Archives: February, 2010

Obama Budget Still Goes to the Moon

The president’s new budget proposes to end NASA’s Constellation program, a Bush initiative intended to put humans back on the moon by 2020. But Obama’s $3.8 trillion budget still goes to the moon figuratively — if you stacked 3.8 trillion $1 bills, the pile would reach the moon with 20,000 miles to spare!

The president’s proposal to end the Constellation isn’t sitting well with those members of Congress who enjoy large NASA spending in their districts. From the Washington Post:

“The president’s proposed NASA budget begins the death march for the future of U.S. human spaceflight,” Sen. Richard C. Shelby (R-Ala.) said Monday. “If this budget is enacted, NASA will no longer be an agency of innovation and hard science. It will be the agency of pipe dreams and fairy tales.”

Rep. Pete Olson (R-Tex.) said, “This is a crippling blow to America’s human spaceflight program.”

Senator Shelby and Rep. Olson exaggerate –- the proposal would only end government human spaceflight to the moon. Private entrepreneurs are likely to continue pushing into space, especially if we reduce the regulatory and tax burdens.

The administration noted that the Constellation program was “over budget [and] behind schedule,” and that an independent review panel considered it “the least attractive approach to space exploration as compared to potential alternatives.” But this underscores an inherent flaw with a government operating with no legal or constitutional constraints on spending: Congress is generally more concerned with buying special interest support than national need.

While I give kudos to the Obama administration for proposing to end Constellation, they made the wrong decision by not putting the proceeds toward reducing the deficit. Instead, they are proposing that NASA receive a funding increase. A new GAO report on poor acquisition management at NASA, which has been on the GAO’s “high risk” list since 1990, shows why the budget increase is unwarranted.

From the GAO:

However, 9 of the 10 projects that have been in the implementation phase for several years experienced cost growth ranging from 8 to 68 percent, and launch delays of 8 to 33 months, in the past 3 years. These 10 projects had average development cost growth of almost $121.1 million—or 18.7 percent—and schedule growth of 15 months, and a total increase in development cost of over $1.2 billion, with over half of this total—or $706.6 million—occurring in the last year.

See this essay for more on cost overruns in government programs.

Five Decades of Federal Spending

The chart below shows federal spending in three component parts over the last five decades. It includes Obama’s proposed spending in 2011. Here are a few thoughts on the recent spending trends:

Defense: In the post-9/11 years, defense spending bumped up to a higher plateau of around 4 percent of GDP. But now we have jumped to an even higher level of around 4.9 percent of GDP.

Interest: The Federal Reserve’s easy money policies reduced federal interest payments in recent years. That is coming to an end. Obama’s budget shows that interest payments will start rising rapidly next year and hit 3 percent of GDP by 2015. And that’s an optimistic projection.

Nondefense: This category includes all other federal spending. After a steady decline during the Clinton years to 12.9 percent of GDP, President Bush pushed up nondefense spending to a higher plateau of around 14.5 percent. Then came the recession and financial crisis, and the Bush-Obama tag team hiked spending to an even higher level of around 19 percent of GDP. That level of nondefense spending is almost double the level in 1970 measured as a share of the economy.

Retroactive Surveillance Immunity, Obama Style

There’s a lot to unpack in the Office of the Inspector General’s blistering 300-page report on illegal FBI abuse of surveillance authority issued last month, but I want to highlight one especially worrisome aspect, about which I spoke with The Atlantic’s Marc Ambinder earlier today.

The very short version of the report’s background finding is that, for several years, analysts at the FBI blithely and illegally circumvented even the minimal checks on their power to demand telephone records under the PATRIOT Act. I’ll go into this further in a future post, but there are strong indicators that the agents involved knew they were doing something shady. Thousands of records were obtained using a basically made-up process called an “exigent letter” wherein they ask for records with what amounts to an IOU promising legitimate legal process any day now. (In many of those cases, the legitimate legal process would not actually have been available for the records obtained.) Still more disturbing, an unknown number of records were obtained without even this fictitious process: Agents simply made informal requests verbally, by e-mail, or via post-it note. And hey, why bother with subponeas or National Security Letters when you can just slap a sticky on someone’s monitor?

Treated to a preview of the OIG’s damning conclusions, the FBI was eager to find some way to cover its massive lawbreaking. So they apparently crafted a novel legal theory after the fact, in hopes of finding some way to shoehorn their actions into federal privacy statutes.  On January 8—as in four weeks ago, years after the conduct occurred—the Office of Legal Counsel seems to have blessed the FBI’s theory, which unfortunately remains secret.  Democratic Sens. Russ Feingold, Dick Durbin, and Ron Wyden have asked the Justice Department for details, but at present we just don’t know what kind of loopholes DOJ believes exist in the law meant to protect our sensitive calling records.

Communications records are generally protected by Chapter 121 of Title 18, known to its buddies as the Stored Communications Act. The few snippets of unredacted material in the OIG report suggest that the FBI’s argument is that the statute does not apply to certain classes of call records. Presumably, the place to look for the loophole is in §2702, which governs voluntary disclosures by telecom firms.  There is, of course, an exemption for genuine emergencies—imminent threats to life and limb—but these, we know, are not at issue here because most of the records were not sought in emergency situations. But there are a number of other loopholes. The statute governs companies providing electronic communications services “to the public”—which encompasses your cell company and your ISP, but probably not the internal networks of your university or employer. The activity at issue here, however, involved the major telecom carriers, so that’s probably not it. There’s another carve-out for records obtained with the consent of the subscriber, which might cover certain government employees who’ve signed off on surveillance as a condition of employment. We do know that in some cases, the records obtained had to do with leak investigations, but that doesn’t seem especially likely either, since the FBI claims (though the OIG expresses its doubts about the veracity of the claim) that the justification would apply to the “majority” of records obtained.

My current best guess, based on what little we know, is this. The SCA refers to, and protects from disclosure to any “government entity,” the records of “customers” and “subscribers.”  But telecommunications firms may often have records about the calling activity of people who are not the customers or subscribers of that company. For example, reciprocal agreements between carriers will often permit a phone that’s signed up with one cell provider to make use of another company’s network while roaming. When these outside phones register on a network, that information goes to a database called the Visitor Location Register. You could imagine a clever John Yoo type arguing that the SCA does not cover information in the VLR, since it does not constitute a “subscriber” or “customer” record. Of course, it beggars belief to think that Congress intended to allow such a loophole—or, indeed, had even considered such technical details of cell network architecture.

My guess, to be sure, could be wrong. But that just points to the larger problem: The Justice Department believes that some very clever lawyerly reading of the privacy statutes—so very clever that despite the rampant “creativity” of the Bush years, they only just came up with it a few weeks ago—permits the FBI to entirely circumvent all the elaborate systems of checks and balances in place (or so we thought) to protect our calling records. If investigators can write themselves secret exemptions from the clear intent of the law, then all the ongoing discussion about reform and reauthorization of the PATRIOT Act amounts to a farcical debate about where to place the fortifications along the Maginot Line.

QDR: The Pentagon Hedges

As usual, Ben Friedman beat me to the punch regarding the Quadrennial Defense Review (QDR) (.pdf), and, as usual again, he nails it.

I do see some value in the exercise, however. So let’s not “forget it” just yet.

By constructing a rationale to justify our existing defense posture, and providing a blueprint for force planning into the future, the QDR can be particularly useful for taking on some sacred cows. For example, the proposals to cancel the CG(X) cruiser, shut down production of the C-17 and the F-22, restructuring the DDG-1000 destroyer and the Future Combat Systems program, are sure to rile up members of Congress who continue to treat the defense budget as just another vehicle for dispensing pork barrel goodies to a handful of constituents. By singling these programs out as inconsistent with our strategic objectives, the QDR forces the advocates of these programs to come up with different rationales, beyond the inevitable “jobs, jobs, jobs” mantra.

But the QDR can only do so much. The real culprit driving an enormous defense posture is a national security strategy which presumes that the United States is, and always will be, the world’s indispensable nation. We need a different grand strategy, one that would shift some of the burdens on our friends and allies around the world who have grown too comfortable under the U.S. security umbrella.

There is vague language in the QDR about evolving our strategic posture in different regions, and emphasis on building capacity, but the bottom line is the same as it has been for decades: a de facto permanent presence for U.S. forces in Europe and Asia, and continued attention to security in “key regions” (a phrase that appears seven times), which could be construed as everywhere in the world.

For nearly two decades, the United States has been the policeman for the world. If the senior civilian leadership in the White House had decided to push other countries to take responsibility for their own security, and for security in their respective regions, the QDR might have become a vehicle for responsibly shaping a smaller military that is explicitly oriented toward defending U.S. security. Instead, because the military is convinced that they will be expected to answer all of the world’s 911 calls for the foreseeable future, the Pentagon hedged its bets.

I can’t say that I blame them.

Deficit Prognostications

Exactly two years ago, George W. Bush released his final budget. Here’s what the Washington Post had to say:

[T]he president’s budget envisions a big jump in the budget deficit, from $163 billion in 2007 to about $400 billion in 2008 and 2009. Much of that increase will be the result of a slowing economy and a stimulus package expected to cost about $150 billion.

Today’s release of President Obama’s FY 2011 budget shows that those deficit prognostications were way off:

Instead of a “big jump” to $400 billion in 2009, the actual deficit turned about to be a trillion dollars higher. Bush deserves most of the blame for that deficit, but the 2010 and 2011 deficits will be on Obama.

The frightening prospect is that, like Bush, Obama’s future budget projections will also turn out to be low-balled. Whether it has been war, natural disasters, or a recession, Bush and Obama have both responded to any “crisis” by spending gobs of money. Given that even Obama is projecting annual deficits still in the trillion dollar range by 2020, taxpayers had better hope the Taliban, Mother Nature, and the economy start cooperating.

The Unrelenting Battle over Campaign Finance

Following on the heels of November’s gubernatorial elections in Virginia and New Jersey, the loss of Ted Kennedy’s Senate seat in Massachusetts two weeks ago was a devastating blow to Democratic Party hopes.  But it must have been especially devastating to President Obama, who promised an adoring University of Missouri crowd, just before he was elected, that “We are five days away from fundamentally transforming the United States of America.”  Yet it would appear, judging from the unrelenting commentary and from the president’s own behavior last week, that those losses pale in comparison to the government’s loss before the Supreme Court two days after the polls closed in Massachusetts.  For 11 days now the wailing over the Court’s Citizens United decision has not ceased.  Indeed, campaign finance regulation, intimately connected to incumbency protection, is a bedrock principle of modern liberalism.

Exhibit A is E.J. Dionne’s column today in the Washington Post – his second in a week on the subject.  Last week, railing against the “reckless decision by Chief Justice John Roberts’s Supreme Court and the greed of the nation’s financial barons,” he charged the Court with “an astonishing display of judicial arrogance, overreach and unjustified activism” and urged “a new populist-progressive alliance” to demand “legislation to turn back the Supreme Court’s effort to undermine American democracy” – including a bill prohibiting political spending by corporations who hire lobbyists, no less.

Today, however, Dionne has last Wednesday’s unseemly episode of Obama rebuking a silent Supreme Court to work with.  And, like the immortal Daniel Schorr on yesterday’s NPR Sunday Morning, he puts all the blame on Justice Samuel Alito for seeming to mouth, silently, “Not true” when Obama, before all assembled and a watching nation, tendentiously misstated the holding in Citizens United.  But Dionne doesn’t stop there, of course.  No, he thanks Alito.  You see, “Alito’s inability to restrain himself” brought a long-ignored truth to the nation:  “The Supreme Court is now dominated by a highly politicized conservative majority intent on working its will, even if that means ignoring precedents and the wishes of the elected branches of government.”  Likening Obama’s behavior to President Reagan’s writing a 1983 article criticizing Roe v. Wade – I didn’t make that up – Dionne chastises conservatives for their double standard:  “Reagan had every right to say what he did. But why do conservatives deny the same right to Obama?”  Where does one begin?

Turning finally to “the specifics of Obama’s indictment,” Dionne tries to defend the president’s misstatements, but unfortunately the precision ordinarily expected of such a wordsmith seems to have deserted him.  Citing Obama’s claim that the Court had reversed “a century of law” and also opened “the floodgates for special interests – including foreign corporations,” Dionne writes that ”Obama was not simply referring to court precedents but also to the 1907 Tillman Act, which banned corporate money in electoral campaigns.”  That’s not what the Tillman Act did:  It banned direct corporate contributions to campaigns.  Only in 1947 were independent campaign expenditures by corporations (and unions) banned – and more clearly so only in 1990, which is the ban the Court overturned.  Moreover, pace Obama, foreign corporations are still specifically banned from contributing anything of value “in connection with a Federal, State or local election.”  Thus, in claiming, without more, ”that the ruling opens a loophole for domestic corporations under foreign control to make unlimited campaign expenditures,” Dionne seems simply to be passing along what he’s read or heard from others.  Nothing in the Court’s opinion warrants that conclusion.

But it’s Dionne’s larger claim that most demands an answer – that an “activist” Roberts Court, exercising “raw judicial power,” is ”ignoring precedents and the wishes of the elected branches of government.”  That’s hardly the definition of “activism.”  That’s what the Court should be doing, where it’s warranted by the Constitution, whether the Court is defending the rights of blacks to attend unsegregated schools or of gays to sexual freedom or of corporate owners, the shareholders, to engage in political speech through their corporation consistent with their articles of incorporation and by-laws.  The claim that corporations aren’t people is a red herring.  Corporate owners are people, and their right to speak can take many forms.  Fortunately, we have a First Amendment, which protects not only corporate owners but E.J. himself from all but the error of his ways.

[Cross-posted at Politico Arena]

Financial Fiasco: ‘Best Books of 2009’

Johan Norberg’s Financial Fiasco: How America’s Infatuation with Homeownership and Easy Money Created the Economic Crisis has been named one of the best books of 2009 by the Spectator, Britain’s most important political affairs magazine. Excerpt:

Ever since the crash, I have been waiting for Johan Norberg to write about it – and finally, this year, he has obliged. I have three copies of his first book, In Defence of Globalisation, with varying degrees of annotation. I have already started to deface Financial Fiasco, his book showing how governments created this mess. The American government pumped up the housing bubble – and then there was a collective delusion that the market was rational. As Norberg says, the market is no more than a collection of humans who fall prey to hubris. And their hubris was imagining that computer models had eliminated risk: that the boom would not be followed by a bust.

It previously got an excellent review in the Financial Times. It’s enough to make you think that the elite British press are smarter than the elite American press.