Outrage Over Latest Round of Bonuses for AIG Employees
by: Grace Huang
truthout|Report

AIG planned to pay out about $100 million in bonuses
Wednesday to many of its employees who worked in a
division of the firm that was largely responsible for
the insurance giant’s spectacular meltdown.

When the company paid out similar bonuses last year, it
led to populist outrage because AIG was the recipient of
a $182 billion bailout from the federal government – the
largest to date – while average Americans were struggling
to find work and save their homes.

Treasury Secretary Timothy Geithner said Wednesday that
the contracts stipulating the payment of the bonuses are
“outrageous” and “never should have been permitted,” though
he noted that they had been signed two years ago before
the government bailed out the company and thus could not
have given any input on the matter.

Testifying before the House Ways and Means Committee today,
Geithner instead drew attention to the administration’s
proposal to make the largest financial institutions pay a
fee as a way to recoup money poured into the financial
sector by the Troubled Asset Relief Program (TARP).

“If you join with us in passing this proposed fee on our
largest financial institutions, you’ll be able to say…
that the American taxpayer will not pay a penny” for AIG’s
role in the financial crisis,” Geithner said.

The retention bonuses are $20 million less than what AIG
would have paid under the original contracts. Current
employees were asked to give up 10 percent of the bonuses,
while former employees were asked to forgo 20 percent. In
return, they would be paid one month earlier, now instead
of in March.

According to unnamed sources quoted in a Washington Post
article, Kenneth Feinberg, compensation czar for the
Treasury, said that he would not sign off on any 2010
compensation packages until the bonus money was returned.

He was “adamant those pledges be honored,” said one quoted
source familiar with the AIG discussions. “It’s non-
negotiable.”

The New York Times reported that in a response to Sen.
Chuck Grassley’s (R-Iowa) inquiry regarding bonuses,
Feinberg said that the contracted bonuses were “grand-
fathered payments” and not covered by the new rules on
cutting down executive bonuses at companies receiving
bailout money. However, he added that he and his staff
have insisted that employees’ overall compensation be
reduced in return.

A statement from AIG said that 97 percent of current
employees in the Financial Products division receiving
the bonuses volunteered to participate in the reductions.
According to two individuals involved in the discussions
in a Washington Post article, only 35 percent of former
employees have agreed to this so far, however.

Financial Products is the AIG division that traded in
derivatives, which led to crisis for the company in 2008.
The bonuses were to be given to the division’s employees
in an effort to retain them to close down the division,
a decision AIG made after the bailout.

Since then, the division has reduced the number of
derivatives trades from 44,000 before the bailout to
16,100, and cut down the notional value of remaining
trades from $2 trillion to $940 billion. Additionally,
the number of Financial Products employees went down
from 428 to 237.

In an email, AIG spokesman Mark Herr said that the
employees accomplished the above tasks and “did what
they were retained to do: unwind [Financial Products].”

Rep. Darrell Issa (R-California), a ranking member on the
House Government and Oversight Reform Committee, who has
been a longstanding critic of the federal bailouts, said
in a statement, “It’s not a question of whether or not the
bonuses are justified, but rather if the administration
is being transparent with the American people about the
nature and need of these bonus payments since the president
expressed outrage over this very issue a year ago.”

“Either the payments are justified and the administration
has an obligation to explain that to the American people
or they are not and they should come forward and say so,”
he said.

After the outrage that ensued when AIG first paid a round
of $165 bonuses after receiving federal bailout money, the
company quickly said it would return about $45 million by
the end of the year. However, only $19 had been refunded.
This figure has increased to about $39 million as of now,
according to Feinberg in an interview today.

Several former employees have volunteered an additional
$4.5 million in returns, but AIG said in its statement
that it is “not able to accept them at this time.” It
is unclear whether those funds could go towards the $45
million being repaid to the government.

In its statement, AIG said that it believed the $20 million
reduction that had been negotiated “allows us to largely
put this matter behind us.”

Critics such as Senator Grassley did not think this was
enough. “AIG has taxpayers over a barrel,” the ranking
member of the Committee on Finance said in a statement
Tuesday. “The Obama administration has been outmaneuvered.
And the closed-door negotiations just add to the skepticism
that the taxpayers will ever get the upper hand.”

Feinberg called the payments “outrageous,” but in an
interview Wednesday on “Good Morning America” said that
the government isn’t being “outmaneuvered.” In fact, he
emphasized that it is maximizing available leverage to
maneuver AIG into paying everything back.

“I do not for a minute ignore the outrage out there, which
I share. But the fact of the matter is, we’ve got to abide
by the law,” Feinberg said.

A few individuals who haven’t agreed to the reductions are
holding out for the full bonuses, believing that they have
a good case under law as AIG’s own lawyers have issued an
opinion saying the contracts are legally binding. For AIG,
breaking the contracts could mean having to pay more money
in the future as a penalty.

After the last of the retention bonus payments in March,
Feinberg said, “These old guaranteed bonuses will be a
thing of the past.”

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Obama’s Budget Calls for Billions in New Spending for Drones
by: Jason Leopold
truthout|Report

This is how major US defense contractors reacted to the
unveiling of President Barack Obama’s fiscal year 2011
spending plan for the Pentagon, part of the president’s
overall $3.8 trillion budget proposal.

Shares of General Dynamics, a maker of military aircraft,
submarines and munitions, rose 3.9 percent and closed at
$69.43 in trading on the New York Stock Exchange, the
uptick due in large part to additional spending on the
war in Afghanistan, according to Sanford Bernstein, a
financial research firm.

Northrop Grumman Corp., which builds unmanned spy planes
and ships, rose 2.3 percent to close at $57.92. Boeing
Co., a manufacturer of aircraft carriers, shares increased
by 1.8 and closed at $61.70. Lockheed Martin’s shares rose
37 cents to close at $74.89. Raytheon Co., a missile
supplier, was up by a percentage point to close at $52.96,
while shares of L-3 Communications Holdings, a firm that
supplies intelligence gathering and monitoring equipment,
was up 1.6 percent to close at $84.64. And shares of
Harris Corp soared 4.2 percent to close at $44.74. Harris
manufactures tactical radios utilizes encryption technology.

All in all, it was a good day for the military-industrial
complex.

Indeed, Craig Fraser, an aerospace and defense analyst
with debt ratings firm Fitch Ratings, said the Defense
Department’s record $708 billion base budget, up $18.2
billion or 3.4 percent, was “better than we expected,
across the board.” The spending covers the fiscal year
which begins October 1, and runs through September 30,
2011. Adjusted for inflation, the defense budget is the
largest since World War II.

The budget was released along with the Pentagon’s
Quadrennial Defense Review (QDR), which for the first time
in years has done away with the concept that the US must
be prepared to wage two wars at once. The QDR says the US
must be prepared for broader security challenges, which
includes investing in technologies to battle threats from
al-Qaeda.

About $159 billion will be used to continue funding the
wars in Iraq and Afghanistan identified in the budget as
“overseas contingency operations.” The wars have already
topped $1 trillion.

Separately, the Obama administration also asked Congress
to immediately approve a $33 billion emergency supplemental
it included with the budget, which comes on top of $130
billion lawmakers approved late last year, to immediately
pay for the troop surge in Afghanistan. The $33 billion
is not included in the Pentagon’s $708 billion spending
package. So that means the Pentagon’s actual spending
proposal comes to $741 billion.

On the campaign trail, Obama vowed not to finance the war
using emergency supplmental requests. Rather, he said he
would pay for the wars out of the Pentagon’s overall
budget. But this is the second time Obama has asked
Congress to approve emergency funds for the wars. The
Bush administration financed the Iraq and Afghanistan
wars with emergency funding requests that were swiftly
approved by Congress.

Travis Sharp, a defense budget analyst at the Center
for American Security, said the Pentagon’s base budget
represents a 40 percent increase since 2001 and when the
costs of the wars are factored in overall defense spending
has increased by 70 percent.

Sharp said the base spending plan for 2011 is 3.5 percent
of gross domestic product. Adding in war costs, it comes
out to 4.6 percent of GDP. Obama has called for a three-
year spending freeze on domestic programs, but the Defense
Department exempt from the proposal.

Aside from the size of the defense budget, another
controversial aspect of it is what it will fund. More
than $2 billion will be used to purchase unmanned aerial
vehicles, or drones, which the Obama administration has
used increasingly over the past year to target suspected
terrorist hideouts in Afghanistan and Pakistan. The drones,
which the administration wants to double in production,
have been blamed for a significant rise in civilian
casualties.

“The Budget … bolsters Unmanned Aerial Vehicles,
helicopters, and cyber capabilities and electronic warfare,
which are key components in the ongoing task of rebalancing
the military to focus on current and emerging threats,”
according to a copy of the Defense Department budget.

For the first time, according to The Los Angeles Times,
the Air Force is proposing the purchase of more drones
than combat aircraft and will double the production of
the MQ-9 Reaper, “a bigger, more heavily armed version
of the Predator drone, to 48. The Army will also buy 26
extended-range Predators.”

“The expansion will allow the military to increase unmanned
patrols – the number of planes in the air at once – to 65,
up from its current limit of 37,” The Los Angeles Times
noted.

Defense Secretary Robert Gates told reporters Monday that
the use of drones will continue to increase “even as the
wars in Iraq and Afghanistan eventually wind down.”

“The more we have used them, the more we have identified
their potential in a broader and broader set of
circumstances,” Gates said.

Spending on the Predator and Reaper drones will jump from
$877.5 million in 2010 to $1.4 billion next year.

The budget also says “a major goal of the administration
is to provide the troops with the most effective and
modern equipment possible.”

“To accomplish this, the 2011 Budget continues to develop
and procure many advanced weapons systems that support
both today’s wars and future conflicts,” according to the
budget. “These include: the F-35 Joint Strike Fighter, a
new family of ground vehicles, new ships such as the next
generation ballistic missile submarine, and the P-8
aircraft.”

In a speech at West Point last year announcing his revised
strategy for the Afghanistan, Obama said, “we can’t simply
afford to ignore the price of these wars.”

But that’s exactly what it appears the Obama administration
has done. Spending on the wars for the next two years is
projected to hover around $159 billion, which is only
slightly less than what the Bush administration spent
during its last years in office. The proposed spending for
2011 is three times more than what Obama projected it to
be a year ago and the soaring costs of juggling two wars
has a major impact on new deficit numbers.

While Obama said in his State of the Union address last
week that creating new jobs for Americans is now his
“number one priority for 2010,” the massive defense
spending his budget proposes will actually do the opposite,
according to Dean Baker, co-director for the Center for
Economic and Policy Research.

In a report published on Truthout last November, Baker
said, “defense spending means that the government is
pulling away resources from the uses determined by the
market and instead using them to buy weapons and supplies
and to pay for soldiers and other military personnel. In
standard economic models, defense spending is a direct
drain on the economy, reducing efficiency, slowing growth
and costing jobs.”

“For some reason, no one has chosen to highlight the job
loss associated with higher defense spending,” Baker
wrote at the time. “In fact, the job loss attributable to
defense spending has probably never been mentioned in a
single news story in The New York Times, Washington Post,
National Public Radio, or any other major media outlet.
It is difficult to find a good explanation for this
omission.”

Baker would be just as disappointed reading the latest
round of news reports on defense spending. It appears
that the same void exists within mainstream media circles
related to how the Pentagon’s budget increase will impact
job growth.

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Marijuana Legalization Petitions Filed in California
by: Peter Hecht
McClatchy Newspapers

California appears headed for a rollicking November
ballot fight over whether to legalize and tax marijuana
cultivation and use for adults 21 years and older.

Proponents of the “Regulate, Control and Tax Cannabis Act
of 2010″ said Thursday that they had submitted to the
state nearly 700,000 petition signatures – more than
enough, if valid, to qualify the measure for the November
ballot.

Secretary of State Debra Bowen has until June 24 to certify
the measure, which needs 433,000 valid voter signatures to
qualify.

But already legalization proponents and opponents are gear-
ing up for a fight. The election battle is expected to
feature rival TV commercials that variously extol the tax
benefits of a regulated marijuana market or warn of the
threat mass legalization poses to communities.

Measure backers promise financial rescue for the state’s
cash-strapped schools, police agencies and social service
providers, saying legalization could generate more than
$1 billion in tax revenue.

“This is an historic first step toward ending cannabis
prohibition,” said Richard Lee, president of an Oakland
medical marijuana dispensary and Oaksterdam University,
a school dedicated to pot.

Lee, whose school specializes in pot law and cultivation,
donated more than $1 million for the petition drive to
qualify the measure. Proponents said they hope to raise
as much as $10 million for the campaign.

The pro-pot coalition has signed on with a prominent San
Francisco political consulting firm, SCN Strategies.
Proponents also are working with an Internet fundraising
firm, Blue State Digital, that helped create the Web
network for Barack Obama’s presidential campaign.

“This isn’t your teenager’s cannabis initiative. …This
was carefully crafted to build a winning coalition of
supporters,” said Dan Newman, a partner with SCN
Strategies. His firm includes veteran Democratic strategist
Ace Smith, son of former San Francisco District Attorney
Arlo Smith.

The initiative will face dogged opposition from law
enforcement, church and anti-drug groups.

“This will be a serious campaign,” said John Lovell, a
lobbyist for the California Peace Officers Association, a
group organizing opposition. “They will raise and spend
$10 million to $15 million. We will raise a fraction of
that. And we will win…

“The fact is that you can’t make a case for legalization
of another mind-altering substance.”

Bishop Ron Allen, president of the International Faith-
Based Coalition, a Sacramento group representing 3,600
congregations, said “angry church leaders” will do
“whatever it is going to take to fight this to the very
end.”

Marijuana has been legal for medical use in California
since voters passed another ballot measure, the
Compassionate Use Act, in 1996.

Allen, a former crack addict who said he started out
smoking marijuana, said his worries over wider legalization
have been stoked by the explosion in dispensaries growing
and selling pot for medical users. He said pot bought in
those dispensaries is being resold on the streets of his
Oak Park community.

The new initiative would allow California residents to
cultivate up to 25 square feet of pot and possess or
transport up to 1 ounce. It would include fines and
criminal sanctions for providing marijuana to minors.

The initiative would allow cities to tax pot sales and
regulate how much pot can be sold legally. It would permit
individual cities to ban local sales but let citizens
possess and consume marijuana.

Proponents point to a state Field Poll in April that found
56 percent of voters supported taxing and legalizing pot.

Opponent Lovell said voter attitudes will change quickly
once they ponder the implications of legalizing pot for
general use. Lovell rallied law enforcement groups two
years ago to defeat Proposition 5, an initiative that
emphasized treatment over jail for nonviolent drug
offenders.

He said opponents will argue that legalization would
increase drug use among youths and result in more fatal
accidents from pot-impaired drivers. “I submit that the
support (for marijuana) is illusionary,” he said.

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Labor’s Big Election Loss
by: Dick Meister
truthout|News Analysis

The Senate Democrats’ loss of a filibuster-proof, 60-vote
majority seems almost certain to doom attempts to revive
the barely functioning National Labor Relations Board
(NLRB), the country’s chief labor law administrator and
enforcer.

That, along with its effects on health care reform, is
certainly one of the most serious consequences stemming
from the election of Massachusetts Republican Scott
Brown to the seat formerly held by the late Ted Kennedy.

For more than two years, the five-seat NLRB has limped
along with only two members, a Republican appointee of
President George W. Bush and a Democratic appointee of
President Bill Clinton. The other three seats had been
held by Republicans, but were vacated when their five-
year terms expired. Democrats, who by then controlled
the Senate, refused to confirm the anti-labor Republicans
that Bush nominated to replace them.

The two-member board has decided cases involving minor,
noncontroversial issues, but invariably has split one to
one on major cases or simply decided against hearing them.
That’s left many important issues unresolved, and left
both labor and management frequently unsure of what they
should do.

Should employers be allowed to prohibit workers from
using the employers’ email systems to send union related
messages, for instance? Just where on an employer’s
property can union organizers be allowed to distribute
literature and talk to workers? Which workers can
legitimately be classified as supervisors and thus
ineligible for union membership? At what point does
employer opposition to their employees’ attempt to
unionize become intimidation?

Dozens of NLRB cases that the board has decided have been
appealed to the federal courts, on grounds that they
weren’t decided by a full board. Which raises the
possibility that at least 80 of the 480 cases decided by
the two-member board may be invalidated.

Several circuit courts ruled in favor of the two-member
decisions, but the Circuit Court in Washington, DC, held
otherwise. The Supreme Court has agreed to make the final
ruling, but, meanwhile, legitimate grievances of working
people and their unions remain unsettled, often at a great
hardship to the workers.

Some workers have waited years for the board to act.
Workers at a home for the developmentally disabled in
Brooklyn, for instance, have been waiting six years for
the NLRB to certify their disputed vote to unionize.

The board’s inability to make decisions has been especially
hard on workers who’ve been fired illegally and seek
reinstatement or back pay, as the law allows.

It could be worse, though much worse, as it was when Bush
appointees controlled the board. As the current NLRB chair,
Clinton appointee Wilma Liebman, noted, “The board lost
its credibility.” The number of cases brought before it
dropped by half as the Bush administration “turned labor
law inside out and missed opportunities to make the law
more effective.”

The Bush-controlled board limited the ability of illegally
fired workers to recover back pay, allowed employers to
discriminate against union supporters in hiring, and made
it much harder to form unions.

President Obama, who appointed Liebman as NLRB chair, has
moved to bring the board up to its full compliment of five.
But that’s been delayed because of heavy opposition from
Senate Republicans led by John McCain of Arizona and two
of the GOP’s powerful corporate allies, the notoriously
anti-labor US Chamber of Commerce and National Association
of Manufacturers.

One of the opponents’ biggest worries is that an Obama
majority on the Labor Board would put into law, through
its decisions, provisions of the Employee Free Choice Act
that GOP lawmakers have long kept from passage because
it’s designed to overcome the principal obstacles to
unionization.

Chief among Obama’s Labor Board nominees is Craig Becker,
an associate general counsel for the AFL-CIO, Service
Employees International Union and American Federation of
Government Employees.

Democrat Tom Harkin of Iowa, who chairs the Senate Labor
Committee, ranks Becker as “one of the pre-eminent labor
law thinkers in the United States.”

It’s highly unlikely nevertheless that either Becker’s or
Obama’s other nominees will win Senate confirmation. The
GOP senators and their anti-union allies fear that Becker
would join Liebman to actually carry out the stated, but
frequently ignored, mandate of the National Labor Relations
Act that unionization should be encouraged.

America’s working people need and deserve nothing less.
But as long as Republican lawmakers stand in the way,
they aren’t going to get it.

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Haitian Radio Helps Keep a Country Afloat
by: Ioan Grillo
GlobalPost

Signal FM, a music radio station, survived the quake and
is helping others in the aftermath.

Port-au-Prince, Haiti – Radio presenter and DJ, Jean Gary
Apollon, had just put a new thumping track of Caribbean
bachata music on the air when the earth moved below this
sprawling seaside city.

For some 60 seconds he felt the building of his station
Signal FM sway back and forth like the bricks were made
of rubber.

But miraculously, the music never stopped.

“We were so used to power cuts here in Haiti that we had
built a special system for when the lights go out,” he
explained, talking in his hectic studio. “Our diesel-run
generator switched on automatically.”

When the Jan. 12 tremor ceased, the crying and wailing
came from the street around, and he looked out the window
to see whole office blocks reduced to rubbles. But besides
having some equipment hurled around, the signal FM studio
was virtually unharmed.

The luck of being saved in the dark lottery allowed Signal
FM to be the only local media outlet broadcasting through
the first frantic days following the catastrophic quake
that devastated this Caribbean country.

Keeping itself on air, the station became a crucial source
of information that helped get thousands of people to
hospitals and back with their families. Now as Haiti faces
the Herculean task of reconstructing its shattered capital,
media outlets will have to play a central role in averting
the chaos and building a new order.

“Right after the quake, it was hard to think about keeping
the station going. We all wanted to just look for our
families and friends. It was so hard to comprehend the
enormity of the event,” said Apollon, a lively radio
presenter in his 40s. “But we realized how important the
station would be. And we all did everything we could to
keep the signal up.”

The electricity grid was down but residents heard Signal
FM on transistor radios and car stereos. Rapidly, hundreds
of people flocked to the station asking to get out calls
to their families.

The station reached out to lost relatives, allowing people
to know news of their loved ones and arrange places to
meet. Soon, thousands had found each other that way.

When the station regained internet connection, it also
started communicating with its many web listeners abroad
in the Haitian communities in the United States, Canada,
France and other countries.

A tidal wave of emails swept in asking about loved ones,
and Signal FM relayed the message onto the shattered
streets of Port-au-Prince. Soon they were activating one
of the country’s few fixed phone lines, and allowing an
endless stream of people to make heartfelt calls to their
families overseas.

“We became like a social center as well as a radio. But
it was the only thing to do in these circumstances,” said
owner Mario Viau, who speaks perfect English, as well as
French and Haiti’s Creole language.

The station also gave out life-saving information about
where there were field hospitals set up on the rubble-
strewn streets, where trucks were handing out water and
where shelters had been made for the homeless.

No newspapers were printing, so many of the journalists
came to the station and started relaying all the
information to Signal FM.

Viau said they tried frantically to get hold of government
officials on the day of the earthquake to allow President
Rene Preval to address his people. But they could not get
ahold of him anywhere.

Eventually, in the second day they got in touch with
Preval’s aides who sent them a written statement from
him.

“Preval has been an almost absent figure in this crisis,”
Viau said. “There has really hasn’t been a Haitian
government since the earthquake. We have to have some
kind of international force in control in Haiti now.”

His views are shared by many on the streets, who consider
Preval to have utterly failed in the face of the tragedy.

As Haiti plods on to its second week since the tremor,
Signal FM is focusing on the newly developing issues, such
as where the U.S. troops are deploying with food aid and
how city infrastructure is coming back.

The radio is also starting to look at what kind of Haiti
they can rebuild in the long term. “We have all been deal-
ing with the immediate problems. But eventually we will
have to face up to some big questions about our country,”
he said. “We don’t just need to build new houses. We need
to build a new political system that actually works.”

When most people are asked what stands out in their mind in
the first days following the quake, they mention the piles
of dead bodies, the wounded and the smashed up city. But
Viau has a different answer.

“It is the solidarity,” he says. “I saw so many people
helping each other. That is what I remember most.”

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Massachusetts Senate Race Results:
Obama’s Signal That All Is Changed
by: Peter Grier
The Christian Science Monitor

Republican Scott Brown’s upset victory in the Massachusetts
Senate race results portends huge challenges ahead for
President Obama and majority Democrats. National health
care reform may well stall, and new carbon-emissions rules
are now unlikely. What will be the revised agenda?

Washington – For President Obama, Republican Scott Brown’s
victory in the Massachusetts Senate race changes everything.

OK, that may be an exaggeration. ­ The GOP’s triumph in a
blue state may not change everything so much as reveal that
everything has changed since Mr. Obama was inaugurated one
long year ago.

Since then, the economy has continued to struggle, while
unemployment has risen into the double digits. Meanwhile,
voters have watched as financial and auto firms got bailed
out and bankers continued to award themselves fat bonus
packages.

The voters wanted change in 2008, and what they’ve got so
far has been change they don’t like.

“I have no interest in sugarcoating what happened in
Massachusetts,” said Sen. Robert Menendez (D) of New
Jersey, head of the Senate Democrats’ campaign committee.
“There is a lot of anxiety in the country right now.
Americans are understandably impatient.”

The future of the Obama administration’s agenda now has
become much less certain.

Healthcare Reform’s Dubious Future

Healthcare reform is in big trouble. There are maneuvers
Democrats could use to try to ram legislation through
despite losing their filibuster-proof, 60-seat Senate
majority. But in the wake of Democrat Martha Coakley’s
crushing loss, some moderate Democrats elsewhere in the
country already are expressing reluctance to take any
drastic steps.

Moderate Sen. Jim Webb (D) of Virginia, for instance, said
the Senate should not hold any further votes on healthcare
until Senator-elect Brown is seated.

House Speaker Nancy Pelosi (D) of California insisted
that a healthcare bill will still pass, however. Liberal
Democrats said that, if anything, the Brown victory meant
they needed to move faster.

Cap-and-Trade for Carbon Emissions? Gone.

Obama’s ambitious proposal for cap-and-trade carbon-
emission regulation, meant to combat global climate
change, now is not going anywhere this year.

Cap-and-trade always faced a steep uphill climb. It would
constitute as big a change in national policy as healthcare
reform, maybe bigger. But lawmakers were never going to get
around to considering it until after the healthcare fight
was over.

Retiring Sen. Byron Dorgan (D) of North Dakota indicated
Tuesday that the Senate is not likely to take up cap-and-
trade at all in 2010.

“In the aftermath of a very, very heavy lift on healthcare,
it’s unlikely that the Senate will turn to a very
complicated and controversial subject of cap-and-trade,”
Senator Dorgan told reporters.

Ahead, a More Intense Focus on Jobs and the Economy

So what initiatives will the White House pursue?
Indications are that Obama may pivot from nation-changing
initiatives to a more populist agenda focused on jobs and
other aspects of the economy.

In recent days Obama has sounded almost like an angry
participant in a “tea party” rally as he excoriated huge
bonuses while proposing a new tax on big banks.

Every new US president reaches a point in his term where
the agenda he brought with him to office no longer applies.
The world has changed, and he has changed, and it is time
to improvise in response.

For Barack Obama, Jan. 20, 2010, thus may mark the
beginning of a new and difficult phase in his presidency.

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Lawmakers Agree to Scale Back Tax on Health Plans
by: David Lightman and Margaret Talev
McClatchy Newspapers

Washington – The White House, congressional leaders and
union officials on Thursday announced a tentative agree-
ment in their health care negotiations, to pare back a
proposed excise tax on high-end insurance policies for
middle-class workers.

The compromise could break a deadlock in the health care
debate — if enough lawmakers agree to it. Many details
were unresolved, however — everything from how much the
pared back tax would cost, to how a government health
care exchange that collective bargaining units and
employers might buy into over time would be structured.

Lawmakers hoped to finish negotiating an overhaul plan
this weekend.

They agreed Thursday to significantly alter the original
40 percent tax contained in legislation the Senate passed
Dec. 24 that would tax policies that cost more than $8,500
for individuals and $23,000 for families.

Under the agreement, the threshold for taxation would be
adjusted based on companies’ or unions’ relative age,
gender and ratio of workers in high-risk jobs. Dental and
vision coverage would be exempt.

It also would give collective bargaining units a five-year
delay before they’re subject to the excise tax. Over time,
more Americans could get their insurance through a govern-
ment-managed private insurance exchange, especially if they
live in states with high insurance costs or participate in
collective bargaining units.

The aim, as union bosses see it, is to tax high-end health
insurance plans carried by wealthy business executives
while shielding middle-class workers who bargained away
their salaries in exchange for high-end health-care
coverage.

Details, though, were sketchy. No firm cost estimate was
available. The Senate plan would have raised an estimated
$149 billion over 10 years.

Nor was it clear how they’d find the lost revenue.
President Barack Obama has insisted on a plan that doesn’t
increase deficits over a 10 years period; the Senate bill
would cut deficits an estimated $132 billion.

House of Representatives leaders suggested that they could
make further increases in the Medicare tax, now 1.45
percent. The Senate would boost that by 0.9 percentage
points for individuals who make more than $200,000 and
joint filers who make more than $250,000. House leaders
are considering a bigger increase.

Some other key differences between the House and Senate
version of health care legislation also remain unresolved,
including abortion funding, a government-run health care
plan and whether health exchanges, or marketplaces where
consumers can shop for coverage, will operate largely on
a state or national basis.

The House agreed to a government-run public option that
would compete with the private sector, while the Senate
prefers a federally-supervised system of multi-state,
privately-run companies.

The tax issue is thus far the lone major breakthrough, as
Obama and Democratic leaders were willing to pivot at the
urging of one of their biggest bases, organized labor,
even if it meant slowing the rate at which the plan the
plan might ostensibly pay for itself.

“The president’s pleased with this agreement,” said White
House communications director Dan Pfeiffer. “He was very
clear that we cannot do health care on the backs of the
middle class, and I think this agreement achieves that.”

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ACLU Sues Library of Congress Alleging
Ex-Guantanamo Prosecutor Wrongfully Fired
by: Yana Kunichoff
truthout|Report

The American Civil Liberties Union (ACLU) has filed a
lawsuit against the Library of Congress on behalf of Col.
Morris Davis, the former top prosecutor at Guantanamo and
an outspoken critic of the military commissions system,
alleging he was unfairly terminated from his position with
the Library’s Congressional Research Service (CRS).

The lawsuit charged CRS with violating Davis’ free speech
and due process rights by removing him from his positions
with CRS, following the publication of a series of articles
he wrote for The Wall Street Journal and The Washington
Post about issues that were related to his former role with
the military commissions, but not with his responsibilities
at CRS.

“Col. Davis has a constitutional right to speak about
issues of which he has expert knowledge, and the public
has a right to hear from him,” said Aden Fine, a staff
attorney with the ACLU First Amendment Working Group.
“Col. Davis’s firsthand experience is invaluable to the
ongoing debate over military commissions, and the public
should not be denied the chance to hear from him just
because he is a public employee.”

Davis resigned from his role as a chief prosecutor in the
Guantanamo military commissions in October 2007, citing
his conviction that the system was fundamentally flawed.
Drawing on his time with the military commissions and his
25 years in the United States Air Force, Davis became an
outspoken critic of the commissions. He wrote articles,
gave speeches and testified before Congress.

Then, in December 2008, he took up a position as the
assistant director of the Foreign Affairs, Defense and
Trade Division at the CRS.

“My status as the former chief prosecutor for the military
commissions at Guantanamo Bay and my opinions on that
subject are completely unrelated to my position at CRS and
totally separate from my duties there, and they don’t
interfere with my ability to do my job,” said Davis. “The
work that CRS does is incredibly valuable and I am proud
of the opportunity to continue serving my country after a
career in the military. I hope to be reinstated to my
original position so I can continue to support Congress at
this critical time in our nation’s history.”

In response to the ACLU’s call for Davis to be returned to
his former position with CRS, the Library of Congress said
that it would not return Davis to his job.

As Truthout previously reported, the articles written
by Davis appeared in The Wall Street Journal and The
Washington Post on November 11, 2009. In them, Davis
argued against using both military commissions and federal
courts to try detainees.

The Wall Street Journal articles identify Davis as the
former chief prosecutor for the military commissions. He
retired from the military in 2008.

In the ACLU’s lawsuit, it said that Davis said he wrote
the pieces in his personal capacity, made no mention of
CRS, wrote the pieces outside of his work hours and did
not receive payment for the articles.

Shortly after the publication of these articles, Davis
received a number of phone calls, emails and requests for
meetings from his supervisor at CRS, Daniel Mulhollan. On
November 20, Davis received a final phone call saying that
his employment would be terminated, and he was transferred
to a temporary 30-day position, which will expire on
January 20.

The ACLU lawsuit said that Davis had previously attended
a conference concerning the military commissions and
submitted a law review article expressing his views in
connection with the conference… Mr. Mulhollan approved
his participation, with the only condition being that
Col. Davis had to participate on his personal time by
using a vacation day, because of the subject of the
conference. Guantanamo and the military commissions
system had nothing to do with his CRS job responsibilities
or duties.

The lawsuit also highlighted the lack of an official policy
regarding CRS employees and whether personal writings must
be subject to prior review or that supervisors must be
notified about the intention to publish.

It goes on to say, “The decision to terminate Col. Davis
for his speech has intimidated and chilled other CRS
employees from speaking and writing in public. CRS
employees are confused, uncertain, and fearful about
what outside speaking and writing is permissible.”

The ACLU is suing James Billington, the Librarian of
Congress and Mulhollan in the US District Court for the
District of Columbia.

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Suspect in Airplane Bombing Attempt Indicted,
Faces Life in Prison
by: Shashank Bengali
McClatchy Newspapers

Washington – A federal grand jury on Wednesday indicted
the suspect in the foiled Christmas Day airline bombing
on six criminal counts that could bring a life sentence
if he’s convicted.

In a seven-page indictment, a grand jury in Michigan
charged that Umar Farouk Abdulmutallab, a 23-year-old
Nigerian, attempted to use “a weapon of mass destruction”
by starting a fire with explosive chemicals he’d smuggled
onto Northwest Airlines Flight 253, which was carrying
289 other passengers and crew members to Detroit.

“The attempted murder of 289 innocent people merits the
most serious charges available, and that’s what we have
charged in this indictment,” said U.S. Attorney Barbara
L. McQuade, the U.S. attorney for the eastern district
of Michigan.

The other charges against Abdulmutallab are attempted
murder, attempted destruction of the aircraft, placing
a destructive device aboard the plane and two counts of
possessing a destructive device.

A Justice Department spokesman said that Abdulmutallab,
who’s in federal custody, would appear in the U.S.
district court in Detroit at 2 p.m. Friday to be
arraigned.

Investigators say Abdulmutallab told them he was acting
on orders from an al Qaida-affiliated group by igniting
a fire shortly before the plane landed in Detroit on
Dec. 25. He set his pants legs and the wall of the plane
ablaze before passengers subdued him and smothered the
flames, according to witnesses.

In an earlier criminal complaint, the Justice Department
said the bomb contained pentaerythritol, a colorless,
organic compound that’s similar to nitroglycerin. The
indictment announced Wednesday said it also contained
triacetone triperoxide, a relatively easy-to-obtain
explosive and a weapon of choice for suicide bombers in
the Middle East, according to the independent Web site
Globalsecurity.org.

Failed “shoe bomber” Richard Reid also used both
explosives. Passengers on an airliner subdued him in
December 2001 while he was trying to ignite PETN in
his shoe.

“The bomb was designed to allow defendant Umar Farouk
Abdulmutallab to detonate it at a time of his choosing,
and to thereby cause an explosion aboard Flight 253,”
the indictment charges.

Attorney General Eric Holder said that the investigation
“has already yielded valuable intelligence that we will
follow wherever it leads.”

The incident aboard the flight, which originated in
Amsterdam, has restarted a massive debate over air
security, including the use of controversial body-
scanning devices at airports.

Homeland Security Secretary Janet Napolitano said that 300
additional whole-body scanners would be in place at U.S.
airports by the end of the year, compared with 40 today.
Proponents argue that the devices could have detected the
explosives that Abdulmutallab is accused of carrying, while
critics say they’re an invasion of passengers’ privacy.

Speaking on CNN, Napolitano said that the scanners, which
cost about $170,000 each, were worth the investment.

“Look, we can’t give 100 percent guarantees here,”
Napolitano said. “I don’t think Americans disagree with
that. They understand that. But they also understand and
we understand that improved technology can help minimize
the risk, and that’s what these scanners assist us in
doing.”

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Embattled Democratic Sen. Christopher Dodd
Won’t Seek Re-Election
by: Jason Leopold,
truthout|Report

Sen. Christopher Dodd, (D-Connecticut), is expected to hold
a news conference Wednesday in his home state to announce
that he won’t seek reelection for a sixth term, according
to news reports.

Dodd, the chairman of the Senate Banking Committee, who was
the principal author of legislation that bailed out founder-
ing Wall Street banks to the tune of $700 billion, will
become the second Democratic senator in the past 24 hours
to announce his retirement.

Earlier Tuesday, Sen. Byron Dorgan, (D-North Dakota),
stunned colleagues and constituents by announcing his
intention to retire in order to spend more time on
personal endeavors.

According to the Washington Post, Dodd’s pending announce-
ment that he will retire is the best shot Democrats have
at holding onto the senate seat.

Connecticut Attorney General Richard Blumenthal, a
Democrat, the Post reported, is the “most popular
politician in the state” and “has long coveted a Senate
seat, and he had already signaled that he would run for
the Democratic nomination against Sen. Joseph I. Lieberman
(I) in 2012.”

Former Rep. Rob Simmons and businesswoman Linda McMahon
are battling for the Republican nomination, but either
would start as an underdog in a general-election match-
up with Blumenthal.

Dodd, 65, was first elected to Congress in 1974. He launced
a bid for the White House in 2008 but dropped out of the
race after the Iowa caucuses. Dodd was the most vulnerable
among Democratic lawmakers facing reelection this year.

As the Post noted, part of the reason he fell out of favor
with Democratic voters was due to reports last year that
Dodd had “received special treatment in his acquisition
of a mortgage loan from [subprime mortgage company] Country-
wide Financial, through a program that labeled him and
others as friends of Countrywide chief executive Angelo
Mozilo.”

“Dodd insisted he was unaware of his inclusion in the
program, and he was cleared of any wrongdoing by the Senate
Ethics Committee, but the political damage was done,” the
Post reported.

Dodd also received $103,000 during the 2008 election cycle
from embattled insurance giant AIG–more than than any
other elected official. President Barack Obama came in a
close second with $101,000.

In recent months, he emerged as a leading figure in the
health care reform debate and was instrumental in drafting
the Senate’s version of legislation to overhaul the health
care industry.

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