Tag: dennis kucinich

Political Support for Energy’s Loan Guarantees

Several weeks ago, 127 House Republicans joined 155 Democrats to defeat an amendment introduced by Rep. Dennis Kucinich (D-OH) and Rep. Tom McClintock (R-CA) that would have shut down the Department of Energy’s Title 17 loan guarantee program. That’s the program that gave birth to Solyndra, which has come to symbolize the failure of the Obama administration’s crony capitalist policies.

Why would members of Congress, and Republicans in particular, continue to support this federal boondoggle incubator? A new paper from Cato adjunct scholar Veronique de Rugy that looks at the Energy loan guarantees explains:

One reason is it serves three powerful constituencies: lawmakers, bankers, and the companies that receive the subsidized loans. Politicians are able to use loan programs to reward interest groups while hiding the costs. Congress can approve billions of dollars in loan guarantees with little or no impact to the appropriations or deficit because they are almost entirely off-budget. Moreover, unlike the Solyndra case, most failures take years to occur, allowing politicians to collect the rewards of granting a loan to a special interest while skirting political blame years later when or if the project defaults. It’s like buying a house on credit without having a trace of the transaction on your credit report.

Veronique notes that most of the money for the loan guarantees issued under section 1705 of Title 17 have gone to large and established companies:

These include established utility firms, large multinational manufacturers, and a global real estate investment fund. In addition, the data shows that nearly 90 percent of the loans guaranteed by the federal government since 2009 went to subsidize lower-risk power plants, which in many cases were backed by big companies with vast resources. This includes loans such as the $90 million guarantee granted to Cogentrix, a subsidiary of Goldman Sachs. Currently, Goldman Sachs ranks number 80 on the list of America’s Fortune 500 companies.

In recent testimony before the House Budget Committee, Chris Edwards and I also discussed the crony nature of the president’s “green” energy subsidies:

President Obama’s green energy programs illustrate how corporate welfare creates corrupting relationships between businesses and politicians. The Washington Post found that “$3.9 billion in federal [energy] grants and financing flowed to 21 companies backed by firms with connections to five Obama administration staffers and advisers.” It also noted that the “main players in the Solyndra saga were interconnected in many ways, as investors enjoyed access to the White House and the Energy Department.” According to the New York Times, Solyndra “spent nearly $1.8 million on Washington lobbyists, employing six firms with ties to members of Congress and officials of the Obama White House.”

American businesses, of course, have a right to lobby the federal government. But given that reality, Congress throws fuel onto the corruption fire by creating business subsidy programs. When subsidy money flows out the door from Washington to businesses at the same time that money flows back from businesses to Washington for lobbying, it’s no surprise that we get influence-peddling. Corporate welfare undermines honest and transparent governance, and Americans are sick and tired of the inevitable scandals.

Unfortunately, most members of Congress apparently aren’t sick and tired of it.

Woodward’s Narrative

The New York Times reports that the book, Obama’s Wars, by longtime Washington Post reporter Bob Woodward that is scheduled for publication next week, depicts an administration completely at odds over the war in Afghanistan.

According to Woodward, the president concluded from the start that “I have two years with the public on this.” He implored his advisers at one meeting, “I want an exit strategy,” and he set a withdrawal timetable because, “I can’t lose the whole Democratic Party.”

It’s unfortunate that the policy debate over Afghanistan will be further spun into a left-vs.-right issue. After all, there are growing, if nascent, signs that some on the political right have reservations about our continued military involvement in Afghanistan. Earlier this year, Congressman Tim Johnson (R-Ill.), who earned an 80 percent favorable rating from the American Conservative Union, was a GOP co-sponsor to Rep. Dennis Kucinich’s (D-Ohio) resolution to force the removal of U.S. forces from Afghanistan. In March, Congressman John Duncan (R-Tenn.) came to the Cato Institute and explained why “there is nothing conservative about the war in Afghanistan.”

And as Cato founder Ed Crane wrote last year in the pages of the LA Times:

Republicans should take this opportunity to return to their traditional non-interventionist roots, and throw their neoconservative wing under the bus and forcefully oppose the war in Afghanistan. The Republicans have a chance at this moment to reclaim the mantle of the party of non-intervention — in your health care, in your wallet, in your lifestyle, and in the affairs of other nations.

I am not a conservative, and neither are many of my Cato colleagues. But these comments are intended to highlight that leaving Afghanistan is far beyond Left vs. Right. In fact, many conservatives used to deride nation-building as a utopian venture that had little to do with the nation’s real interests. In the case of Afghanistan, troops are being deployed to prop up a regime Washington doesn’t trust, for goals our president can’t define. There is a principled case to be made that a prolonged nation-building occupation is weakening our country militarily and economically. It’s a question of scarce resources and limiting the power of government. The immense price tag for war in Afghanistan can no longer be swept under the carpet or dismissed as an issue owned by peaceniks and pacifists, much less “the Democratic Party.”

The Postal Service’s Union Problem

Comments from members of the House Oversight and Government Reform Committee at a recent hearing on the U.S. Postal Service’s woes indicate they don’t appreciate the USPS’s union problem. Postmaster General John Potter went before the committee to make his case for restructuring the postal operation, including greater labor flexibility.

From GovExec.com:

“You have to find people meaningful work, or no matter how compassionate you are, you’re not doing them any favors,” said Rep. Darrell Issa, R-Calif., the ranking member of the House Oversight and Government Reform Committee, criticizing holding rooms where underemployed postal workers wait until there are tasks for them to perform. “How many billions of dollars would have been saved if you’d aggressively right-sized the force before you came to us and said you want to go from six days [of mail delivery] to five?”

Congressman Issa should be informed that it is union rules that prevent postal management from laying off underemployed postal workers and having to put them in holding rooms.

Issa told Potter during his opening statement that the Postal Service has “more or less a third more people than you need,” but he said it “is not really acceptable” to convert full-time jobs to part-time positions, unless applicants are looking specifically for part-time work or part-time positions that lead to full-time work. Rep. Diane Watson, D-Calif., said she was concerned that part-time workers might not be treated fairly or could be excluded from collective bargaining agreements.

Lawmakers insisted repeatedly that even as the Postal Service confronts harsh financial realities, the agency must take into consideration the jobs of postal workers. “I’m hopeful this committee will find a way to deal with it that preserves the good faith that the people who serve the U.S. Postal Service have a right to expect,” said Rep. Dennis Kucinich, D-Ohio.

These members might want to read the Government Accountability Office’s latest report on the USPS, which called the mail monopoly’s business model “not viable.” Union labor is part of the problem. The average postal employee earns $83,000 a year in total compensation and 85 percent of its workforce is covered by collective bargaining agreements. Labor accounts for 80 percent of the USPS’s cost structure.

The GAO cites the following as reasons why USPS labor costs are so high:

  • The USPS covers a higher proportion of employee premiums for health care and life insurance than most other federal agencies, which is impressive because it’s hard to be more generous than federal agencies.
  • USPS workers participate in the federal workers’ compensation program, which generally provides larger benefits than the private sector. And instead of retiring when eligible, USPS workers can stay on the “more generous” workers’ compensation rolls.
  • Collective bargaining agreements limit the amount of part-time and contract workers the USPS can use to fit its workload needs, and they limit managers from assigning work to employees outside of their crafts. The latter explains why you get stuck waiting in line at the post office while other postal employees seemingly oblivious to customers’ needs go about doing less important tasks.
  • Most postal employees are protected by “no-layoff” provisions, and the USPS must let go lower-cost part-time and temporary employees before it can lay off a full-time worker not covered by a no-layoff provision.
  • If the collective bargaining process reaches binding arbitration, there is no statutory requirement for the USPS’s financial condition to be considered. This is like making the decision whether or not to go fishing, but not taking into consideration the fact that the boat has holes in its bottom.

The fact that Postmaster Potter has to go to Congress to plead for help to make business decisions points to a fundamental problem. Government-run businesses are necessarily hamstrung by the whims of politicians, who often only have a vague understanding of economics and business. If FedEx or UPS had to get congressional permission to manage its workforce, both would collapse. As mail volume falls, that’s where the USPS is headed unless we privatize it and deregulate postal markets.

Will Kucinich’s Vote Help ObamaCare?

Whether Rep. Dennis Kucinich’s (D-OH) “aye” vote will help pass ObamaCare depends on whether he asked for something in return.

Jane Hamsher of FireDogLake reports, “Kucinich told Obama that he wants a full ERISA waver [sic] and a public option in exchange for his vote.”  If he gets either of those things in the reconciliation “fixer” bill, then that will trigger a backlash.  His “support” could undermine the whole process.

It really depends on what kind of a negotiator Kucinich is.  If he’s a good negotiator, it hurts ObamaCare.  If he’s a lousy negotiator, it helps.

Thursday Links

Message to Republicans: Stop Hiding Behind the Troops

In what can only be described as a cheap partisan attack masquerading as patriotic chest-thumping, House Republicans this morning issued a statement opposing Ohio Representative Dennis Kucinich’s resolution for the withdrawal of troops from Afghanistan because… [drum roll please] the Republicans strongly support the troops in Afghanistan.

In a statement of Republican policy forwarded to GOP politicians and their staffers, the House Republican Leadership and the House Committees on Foreign Affairs and Armed Services Republicans write, ”Since the President’s speech, more United States Armed Forces have been deployed to the Afghanistan theatre in support of the implementation of our nation’s counterinsurgency strategy.  Many of them leave behind family and friends for the second, third, and fourth time.  They have been engaged in the largest offensive since the beginning of the war there, and they have done a magnificent job.  House Republicans are mindful these troops and their families will be watching this debate and remain committed to working towards swift and clean action when the resources impacting their military readiness, operational needs, and family support is debated and passed this spring.”

The GOP has got to stop hiding behind the troops. As I mention in a recent article, our brave servicemen and women are being deployed to prop up a regime Washington doesn’t trust, for goals our president can’t define. Sadly, the war not only provides a potent recruiting tool for militants, but it’s clear that it does little to appreciably protect America. As aptly demonstrated by the Christmas Day crotch bomber, the old argument of “We fight them there so we don’t have to fight them here” is complete and utter hogwash.

A Few Foreign Policy Items

1) Commandant of the Marine Corps announces part of justification for sending more troops to Afghanistan: “where we have gone, goodness follows.”  Pat Lang is displeased.

2) Glenn Greenwald observes that in Foreign Policy magazine’s survey of leading public intellectuals who write about foreign policy, the United States is tied with Somalia and Iran for second place in the category “Most Dangerous Country in the World.”

3) Afghanistan is an ideologically cross-cutting issue.  Rep. Dennis Kucinich (D-OH) praises Cato’s Afghanistan study on Fox News’ On the Record, saying

…I’m against any further taxes to pay for this war. But I think it has to be pointed out, this isn’t a left-right issue. I mean, here’s the Cato Institute, hardly a left-wing organization, wrote a piece called “Escaping the Graveyard of Empires,” and they have a plan, and I’ve met with them, that gets us out of Afghanistan, with advisers and a new approach to intelligence and also a new drug policy.

Meanwhile, the liberal Center for American Progress has produced a statement on Afghanistan that offers some empty rhetoric about an exit strategy but contains no actual plan–or even a call for a plan–for exiting.  Instead, their proposal for when to leave is limited to calling for a multinational effort that merely will “have all Afghan forces in the lead within four years, or the 12-year mark of our engagement.”  CAP is also offering a pretend plan to cut the Pentagon budget, urging Obama to spend more than $600 billion on defense for each of the next several years.