iOS app Android app More

Sequester Insanity

Joe Peyronnin   |   February 20, 2013    8:19 AM ET

It is doubtful that Congress and the White House will reach a budget agreement in time to avoid the deep mandatory cuts, known as the "sequester," from going into effect at the end of next week. The consequences, according to many economists, could be disastrous for the already anemic American economy.

Conventional wisdom currently is that the sequester deadline will pass and then Washington will come up with some sort of compromise solution. Perhaps just in time for the next self-inflicted crisis, the threat of a federal government shutdown on March 27 if Congress does not approve funding.

At the heart of this crisis is the debate over how to reduce the annual deficits that Washington continues to rack up. The national debt is currently $16.5 trillion, or about $50,000 for each citizen.

On Tuesday, Erskine Bowles and former Wyoming Senator Alan Simpson released their new deficit reduction plan, which they say splits the difference between President Barack Obama and House Republicans. Their plan would reduce the deficit by $2.4 trillion dollars over the next decade.

Bowles worked in the Clinton administration, and Simpson was a highly respected Republican Senator. They served as co-chairmen of the White House's 2010 deficit-reduction panel, which put together a bipartisan package of tax and spending changes that was rejected by both the administration and Congressional Republicans.

The Bowles-Simpson plan includes $600 billion in cuts from Medicare and Medicaid, $600 billion in new tax revenue from ending or reducing deductions and breaks, and $1.2 trillion in cuts to discretionary spending, along with cuts in cost-of-living increases for Social Security, the farm program and civilian and defense retirement programs. Bowles-Simpson 2.0, as it is being called, sharply reduced tax revenues from their original plan, perhaps in an effort to win over some Republicans.

In the current deficit debate, the White House favors a $1.5 trillion package that includes smaller cuts in social programs, investments in education, new technologies and infrastructure, and additional revenues achieved by closing tax loopholes. Republicans say they will propose a $4 trillion package of cuts that they claim will result in a balanced budget in 10 years, although they have not provided details. But Republicans have ruled out any further tax revenues.

Meanwhile, some economists question making deep cuts in federal spending at a time when the nation's economic recovery is so weak. They point to failed austerity measures in European countries, like England, which slipped back into another recession.

A compromise like the Bowles-Simpson plan seems appropriate for the country to avoid further calamity. "Our plan is not perfect, but it can serve, we believe, as a mark for a bipartisan deal," Mr. Bowles told reporters Tuesday morning. However, it is unlikely that the plan will receive any traction in Washington.

So, at the end of next week, the sequester is likely to go into effect. It calls for $85 billion in across the board cuts, and gives the government little discretion in how to enact them. The president called it a "meat cleaver" approach, warning that national security and vital services will be reduced, resulting in furloughs for border patrol agents, first responders, teachers and air traffic controllers.

With Congress on a break, no negotiations are underway. Instead, Congressional leaders are pointing fingers and playing the blame game. On Tuesday, House Speaker John Boehner said, "Words alone won't avert it. Replacing the president's sequester will require a plan to cut spending that will put us on the path to a budget that is balanced in 10 years. To keep these first responders on the job, what other spending is the president willing to cut?"

No wonder a recent Quinnipiac poll showed that 72 percent of American registered voters disapprove of the way Congressional Republicans are doing their job. And now Republicans are ready to bring the country to its knees rather than compromise on a more balanced budget deal to avert the latest Washington manufactured crisis. This is insanity.

Second Verse, Same as the First?

Andrei Cherny   |   February 19, 2013    8:52 PM ET

President Obama chose to begin his State of the Union address last week with a quotation from President Kennedy. It was appropriate and well-chosen. However, the agenda that he presented to the nation brought to mind another of Kennedy's quotes, this one from his 1960 campaign. A standard line in JFK's stump speech was that the Republican Party reminded him of its mascot: a "circus elephant, with his head full of ivory, a long memory and no vision." What went unsaid but left to his audience to infer was that the pachyderms invariably had to be trailed by a man with a shovel to clean up the mess.

It was a similar - and similarly unpleasant task - that occupied much of President Obama and President Clinton's first terms in the aftermath of the Great Recession and the double-dip recession of the early 1990s, respectively. In both men's presidencies, a stabilizing economy at the start of their second terms made it possible for them to speak to propose to the nation a longer term and broader set of ideas. Having been privileged to be part of President Clinton's post-reelection White House, what was remarkable to me in listening to this year's State of the Union address was how much of President Obama's new agenda had a familiar ring.

Whether it was raising the minimum wage, strengthening infrastructure, promoting research and innovation, providing high-quality preschool to every child in America, making college more affordable, addressing climate change, stemming gun violence, or even passing specific legislation such as the Violence Against Women Act and the Paycheck Fairness Act much of the 2013 State of the Union address picked up - even with the same words - where the 2000 State of the Union speech left off.

Yet while aspects of the agenda may be similar, the moment is very different. The intervening years between Clinton and Obama were not simply a pause but a detour - a devastating attack on the country, two painful wars, runaway deficits, economic policies that tilted away from middle class opportunity, and ever more corrosive politics.

The broadly shared growth and yawning budget surpluses of the end of the Clinton presidency have not yet reappeared, and it is doubtful we will see them soon. That means that some of the more ambitious elements of the Clinton agenda of 2000 - such as new universal retirement savings accounts to supplement Social Security - are now out of reach. "Of all sad words of tongue or pen," wrote John Greenleaf Whittier, "the saddest are these: 'It might have been!'"

The question, however, is what yet might be. That is because more has changed in the intervening years than our economic and budgetary situation. The partisan polarization already well in evidence in Congress in the late 1990s has been overtaken by an ideological polarization. The ranks of moderate Republicans, Blue Dogs, and New Democrats have dramatically thinned. Where Clinton could laugh about "the seesaw" he was witnessing in his 2000 speech with Democrats giving ovations at some points and Republicans providing them at others, Speaker Boehner and his Republicans could scarcely be roused to their feet to applaud what once would have been considered common sense.

Though the times are different, a president's agenda can still speak to that dynamic. So much of what was said in 2000 and in 2013 overlapped, but just as important as the specific programs was Obama's eloquent plea to address Medicare spending in a balanced way by appropriating the targets of the Bowles-Simpson commission. In doing so, he echoed the passion Clinton demonstrated for approaches such as reinventing government and reforming welfare - ideas that broke the mold and broke out of the traditional contours of the two party debate.

Perhaps it is too late to recreate "the seesaw" of the late 1990s, but these types of ideas are crucial to building a new long-term governing majority among the independents distrustful of the stalest parts of both parties' programs.

"The era of big government is over, but we can't go back to a time when our citizens were just left to fend for themselves," said Clinton in his 1996 State of the Union address. "It's not a bigger government we need, but a smarter government that sets priorities and invests in broad-based growth," argued Obama seventeen years later. What passed between their presidencies took America in a wrong direction in so many ways. In his 2013 State of the Union address, Obama held out the promise of building the bridge to a better 21st century.

Mollie Reilly   |   February 18, 2013   10:15 AM ET

Hillary Clinton will begin giving paid speeches this year, Politico's Mike Allen reported Monday.

Clinton, who retired as U.S. secretary of state earlier this month, is joining the Harry Walker Agency and is expected to earn fees in the six-figure range. However, Politico reports that she will likely speak for no fee on behalf of causes she supports, and will donate some of her earnings to charity.

The agency confirmed the news on its website Monday morning.

"We are proud to share the exciting news that Former Secretary of State Hillary Rodham Clinton has joined the Harry Walker Agency exclusively for her speaking engagements," reads the announcement.

Former President Bill Clinton, also represented by Harry Walker Agency, has had a lucrative career on the speaking circuit since exiting the White House in 2001. In 2011, he earned $13.4 million from speaking fees, increasing his total speaking earnings to $89 million over 10 years.

Other notable political figures at the agency include Al Gore, Dick Cheney, Joe Lieberman, Howard Dean, and Karl Rove.

Hillary Clinton is expected to join the paid speaking circuit in April or May.

As speculation swirls about whether or not she will run for president in 2016, Clinton has insisted she intends to take a break from politics after her busy four years at the State Department. In addition to her new speaking gig, she has also announced plans to write another memoir, focusing on her time as secretary of state.

  |   February 15, 2013    5:29 PM ET

The story revealing that FreedomWorks produced a video with an obscene scene featuring a giant panda, Hillary Clinton, and oral sex created quite a stir and, according to former officials of the influential tea party group, had staffers at the conservative advocacy group and super-PAC "freaking out," as one put it.

  |   February 4, 2013    9:42 AM ET

Message to the Republican Party: Be afraid, be very afraid.

MATTHEW LEE   |   February 1, 2013    7:42 AM ET

WASHINGTON — Secretary of State Hillary Rodham Clinton is leaving office with a slap at critics of the Obama administration's handling of the September attack on a U.S. diplomatic mission in Libya. She told The Associated Press that critics of the administration's handling of the attack don't live in an "evidence-based world," and their refusal to "accept the facts" is unfortunate and regrettable for the political system.

In her last one-on-one interview before she steps down on Friday, Clinton told the AP that the attack in Benghazi was the low point of her time as America's top diplomat. But she suggested that the furor over the assault would not affect whether she runs for president in 2016.

Shame on You, Goldman Sachs. Now Here's Your Bonus

Robert Scheer   |   February 1, 2013    4:46 AM ET

Here's a get-out-of-jail-free card, and while we're at it, take this obscenely huge bonus for having wrecked the economy. As the inspector general for the Troubled Asset Relief Program pointed out in a devastating report this week, "excessive" compensation was approved by the Treasury Department for the executives of the three companies that required the largest taxpayer bailouts to survive.

In a stinging rebuke of Timothy Geithner's Treasury Department, the report "found that once again, in 2012, Treasury failed to rein in excessive pay." Whopping pay packages of $5 million or more were allowed by the Treasury Department for a quarter of the top executives at AIG, General Motors and Ally Financial, the former financial arm of GM.

But that's nothing compared with the $21 million for last year's work garnered by Lloyd Blankfein, CEO of Goldman Sachs, which is now free of TARP supervision. In addition to his paltry $2 million in salary, Blankfein received a $19 million bonus for his efforts. Not quite the $67.9 million bonus he got in 2007 before the market crash that his firm did so much to engineer, but times are still hard.

Goldman was the training ground for Robert Rubin and Henry Paulson, the two Treasury secretaries who did their best to grease the skids for Wall Street hustlers. It was Rubin under President Bill Clinton who pushed to get the law changed to allow investment banks like Goldman to become commercial banks, and it was Paulson under President George W. Bush who permitted Goldman to take advantage of that loophole and partake in the low interest Fed money available to the commercial banks. Throw in the AIG bailout that allowed the passage of billions of dollars to Goldman, and you get the picture.

What you may not know, and file this in the gallery of the terminally shameless, is the role of James A. Johnson, the longest serving director of Goldman Sachs and chairman of its compensation committee that awarded Blankfein his outrageous bonuses. Before being named a director at Goldman, Johnson served as the CEO of Fannie Mae when the once public-spirited federal housing agency joined forces with Countrywide CEO Angelo Mozilo and other mortgage scam artists in initiating the great housing bubble.

Back in 1996, Johnson had named Mozilo to be chair of Fannie Mae's National Advisory Council, and together they cooked up a deal in which Fannie Mae came to rely on Countrywide's proprietary CLUES software for short-circuiting the mortgage qualification process. Thus was born the housing mortgage debacle that to this day has haunted the economy.

Countrywide announced its "Strategic Agreement with Fannie Mae" in a press release that all but predicted the subsequent housing crisis:

The objective is to expand markets to accommodate more customers and streamline loan processing in order to reduce the upfront cost of homeownership. This entails increased acceptance of Countrywide's proprietary CLUES underwriting technology, greater usage of short form appraisals, expansion of streamlined loan products, flow sales for expanded criteria loans, and guideline waivers.

That history became inconvenient back in 2008, when Democratic candidate Barack Obama picked Johnson, a lifelong Democrat, to head the search for a vice presidential candidate. Turns out Johnson was one of the beneficiaries of the new streamlined loan processing system, being what was known inside Countrywide as a "friend of Angelo," entitled to fast-track approval on loans. As a result, Obama had to drop him, but not so Goldman Sachs, where Johnson had landed as a director and remains today as the chairman of the firm's compensation committee.

They do flock together, and so it makes perfect sense that Johnson would approve the enormous bonus for Blankfein. In the end, it doesn't matter whether these folks are Democrats or Republicans, nor whether they are operating at the highest levels of government or banking -- they take care of their own. It is the new model of crony capitalism that must have Adam Smith turning in his grave, for it has nothing to do with free-market performance.

The invisible hand of that primitive and pure free market so celebrated in the folklore of capitalism as the essence of efficiency and productivity has been replaced by the all too visible hand of the fixer, who can combine government power and corporate profits to game the system. Yes, visible. Just observe how easily folks such as Rubin, Paulson and Johnson move through the revolving door between corporate and government power undeterred by critical media notice. And now it is Geithner's turn.

PHOTOS: Hillary's Best Moments Abroad

Eline Gordts   |   January 31, 2013    3:21 PM ET

On Friday, Hillary Clinton is handing over the keys of the State Department to John Kerry, and at least in one respect, Mme. Secretary's legacy will be hard to beat.

Clinton is the most traveled Secretary of State in the department's history, having covered a record 956,7333 miles over the course of her four-year term.

CBS explains that Clinton broke the record formerly held by Madeleine Albright, who led the State Department from 1997 to 2001. Albright took 96 trips during her term, while Clinton made more than a hundred visits abroad.

And in those trips, there sure were some magical moments: Hillary hugging Sarkozy; Hillary surrounded by handsome Indian men; Hillary dancing in Malawi; Hillary dancing in South Africa; Hillary in Kenya -- dancing, again.

Take a look at Hillary Clinton's best moments abroad in the slideshow below. We wish her lots of sleep (and very little jet lag) in the coming years.

DAVID BAUDER   |   January 28, 2013    5:26 PM ET

NEW YORK — With limited time and the unusual nature of a dual appearance with President Obama and outgoing Secretary of State Hillary Rodham Clinton, CBS' Steve Kroft said Monday said he thought it important to focus on their professional relationship instead of specific questions about world events.

Kroft said CBS was surprised when the White House suggested the appearance a little more than a week ago. The interview was conducted Friday and aired Sunday on "60 Minutes."

Luke Johnson   |   January 23, 2013   11:39 AM ET

Sen. Rand Paul (R-Ky.) criticized Secretary of State Hillary Clinton Wednesday during the Senate Foreign Relations Committee hearing over the terrorist attack in Benghazi, Libya, that killed Ambassador Chris Stevens and three other Americans.

"I'm glad that you're accepting responsibility," said Paul. "I think ultimately with your leaving that you accept the culpability for the worst tragedy since 9/11. And I really mean that."

"Had I been president and found you did not read the cables from Benghazi and from Ambassador Stevens, I would have relieved you of your post. I think it's inexcusable," he said, referencing Clinton's comments that she had not read all of the documentation surrounding the attack.

"I think we can understand you're not reading every cable," Paul said. He added that he didn't suspect Clinton of "bad motives" but said that it was a "failure of leadership."

Clinton responded, "I am the Secretary of State. And the [Accountability Review Board] made very clear that the level of responsibility for the failures that they outlined was set at the Assistant Secretary level and below."

Sen. Chris Murphy (D-Conn.) rebuked Paul in the next exchange. "If some people on this committee want to call this tragedy the worst since 9/11, it misunderstands the nature of 4000 plus Americans lost in the War in Iraq under false pretenses."

All Good in the Hood: Hell's Kitchen

Yvonna Russell   |   January 11, 2013    1:27 PM ET

2013-01-10-4dbfbcb4b72c8.jpg2013-01-10-2.jpg 2013-01-10-images1.jpeg2013-01-10-images.jpeg2013-01-10-storeop.jpg2013-01-11-sum8g.jpg2013-01-11-thumb1.php.jpeg2013-01-11-thumb2.php.jpeg

Our 9th Avenue Stiles Market is closing. As luxury high-rise buildings grow around the ethnically, culturally and economically diverse Hell's Kitchen neighborhood, many small businesses have closed or relocated. We have some delicious newcomers: Casellula, Merilu Pizza al Forno, Totto Ramen, Bar Centrale, and Shorty's. But I want to give a shout out to the old spots in the hood. Amy's Bread has great breads and so much more. This time of year the line outside her shop goes down the block for her yummy fragrant soups, sandwiches and salads.

A great spot for watching games and kicking back burgers and beers, Mr. Biggs's is the neighborhood bar. The owner Scott Sternick annually hosts a free Thanksgiving dinner for anyone in need. Everyone has a favorite pie at Little Pie Company. Mine is the Apple Walnut Sour Cream pie heated with a scoop of vanilla ice cream. Hell's Kitchen has many Thai restaurants, but I love the tiny Olieng Thai. Decorated in American memorabilia, The Cupcake Café is the place to sip cappuccino or coffee and indulge in the beautiful butter cream frosted cupcakes or cake. Tucked on the of side 51st Street near Tenth Avenue, Ezra Cohen presides over Azuri Cafe in his tiny space that seats 10 people max. Ezra serves the best and freshest falafel plates to a loyal following. Insatiable Critic Gael Greene stopped by recently.

Scentelate shelves carry the finest in aromatherapy, fragrances, incense and collectible Lampe Bergere. The go to guy for bike repair is Enoch at his 10th Avenue shop, Enoch Bikes. Fresh Cut owner Robert McKinnon designs beautiful floral arrangements for the table, event or terrace. Raconteur Jean Claude is the host of the glamorous Chez Josephine serving French, American and soul food cuisine in an opulent setting. Classic Frankie and Johnnie's Steakhouse is the place for a great macho dinner. Go to El Azteca for the lethal margaritas and shrimp tacos. Owner Pat Robustelli has the best New York slice at Pateriza.

Any diva or hairdresser will tell you Ray's Beauty Supply is the spot for hair products, equipment and worth the trip for sale bins of nail polish and beauty products. I almost hate to share Blossom Salon but love the chicas who excel at hair care with deep conditioning treatments, hair color and roller sets at affordable prices. Sea Breeze Market has the freshest seafood in the city. Westerly Natural Market stocks the best in organic and natural foods, supplements and products. Restaurant 44 & X is cool and elegant with delicious signature American cuisine and excellent wines. Check it out and add your suggestions below. I'm going out now. Writing this post has made Mama hongray!

  |   January 2, 2013    5:30 PM ET

BY JOSH LEDERMAN, ASSOCIATED PRESS

WASHINGTON -- Secretary of State Hillary Rodham Clinton has been speaking with staff and reviewing paperwork from the New York hospital where she is recovering from a blood clot in her head, the State Department said Wednesday.

Doctors continue to monitor Clinton's progress and her response to blood thinners intended to dissolve the clot. Aides said there was no update Wednesday on her condition, but emphasized that the secretary remained engaged with staff in Washington who are handling U.S. foreign policy in her absence.

"She's been quite active on the phone with all of us," said State Department spokeswoman Victoria Nuland.

Clinton was admitted Sunday to New York-Presbyterian Hospital for treatment of a clot stemming from a concussion she suffered earlier in December. While at home battling a stomach virus, Clinton had fainted, fallen and struck her head, a spokesman said. Clinton, 65, hasn't been seen publicly since Dec. 7.

Clinton was photographed Wednesday getting into a black van with her husband, Bill, daughter, Chelsea, and a security contingent to be taken elsewhere on the sprawling hospital campus.

Doctors found the clot, located in a vein that runs through the space between the brain and the skull behind the right ear, during a follow-up exam and began administering blood thinners. Her physicians said Monday that there was no neurological damage and that they expect she will make a full recovery.

Sidelined by her illness for most of December, Clinton was forced to cancel scheduled testimony before Congress about a scathing report into the attack on the U.S. diplomatic mission in Benghazi, Libya, and was absent on Dec. 21 when President Barack Obama nominated Sen. John Kerry, D-Mass., to succeed Clinton when she steps down at the start of Obama's second term, as had long been planned.

But Clinton had expected to return to work this week and had already started to resume regular phone contact with her foreign counterparts. On Saturday, the day before the clot was discovered, Clinton had a half-hour conversation with Lakhdar Brahimi, the U.N. envoy to Syria, in which the two discussed the state of affairs in that civil-war-torn country, Nuland said.

Also on Saturday, Clinton spoke by telephone with Qatari Prime Minister and Foreign Minister Hamad bin Jassim Al Thani, discussing recent developments in Syria, Afghanistan and the Palestinian territories.

Clinton's doctors said they planned to release Clinton from the hospital after the proper dose for the blood thinners had been established, and doctors not involved with her care say it's likely she will have no long-term consequences from the clot. But it remains to be seen whether she will be able to return to work before she resigns as secretary of state.

The illness has also raised questions about Clinton's political future and how her health might influence her decision about whether to run for president in 2016, as prominent Democrats have been urging her to consider. Clinton also suffered from a blood clot in 1998, midway through her husband's second term as president, although that clot was located in her knee.

  |   January 2, 2013    4:31 PM ET



WASHINGTON, Jan 2 (Reuters) - U.S. Secretary of State Hillary Clinton was discharged from a New York hospital on Wednesday after being treated for a blood clot near her brain and her doctors expect her to make a full recovery, the State Department said.

Clinton, who has not been seen in public since Dec. 7, was at New York-Presbyterian Hospital under treatment for a blood clot behind her right ear that stemmed from a concussion she suffered in mid-December, the department said on Sunday.

The concussion was the result of an earlier illness, described by the State Department as a stomach virus she had picked up during a trip to Europe that led to dehydration and a fainting spell after she returned to the United States.

"Secretary Clinton was discharged from the hospital this evening. Her medical team advised her that she is making good progress on all fronts, and they are confident she will make a full recovery," Philippe Reines, a deputy assistant secretary of state, said in a statement.

Reines said Clinton was "eager to get back to the office."

Earlier, State Department spokeswoman Victoria Nuland told reporters at her daily briefing Clinton had been talking with her staff by telephone and receiving memos.

Clinton also spoke to two foreign officials - the U.N. envoy on Syria and the prime minister of Qatar - on Saturday, the day before the State Department disclosed the blood clot and her stay at the hospital.

In a statement released by the State Department on Monday, Clinton's doctors said she was being treated with blood thinners and would be released from the hospital once the correct dosage had been determined.

  |   January 2, 2013    3:21 PM ET

WASHINGTON -- The State Department says Secretary of State Hillary Rodham Clinton is speaking with staff and reviewing paperwork while she continues to recover from a blood clot in her head.

Spokeswoman Victoria Nuland says Clinton has been "quite active" on the phone Wednesday with State Department aides. She says doctors will continue to monitor her progress.

Clinton was admitted to a New York hospital Sunday and is being treated with blood thinners to dissolve a clot in the vein behind the right ear. Doctors found the clot during a follow-up exam stemming from a concussion she suffered in early December.

Clinton's doctors say there was no neurological damage and they expect she will make a full recovery.

UPDATE -- 4:05 p.m.: An earlier version of this post cited reports that Clinton had left the hospital. NBC News confirms those reports are untrue. This post has been updated to reflect that the Secretary of State is still in the hospital.