The AMT patch package will probably include a repeal of the IRS private debt collection program, according to BNA. We'll have more when the bill is marked up by the Ways and Means committee tomorrow.

Most major news outlets are reporting today that some Blackwater guards involved the Sept. 16th shooting have been given immunity under strange circumstances.

The State Department investigators from the agency's investigative arm, the Bureau of Diplomatic Security, offered the immunity grants even though they did not have the authority to do so, the officials said. Prosecutors at the Justice Department, who do have such authority, had no advance knowledge of the arrangement, they added.

Most of the guards who took part in the Sept. 16 shooting were offered what officials described as limited-use immunity, which means that they were promised that they would not be prosecuted for anything they said in their interviews with the authorities as long as their statements were true. The immunity offers were first reported Monday by The Associated Press.

Giving contractors immunity sets a bad precedent. Too many of them will think they can get away with anything. The civilian shootings may continue, and who knows if anybody will be held accountable.

How important is accountability and responsiveness in a war zone? So important that the military is probably one of the most hierarchical organizations on earth. But now, not only are we losing control of our hired guns while they're on the battlefield, we could be letting them off after the fact.

This is our foreign policy we're talking about. These guys can shoot anyone they want if they aren't punished. They say they're doing it on behalf of the United States, but they don't really answer to us if they aren't punished for doing something nobody wanted them to do. They're making foreign policy for us (see this argument better developed by Paul Verkuil in Outsourcing Sovereignty.

I can't think of an instance where military personnel or government employees (political appointees excluded) had been offered the same deal. In fact, the contractors involved in the Abu Ghraib scandal got off just as easily, whereas the military personnel were severely disciplined, according to Verkuil. A pattern is developing. Structural forces are probably at work.

So perhaps the drawbacks of using contractors over public employees aren't quite as small and insignificant as some see.

Tyler Cowen attempts to minimize the difference between contractors and government in a piece in the Sunday New York Times. A few selected paragraphs from it:

ALLEGATIONS of misbehavior by employees of Blackwater USA in the shooting deaths of 17 Iraqis have brought the military's use of private contractors into question. But whatever the possible sins of the Blackwater firm, the overall problem is not private contracting in itself; contractors do not set the tone but rather reflect the sins and virtues of their customers, namely their sponsoring governments...

When private contractors are combined with government troops, the contractors usually can't do much better than the setting in which they are asked to perform...

Note that a serious issue for Blackwater — the allegations about needless deaths of innocent civilians — has also been an issue for United States government forces from the beginning of the conflict.

Cowen's assertions, as based in abstract, ideological and non-empirical thought as they are, will probably be convincing to far too many people. Somebody has to say no to this line of thinking. I imagine that Cowen's solution for all cases of contracting mishaps is probably to not have government do whatever it is it's doing, or to outsource more services, perhaps even the jobs that determine the "sins and virtues" of the great beast itself.

The reality is that contracting, and maybe even the entire Iraq debacle, is a danger to government. It's just too hard for the public on its own to see the distinction between Blackwater and government. And Cowen's article shows that shameless privatization advocates have found a new opportunity to attack government. Who is brave enough to come to government's defense?

In the Guardian, Greg Anrig has a comprehensive look at rightist ideology and how its been neither efficient nor effective in practice.

In a recent speech, former business consultant and current Republican presidential candidate Mitt Romney sang from the conservative movement's hymnal when he intoned: "Compared to free markets and free enterprises, government is slow to act, wasteful, duplicative, bureaucratic, inefficient, ineffective and unresponsive." That same mindset under the Bush administration impelled a massive increase in reliance on private contractors to provide goods and services that previously the government had been more directly responsible for producing and overseeing. The upshot has been far more egregious and pervasive wastefulness of taxpayer dollars than anything documented in the past.

The state department's contracting failures closely resemble those uncovered last month by the government accountability office (GAO) in its investigation of the department of homeland security's (DHS) outsourcing. The GAO, which scrutinized 117 DHS contracts, found that "the level of oversight provided did not always ensure accountability for decisions or the ability to judge whether the contractor was performing as required." Other studies have documented egregious wastefulness connected to post-Katrina government contracts with private providers, as well as the defence department's outsourcing to companies like Bechtel, Fluor, Parsons and the Halliburton subsidiary KBR.

As the problems with contracting get worse, the right's rhetoric on government gets even more supportive of contracting and the market and less supportive of government. The contradicting evidence provided by Blackwater and all the other contracting mishaps that Anrig documents is merely a test of the faithful, a way of sorting out the true believers from the casually observant. And Romney's quote shows that the true believers have increasing control over the Republican Party.

Via, Lawrence Lessig, Robert Reich's new book, Supercapitalism, makes a point regarding the place of corporations in civil society well worth highlighting:

This is a critically important point for people to get -- and one that many good thinking souls don't yet agree with. [...] Corporations are not more efficient governments. They are instead increasingly efficient money making machines. And while there's nothing at all wrong with money making machines -- indeed, wealth and growth depends upon them -- there is something fundamentally wrong with trusting these machines to restrain the drive for profits in the name of doing the right thing.

Michael Tomasky asks a vital question in The Guardian:

That is, Americans have now experienced a conservative government failing them. But what lesson will they take? That conservatism itself is exhausted and without answers to the problems that confront American and the world today? Or will they conclude that the problem hasn't been conservatism per se, just Bush, and that a conservatism that is competent and comparatively honest will suit them just fine?

There's a lot of ink on this subject (Greg Anrig Jr. has written a book on it, Rick Perlstein has a blog), but there are two major fiscal policy stances that are both distinctly conservative and have directly contributed to recent governmental failures (think Katrina, Walter Reed, Iraq, etc.): budget cuts and excessive privatization.

I could be wrong, but I don't think cronyism, corruption or arrogance are in conservative's blood, nor do they have a permanent monopoly on it, however much they do at the moment. But as champions of the "free market" and "self-reliance," conservatives are ideologically disposed to favor agency cuts and privatization.

Once effective governance was an issue to co-opt from the right; now it's a defining issue for liberals, particularly in these two ways. Only liberals can clean up the mess conservatives made of government, because only liberals understand the limitations of the market and the potential of government. Hopefully the public will see this.

Writing for McClatchy, Warren P. Strobel and Jonathan S. Landay report on a criminal probe into mismanagement of the construction of the $600 million Baghdad Embassy.

A congressional committee is examining whether the walls of the still-unfinished embassy complex, which are supposed to be blast-resistant, performed as they should have during the mortar attack.

U.S. Ambassador Ryan Crocker banished [the State Department contractor in charge of the project, James L.]Golden from Iraq, but he continues to oversee the construction of the embassy in Baghdad; to be the liaison with the contractor, Kuwait-based First Kuwaiti General Trading and Contracting Co.; and to supervise other projects for the State Department's Overseas Buildings Operations (OBO) bureau.

The embassy — actually a 104-acre, Vatican-size compound of 21 buildings meant to house and sleep about 1,000 U.S. officials was originally meant to open in June, then in September. Now, due to problems with the sprinkler system, the latest in a series of deficiencies blamed on First Kuwaiti, it remains unclear whether it will be ready for occupancy this year.

It's not that private firms can never do right, but that, contrary to conservative ideology, they are quite capable of colossal failure. The tragedy of the president's failure to recognize this simple, yet blindly obvious fact will result in millions of kids going without health insurance.

At the behest of Committee Chair Rep. Henry Waxman (D-CA), the House Committee on Oversight and Government Reform has produced a report on the wildly successful cost-reducing cost-inflating results of the private provision of the Medicare drug program (Medicare Pard D)

• The administrative expenses, sales costs, and profits of the privatized Part D program are almost six times higher than the administrative expenses of traditional Medicare.



• The rebates negotiated from drug manufacturers by the private Part D insurers will reduce Medicare drug spending by 8.1% in 2007. In contrast, the Medicaid program receives rebates from drug manufacturers that reduce drug spending by 26%, over three times as much.



• private insurers receive rebates from the drug manufacturers on purchases paid out-of-pocket by beneficiaries. In 2007, the Part D insurers are expected to receive $1.0 billion in drug rebates from transactions in which beneficiaries in coverage gaps pay 100% of the drug costs.



• In 2007, 59% of prescriptions filled by Medicare Part D will be filled with generic drugs. This level of use of generic drugs compares favorably with Medicaid, which fills 54% of prescriptions with generic drugs. It does not compare favorably with the experience of the Department of Veterans Affairs, which fills 68% of prescriptions with generic drugs.

Note: Title is snark directed at David Broder's piece pimping the free market as a cure-all.

Be sure to read a great op-ed by our own Matt Lewis in TomPaine.com today on larger lessons to be learned from the privatization of security services in Iraq. Here's the key passage:

Citizens who believe in government as a tool to advance the public interest ought to be concerned about excessive privatization of public services. Contractors like Blackwater USA are alienating would-be friends abroad and the public back home. Instead of rushing to privatize public services at every turn, our government should carefully review the services it currently oursources—keeping in mind the role of government should be to serve the public interest.