Despite President Obama's order that officials have to disclose their contacts with registered lobbyists that try to influence Recovery Act funding, the government continues to capture very little information. The Associate Press reports that "few such communications have been reported even though lobbyists say they are busier than ever with the multibillion-dollar stimulus. Since the $787 billion American Recovery and Reinvestment Act passed in February, federal agencies have reported 197 contacts with lobbyists about stimulus grants."
This may be partly due to the changes made in July, modifying the restrictions placed on lobbyists' communications. Federal officials are prohibited from orally communicating with anyone about Recovery funds, but only after competitive grant applications have been submitted for review. Therefore, someone who is not a federally registered lobbyist can make undisclosed contacts about Recovery projects before an application is submitted. Lobbyists can simply send their clients without any public disclosure. "Lobbyists have separately reported work related to stimulus projects, and in many cases have operated in new ways to skirt restrictions on their efforts to influence stimulus spending."
Unfortunately the transparency is incomplete as long as registered lobbyists are the only ones whose contacts have to be disclosed. OMB Watch has a chart listing the agencies reporting communications with lobbyists.
(Amanda Adams 08/31/09; 0 comments)The Environmental Protection Agency (EPA) has discovered numerous pollutants in well water near gas drilling sites, including chemicals that are used in a controversial technique called hydraulic fracturing, or fracking. The investigation in central Wyoming is the first water testing by EPA examining the impacts of gas drilling on drinking water. However, EPA is hobbled in its duty to protect the public because gas drillers are allowed to keep secret the chemicals they pump into the ground – toxic chemicals that may be entering ground water supplies.
Responding to years of complaints of water contamination and illnesses from citizens in rural Wyoming, the EPA investigated the water quality of 39 wells surrounding a small community besieged by gas drilling. The agency found a range of contaminants, including arsenic, copper, vanadium, and methane gas in the water. Many of the substances are found in various fluids used at drilling sites. EPA scientists are acknowledging the growing body of evidence linking hydraulic fracturing to numerous cases of contamination and health problems.
The drilling industry claims no federal regulation of fracking is needed, citing the lack of conclusive proof linking fracking chemicals to contamination of a particular water source. Unfortunately for EPA and citizens like those in Wyoming who depend on wells, EPA has little authority to do the scientific analysis needed to effectively protect water supplies. A 2005 energy bill exempted gas drilling operations from the requirements of the Safe Drinking Water Act. EPA eventually was able to exercise its authority under the Superfund law to begin its investigation in Wyoming.
The news organization ProPublica describes the burdensome and slow process EPA is forced to use to protect public health:
EPA investigators explained that because they had no idea what to test for, they were relegated to an exhaustive process of scanning water samples for spikes in unidentified compounds and then running those compounds like fingerprints through a criminal database for matches against a vast library of unregulated and understudied substances. That is how they found the adamantanes and 2-BE [compounds associated with gas drilling].
All this effort was to test just 39 water wells surrounding one small town. There are thousands of gas-drilling sites around the country that are using secret fracking fluids. Gas drilling expanded greatly during the previous administration. Drilling sites are active or in development in more than 30 states, including in the watershed that supplies drinking water to New York City.
Legislation that is now in Congress would close the regulatory loophole granted to the oil and gas industry and require drillers to disclose what chemicals are in their fracking fluids. Without knowing what chemicals to test for and without the authority of the Safe Drinking Water Act, the EPA's investigations will be slower and costlier and identifying the source of contaminants extremely difficult. Under these restrictions, which are designed to protect industry, the government cannot protect the drinking water and health of Americans.
(Brian Turnbaugh 08/31/09; 1 comment)
Since the phrase "too big too fail" entered the fiscal lexicon last year, I've been really curious as to why the anti-trust divisions at the Federal Trade Commission or Department of Justice have not taken a keen interest in the nation's banking system. And much to my chagrin, Congress has yet to hold a hearing entitled "Busting the Banking Trust," or something along those lines*.
And now I'm dismayed to read in the WaPo on Friday, that too-big-too-fail banks are getting even bigger.
J.P. Morgan Chase, an amalgam of some of Wall Street's most storied institutions, now holds more than $1 of every $10 on deposit in this country. So does Bank of America, scarred by its acquisition of Merrill Lynch and partly government-owned as a result of the crisis, as does Wells Fargo, the biggest West Coast bank. Those three banks, plus government-rescued and -owned Citigroup, now issue one of every two mortgages and about two of every three credit cards, federal data show.
It was federal banking regulators that "pushed failing mortgage lenders and Wall Street firms into the arms of even bigger banks and handed out billions of dollars to ensure that the deals would go through," ostensibly because those smaller banks were too big too fail. Even more worrisome, rules put in place to prevent this sort of conglomeration were waived.
J.P. Morgan Chase, Bank of America and Wells Fargo were each allowed to hold more than 10 percent of the nation's deposits despite a rule barring such a practice. In several metropolitan regions, these banks were permitted to take market share beyond what the Department of Justice's antitrust guidelines typically allow, Federal Reserve documents show.And in addition to failing to bring banking institutions down to sizes that don't necessitate multi-trillion dollar bailouts, banking regulators actually made the situation much worse by expanding the market power (i.e. monopoly power) of the too-bigger-to-fail, government-subsidized survivors. When firms control a certain proportion of the market and are not threatened by competition, they tend to screw consumers and squeeze the remaining competition -- and that's exactly what we're seeing now.
In the last quarter, the top four banks raised fees related to deposits by an average of 8 percent, according to research from the Federal Reserve Bank of Dallas. Striving to stay competitive, smaller banks lowered their fees by an average of 12 percent.
Maybe Bernanke, Geithner, Paulson, et al. were right to conjoin these institutions to avoid an apocalyptic collapse of the economy, but had the regulators and trust watchers not been asleep at the switch for the past decade, we wouldn't be where we are now. It's extremely troubling that there's been little effort to move to a resolution of the root cause of the banking crisis -- that some banks control more of the financial services market than is economically viable.
*In July, the House Financial Services Committee held a hearing entitled "Systemic Risk: Are Some Institutions Too Big to Fail and If So, What Should We Do About It?" That hearing, however, was focused solely on risks too-big-too-fail banks pose to the financial system and not on those banks' market power.
Image by Flickr user cliff1066 used under a Creative Commons license.
(Craig Jennings 08/31/09; 0 comments)The Department of Labor (DOL) today officially announced that it will not go forward with a controversial proposal that would have made it more difficult for the government to write new worker protection rules.
In a notice in today’s issue of the Federal Register, DOL said it was withdrawing a proposed rule published Aug. 29, 2008. The notice called the requirements outlined in the proposed rule, “unnecessary.”
The proposed rule was essentially an attempt to regulate regulations. It would have added to the workload of regulators at the Occupational Safety and Health Administration (OSHA) and the Mine Safety and Health Administration (MSHA) by requiring those agencies to publish an Advanced Notice of Proposed Rulemaking before publishing a Notice of Proposed Rulemaking.
As DOL notes in today’s withdrawal notice, an advanced notice is published “only if the agency believes it will be beneficial to the rulemaking,” adding, “This decision is made on a case-by-case basis.” The proposed rule would have added a mandatory step to an already complicated rulemaking process. In many cases, the advanced notice phase would have been a complete waste of time for OSHA, MSHA, and any commenters.
The proposal also would have changed the way OSHA and MSHA study workplace risks. Scientists and regulators would have had to collect industry-specific data on occupational hazards, use central estimates for risk assessments, and quantify the level of uncertainty in the scientific studies upon which worker safety and health regulations are based. (For more on the proposed requirements, click here.)
Many critics of the proposed rule, including OMB Watch, accused the Bush administration of pushing the regulation as a means to delay the development of standards designed to protect workers from occupational hazards.
But President Bush’s Labor Secretary, Elaine Chao, did not finish the rule before leaving office, giving President Obama’s Labor Secretary, Hilda Solis, an opportunity to review the rulemaking. Thankfully, with today’s announcement, Solis put an end to this saga once and for all.
(Matthew Madia 08/31/09; 0 comments)A new report by Public Citizen says that representatives of the banks that received the most money from the federal bailout have spent millions of dollars in campaign donations to Members of Congress. The study was based on the 10 banks that received the most funds under the Troubled Assets Relief Program (TARP) and of five trade associations. Public Citizen analyzed fundraiser invitations collected by the Sunlight Foundation and campaign contribution disclosures.
According to the report, Bank-Rolling Congress, "Lobbyists, political action committees and trade associations connected to the industry have scheduled 70 fundraisers for Members since Election Day 2008 and have made $6 million in contributions."
The press release quotes David Arkush, director of Public Citizen's Congress Watch: "One Wall Street investment strategy hasn't changed despite the economic downturn, and that's spending money on lobbying and campaign contributions. In the current system, members of Congress have little choice but to raise mountains of campaign cash, which gives Wall Street and others the opportunity to buy access and influence."
Lobbyists representing the American Bankers Association and that association's PAC contributed nearly $2 million in the period studied. Lobbyists and a PAC tied to Citigroup, which is one-third owned by taxpayers, gave more than $1 million. Lobbyists and PACs associated with Goldman Sachs, Mortgage Bankers Association of America, J.P. Morgan Chase and the U.S. Chamber of Commerce each gave more than $500,000.(Amanda Adams 08/28/09; 1 comment)
In May, President Obama announced that his administration would set new, nationwide standards for vehicle fuel efficiency in order to reduce tailpipes’ contribution to global warming. The administration said it would use a plan developed by the state of California as a model.
The announcement appeased environmentalists and the California government, both of whom wanted the stricter standards. The auto industry also jumped on board, because it wanted one standard applied to all 50 states.
But since then, we’ve heard nary a whisper from the administration about when these new standards would be formally proposed, finalized, or made effective.
That changed Tuesday, when EPA sent a proposed rule titled, “Control of Greenhouse Gas Emissions from Light-duty Vehicles” to the White House Office of Information and Regulatory Affairs (OIRA). OIRA will review the draft proposal, share it with other federal agencies, and suggest edits. Since the president himself promised to enact emissions controls, OIRA is almost sure to sign-off on the proposed rule.
As Frank O’Donnell at the Blog for Clean Air points out, the movement on the vehicle emissions rule signals that EPA may be nearing completion on its final rule declaring greenhouse gases a threat to society. The two rules are related because, under the Clean Air Act, once EPA says that a pollutant is a danger, it is obligated to regulate it.
O’Donnell also says that these regulatory developments may prod the Senate to work on cap-and-trade legislation when it returns from summer recess:
The review suggests that EPA is nearing a final “endangerment” finding that global warming emissions threaten health and the environment. That decision – the right response to the big Supreme Court decision on global warming – may be interpreted by some as a polite reminder to the Senate that it cannot ignore the climate issue. The EPA finding could be the starting point for additional administrative action on climate if the Senate fizzles.(Matthew Madia 08/27/09; 0 comments)
Yesterday, the House Committee on Oversight and Government Reform, chaired by Rep. Edolphus “Ed” Towns (D-NY), announced that it "is conducting a broad investigation of problems with the Federal procurement system." The announcement states that as part of the investigation, the committee is examining the suspicious events surrounding contracts awarded by the Army's Communications-Electronics Command (CECOM) uncovered in a recent Washington Post exposé.
I blogged on that sensational story of George Raymond and Catherine Campbell, noting their improper relationship that helped Campbell's defense firm rack up millions of dollars in contracts with Raymond's employer, CECOM; the questions those events sparked in an Army counsel named Barbara Strong; and the seeming retaliation for raising questions in Strong's subsequent dismissal. Last week, Rep. Towns sent a letter to the U.S. Merit Systems Protection Board asking for all material related to Strong's case.
It is hard to tell where a broad investigation of the procurement system will lead, making it all the more interesting to see where the committee takes the CECOM matter. The case is a microcosm of the broken government contracting system, featuring improprieties ranging from contracting ethics to whistleblower protections. If the allegations in the Post article bear out, Rep. Towns and his committee are facing an opportunity to address some serious aspects of the culture of complacency currently dogging the federal contracting world.
Image by Flickr user wallyg used under a Creative Commons license.
(Gary Therkildsen 08/27/09; 0 comments)
Over the next few months, as the October 10 recipient reporting deadline approaches, expect to see many more articles such as this one out of New York City. Apparently, the city is having some problems with estimating how many jobs are being created through teh Recovery Act. With the Office of Management and Budget leaving it up to recipients to estimate/guess how many jobs are being created, such articles are going to be inevitable. The question is whether or not OMB decides to do anything about it, and rework the guidlines for Recovery Act job estimation. A good place to start? Introducing a more effective full-time equivalent standard, or the number of hours that constitute a full-time job. Right now, states can decide on their own what constitutes a full-time job, which makes it difficult to compare projects across state lines. Standardizing the full-time equivalent across the country would be a great first step towards taking the guesswork out of job estimation.
Image by Flickr user sensesmaybenumbed used under a Creative Commons license.
(Sam Rosen-Amy 08/27/09; 0 comments)Following up on my and Craig's recent posts on the OMB and CBO updated economic outlooks released on Tuesday, the Bureau of National Affairs (subscription required) ran a piece yesterday further exploring the effects of the sagging economy on spending and deficit projections, which are often overlooked in the heated debates over this issue.
As Director Peter Orszag points out in a recent blog, OMB increased its projections for the national debt in 2019 by $2 trillion because of a worse-than-foreseen economy. When a bad recession turns worse, more people lose their jobs – the unemployment rate is now projected to top 10 percent next year and is not expected to dip below 5 percent before 2014 – and the government must shell out more for unemployment insurance and food stamps all while receiving less in tax revenues.
Moreover, as the BNA article highlights, the slumping economy pushes more people down into income levels that qualify them for earned income tax credits, dramatically increasing the cost of those credits. According to OMB, total federal spending on seven refundable tax credits, including the child tax credit and the saver's credit, will increase by $34 billion over the next 10 years. Of course, the hope is that the tax credits – along with unemployment insurance and food stamps – will help these recently poorer individuals get by during tough times. As the revised debt estimates demonstrate, though, unanticipated costs can have staggering consequences on long-term projections.
Image by Flickr user "SIR: Poseyal : KNIGHT of the DESPOSYNI used under a Creative Commons license.
(Gary Therkildsen 08/27/09; 0 comments)On Aug. 25, The National Security Archive published an online database of over 83,000 federal government documents related to the detention and interrogation of individuals by the United States during the “global war on terror” as well as the wars in Iraq and Afghanistan. This database serves as a central point of access for documents obtained through whistleblowers, litigation, and the Freedom of Information Act.
Several organizations including the American Civil Liberties Union and the Center for Constitutional Rights were responsible for pursuing litigation that resulted in the releases of hundreds of documents. Most of this litigation surrounded Freedom of Information Act requests that were denied, often to cover up illegal government activity.
The new database is searchable by keyword, document title, date, or organization. Many of the documents found in this database were used as part of the PBS documentary, Torturing Democracy, released earlier this year.