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.  

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.

According to Stein's story, Justice Department attorneys were prepared to charge Harman, but Gonzales intervened on her behalf in exchange for her support during the forthcoming scandal over the NSA's warrantless wiretapping program. And she did whole-heartedly defend the program when it was revealed in the New York Times. Ironically, Harman may turn out to be the highest profile victim of an NSA wiretap to date. 

Thankfully, nobody actually benefited from this exchange: Harman never got her chairmanship, the justice department still charged the AIPAC officials, and Gonzales was forced to resign, partly because of the NSA scandal.

If this is true, it's corruption on an awe-inspiringly audacious scale on Harman and Gonzeles's part. But former CIA directors Porter Goss and Michael Hayden as well as former director of national intelligence John Negroponte were all informed of the wiretap and allowed Gonzales to protect her.

It also makes one wonder how extensive the NSA wiretapping of members of congress was during this period and what other past phone conversations are keeping congressional leaders up at night right now. The Harman tap was part of a larger investigation of Israeli covert action in Washington and it's hard to imagine that she was the only member they were looking at.

Writing in the Washington Times, Audrey Hudson and Eli Lake report that the Department of Homeland Security has produced and disseminated a nine-page report on the threat of "rightwing extremist activity," spurred by the global economic crisis, election of a black president, and the return of "disgruntled war veterans."

The nine-page document was sent to police and sheriff's departments across the United States on April 7 under the headline, "Rightwing Extremism: Current Economic and Political Climate Fueling Resurgence in Radicalization and Recruitment."

It says the federal government "will be working with its state and local partners over the next several months" to gather information on "rightwing extremist activity in the United States"....

"Most statements by rightwing extremists have been rhetorical, expressing concerns about the election of the first African American president, but stopping short of calls for violent action," the report says. "In two instances in the run-up to the election, extremists appeared to be in the early planning stages of some threatening activity targeting the Democratic nominee, but law enforcement interceded." 

In producing the report, the United States joins numerous European countries facing possible right-wing nationalist activity. But Europe's long-struggled with nationalism stoked by immigration from ethnic minorities; it has right-wing anti-immigration political parties, mainstreaming sentiment which might otherwise be considered or become extremist.

In Great Britain, the Labour Party has worried that the British National Party, which condemns "non-white immigration," may win a Parliamenary seat. So have parties in Austria and Turkey.

The war cries to bring down Somali pirates are deafening this morning (Obama has promised to do so), but none more alarming than this report from Bloomberg:

The U.S. military is considering attacks on pirate bases on land and aid for the Somali people to help stem ship hijackings off Africa’s east coast, defense officials said.

Does the United States know what they're getting into? Piracy experts have long suggested that the root of the problem is indeed on land. But air strikes on Somali bases would be dangerously close to a U.S. military operation in Somalia -- the kind that the country has avoided since Blackhawk down in 1994.

Let's think hypothetically about what might happen if strikes go ahead. U.S. onland intervention will surely anger al Shabaab, the Islamist militant wing that controls an alarming percentage of Somali territory and is the biggest single threat to Somali stability. Already, the Somali government is struggling to convince the country that its relatively pro-Western stance is for the greater good. That argument will lose all weight if and when the U.S. starts airstrikes. Forget about the government's effectiveness, and forget about any hopes that al Shabaab will disarm. This would fuel the fire. No, we shouldn't kneel to the demands of al Shabaab, but nor should we ignore that their ire will be taken out on the already dilapidated Somali population. 

Talk about an escalation.

To be fair, the rumored U.S. plans includes the creation of a Somali coast guard, and support for the Somali government. U.S. Congressman Donald Payne, long a Somalia pragmatist, made a daring visit to Mogadishu today to talk about how the U.S. can help the Somalis fight piracy. But the fact that his plane was shot at only proves how difficult a situation we are walking into.

If we have learned anything about Somali over the last two decades, surely it is that military escalation (this one included) will inevitably breed more chaos. And if we have learned anything about the pirates, it is that chaos on land breeds impunity at sea.

Photo: MOHAMED DAHIR/AFP/Getty Images

Opening up diplomatic dialogue with Cuba is one thing, this is another:

“It was almost like listening to an old friend,” said Rep. Bobby Rush (D-Il.) [after meeting with Fidel Castro], adding that he found Castro’s home to be modest and Castro’s wife to be particularly hospitable.

“In my household I told Castro he is known as the ultimate survivor,” Rush said.

For the most part, the Congressional Black Caucus's meeting with Castro seems to have been quite a lovefest. Fidel seems to have gotten a bit creative in his recollection of it, though:

In a statement following the meeting today, Castro said that the delegation had expressed to him that a segment of American society “continues to be racist,” and is at least partly to blame for the travel restrictions.

But the delegation this evening said those remarks were not expressed in the meeting.

“That did not happen,” Rep. Emanuel Cleaver (D-Mo.), told reporters.

Without in any way condoning the embargo or the diplomatic isolation of Cuba, the CBC's visit seems to have been about the worst way to engage the regime -- almost a parody of the way Barack Obama's campaign pledges of reaching out to hostile regimes was characterized as appeasement by his opponents. 

ADALBERTO ROQUE/AFP/Getty Images

I see that American officials in Israel are outraged that U.N. staffers had the temerity to hand John Kerry, who was touring Gaza recently, a letter purportedly from Hamas to U.S. President Barack Obama. And the Senate Foreign Relations Committee chairman himself has now caught the vapors:

Kerry turned the letter over to the U.S. consulate in Jerusalem on Friday and his spokesman told FOX News that the Democratic senator was not aware that the letter was from Hamas when he accepted it from an official with the U.N. relief agency.

Kerry told FOX News that he never read the letter because it was sandwich among other promotional papers the U.N. gave him. A State Department official confirmed to FOX News that it was from Hamas and is now under review.

A potential concern was whether such a letter would violate the United States' policy toward Hamas. Obama has said his administration will not engage in diplomatic talks with Hamas unless the group renounces terrorism and affirms Israel's right to exist.

This is all rather silly. What's the harm in accepting a letter? There's no obligation to do anything with the information. And shouldn't U.S. officials at least be interested to see what Hamas, or those claiming to be its representatives, have to say? Even if its clear that Hamas has no intention of recognizing Israel anytime soon, this policy of pretending that the group doesn't exist -- even as it steadly takes over the Palestinian territories -- is completely baffling to me.

MOHAMMED ABED/AFP/Getty Images

All may not be lost for McCain-supporting Democratic Sen. Joe Lieberman. It seems President-elect Obama won't be kicking him to the party curb after all. Apparently, supporting the opposition -- campaigning with Republican candidate John McCain, speaking at the Republican National Convention, and criticizing Obama's foreign policy cred -- wasn't enough of an offense against Obama to get Lieberman banished from the party altogether.

Not all Democrats are in a forigiving mood, though. Many, like Majority Leader Harry Reid, are still gunning to strip Lieberman of his chairmanship of the Homeland Security and Governmental Affairs Committee. Senate Democrats are set to vote next week on whether or not Lieberman will keep his chairmanship. If Lieberman has spent any time kissing the reigning party's behind since the election in an attempt to keep his spot, he's not exactly apologizing for his recent behavior. Lieberman says he'll walk if he loses his gavel.

I have to get behind Connecticut Sen. Chris Dodd's advice that Obama stay out of this one and avoid a political mess. Why would the president-elect waste such precious time and energy haggling over a Senate seat? And even more to the point, over Lieberman? Let's not gloss over Lieberman's voting recording. While he's fond of saying it's 90 percent in line with Democrats, it tends to go against the next administration's plans when it comes to matters of foreign policy -- Iraq and Iran to name two biggies.

The Connecticut senator has shown himself to be a hardy politician, one who's stayed afloat by swinging between parties. This time Lieberman played his hand, hoping to get another shot at the VP seat, and he bet poorly -- on McCain. If there's a pity party in his honor, I won't be going.

Brendan Hoffman/Getty Images

The media circus surrounding the upcoming U.S. presidential elections and the candidates' constant reversion to rehearsed talking points in both the debates and interviews might leave you feeling jaded about the value of media political coverage. But rather than hope for the hoopla to stop, perhaps we should pray that it continues.

 

A recent study by political scientists at MIT and IIES, a research institute in Stockholm, suggests that in the long run media attention really does make politicians -- or U.S. congressmen, anyway -- more accountable:

Congressmen who are less covered by the local press work less for their constituencies: they are less likely to stand witness before congressional hearings, to serve on constituency-oriented committees, and to vote against the party line… Federal spending is lower in areas where there is less press coverage of the local members of congress.

The study set low standards for what counts as press coverage; the researchers simply looked at how often a politician's name is mentioned in local newspapers, which makes the apparent impact of such coverage all the more surprising. The study also finds that press coverage of local politicians is lower in areas where residents get their news from media sources that cater to multiple political districts. Bad news for local readers of the Washington Post and the New York Times?

In sheer economic terms, I tend to doubt that unless Congress puts together a bailout bill before Monday -- as seems to be the emerging conventional wisdom -- all hell will break loose in markets around the world. As Raghuram G. Rajan told FP earlier this week, the U.S. government's recent moves have actually given the economy some breathing room:

I think three actions by the regulators have bought us a little bit of time. First, guaranteeing the money-market funds. The second was taking some of the pressure off Goldman Sachs and Morgan Stanley by allowing them to become bank holding companies. And third, announcing the fact that the government was serious about fixing the system.

That said, Senate Majority Whip Dick Durban makes a good point here when he says, "If we start talking about another week or two, it will take another week or two." What's more, opportunistic members of Congress will only have more chances to lard up the legislation with irrelevant, possibly harmful additions. So, I can understand why President George W. Bush wants to see action sooner rather than later -- even if it isn't quite as urgent as he says it is.

I could, of course, be catastrophically wrong, and the markets could seize up Monday if Congress doesn't pass a bill.

Here's what to look for. Forget about stocks for the moment. Since the main problem that is keeping Ben Bernanke and Hank Paulson up nights is financial institutions' unwillingness to lend to one another, that's what we should really be paying attention to. The key indicators to watch in this regard are the so-called TED spread and, relatedly, LIBOR. Here's what the TED spread is doing these days:

As you might be able to infer, up is bad. If it spikes any further on Monday, we are all in big trouble.

Despite the usual comments about the need to keep comments short, the senators are still bloviating. Meanwhile, the first pictures of Hank Paulson and Ben Bernanke are now dribbling in. Do these look like men who are happy to be sitting in front of the Senate Banking Committee this morning?

I see now that Democratic Sen. Chris Dodd has come forward with his own proposal for fixing the U.S. financial system. Dodd, who chairs the Senate Banking Committee, is calling for more oversight of the Treasury Department, limits on executive pay (a red herring), and for the government to be able to get equity stakes in companies that take the bailout (potentially a good idea, but also a can of worms).

You'd have to think that even President George W. Bush and Treasury Secretary Hank Paulson, who sent Congress a bare-bones bill with zero oversight provisions, had to see this coming. In fact, I think they want Democrats to take this legislation and run with it. Why? Because once the Democrats put their stamp on the bill, they'll no longer be able to hang any failure around Bush's neck. It'll be their failure, too.

UPDATE: Republican blogger Patrick Ruffini evidently agrees:

Republican incumbents in close races have the easiest vote of their lives coming up this week: No on the Bush-Pelosi Wall Street bailout.

God Himself couldn't have given rank-and-file Republicans a better opportunity to create political space between themselves and the Administration. That's why I want to see 40 Republican No votes in the Senate, and 150+ in the House. If a bailout is to pass, let it be with Democratic votes. Let this be the political establishment (Bush Republicans in the White House + Democrats in Congress) saddling the taxpayers with hundreds of billions in debt (more than the Iraq War, conjured up in a single weekend, and enabled by Pelosi, btw), while principled Republicans say "No" and go to the country with a stinging indictment of the majority in Congress.

I think Joe Biden is a smart choice for Barack Obama. With nearly 36 years in Washington and much of it atop the Senate Foreign Relations Committee, the Delaware senator's got decades of knowledge about how the U.S. national-security apparatus works and a clear-eyed, unromantic view of America's role in the world.

This experience has made Biden nothing if not extremely confident in his views, which makes him well suited to play the role of Democratic attack dog on foreign policy.

One of his favorite tactics is ridicule: Everyone remembers him saying that a Rudy Giuliani sentence has only three words: "a noun, a verb, and 9/11" during the primary season. But Biden's a pretty serious guy, too. He believes Democrats, who usually poll below Republicans on national security, shouldn't "play defense on foreign affairs," and he leads by example in his frequent op-eds and appearances on the Sunday talk shows.

Watch him take on President Bush here on Meet the Press:

The big rap on Biden, of course, is that he's gaffe-prone and likes to talk, and that's certainly true. Dana Milbank had some fun with the prolix Delaware senator after his questioning of Bush Supreme Court nominee Samuel A. Alito Jr.:

Sen. Joseph R. Biden Jr. (D-Del.), in his first 12 minutes of questioning the nominee, managed to get off only one question. Instead, during his 30-minute round of questioning, Biden spoke about his own Irish American roots, his "Grandfather Finnegan," his son's application to Princeton (he attended the University of Pennsylvania instead, Biden said), a speech the senator gave on the Princeton campus, the fact that Biden is "not a Princeton fan," and his views on the eyeglasses of Sen. Dianne Feinstein (D-Calif.).

Biden's got a good sense of humor about it, though: Watch him eat humble pie on the Daily Show just after he called Barack Obama "the first mainstream African-American... who is articulate and bright and clean and a nice-looking guy." Asked during one of the Democratic debates if he thought he could control himself as president, he simply said, "Yes."

But as much as he likes to talk, Biden's actually a pretty nuanced foreign-policy thinker. He doesn't have strong ideological views, so he's hard to pigeonhole. Looking over his statements and policies over the years, I'd say he hews to a pragmatic form of liberal internationalism backed by American power. I think he takes his responsibilities very seriously.

He uses the term "national interests" frequently, but he's not quite a Scowcroftian realist -- as his push for action in the Balkans and Sudan demonstrates. Nor is he quite a "liberal hawk," either. He has little patience for sweeping rhetoric about how the United States is bringing freedom and democracy to Iraq, and he doesn't (unlike certain other Democratic senators who were passed over for veep) default to the hawkish position on national security just for the sake of sounding "tough". He believes that some situations call for toughness (Sudan) while others call for engagement (Iran). He understands both the need for and the limits of multilateral institutions, and he doesn't see multilateralism as an end in itself, unlike some in his party.

That said, Biden doesn't bat 100 percent. He went ahead and supported the Iraq war despite warning that President Bush was underestimating the risks (he now says he didn't realize Bush would be so incompetent and that he thought Saddam could be deposed by other means). He called the surge "a tragic mistake" in February 2007 while John McCain has backing it wholeheartedly.

But he has gotten lots of other issues right, in my view: He has been calling for years for more resources in Afghanistan, for a more coherent U.S. relationship with Russia, for engagement with Iran, for a broader U.S. strategy toward Pakistan, and so on.

How much influence will Biden have on Obama's foreign-policy views? We'll have to see. But I imagine it will be considerable. Biden doesn't seem like the kind of guy who will simply stick to the talking points he's handed. Should be fun to watch.

With the space shuttle set to retire in 2010, and its replacement not ready until 2015, the United States had been planning on hitchhiking to the International Space Station for a few years. That may be a bit of a problem now, as the one country with the ability to transport to and from the station turns out to be -- you guessed it -- Russia.

Beyond the rising rhetorical showdown between the two sides, there's also a legal roadblock that may prevent further space cooperation with Russia. The United States needs to negotiate a new contract with the Russian space program, which may be difficult because Congress must first pass a waiver to a 2000 law banning government contracts with states who supported nuclear programs in North Korea and Iran. That includes -- you guessed it -- Russia.

In an election year with an increasingly bellicose Moscow, that's "almost impossible," says Florida Sen. Bill Nelson, a supporter of the waiver who admits America is stuck between a rock and a hard place:

It is a lose-lose situation," Nelson said.

"If our relationship with Russia is strained, who knows if Russia will give us rides in the future?" Nelson asked. "Or if they give us rides, will they charge such an exorbitant price that it becomes blackmail?"

Still, who knows what relations with Russia will be like in 2010? Even if the Cold War is truly back, that doesn't necessarily spell the end of U.S.-Soviet -- er, Russian -- space cooperation. A lot could change in the next few years.

Walter Pincus reports today on a surprisingly large allocation of U.S. federal funds for cyber security:

A highly classified, multiyear, multibillion-dollar project, CNCI -- or "Cyber Initiative" -- is designed to develop a plan to secure government computer systems against foreign and domestic intruders and prepare for future threats. Any initial plan can later be expanded to cover sensitive civilian systems to protect financial, commercial and other vital infrastructure data."

The cyber security issue is a tricky one. For lack of a better option, the job of protecting government computer systems has fallen to the Department of Homeland Security (DHS), although the Air Force is an active player. The Navy and the Army also have their own programs.

I called James Lewis, an expert at the Center for Strategic and International Studies, to get some insight. He told me that the White House was becoming concerned because "DHS hasn't really done anything" on the issue of cyber security. "Some of it's internal squabbling" he says, "but they just can't seem to get their act together. You hear [Defense Secretary Robert] Gates and [Director of National Intelligence Mike] McConnell talking about it, but you never hear anything from [DHS Secrtary Michael] Chertoff."

So far, CNCI has been criticized for being too secretive, though the initiative is a step forward overall. In fact, it's good news that someone is finally starting to take this seriously. Both presidential candidates have expressed a committment to improving cyber security. Senator Obama has said he will appoint a "national cyber advisor" and will make the issue "the top priority that it should be in the 21st century." Senator McCain has pointed to a need to "invest far more in the federal task of cyber security" in order to protect strategic interests at home.

Knowing just who is supposed to be in charge of cyber security would be a good start. As Lewis points out, "It's not something you can do on an ad hoc basis like we've been doing for the past several years," adding, "We need to be better organized and better at assigning responsibilities."