, “This conversation doesn’t exist.”

...

The identity of the “suspected Israeli agent” could not be determined with certainty, and officials were extremely skittish about going beyond Harman’s involvement to discuss other aspects of the NSA eavesdropping operation against Israeli targets, which remain highly classified.

But according to the former officials familiar with the transcripts, the alleged Israeli agent asked Harman if she could use any influence she had with Gonzales, who became attorney general in 2005, to get the charges against the AIPAC officials reduced to lesser felonies.

AIPAC official Steve Rosen had been charged with two counts of conspiring to communicate, and communicating national defense information to people not entitled to receive it. Weissman was charged with conspiracy.

AIPAC dismissed the two in May 2005, about five months before the events here unfolded.

Harman responded that Gonzales would be a difficult task, because he “just follows White House orders,” but that she might be able to influence lesser officials, according to an official who read the transcript.