Zach Carter2013-05-21T15:02:59-04:00Zach Carterhttp://www.huffingtonpost.com/author/index.php?author=zach-carterCopyright 2008, HuffingtonPost.com, Inc.HuffingtonPost Blogger Feed for Zach CarterGood old fashioned elbow grease.TRIPS Exemption Opposed By Obama Administration, Threatening Cost Spike For Drugs In Poorest Nationstag:www.huffingtonpost.com,2012:/theblog//2013-05-20T12:56:08-04:002013-05-21T09:46:55-04:00Zach Carterhttp://www.huffingtonpost.com/zach-carter/
The regulations would extend intellectual property rules currently used in developed countries to a few dozen nations currently classified by the United Nations as "Least Developed Countries" (LDCs), including Haiti, Bangladesh, Rwanda, Somalia, Chad and several other nations in sub-Saharan Africa. Because many of the nations classified as least developed exhibit very high rates of HIV and AIDS, the proposed rules have raised concerns among human rights advocates who note that higher drug prices will result in lower treatment levels.
Worldwide, less than 50 percent of HIV-positive adults currently receive treatment, while less than 25 percent of HIV-positive children do, according to the U.N. Global Commission on HIV and the Law. Nearly one-third of all HIV positive people live in LDCs, according to UNAIDS.
"There are many reasons for this [HIV] treatment gap. But a major one is the result of recent bilateral and multilateral trade agreements that have undoubtedly increased the power of pharmaceutical patent holders to control the prices of drugs on global markets. Governments, especially in low- and middle-income countries, cannot afford them," wrote the U.N. Global Commission in July 2012.
The rules currently being debated by international negotiators stem from the World Trade Organization's Agreement on Trade Related Aspects of Intellectual Property Rights, known as TRIPS. The treaty requires countries to abide by a host of U.S.-style intellectual property standards, including patent criteria that grant pharmaceutical companies long-term monopolies on medicines. Protected by these monopolies, companies routinely charge extremely high prices in pursuit of profit maximization, locking the global poor out of treatment. While TRIPS rules explicitly include a host of important terms that allow countries to produce or import cheaper, generic medicines, the U.S. and European governments have repeatedly pressured nations against using those exemptions to treat their citizens.
"The HIV epidemic has exposed the serious problems of applying TRIPS to medicines and other pharmaceutical products," the U.N. Global Commission wrote.
When the TRIPS treaty was signed in 1994, it granted LDCs 20 years to comply with its terms. While some countries have witnessed substantial economic improvement and "graduated" out of their LDC classification, many remain essentially poor. A coalition of those nations is currently negotiating with other WTO nations to extend this exemption until countries have economies robust enough to be considered "lower-middle income" rather than "least developed."
Last week, five House Democrats, including Reps. Henry Waxman (D-Calif.) and Barbara Lee (D-Calif.), wrote a letter to the Office of the U.S. Trade Representative urging the agency to abide by the nations' request.
"We are concerned that if LDCs are required to fully implement TRIPS while still 'least developed' this could limit access to quality, affordable medicines to fight HIV, malaria and other diseases," the lawmakers wrote.
But USTR opposes this plan, and is pushing to limit an extension of the LDC exemption to five years, according to sources familiar with the negotiations. In addition, USTR is seeking to ban countries from rolling back any existing intellectual property standards that may help lower the cost of drugs. Many nations implemented TRIPS-like policies during the colonial era, while others adopted them under more recent pressure from the U.S. and Europe.
"The proposal about which we're expressing questions is from some of the LDCs requesting a permanent exclusion for LDCs from TRIPS obligations," USTR spokeswoman Carol Guthrie told HuffPost. "We want LDCs to be able to participate more fully in, and benefit more broadly from, the global trading system, sending positive messages about their innovation climates to draw investment and jobs, rather than being permanently excluded."
The implication of USTR's position is that that TRIPS will help LDC countries to develop, but that by refusing to implement the treaty, countries have been relying on a global safety net rather than growing their economies.
In April, 130 academics specializing in development economics signed a letter urging USTR to agree to the LDCs' request. "Existing empirical evidence does not support the proposition that heightened intellectual property protections have had positive impacts on foreign direct investment, local innovation, technological capacity-building, or even development more broadly in LDCs," wrote the academics, who included professors from Yale, New York University and the University of California, Berkeley.
"Suggestions that least developed countries -- the poorest and most economically vulnerable countries in the world -- are somehow trying to stay poor to take advantage of WTO rules is ridiculous," said Matthew Kavanagh, director of U.S. Advocacy for the Health Global Access Project. "Do U.S. officials think LDCs are not doing everything they can to end the poverty, famines and disease they face?"
The short-term extension, moreover, does not allow countries to devise long-term public health treatment projects, particularly for diseases like HIV, which require decades of treatment.
"We are disappointed that the U.S. Trade Representative's office has chosen to deny a request by the world's poorest countries that is fair, sensible and takes into account the multiple challenges these countries face, including a heavy burden of infectious diseases such as HIV and AIDS and [tuberculosis]," said Rohit Malpani, director of policy and analysis at Doctors Without Borders's Access Campaign. Doctors Without Borders is a humanitarian organization that won the Nobel Peace Prize in 1999. "Unsurprisingly, the approach adopted by the U.S. Trade Representative is not too different from the approach preferred by the multinational pharmaceutical industry."
The Obama administration has spent over a year pressuring the Indian government to abandon its policy of providing a less expensive generic version of a new cancer drug. India, which features a per capita income of about $1,400 a year, is not considered a least developed country, but rather a "lower-middle-income country" and, as such, is required to comply with WTO treaties.
Although TRIPS requires countries to issue pharmaceutical patents and implement a host of other standards that give drugmakers greater pricing power, the treaty explicitly protects countries' rights to produce generic versions of medications under a variety of circumstances.
In India, Bayer was charging $5,000 a month for its cancer drug -- a price so high that only 2 percent of Indian patients who needed it could afford it. When the government licensed a generic producer to provide the medicine for $157 a month, the Obama administration declared in a congressional hearing that the move was an "egregious" TRIPS violation.]]>Mitch McConnell On IRS Scandal: 'I Don't Think We Know What The Facts Are'tag:www.huffingtonpost.com,2012:/theblog//2013-05-19T12:16:57-04:002013-05-20T09:47:19-04:00Zach Carterhttp://www.huffingtonpost.com/zach-carter/
"There is a culture of intimidation throughout the administration," McConnell said on NBC's Meet the Press. "The IRS is just the most recent example."
"Do you have any evidence that the President of the United States directed what you call a culture of intimidation at the IRS to target political opponents?" host David Gregory asked.
"I don't think we know what the facts are," McConnell replied.
"That hasn't stopped you from accusing," Gregory noted.
"We're talking about an attitude that government knows best, the nanny state is here to tell us what to do and if you start criticizing, you get targeted," McConnell said.
McConnell was one of several Republican lawmakers to discuss the IRS controversy on Sunday. Earlier in the day, Rep. Paul Ryan (R-Wis.) suggested strongly that the White House was involved in the scandal.
"This is rotten to the core," Ryan said on "Fox News Sunday." "This is arrogance. This is big government cronyism … To try and suggest that this is just bureacratic snafus, we already know that this is not true."
But later on "Meet The Press," Rep. Dave Camp (R-Mich.) acknowledged that Republicans have no evidence that the administration was, in fact, involved.
"Two years ago the director of the exempt organization division knew of this. Did anyone up the chain know about it? We don't know that yet," Camp said. "We don't have anything to say that the president knew about this."]]>Mitch McConnell Defends Obama Administration On AP Scandaltag:www.huffingtonpost.com,2012:/theblog//2013-05-19T12:00:02-04:002013-05-20T09:19:34-04:00Zach Carterhttp://www.huffingtonpost.com/zach-carter/
The AP has openly questioned the legality of DOJ's actions, and civil liberties advocates have decried them as a violation of the First Amendment right to a free press.
But during an appearance on NBC's "Meet The Press," McConnell declined to attack the administration over the issue.
"Actually, I do think these national security leaks are very important and it looks to me like this is an investigation that needs to happen because national security leaks, of course, can get our agents overseas killed," McConnell said.
The AP reported in May 2012 that the CIA had thwarted a plot by an al-Qaeda affiliate to bomb a U.S.-bound airplane. It was later revealed that the would-be bomber was a U.S. spy, and the news put an end to the ongoing CIA operation. The Justice Department investigation is thought to have occurred as a result.
When pressed by host David Gregory about whether DOJ's conduct in the matter should be reviewed, McConnell reiterated that he was concerned about the leak itself. He did not criticize the administration on First Amendment grounds.
"What I am supportive of is investigating national security leaks that endanger Americans around the world," McConnell said. "Any time you're leaking national security information, if it endangers Americans around the world, it's a serious matter."
The Obama administration has aggressively pursued leaks and prosecuted leakers, and it helped derail a reporter shield bill in 2009 that would have protected journalists from revealing their sources to prosecutors. While early versions of the bill had included a narrow exemption for "terrorist" threats, the White House demanded a broad exemption for "national security" matters and a host of other provisions granting prosecutors access to information reporters uncover. The administration eventually backed a much weaker shield law with a broad national security loophole that did not protect reporter notes and other work records. ]]>Karl Rove Talks IRS Scandal, Compares His Group To NAACPtag:www.huffingtonpost.com,2012:/theblog//2013-05-19T11:40:05-04:002013-05-20T09:40:21-04:00Zach Carterhttp://www.huffingtonpost.com/zach-carter/
Rove said liberal organizations had first exploited the loophole, which has garnered attention in the wake of news the IRS scrutinized applications for tax-exempt status from small tea party groups.
"501(c)4s have been around for a long time and the Democrats and the left have used these for years to do some politics and a lot of social welfare," Rove said on "Fox News Sunday," listing the NAACP, the Sierra Club and Planned Parenthood as groups that serve a social welfare function and still engage in political activity. "You have to spend a majority of your money on social welfare and a minority of your resources on political activity."
Rove, a career political strategist, raised hundreds of millions of dollars during the 2012 election and spent them on political advertisements designed to influence the presidential and congressional races. Rove's Crossroads GPS is one of hundreds of essentially political organizations that receive tax-exempt status designed for "social welfare" groups.
While many have called for reforms to the law allowing such groups to receive tax breaks, Rove insisted that the exemption is justified, and that organizations that support the Democratic Party have been working the statute longer.
"What happened is the Democrats had this for decades, for literally decades, and no criticism at all. Then Republicans began in 2010 to say, wait a minute, if it's good enough for them, we'll duplicate that structure as well. Then suddenly we get what we get, which is a huge bunch of activity aimed at conservative groups."
Rove's organizations do not provide the counseling, legal assistance and other support functions that the NAACP provides on civil rights.
Federal agencies frequently target smaller players who may be abusing the system to avoid lengthy legal battles with more prominent companies or organizations. Sen. Robert Menendez (D-N.J.) on Sunday criticized the IRS for targeting small Tea Party groups while allowing bigger fish, like Rove's Crossroads GPS, to pass through with little scrutiny.
"It's outrageous that the IRS went after these small tea party groups when Karl Rove is out there saying that he wants to use these groups to change the outcome of the election," Sen. Robert Menendez (D-N.J.) said on ABC's "This Week."]]>Paul Ryan On Benghazi: 'I Don't Know' If There Was A Cover-uptag:www.huffingtonpost.com,2012:/theblog//2013-05-19T10:37:24-04:002013-05-19T11:07:16-04:00Zach Carterhttp://www.huffingtonpost.com/zach-carter/
"What we now know from congressional testimony is that the number two man in Benghazi, the deputy chief of mission, informed his superiors including the secretary of state that this was a terrorist attack," Ryan said during an appearance on "Fox News Sunday."
"Those of us who have had the briefings, seen the videos, know there was no protest involved. To suggest afterwards that this was the result of a spontaneous protest, we now know is not the case. So the burden of proof here is on the administration's side. It is -- why did they continue to push this kind of a story when they knew nearly immediately afterwards that that was not the case?"
"Do you believe that the White House purposely misled the American people on Benghazi to try to beat you and Mitt Romney and win the election?" host Chris Wallace asked.
"I don't know the answer to that question," Ryan responded. "Rather make a conclusion before an investigation has been completed, we just need to investigate this for the sake of good government."
As recently as last week, Ryan insisted to conservative radio that there is "no doubt" a cover-up took place, an assertion that remains on his official congressional website.
But a day after Ryan's talk radio appearance, the White House released more than 100 pages of emails that cast doubt on the Republican theory that the administration had altered its talking points about the attack for political gain.
The emails detailed revisions to the talking points that were ultimately used by UN Ambassador Susan Rice in appearances on Sunday talk shows. Although one State Department email did voice concerns about the talking points being "abused" by members of Congress to "beat up the State Department," the documents show that both the CIA and the State Department had urged revisions, with both agencies voicing concerns that the talking points not interfere with an investigation into what had taken place in Benghazi. The repeated GOP refrain that Rice had been responsible for doctoring the talking points was discredited.
Ryan, the 2012 Republican vice presidential nominee, repeatedly attacked the Obama administration on Benghazi during the campaign.]]>Reporter Shield Law: Obama Asks Schumer For New Bill After Hampering Prior Effortstag:www.huffingtonpost.com,2012:/theblog//2013-05-15T13:11:24-04:002013-05-15T15:12:59-04:00Zach Carterhttp://www.huffingtonpost.com/zach-carter/
The scope of the bill and how effective it would be remains unclear, however, given prior administration opposition to a "reporter shield" law.
The request is opportunistically timed, coming just days after it was revealed that the Department of Justice had subpoenaed telephone records of 20 AP phone lines and more than 100 reporters and editors. The White House has faced heavy criticism for the subpoena, though the president has said that he was unaware of it and Attorney General Eric Holder said that he had recused himself from the investigation.
The subpoena, nevertheless, renewed questions over the administration's relationship with the press in general and with the proposed shield law specifically.
During a press conference on Tuesday, Holder said that both he and the president had long supported "a reporter shield law."
"If you remember, back in 2009 during my confirmation hearings, I testified in favor a of a reporter shield law," Holder said. "We actually as an administration took a position in favor of such a law. Didn't get the necessary support up on the Hill. It is something that this administration still thinks would be appropriate."
The actual backstory was more complex than Holder let on. In fact, the Obama administration played a significant role in weakening the reporter shield law under consideration, which led ultimately to its shelving.
In the fall of 2009, Sen. Chuck Schumer (D-N.Y.) and then-Sen. Arlen Specter (D-Pa.) put forward a bill that sought to prevent federal officials from compelling journalists to reveal sources or information under threat of jail time.
The bill would have required prosecutors to pursue every possible avenue for obtaining information without reporters' input before seeking information from them. It also would have required a court to sign off on a prosecutor's effort to subpoena a reporter by balancing the public's right to a free press with prosecutorial interests. It included narrow exemptions for information that would prevent an act of terrorism or a violent crime, and for eyewitness accounts of a crime.
The Obama administration worked to water down the bill by seeking a far broader national security exemption. It would have given members of the administration the prerogative to declare certain types of leaks a matter of national security, and require federal judges to defer to prosecutors' claims that the information involved was indeed an important national security issue.
“The White House’s opposition to the fundamental essence of this bill is an unexpected and significant setback," Sen. Chuck Schumer (D-N.Y.) told The New York Times in 2009. "It will make it hard to pass this legislation.”
Civil liberties advocates also noted that the administration's efforts had a dramatic effect on the bill's propsects for passage.
"They requested a specific exception for national security leaks, and that killed the bill," ACLU Legislative Counsel Gabe Rottman told HuffPost.
A month after the administration objected to the Schumer-Specter bill, the parties reached a compromise that largely reflected the Obama administration's preferences. The compromise also would not have protected reporter notes and other records from a prosecutor's subpoena.
The bill cleared the Judiciary Committee, but was unable to garner the votes necessary to pass the Senate, even though Democrats had a filibuster-proof 60 seats at the time. Members of Congress began debating whether bloggers should receive the same protections as journalists employed by traditional media outlets. When WikiLeaks released its first trove of documents in 2010, the legislation lost its remaining support.
UPDATE: 1:30 p.m. -- Brian Fallon, a spokesman for Schumer, told The New York Times that the senator would reintroduce the compromise version of the bill, not the original version that didn't include Obama's edits.
“This kind of law would balance national security needs against the public’s right to the free flow of information," Schumer said. "At minimum, our bill would have ensured a fairer, more deliberate process in this case.”
It's unclear what the compromise shield law would have accomplished in the case of the current controversy over the AP subpoena. The administration, after all, has cited compelling national security concerns as a justification for seizing those phone records.
White House Press Secretary Jay Carney, meanwhile, skirted questions about the dubious timing of the administration's push for a shield law. The president, he said, has long supported such a measure and "does think it is appropriate to resubmit that legislation and try to convert it into law."
"We are glad to see that that legislation will be reintroduced because [the president] believes strongly that we need to provide protections to the media that this legislation will do," said Carney. ]]>Obama, Cameron Promote Trade Deal Granting Corporations Political Powertag:www.huffingtonpost.com,2012:/theblog//2013-05-13T18:44:48-04:002013-05-14T00:38:34-04:00Zach Carterhttp://www.huffingtonpost.com/zach-carter/new political powers for corporations in the deal.
Negotiations have not formally begun, but a series of meetings between U.S. and EU officials have established some ground rules and the preliminary scope of the talks. Since tariffs are already low or nonexistent, the agreement will focus on regulatory issues. That emphasis has concerned food safety advocates, environmental activists and public health experts, who fear a deal may roll back important standards.
Obama and Cameron were vague on Monday, while celebrating the potential for a trade pact to create jobs.
"Our extensive trade with the U.K. is central to our broader transatlantic economic relationship, which supports more than 13 million jobs," Obama said at a press conference Monday. "I believe we’ve got a real opportunity to cut tariffs, open markets, create jobs, and make all of our economies even more competitive."
The 13 million figure is a broad measure of the total jobs in U.S. and Europe "supported" by both trade and financial investment. U.S. exports to Europe support 2.4 million American jobs, according to the Office of the U.S. Trade Representative.
"To realize the huge benefits this deal could bring will take ambition and political will -- that means everything on the table, even the difficult issues, and no exceptions," Cameron said. "It’s worth the effort. For Britain alone, an ambitious deal could be worth up to £10 billion ($15.3 billion) a year, boosting industries from car manufacturing to financial services."
The negotiation has received little attention after being endorsed by Obama in February during his State of the Union address, and the official public comments system for a deal at regulations.gov received 347 comments, mostly from corporations and corporate lobbying groups.
Last week, however, Rep. Alan Grayson (D-Fla.) delivered more than 10,000 citizen comments to the U.S. trade representative that he received through an online campaign protesting the inclusion of new political powers for corporations under a controversial process known as "investor-state dispute resolution." In April, the Office of the U.S. Trade Representative told HuffPost that the agency will seek to include such a process in the EU trade deal.
Investor-state resolution grants corporations the political power to appeal one government's laws and regulations to an international court. If the court rules that the government's standards violate the terms of a trade agreement, it can impose financial penalties and other sanctions.
The mechanism has been included in U.S.-negotiated pacts with individual nations since the North American Free Trade Agreement in 1994. But the resolution is not currently permitted in disputes with the U.S. and with EU nations, currently governed by World Trade Organization treaties. Under WTO rules, a company must persuade a sovereign nation that it has been wronged, leaving the decision to bring a trade case in the hands of elected governments.
Granting corporations the political power to appeal regulations and laws to an international court is usually defended as a way to protect companies from arbitrary dictators or weak court systems in developing countries. But the expansion of the practice to first-world relations exposes that rationale as disingenuous. Rule of law in the U.S. and EU is considered strong because the court systems are among the most sophisticated and expert in the world.
Public interest groups said they worry that an investor-state resolution system between the U.S. and the EU would allow corporations to compare regulatory standards in different countries, and sue the nation with the strongest rules. EU food safety regulations, for instance, are more robust than those in the U.S., while American bank regulations are stricter than those the many EU countries, including the U.K.
Grayson's website, www.tradetreachery.com, allowed citizens to submit a form letter opposing the plan.
"I oppose including an 'investor-state' dispute resolution in this trade agreement," the form letter read. "Corporations should not be allowed to sue my country to break the laws that they do not like."
"We welcome all input from Members of Congress and their constituents," USTR spokeswoman Carol Guthrie told HuffPost. "We are in contact with Rep. Grayson's office directly to make sure we take in all comments."
Companies have grown increasingly ambitious about bringing investor-state cases under NAFTA in recent years. Exxon Mobil and Dow Chemical have challenged Canadian rules that apply to offshore oil drilling, hydraulic fracturing and the use of pesticides. In December, drug giant Eli Lilly brought a NAFTA case against the Canadian government after it invalidated a patent for one of the company's medications.
]]>Wall Street Bills Clear Hurdle With Democrats Backing Deregulationtag:www.huffingtonpost.com,2012:/theblog//2013-05-07T18:50:22-04:002013-05-08T11:40:52-04:00Zach Carterhttp://www.huffingtonpost.com/zach-carter/wrote a letter urging lawmakers to reject a slate of Wall Street deregulation measures, nearly two dozen Democrats joined Republicans to approve the package in the House Financial Services Committee.
The legislation would repeal several sections of the 2010 Dodd-Frank Wall Street reform law targeting derivatives, the complex financial transactions at the heart of the 2008 banking collapse. Similar measures have already cleared the House Agriculture Committee with broad bipartisan backing.
The most controversial bill advanced on Tuesday would expand government backing for derivatives by allowing banks to sell them from their taxpayer-insured divisions. Dodd-Frank requires banks to "push out" many of these operations into units that do not receive deposit insurance from the Federal Deposit Insurance Corporation (FDIC).
The bill's primary Democratic supporters, Reps. Jim Himes (Conn.) and David Scott (Ga.), argued that ordinary taxpayers do not in fact provide assistance to the bank divisions involved.
The FDIC guarantees certain deposits at banks, ensuring that ordinary citizens do not lose their savings if their bank fails. This insurance is paid for by premiums the government charges banks -- hence the Himes-Scott argument. But the fund typically holds less than 1.5 percent of the banking industry's total deposits on hand, an amount easily overwhelmed in times of crisis.
At the hearing Tuesday, Himes, a former Goldman Sachs banker, noted that the FDIC's fund was not exhausted during the 2008 collapse. It's true that the FDIC's fund was not depleted, but only because banks received trillions of dollars in bailouts from Congress and the Federal Reserve. When the fund was emptied in the savings-and-loan crisis of the early 1990s, ordinary taxpayers stepped in to pick up the tab.
Nevertheless, just six of the Financial Services Committee's 28 Democrats opposed the bill, which garnered unanimous GOP support. The "no" votes came from Reps. Stephen Lynch (D-Mass.), Keith Ellison (D-Minn.), Al Green (D-Texas), Michael Capuano (D-Mass.), Nydia Velazquez (D-N.Y.), and Maxine Waters (D-Calif.), the panel's top-ranking Democrat.
Another bill in the deregulatory package would exempt derivatives traded between different subsidiaries of the same company from new transparency rules. These "inter-affiliate" swaps are often used in complex offshore tax avoidance schemes.
That bill's author, Rep. Gwen Moore (D-Wis.), bemoaned media pressure surrounding the legislation, arguing that the current law hammers the economy. "The notion that now we should just do nothing and continue to cripple the economy is something that I reject," Moore said.
Another bill approved by the committee on Tuesday would exempt foreign offices of U.S. banks from many U.S. rules. AIG's infamous credit default swap unit was located in London, as was the "London Whale" debacle at JPMorgan Chase.
On Monday, the Treasury secretary had warned lawmakers against repealing pieces of Dodd-Frank.
"The derivatives provisions in the Wall Street Reform Act constitute an important part of the reforms being put in place to strengthen our financial system by improving transparency and reducing risks for market participants," Lew wrote. "These reforms should not be weakened or repealed."
So the Obama administration currently opposes the legislative package, and the bills seem unlikely to overcome a filibuster in the Senate. But the broad bipartisan support for bank deregulation worries progressives on Capitol Hill that the package could eventually follow the path taken by 2012's JOBS Act -- another deregulatory bill that ultimately secured President Barack Obama's support after winning over House Democrats.
CORRECTION: A previous version of this story misidentified Rep. Gwen Moore as representing a district in Illinois. She represents a district in Wisconsin.
]]>Executive Pay Of Austerity Advocates Saves Companies More Than $1 Billion Via Tax Loopholetag:www.huffingtonpost.com,2012:/theblog//2013-05-02T00:00:01-04:002013-05-02T08:26:22-04:00Zach Carterhttp://www.huffingtonpost.com/zach-carter/a new report by the liberal think tanks Institute for Policy Studies and Campaign for America's Future.
The four highest-paid executives at the firms received a total of $6.3 billion in pay over the period, according to the report. Federal tax law allows companies to deduct executive pay based on performance from the firm's tax bill as a business expense. This performance-based compensation includes stock options, stock awards and other types of incentive pay. These 90 companies qualified for tax perks totaling between $1 billion and $1.5 billion over the course of three years, depending on how many types of pay firms actually deducted.
Companies can choose to be more or less aggressive about their tax deductions, and some types of incentive pay exist in a gray area where certain companies choose to claim deductions and others do not. Firms do not make their tax filings public, although they release estimates of overall taxes paid in SEC filings. The IPS-CAF study was based on actual payments to executives that were taxable in the years 2009, 2010 and 2011 that would have qualified for deductions, but whether firms chose to take them is not a matter of public record.
Fix the Debt is one of several austerity advocacy groups tied to Wall Street billionaire Peter Peterson, who started a think tank devoted to deficit reduction in 2008 and has bankrolled multiple public relations campaigns on the issue.
A total of 125 CEOs are officially members of the coalition, including CEOs of 90 public companies. The IPS-CAF report only examined tax perks for public companies in the coalition. The same CEO pay loophole is available to private companies, but private firms do not have to disclose executive pay to the SEC.
The coalition urges a host of spending cuts and tax reforms, including benefit cuts for Social Security, Medicare and Medicaid, as a means to reduce the federal budget deficit. A spokesman for the group told HuffPost that while the group doesn't advocate for specific policies, it does insist that comprehensive tax reform be part of any debt deal.
"It's a lot easier for groups like this to sit on the sidelines and throw stones than to talk about the 4 million meals that are going to be eliminated for seniors because Congress wouldn't pass a debt deal," Fix the Debt spokesman Jon Romano said. "All of our supporters understand that there is going to be pain associated with a comprehensive debt deal and that people are going to have to give something up to get a debt deal in place. But everything has to be on the table. We're a campaign about fixing the debt. This is not about protecting special interests, this about what's in the best interest of the American people."
The group is currently airing an online video pushing to cut Social Security benefits by using a more conservative measure of inflation to calculate annual cost-of-living increases.
The CEO pay loophole being used by Fix the Debt companies is extremely popular in corporate America. According to a report by Citizens for Tax Justice, Fortune 500 companies skipped out on $11.2 billion in taxes in 2011 alone thanks to this loophole.
"The stock option loophole is a major reason why corporations are paying record-low federal income tax rates," said Matthew Gardner, executive director of the Institute on Taxation and Economic Policy. "The worst of it is that there is no 'cost' to a corporation that uses stock options to pay its executives, so there's no justification for allowing them to deduct it as an expense. It's not an expense."
Sen. Carl Levin (D-Mich.) has introduced legislation that would eliminate the loophole, but the plan is rarely included in deficit reduction talks on Capitol Hill.
The highest-paid executive in the Fix the Debt coalition is UnitedHealth Group CEO Stephen Hemsley, who received $198.9 million from 2009 to 2011, which would have qualified his company for $67.7 million in tax breaks. UnitedHealth declined to comment for this article.
Some of the companies eligible for the biggest tax breaks from CEO pay are run by politically influential executives.
According to the IPS-CAF report, Honeywell could have lowered its tax burden by as much as $21.5 million based on CEO David Cote's $70.1 million in pay from 2009-2011 -- the fifth-highest break among the firms analyzed. Cote serves on Fix the Debt's steering committee, and is also close with President Barack Obama, who named him to the Simpson-Bowles Commission, where he served as the second-ranking Republican. (Alan Simpson and Democrat Erskine Bowles also co-chair Fix the Debt.)
Honeywell is very aggressive about minimizng its tax payments, paying nothing at all in federal income taxes between 2008 and 2010, and receiving $34 million in tax rebates from the federal government during that period.
"Mr. Cote's compensation is aligned with the company's strong growth and reflects our variable, at-risk and long-term compensation plan that’s based on sustainable, profitable growth and stock price appreciation," said Honeywell spokesman Rob Ferris. "Honeywell is in compliance with U.S. tax law for treatment of corporate tax deductions for CEO pay."
President Obama named former Verizon CEO Ivan Seidenberg to his Export Council in 2010. From 2009 and 2011, Verizon qualified for $29.9 million in tax breaks from Seidenberg's $94.2 million in pay, third-highest among the Fix the Debt CEOs. Seidenberg stepped down from Verizon in 2011 but remains a member of Fix the Debt. Verizon declined to comment for this article.
Verizon disputed IPS' methodology and told HuffPost it only had $32.9 million in deductible CEO pay for Seidenberg during those years, which would have reduced the firm's tax bill by $11.5 million. Verizon said its deductions were the sum of $3 million in salary, $10.4 million in short-term incentive pay and $19.5 million in long-term incentive payments recognized during the years. Verizon did not provide documentation to verify the claims.
"We strongly dispute the IPS findings -- which are simply inaccurate with respect to Verizon," company spokesman Robert Varettoni told HuffPost. "We fully comply with tax law, which makes performance-based compensation deductible provided we obtain the requisite shareholder approval."
The IPS-CAF report based its Verizon calculations on a 2012 SEC filing which stated that Seidenberg exercised $20 million in stock options from 2009 - 2011 in 2012 which were tax deductible. Seidenberg cashed in another $30 million in stock options from the period in 2011, and $25 million in 2010. In addition, Seidenberg received $10,434 in non-equity performance compensation, including $3.5 million in 2011, $3.0 million in 2010 and $3.9 million in 2009.
Although the scope of the federal budget deficit has been a major political issue over the past four years, it has faded in recent months as Congress has considered gun legislation and immigration reform.
The deficit itself is also shrinking rapidly. With no policy changes, Goldman Sachs economists expect it to fall from $775 billion in 2013 to $475 billion by the end of 2015 due to economic growth.]]>India's U.S. Drug Rulings Earn Trade Blacklist Spot From Obama Administrationtag:www.huffingtonpost.com,2012:/theblog//2013-05-01T20:52:00-04:002013-05-02T08:56:21-04:00Zach Carterhttp://www.huffingtonpost.com/zach-carter/
The Office of the U.S. Trade Representative objected to aspects of India's patent system in the agency's latest Special 301 report:
Recent actions by the Indian Government, however, have raised serious questions about the innovation climate in India and risk hindering the country’s progress towards an innovation-focused economy. In the pharmaceutical sector, some innovators are facing serious challenges in securing and enforcing patents in India. The United States urges India instead to adopt policies that support both cutting-edge innovation to address important health challenges and a robust generic market.
India's generic drug industry, the world's largest maker of low-cost medicines, has been the core of a public health revolution in the past decade, producing inexpensive versions of drugs used around the globe. Treatment for AIDS, in particular, was virtually nonexistent in developing countries prior to the emergence of Indian generic drug manufacturing in the early 2000s. The U.S. AIDS relief program, the President's Emergency Plan for AIDS Relief, relies heavily on generic medications.
But the Indian generic industry is reviled by pharmaceutical firms in the U.S. and Europe, which rely on strict intellectual property standards to charge high prices for their medicines. By securing monopolies through patents and other methods, these companies are able to charge high prices in the U.S. without the threat of market competition until the patents expire.
The Office of the U.S. Trade Representative has placed India on its "Priority Watch List" for several years, citing issues valued by the American pharmaceutical industry every year Obama has been in office. The list is little known in the U.S. and has no recognizable immediate impact. Still, it is a significant economic tool abroad that can have political repercussions, although some experts argue that it's relevance has waned.
“The U.S. Trade Representative's decision to place India on its annual trade 'Watch List' is a bully tactic being used to punish the country for taking steps to ensure access to affordable, lifesaving medicines and to prevent other developing countries from following similar strategies," said Judit Rius, U.S. manager of the Doctors Without Borders Access Campaign. Doctors Without Borders is a humanitarian group that won the Nobel Peace Prize in 1999.
"We believe that both branded companies and generic companies are part of a larger pharmaceutical ecosystem that’s critical to the health of our citizens," a U.S. Trade Representative official told HuffPost on the condition of anonymity.
There have been two major intellectual property cases in India since USTR's last Special 301 list. The first occurred last year, when the Indian government approved the development of an affordable generic alternative to Nexavar, an expensive cancer drug patented in India by the German drugmaker Bayer AG. Bayer was charging more than $5,000 a month for standard doses of the medication -- unthinkable in a nation with a per capita income of about $1,410.
A generic version, approved by the Indian government, cost just $157 a month. Under the compulsory license issued by the government, Bayer received a 6 percent royalty on sales of the generic drug.
In a July 2012 hearing, U.S. Patent and Trademark Office Deputy Director Teresa Stanek Rea called the decision an "egregious" WTO violation. "This is front and center," she said. "[We are] trying to stop the granting of further compulsory licenses."
Compulsory licensing -- the granting of a license to produce a generic version of a product -- is explicitly protected by WTO treaties to help countries improve public health and ensure access to medicines.
USTR referenced the Nexavar case in its Special 301 Report, objecting to the Indian government decision for saying the country's law allows a compulsory license on products that are not being manufactured in India three years after they are patented. The India court's decision, however, primarily focused on Bayer's failure to meet demand for the medication and the firm's failure to offer the drug at "reasonably affordable price."
James Love, director of the nonprofit group Knowledge Ecology International, told HuffPost the Obama administration, by focusing on India's domestic drug production rules, neglected to admit it was trying to force India to accept a $65,000 annual price for a cancer drug.
"We are very interested in working with India to achieve the right policy mix to maximize both innovation and access," the anonymous USTR official told HuffPost. "We do remain concerned, however, about some of the circumstances cited by Indian courts to justify the Bayer compulsory license, including the fact that the drug was not being manufactured in India. This is compounded by other Indian Government industrial policies, such as the National Manufacturing Policy."
This spring, India issued another major patent ruling on the cancer drug Gleevec, manufactured by Swiss drugmaker Novartis. While the drug had been around for a long time, the company filed a patent for an updated version available in pill form. India's highest court ruled against Novartis, on the grounds that the pill format did not constitute a significant new breakthrough worthy of monopoly pricing power.
Companies frequently apply for patents on minor upgrades to existing medications in an effort to extend their monopolies beyond the standard 20-year patent, a process known as "evergreening." Evergreening is frowned upon by the World Health Organization.
Some types of evergreening are also frowned upon by the Obama administration inside the U.S. Obama's latest budget proposal criticized "evergreening" of biotech drugs based on "minor changes in product formulations."
The 2013 Special 301 Report, however, objected to the standard provided by the Indian court.
"The United States is concerned that the recent decision by India’s Supreme Court with respect to India’s prohibition on patents for certain chemical forms absent a showing of 'enhanced efficacy' may have the effect of limiting the patentability of potentially beneficial innovations," the report reads. "Such innovations would include drugs with fewer side effects, decreased toxicity, or improved delivery systems."
The different message on evergreening is part of what Love said he sees as an emerging dualism in Obama's prescription drug policies. On some domestic issues, Obama is interested in emphasizing consumer affordability. Those priorities often do not apply abroad, however.
"Obama has been really willing to throw poor people in developing countries under the bus in order to shore up his political support with big pharma," Love said. "He's going to try to push back a bit on some pharmaceutical things in the United States that would benefit U.S. consumers, but he's showing no interest in doing things that would recognize the vast differences in income between people in the United States and developing countries."]]>Offshore Tax Havens: Sequestration Damages IRS Battle With Tax Evasiontag:www.huffingtonpost.com,2012:/theblog//2013-04-30T07:29:24-04:002013-04-30T12:14:30-04:00Zach Carterhttp://www.huffingtonpost.com/zach-carter/a new report by the Government Accountability Office. But paltry IRS funding -- compounded by budget cuts required by sequestration -- is undermining its ability to combat tax cheating.
Since 2009, the IRS has recovered roughly $5.5 billion in unpaid taxes and penalties through amnesty programs targeting Swiss banking customers. These programs are being efficiently and effectively managed, according to the GAO, but an independent investigation by Sens. Carl Levin (D-Mich.) and Tom Coburn (R-Okla.) estimated that the government still loses at least $100 billion a year from offshore tax evasion.
"That's probably the tip of the iceberg," said Rebecca Wilkins, senior tax policy counsel at Citizens for Tax Justice.
While there are legal ways for the wealthy to reduce their taxes by shifting cash abroad, the GAO report exclusively examined simple, criminal offshore tax evasion, in which money his hidden from the IRS in low- or no-tax countries like Switzerland or the Cayman Islands. Through tax amnesty programs, the IRS has developed critical new information about the banks where people illegally hide money, and the accountants and financial advisers who help engineer illegal tax schemes. The IRS has the authority to ask these financial professionals for client names, and use them to open new investigations.
The amnesty programs also have exposed new demographic information on tax criminals, revealing two basic categories of offshore tax criminals: ultra-wealthy families who pass down their accounts to future generations, and everyone else.
According to the GAO report, 49 percent of the total penalties assessed on offshore tax dodgers by the IRS were culled from only 378 cases -- just 6 percent of the 10,439 cases that the IRS has processed in full. The high penalty amount is an inevitable result of the scope of the tax evasion for these accounts -- all featured unpaid tax bills of at least $5 million.
Of those 378 cases, 47 percent involved offshore accounts that had been inherited from another family member. Nearly one-fourth of all the $5.5 billion in tax penalties the IRS has collected since the inception of its amnesty program has come from inherited wealth.
Because of the IRS budget squeeze, the agency finds it difficult to take advantage of the new data. The IRS currently audits about 1 percent of tax returns, according to Wilkins, making it easy for fraudulent or fishy returns to go undetected.
"The IRS just doesn't have the resources to investigate and prosecute all of the fraud that's going on," Wilkins said. "It's the same problem with corporate disclosures. One company might have a 58,000-page filing. Nobody has time to go through all of that material."
The IRS budget has been cut steadily over the past few years as political pressure to cut government spending has increased. That spending problem has grown more severe under the budget cuts associated with sequestration.
Last week, Acting IRS Commissioner Steve Miller sent a memo to all of the agency's employees notifying them that they would be furloughed without pay for seven days this summer, according to a copy of the memo obtained by The Huffington Post. The IRS declined to comment for this article.
"Congress cutting the IRS budget is so short-sighted," Wilkins said. "This is obviously an area where you can spend money to make money. "They could bring in a lot more money by staffing up."
For years, criminal offshore tax evasion was a low-risk way to lower U.S. taxpayer tabs, since the bank secrecy laws in Switzerland and the Cayman Islands are strict. But in 2008, a whistleblower from Swiss banking giant UBS presented the IRS with the names of thousands of clients who were hiding money from the U.S. government with his company to avoid paying American taxes. The resulting caseload overwhelmed already-overburdened IRS staff, prompting the agency to offer these tax cheats a deal: Anyone who confessed to illegally stashing money abroad could avoid jail time and publicity by agreeing to pay all back taxes owed, plus a 20 percent penalty. For some accounts deemed "small" -- less than $75,000 in unpaid taxes -- the IRS imposed lower penalty fees.
Thousands of wealthy Americans decided to take the deal rather than risk prison. To date, more than 30,000 taxpayers have sought amnesty through the program. More than 10,000 of those claims have been fully processed.
The GAO flagged an additional 10,000 taxpayers who may have filed "quiet disclosures" without catching the IRS' attention. In a quiet disclosure, taxpayers officially acknowledge the existence of an offshore account without owning up to unpaid back taxes or mandatory penalties that would be imposed by the amnesty program. A quiet disclosure is relatively risky -- taxpayers give the IRS more information to bring a tax evasion case. But for many taxpayers, the certainty of saving money in the short-term is still worth the risk of getting caught.
The scope of criminal tax evasion is likely far broader than what the GAO cited and some of the wealthy taxpayers who took amnesty may not have disclosed other criminal accounts in jurisdictions outside of Switzerland.]]>Sherrod Brown: Obama Is 'Wrong' On Banks Too Big To Failtag:www.huffingtonpost.com,2012:/theblog//2013-04-25T15:14:16-04:002013-04-26T13:41:23-04:00Zach Carterhttp://www.huffingtonpost.com/zach-carter/
"They're wrong," Brown said during an interview on HuffPost Live, when asked about previous comments from Obama and Treasury officials that Dodd-Frank had solved too-big-to-fail.
WATCH Brown's comments in the video above.
Obama declared bank bailouts dead in July 2010 when he signed Dodd-Frank into law and later reiterated the theme during his 2012 reelection campaign. Treasury officials repeatedly stated after the bill's passage that the legislation empowered regulators so they wouldn't be pushed to save major financial institutions with tax dollars in the future.
"The American people will never again be asked to foot the bill for Wall Street's mistakes," Obama said in July 2010. "There will be no more tax-funded bailouts -- period."
"They need to think that," Brown told HuffPost, referring to Obama and Treasury. "They want to think that because they want that chapter closed and not reopened. They don't really want to deal with those issues. But I do think they're wrong. I think the Treasury Department has over the years -- as many of the agencies, like the SEC [Securities and Exchange Commission] and OCC [Office of the Comptroller of the Currency] -- been too close to Wall Street. I think there's no question about that."
Brown said that extensive lobbying at regulatory agencies by the six largest banks has prevented Dodd-Frank from being implemented effectively and argued that most investors still believe big banks would be salvaged by the government in a crisis.
"It really doesn't matter what Treasury thinks. It doesn't matter what I think ... What matters is what the capital markets think. And the capital markets will loan money to Wall Street, to these Wall Street banks at lower interest rates than they loan to the Peoples Bank in Coldwater, Ohio, or loan to the Huntington Bank in Columbus, Ohio ... Why is that? The people investing money understand that there is almost no risk in lending to the big banks, because if they fail, then they think taxpayers will bail them out."
As further proof that too-big-to-fail remains in full effect, Brown pointed to Attorney General Eric Holder's comment that he resists prosecuting officials from big banks out of concern that such cases could damage financial markets.
On Wednesday, Brown held a press conference to unveil bipartisan legislation, co-sponsored by Sen. David Vitter (R-La.), that would force the six largest U.S. banks to hold significantly higher levels of capital than they currently do on big banks. That bill would require banks with at least $400 billion in assets to carry at least 15 percent of those assets in hard equity capital.
That percentage is five times the threshold required by Basel III international banking standards. High capital requirements limit the amount of money that banks can borrow to finance their operations. This capital makes it less likely that a bank will fail if risky bets backfire and limits the losses to creditors if the bank does fail. The high standards are designed to put banks in a difficult position and encourage them to break up into smaller firms, limiting their power in the marketplace and on Capitol Hill.
Separately, Brown is also pushing further legislation that would require big banks to break up into smaller institutions.
The bill would cap the total non-deposit liabilities of any bank at 2 percent of the total U.S. economy. If the plan were implemented, JPMorgan Chase, Wells Fargo, Citigroup, Bank of America, Morgan Stanley and Goldman Sachs would all have to be broken up into two or three smaller banks.
The idea has long had the support of progressives who focus on limiting the power of large corporations, but it also has garnered support from self-styled free-market conservatives like Vitter, who want to eliminate government benefits enjoyed by select firms.
Brown has introduced similar legislation in prior sessions of Congress. He also offered the measure as an amendment to Dodd-Frank, but the amendment failed after garnering just 33 votes. The senator told HuffPost that he's secured at least "a dozen" additional votes for the proposal in the ensuing years.
CLARIFICATION: A previous version of this article stated that Brown introduced liability cap legislation on Wednesday. He introduced stronger capital requirements.]]>Lawmaker Unemployment Hearing Attended By Single Member of Congress At Openingtag:www.huffingtonpost.com,2012:/theblog//2013-04-24T14:20:48-04:002013-04-25T00:56:50-04:00Zach Carterhttp://www.huffingtonpost.com/zach-carter/
Nobody told Congress.
A hearing Thursday on long-term unemployment held before the 19-member Joint Economic Committee began with just a single lawmaker in attendance. Panelists testifying on the problem and its potential solutions spoke only to Sen. Amy Klobuchar (D-Minn.), the committee's vice-chair, for the beginning of the roughly 90-minute session.
The all-but-complete absence of congressional interest was first documented by National Journal reporter Niraj Chokshi, who tweeted a photo of the hearing. Shortly after the photo was posted, several other lawmakers did trickle in to participate. Sen. Christopher Murphy (D-Conn.) arrived eight minutes into the hearing. Once the hearing had been under way for 35 minutes, Rep. John Delaney (D-Md.) was also in attendance, according to Chokshi. Eventually Rep. Elijah Cummings (D-Md.) also joined, bringing the crowd to four.
More than 4.6 million Americans have been jobless for at least 27 weeks, according to the latest job figures, a rate of 3.0 percent. That's higher than at any point since World War II, including the 2.6-percent peak during the recession of the early 1980s. The official unemployment rate currently stands at 7.6 percent, down from 10.0 percent at the recession's darkest moments, although much of the reduction has been due to people leaving the workforce -- simply giving up hope of finding a job.
Jobs advocates have continually chastised Congress for focusing on the federal budget deficit instead of the shortage of employment in the U.S., which still features more than four job seekers for every open position in the country.
Senators who did not attend the hearing included Sens. Robert Casey (D-Pa.), Mark Warner (D-Va.), Bernie Sanders (I-Vt.), Martin Heinrich (D-N.M.), Dan Coats (R-Ind.), Mike Lee (R-Utah), Roger Wicker (R-Miss.) and Pat Toomey (R-Pa.). Reps. Kevin Brady (R-Texas), John Campbell (R-Calif.), Justin Amash (R-Mich.), Erik Paulsen (R-Minn.), Richard Hanna (R-N.Y.), Carolyn Maloney (D-N.Y.) and Loretta Sanchez (D-Calif.) also did not attend.
The Joint Economic Committee is one of only a handful of congressional panels that features members of both the House and Senate. Its hearings are thinly attended at times, but the contrast between Thursday's hearing and a March 14 hearing on "Solving The Federal Debt Crisis" is revealing. That hearing on debt opened with five members of Congress in attendance, including three Democrats and two Republicans. Over the course of the nearly two-hour session, several other members of the committee filed in.
Kevin Hassett, the author of Dow 36,000, which predicted a fantastic rise in equities before two subsequent crashes, said he wasn't surprised. "There are often moments like that at hearings. Very few are ever heavily attended. People came in late, after the picture, I suppose," he told HuffPost.
Dr. Harry J. Holzer, a public policy professor at Georgetown University, said by the time he testified at about 11 a.m., two senators -- Klobuchar and Murphy -- were in the room. "There were people in the audience," he said, noting that Klobuchar sounded motivated on the subject. "That can make it worth it," he added. "If one senator sponsors a bill with some of your information, that's a pretty big reward for your effort."
Holzer testified about the various hardships that the long-term unemployed faced and the differences between older unemployed citizens and younger unemployed citizens. He proposed wage insurance for people who transition from manufacturing jobs to jobs with lesser pay, having the federal government pitch in to make up the difference. Holzer said he has testified before Congress 15 times over the years, and there is always a risk of a low turnout.
Keith Hall, a senior research scholar at the libertarian-leaning Mercatus Center, is a former Bureau of Labor Statistics commissioner who testified at the hearing. "It's disappointing, I have to say," he told HuffPost about the attendance. "It is a little bit disappointing, because you'd really like to see a more engaged discussion, and it would be nice to see that both sides were there and both sides were talking."
Hall said that attendance was low probably because Congress isn't doing anything about long-term unemployment. With no bills to choose from, there's little value in becoming educated on the issue. The lack of interest may also be a consequence of the slow start to the year for the House of Representatives, which held just one markup session legislation on any topic in the first eight weeks of 2013.
"They're talking about the problem and they're looking for solutions, but there's really no hard proposal on the table," said Hall, "so while this is informative and helpful, they're not dealing with some proposal where they're close to working on something."
Congress is a long way off, Hall said. "I think it's good this is hitting their radar screen, but there's a lot of work to go to get the economy back in shape and get the long-term unemployed back in shape, and they need more than just a hearing a two," he said.
CORRECTION: A previous version of this article indicated that Sen. Klobuchar had been alone for the first half hour of the session. She was joined by Sen. Murphy after 8 minutes alone.]]>Goldman Sachs: Deficit Will Plunge Over Next 3 Yearstag:www.huffingtonpost.com,2012:/theblog//2013-04-22T15:39:38-04:002013-04-22T16:03:08-04:00Zach Carterhttp://www.huffingtonpost.com/zach-carter/
After beginning the year expecting a $900 billion deficit for 2013, Goldman's economic team, lead by Jan Hatzius, has now cut the figure twice, this time to $775 billion. By the close of 2014, the economists said, the deficit will decline to $600 billion, and clock in at $475 billion at the end of 2015. Goldman had previously expected a $650 billion deficit at the end of 2014 and $500 billion at the end of 2015. The improvements are due to stronger-than-anticipated tax collections coupled with lower-than-expected levels of government spending. The projections were published on Goldman's site in a note to clients, and sent to The Huffington Post by a HuffPost reader.
Goldman economists said the lower spending levels so far this year have not been driven by sequestration, which had very little effect on government spending in the first three months of 2013. They did, however, note that $42 billion in spending cuts from sequestration for 2013 will pull the deficit lower. Higher tax revenues in a steadily improving economy will have a greater impact, however, with a 1 percentage-point increase in tax revenues adding $25 billion to federal coffers.
Although politicians in both parties have cited the scope of the deficit while advocating for a variety of austerity measures over the past four years, Goldman's projections indicate that simply allowing the economy to grow will result in significant deficit reduction without painful spending cuts.
Goldman said it expects the government's push toward austerity policies to hamper economic growth by 2 percent this year, but will peak in the middle of year, allowing for growth of 3 percent to 3.5 percent "over the next few years."
Goldman also projects federal debt levels roughly equivalent to those predicted by the Congressional Budget Office, with total debt held by the public stabilizing a little below 80 percent of GDP through 2023.
Read the full note here. ]]>CISPA Vote: House Passes Cybersecurity Bill To Let Companies Break Privacy Contractstag:www.huffingtonpost.com,2012:/theblog//2013-04-18T13:49:23-04:002013-04-18T21:09:30-04:00Zach Carterhttp://www.huffingtonpost.com/zach-carter/
The Cyber Intelligence Sharing and Protection Act, known as CISPA, passed by a margin of 288 to 127, despite receiving a late veto threat from the Obama administration, which warned that the bill does not sufficiently protect civil liberties. The veto threat was particularly noteworthy, given President Barack Obama's Department of Justice has been urging Congress to expand its data-gathering and cybercrime powers for years. Congress shelved a similar bill last year after the White House expressed its formal opposition.
Supporters of the bill argue that it's needed to help the government protect key infrastructure and institutions from online attacks. They also have said the bill doesn't require companies or the government to monitor customer content, although it does authorize them to share personal account data, including emails and other information. Firms that voluntarily turn over such data would be immune from civil lawsuits.
The broad language of the bill, which imposes its standards above "any other provision of law," would effectively void privacy contracts between companies and their customers. Specifically it states that "Notwithstanding any other provision of law, a self-protected entity may, for cybersecurity purposes ... share such cyber threat information with any other entity, including the Federal Government." Companies could not be held accountable for violating terms of service agreements or other arrangements in which they promise not to share customer information with other parties.
Privacy and civil liberties advocates, including the American Civil Liberties Union, have blasted CISPA for overriding private contracts and authorizing both corporate and government access to personal information. Several Internet freedom groups also objected to the bill, warning that people will be less willing to use online services for fear that their privacy will be compromised.
Privacy proponents like the Electronic Frontier Foundation had urged the House to adopt an amendment that would have allowed companies to make legally enforceable privacy contracts with their customers. The amendment was never brought up for a vote.
The bill's opponents shared their concerns with the White House in the form a petition, which received the 100,000 signatures necessary to elicit a formal response last month. They also submitted more than 300,000 online signatures to the House Intelligence Committee.
But the corporate coalition that teamed up with web activists to take down the Stop Online Piracy Act in January 2012 was notably fractured during the congressional debate over CISPA. Many telecom companies, including AT&T and Comcast, support the legislation, which exempts them from legal liabilities. Chip manufacturer Intel and security software firm McAfee are also in favor. Others, such as Google, took no public position, while Microsoft and Facebook rescinded their support for the legislation, the latter after facing pressure from Demand Progress, the Internet freedom advocacy group founded by Aaron Swartz.
The intensity of the opposition, however, has been far more muted than that against SOPA, which pitted the bill's Silicon Valley opponents against support from corporate interests in Hollywood.
The weak corporate opposition to CISPA underscores the uphill battle that many nonprofit advocacy groups face in Washington when they lack such support: With corporate backing for the opposition, SOPA was abandoned without a vote, while CISPA, which is opposed largely by nonprofits, sailed through the House.
The CISPA vote also tested the Internet freedom credentials of SOPA opponents Reps. Darrell Issa (R-Calif.) and Jason Chaffetz (R-Utah), who have made significant inroads among web activists and tech firms on behalf of the Republican Party. Nevertheless, both voted in favor of CISPA.
Issa and Chaffetz defended their votes and argued that resurrecting their opposition to SOPA in the debate over CISPA was comparing apples to oranges.
"[SOPA] was a totally different thing ... just completely about something else," Chaffetz told The Huffington Post. "This is a question of cyber threats and our national security, and I believe we have to do everything we can to protect our national security."
Issa, who serves as the House Oversight Committee Chairman, said he was aware of the backlash the bill will provoke from the privacy and civil liberties communities but that he was comfortable with the final product.
"We've done our best to address their concerns in this bill," he told HuffPost, adding that measures would be taken to ensure oversight of what information was being shared, should the bill become law. "I'm confident we have all of the appropriate privacy protections in place."
The bill's chief backers stepped up pressure on members to garner their support ahead of the vote. CISPA sponsor Rep. Mike Rogers (R-Mich.) implied opponents were basically teenagers in their basements, while Rep. Michael McCaul (R-Texas) on the House floor invoked this week's Boston Marathon bombing to underscore the need to enhance national security.]]>