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Friday, October 28, 2005

One More Thing About Davis-Bacon
One more thing about the White House's decision to rescind the waiver of Davis-Bacon Act prevailing wage requirements, per CNN's Lou Dobbs Tonight:

The reinstatement will not change the wages of those already working under contract. So far, the federal government has awarded $50 million in relief contracts. But it should make the contracting process from here on out more transparent and ensure displaced workers are first in line to rebuild their communities.

So there is $50 million in taxpayer money going to contractors who will continue to be allowed to pay less than the prevailing wage for construction and construction-related work.

Posted by Robert Shull, 06:04:23 PM

Hard Labor After Katrina
Times apparently aren't good for workers in the post-Katrina aftermath. Most notably, of course, the White House waived Davis-Bacon Act prevailing wage requirements for contractors, until the political pressure became too much to bear. Almost immediately after the hurricane hit, the Bush administration also announced a slew of waivers of regulatory protections, including waiver of the already atrocious rules for the maximum number of hours trucking companies can force their drivers to work without rest. (That waiver has now expired.)

Earlier this month, National Public Radio reported that thousands "of Latino workers, both documented and undocumented, fled the U.S. Gulf Coast in the wake of Hurricane Katrina. Now there are reports of discrimination by law enforcement officials, harassing suspected illegal immigrants at a Red Cross shelter in Long Beach, Miss. Contractors are also suspected of bringing undocumented workers into disaster areas for rebuilding projects, and dumping them at shelters as a form of subsidized housing."

Just last week came word that some "contractors leading reconstruction projects in the hurricane-hit southern United States have badly exploited workers and taken away business from local firms."

Cash alone won't rebuild New Orleans and the Gulf Coast; it will take the labor of American workers. Something's going terribly wrong if there are this many reports of failures to protect those workers.

Posted by Robert Shull, 04:19:28 PM

Thursday, October 27, 2005

Additional Katrina Spending Bill Expected Friday

The Bush administration is putting the finishing touches on another Katrina spending relief bill tonight and it is expected on Capitol Hill tomorrow. Early reports indicate the bill will propose to use up to $17 billion in already appropriated funds to begin reconstruction of federal facilities damanged by the hurricanes.

Although there is still a substantial amount of the previously appropriated $62 billion in relief funds left to be spent, federal rules prohibit that money from being spent on other projects, such as repairs of military bases, highways, and other federal infrastructure. The Associated Press reports the shift in funds would most likely be used for "repairs to Interstate 10 in Mississippi and Louisiana and Keesler Air Force Base in Mississippi."

AP: White House Readies New Hurricane Request

Posted by Adam Hughes, 07:50:21 PM

Tuesday, October 25, 2005

Mismanagement Failing to Keep America Safe
The dramatic (and heavily covered) speech by former State Dept. Chief of Staff Lawrence Wilkerson is most noted for its reference to a White House "cabal" that drove America into war with Iraq, but it's worth noting that Wilkerson's speech addressed a fundamental problem of mismanaging government that has not just international but also domestic policy consequences:

Generally with regard to domestic crises like Katrina, Rita -- and I could go on back -- we haven't done very well on anything like that in a long time. And if something comes along that is truly serious, truly serious, something like a nuclear weapon going off in a major American city, or something like a major pandemic, you are going to see the ineptitude of this government in a way that will take you back to the Declaration of Independence. . . . Read in there what they say about the necessity of the people to throw off tyranny or to throw off ineptitude or to throw off that which is not doing what the people want it to do. And you're talking about the potential for, I think, real dangerous times if we don't get our act together.

Underlying it all, according to Wilkerson, is a failure to engage the bureaucracy: "When you cut the bureaucracy out of your decisions and then foist your decisions, more or less out of the blue, on that bureaucracy, you can't expect that bureacuracy to carry out your decision out very well. And furthermore, if you're not prepared to stop the feuding elements in that bureaucracy as they carry out your decision, you're courting disaster."

The Bush administration's answer to the problem of a resistant bureaucracy appears to have been cronyism: installing people who are loyal to the administration, especially to its anti-regulatory, pro-corporate agenda, at the head of every agency and program in order to shove that agenda through as firmly as possible. Adbusters asks about the consequences of this approach: "in a crunch, just how many of Bush’s appointments can actually be trusted to do these jobs, both competently and with impartiality?"

When "truly serious, truly serious, something like a nuclear weapon going off in a major American city, or something like a major pandemic" happens, we'll find out the hard way.

Posted by Robert Shull, 06:37:54 PM

Friday, October 21, 2005

Are Govt. Rebuilding Contracts Too High?

Spending in the wake of Hurricane Katrina has elicited a lot of yelling and screaming from all sides, with worries ranging from how much we are spending, to how we will offset that spending, to whether or not tax and budget cuts are necessary or wise in the wake of the disaster. A new round of legitimate worries has gained more momentum recently, specifically over which giant corporations are getting government contracts, why they are getting those contracts, what their ultimate development goals are, and whether or not they are receiving too much money for the services they are providing (and thus wasting taxpayer dollars).

Halliburton has been the focus of much of this attention for receiving tens of millions of dollars from the Republican administration to work on rebuilding the Gulf Coast. Now, many are questioning the deal struck between the government and Carnival Cruise Lines, which is housing displaced hurricane victims on three of their cruise ships. The company is receiving $236 million for this six-month contract, to cover the costs of using the ships, and also to compensate for lost revenue Carnival would have received if the ships were stocked with paying vacationers.

The disconnect here, however, is that Carnival Cruise Lines is possibly making significantly more money than they should be, and thus wasting disaster-relief funds which are badly needed in many areas. The cruise line earned $150 million in revenue over a 6 month period (the data came from 2002), which is significantly lower than the $236 million being allocated to the company. (A spokeswoman for Carnival noted that revenue was down because it was the year following the September 11 attacks, but did not provide data to back up this statement). On top of this, many of the cruise line's entertainment services and staff -- a big chunk of their expenditures, no doubt -- will not be needed or used by the company over the next six months, thus arguably bringing costs even lower than $150 million.

Rep. Henry Waxman (D-CA) is a key lawmaker investigating this issue, and he sent a letter to Dept. of Homeland Security Secretary Chertoff yesterday demanding more accountability and transparency in federal contracting. The letter asks DHS to provide the following information:

All documentation regarding calculations of lost revenue provided by Carnival Corporation to justify the cost of the contract;

All documentation regarding the calculations of expenses incurred under normal operations and under the charter contract that were provided by Carnival Corporation to justify the cost of the contract;

All documentation regarding the decision to reimburse Carnival for federal taxes owed while under the charter contract; and

Any documentation regarding the development of the provision calling for return of excessive profits by Carnival.

In a time when lawmakers are calling for harsh budget cuts to offset the costs of Katrina-related spending, it is imperative that funds are not wasted through excessive government handouts to these major corporations. Lawmakers, who are responsible for these contracts, should know what the cost estimates for certain contracts should be and not be duped into paying more than what is necessary.

Posted by Becky Lewis, 02:09:02 PM

Small Business is Not So Small
The government's definition of small business is so expansive that billion dollar corporations are receiving Katrina cleanup contracts dedicated to small businesses. From the Washington Post:

The government's list of small businesses receiving Katrina-related federal contracts along the Gulf Coast includes one of the largest debris-removal firms in the country and a billion-dollar corporation that boasts former vice president Dan Quayle on its board of directors.
Neither company is a small business by any conventional standard. But because of a loophole in federal regulations, a company can be counted as one if it was once small even if it is not now, raising questions about the statistics the government has been citing to defend itself from charges that it has favored big companies in the massive Hurricane Katrina cleanup.

Big businesses taking advantage of special breaks provided for small businesses is not limited to Katrina clean up.

A study last year for the Small Business Administration found $2 billion worth of contracts awarded in fiscal 2002 that were listed as going to small businesses that were not really small. A Government Accountability Office review in 2003 found $460 million worth of small-business awards to five large firms in fiscal 2001.
"This is not an occasional occurrence. This is a problem they've had for quite some time. And they seem either unwilling or unable to correct it," said Steven Sims, vice president of the National Minority Supplier Development Council, a trade group.

Businesses that fall under the SBA's definition receive preferential treatment in the rulemaking process and in Congressional initiatives for regulatory reform. Under the Regulatory Flexibility Act, regulators have to consider the impact of regulations on small businesses. In Congress, legislators continually hold up the plight of small businesses as a rationale for regulatory reform. Yet the businesses that benefit are rarely the romanticized mom and pop store. Large corporations are in better position to take advantage of these special breaks while real small businesses are continually left out in the cold.

Read more: Small Businesses Not So Small

Posted by Genevieve Smith, 12:17:42 PM

Wednesday, October 19, 2005

Latest Watcher
Be sure to check out the latest issue of our biweekly newsletter, The Watcher. Katrina-related policy articles this time:

Katrina Exposes Some, But Not All, Unmet Security and Safety Needs
Republicans Use Katrina To Push For More Drastic Cuts
Congress Mistakenly Focusing On Katrina Spending As Top Fiscal Danger
Post-Katrina Affordable Housing Bill to Include Nonprofit Gag Provision

Posted by Robert Shull, 10:58:30 AM

Friday, October 14, 2005

Bills to Dismantle Government
Hurricane Katrina revealed more dramatically and tragically than ever before in recent memory just how much we need public institutions to protect the public and meet critical needs. There are bills pending in Congress that go in completely the wrong direction -- dismantling government rather than creating the public institutions we need.

The common themes are (1) shutting down government programs through mandatory sunsets, and (2) giving the White House the power to reorganize government with no effective oversight from Congress.

Click the links above for more information, including downloads of bill text.

Bills that mandate sunsets or call for power to shut down government programs:

S. 1399
H.R. 973
H.R. 3277
H.R. 3282

Bills that would give President Bush the power to reorganize government programs with little or no oversight:

S. 1155
S. 1399
H.R. 2470
H.R. 3276

And don't miss OMB Watch's testimony on two of those bills in the House.

Posted by Robert Shull, 06:53:45 PM

Thursday, October 13, 2005

Davis-Bacon Suspension Angers House Republicans

After Hurricane Katrina, President Bush waived wage protections established under the Davis-Bacon Act that require federal contractors to pay area prevailing wages. While some have speculated on the legality of this decision, it has flat out angered a substantial number of House members from the President's own party, who sent a letter to him in late September expressing their outrage.

This week, Rep. LaTourette (R-OH) - the member who spearheaded the effort to rally 36 other Republicans against the waiver - announced on the House floor he would be seeking legislative action to reinstate Davis-Bacon requirements. "I don't know exactly what we have in mind yet, but I think the week of the 17th [of October] there may be some activity," LaTourette said.

Democrats in the House have already taking action to attempt to reverse Bush's decision. Rep. George Miller (D-CA) has introduced a bill, H.R. 3763, that will require the re-application of Davis-Bacon wage requirements to the areas affect by Hurricane Katrina. It is widely agreed the bill would pass it voted upon, but the House GOP leadership has continued to block any such vote.

Make Your Voice Heard
The Campaign for America's Future has launched a letter writing campaign to raise support for reinstating Davis-Bacon requirements.

Posted by Adam Hughes, 02:54:11 PM

Some Republicans Don't Love Every Tax Break

CongressDaily, a publication of the National Journal, reported this morning that 65 House members sent a letter to President Bush urging him to exclude gambling interests in tax cuts designed to spur reconstruction and renewal on the Gulf Coast.

Lead by Rep. Frank Wolf (R-VA), the letter was signed by both Republicans and 14 Democrats and was sent in response to press reports that the administration was considering allowing casinos to qualify for tax breaks in the wake of Hurricane Katrina. The letter concluded, "We trust you will do the right thing and make sure federal resources go to the poor, the needy and the vulnerable and not the gambling interests who already have insurance to cover catastrophic events like hurricanes."

It's nice to see rational and moderate Republicans (and Democrats) speaking out for the right priorities in the wake of Katrina. Now if only they would apply this philosophy across the board and oppose the extension of more tax cuts for the superwealthy paid for by budget cuts to programs for low-income Americans.

Read the letter send to President Bush.

Posted by Adam Hughes, 02:15:16 PM

Tuesday, October 11, 2005

Toxic Gumbo... Flowing from YOUR Tap, Too?
Grist Magazine is exploring whether New Orleans is alone in seeing a "toxic gumbo" in the drinking water:

Last month, "toxic gumbo" entered the American lexicon with the speed and force of the floodwaters it describes.... "I want to be very clear," cautioned EPA administrator Stephen Johnson, describing the situation in the devastated city to the press. "Emergency response personnel and the public should avoid direct contact with any floodwater."
It was a dire warning. And to some water-quality experts, it came as no surprise. Our national water infrastructure -- everything from streams, lakes, and coastal waters to treatment plants and the pipes that carry the precious liquid to our individual taps -- is in serious trouble, they say. Toxic gumbos are simmering, for the most part out of sight, all across the country. New Orleans was just the first to boil over on a grand scale.

Check it out here.

Posted by Robert Shull, 04:13:32 PM

Groups Demand Better Protection for Katrina Cleanup
From Medical News Today:

Gulf Coast Cleanup Workers Must Be Protected from Serious Health Hazards
The U.S. Congress should immediately act to protect the health and safety of workers and residents engaged in the cleanup of New Orleans and the Gulf Coast, according to a group of more than 100 of the nation's foremost labor, religious, environmental, community, public health and public interest organizations and more than 100 academic, medical, religious and public health leaders.

Posted by Robert Shull, 03:52:48 PM

House Pushes Back Deadline for Budget Spending Bill

It appears the House Budget Committee has moved the deadline for budget reconciliation back yet again. After initially postponing the deadline post-Katrina, the committees were slated to get their spending proposals to the Budget Committee the week of Oct. 17, but Chairman Jim Nussle (R-IA) was able to push back the deadline to Oct. 28. The hope for Nussle is that this pushback will give committees an extra week to submit proposals for cutting mandatory spending to the budget panel. The Senate, apparently, will not join the House in this spending bill delay.

Nussle has proposed amending the FY 2006 budget resolution to call for across-the-board cuts in discretionary spending. His proposal notably calls for cuts in both defense and homeland security spending, as well as increased cuts in mandatory programs such as Medicare.

The calls for increased cuts have been increasing along with Republican restlessness over how to save money to pay for the costs of Katrina recovery. Groups such as the Committee for a Responsible Federal Budget have lauded Nussle and others for their attempts to bring down the deficit by increasing budget cuts, yet are ignoring the fact that these same lawmakers support passing $70 billion worth of deficit-financed tax cuts in reconciliation. The Democratic Senate leadership has taken steps to urge Congressional GOPs that it is more important to deal with immediate needs of hurricane victims and rising energy prices, as opposed to passing another round of tax breaks through reconciliation. Minority leader Reid (D-NV) and a number of other Democratic Senators sent a letter to Majority leader Frist (R-TN) on Friday, outlining those points.

Posted by Becky Lewis, 01:18:07 PM

Friday, October 07, 2005

House GOP Leadership Approves Drastic Budget Cuts Proposal

In a boost to Budget Chairman Jim Nussle's plans to enact substantial budget cuts to offset the cost for recovery from Hurricane Katrina, House Speaker Hastert announced yesterday the approval of a package of cuts modeled after Nussle's plan. "In order to maintain our commitment to deficit reduction, we are proposing to move a mid-session Budget Amendment for the first time in almost 30 years (1977)," Hastert said in a written release. The release also detailed the following proposals for offsetting Katrina costs:

An "additional across the board cut of '06 discretionary spending." Permanently eliminate and "deauthorize" programs that House appropriators have zeroed out.
Increase total minimum reconciled mandatory savings from $34.7 billion to $50 billion. "In addition to the $50 billion, we will offset dollar-for-dollar the new mandatory spending included in reconciliation/entitlement reform that is required to address the disasters."
"We will bring forward packages of additional rescissions to further help offset reconstruction costs. Congress must develop, with the President, a budget for reconstruction and a plan to pay for it."

What is truly befuddling about this statement is Haster's claim of a committment to deficit reduction. It has been under his leadership that the Congress has enacted reckless and short sighted tax and budget policies that have driven the federal government back iinto the red in the first place. And Hastert does not have a committment to deficit reduction - he has a committment to cutting programs and services and reducing the size of government. If the Speaker was serious about deficit reduction, he would be talking about either tax rollbacks or increases in addition to budget cuts.

Posted by Adam Hughes, 12:32:50 PM

Thursday, October 06, 2005

Usefulness of Tax Breaks For Katrina Relief Questioned

A week after a hearing of the Senate Finance committee cast doubt on the usefulness of tax cuts in relief efforts to help individuals and businesses on the Gulf Coast, additional economists and expert analysts have supported that position. The New York Times reported this morning that economists from the very conservative Heritage Foundation to the more centrist Tax Policy Center have confirmed that President Bush's tax incentive proposal will do less for individuals who live in the affected areas and more for rich investors and businesses from other parts of the country. The Times article quoted William Beach, chief economist at the Heritage Foundation as saying, "People in the area obviously won't have tax liabilities for some time. What we're talking about is getting very wealthy people from around the United States to invest in New Orleans."

In addition to growing concensus among private economists that tax cuts are not the best option for relief and reconstruction efforts in the Gulf Coast, the highly respected Congressional Research Service released a report last week that found little evidence of the positive impact of tax incentives such as the "opportunity zones" proposed by President Bush in growth and employment in those areas. Nonetheless, Congress continues to explore writing yet another tax cut bill under the guise of "Katrina relief." Treasury Secretary John Snow was the lead witness today at another Senate Finance Committee hearing to promote the president's tax proposals for reconstruction of the Gulf Coast and spent most of his time defending the proposals against attacks from skeptical Senators.

Posted by Adam Hughes, 06:04:23 PM

Grassley Lashes out at White House

During a Senate Finance Committee hearing this afternoon at which Secretary of the Treasury John Snow was testifying on the president's tax incentive proposals for rebuilding the Gulf Coast, Chairman Charles Grassley (R-IA) vocalized his anger at the White House for what he perceives to be a covert effort to derail legislation to temporarily extend Medicaid to hurricane victims. “Unfortunately, the White House is working against me behind the scenes, and I resent that considering how much I’ve delivered for the White House” in recent years, Grassley said.

Sens. Grassley and Max Baucus (D-MT), the ranking member on the Finance Committee, have been trying to win approval from a number of conservative Senators for legislation that would extend Medicaid coverage to all low-income victims of Hurricane Katrina and guarantee that the federal government would pay for 100 percent of the costs. The legislation is supported by the National Governors Association, Majority Leader Biill Frist (R-TN) and Minority Leader Harry Reid (D-NV), the American Medical Association, and dozens of other groups.

The White House has proposed instead to grant a waiver to individual states who are currently providing health care coverage for victims. This proposal has been heavily criticized, particularly by the Center on Budget and Policy Priorities for excluding many low-income vicitims from receiving benefits and for not assuring states that 100 percent of the cost would be covered by the federal government.

Grassley has previously threatened to withhold support or delay the tax reconciliation bill his committee must write this fall if Senators do not support his Medicaid bill. Unfortunately, it seems these threats have had little impact.

Posted by Adam Hughes, 05:01:39 PM

Growing Unease With Nussle's Budget Cut Plans

As House Budget Chairman Jim Nussle (R-IA) continues to push for an amendment to the budget resolution passed in April to institute an across the board cut to discretionary spending by 2 percent, many Republican members of the Senate have expressed reservations or outright disdain for such a plan, threatening its survival.

While not ruling out any avenue for finding budget cuts to offset the cost of Hurricane Katrina relief and reconstruction spending, a number of key Senate Republicans criticized Nussle's proposal. Senate Budget Committee Chairman Judd Gregg's (R-NH) preference is to use the reconcilation process already in place to look for larger cuts to entitlement programs. Senate Majority Leader Bill Frist (R-TN) called Nussle's proposal a "nonstarter," ruling out re-opening the budget resolution. And Defense Appropriations Subcommittee Chairman Ted Stevens (R-AK) stated he opposes the proposal and believes a substantial majority of the Senate would also oppose it. Discretionary spending makes up only 26 percent of the total federal budget and Stevens believes it should not have to shoulder a disproportionate share of the cuts.

Unfortunately, Congress has yet to realize the damage done by cutting investments in America to pay for Katrina costs will not only make communities and families around the country less secure, it will actually do very little to offset the cost of Katrina. It's time Congress realizes it needs to revisit the massive tax cuts for the wealthy if it wants to truly keep Katrina spending deficit neutral.

Posted by Adam Hughes, 10:56:46 AM

Wednesday, October 05, 2005

Hearing on Tax Policy to Help Katrina Rebuilding
The Future of the Gulf Coast: Using Tax Policy to Help Rebuild Businesses and Communities and Support Families after Disasters

October 6, 2005, at 10:00 a.m., in SD215 Dirksen Senate Office Building

Panelists Include:

The Honorable John W. Snow, Secretary, U.S. Department of the Treasury, Washington, DC

The Honorable Jack Kemp, Founder and Chairman, Kemp Partners, Washington, DC and Honorary Co-Chairman, Free Enterprise Fund, Washington, DC

The Honorable Tate Reeves, State Treasurer, State of Mississippi, Jackson, MS

Ms. Dianne Bolen, Executive Director, Mississippi Home Corporation, Jackson, MS

Mr. Harry Connick Jr., Honorary Chair, Operation Home Delivery, Habitat for Humanity International, Americus, GA

Dr. Jane Gravelle, Senior Specialist in Economic Policy, Congressional Research Service, Library of Congress, Washington, DC

Mr. James R. Kelly, Chief Executive Officer, Catholic Charities Archdiocese of New Orleans, New Orleans, LA

Posted by Jennifer Lowe, 08:38:36 PM

Goverment Cracks Down on Fake Katrina Charities
From the Washington Post

Concerned that the Gulf Coast hurricanes are spawning an unprecedented number of bogus appeals to help victims, law enforcement officials and charities have launched aggressive efforts to prosecute fraud.

State and federal officials have filed charges in at lease four cases involving fraudulent appeals. They expect that number to rise sharply in the coming weeks as investigators examine thousands of suspicious fundraising Web sites, "phishing" schemes that steal financial information from donors and people falsely claiming to be raising money for hurricane funds.

Posted by Jennifer Lowe, 09:08:48 AM

New Study Shows Importance of Louisana Nonprofits
According to a new study by the Urban Institute, nonprofits in Louisiana and New Orleans, many of which were devastated by Hurricane Katrina, play a critical role in providing health and human services to residents.

"The Aftermath of Katrina: State of the Nonprofit Sector in Louisiana" analyzes the state of nonprofits in Louisiana. Louisiana is home to about 3,200 charities, which spend a total of $8.7 billion each year and report combined assets of $13.8 billion.

The damage to the infrastructure of the city is having terrible consequences in the LA's nonprofit sector. Louisiana nonprofits will need support if they are to continue providing critical services to citizens, especially in the wake of Hurricane Katrina, when needs are high.

Posted by Jennifer Lowe, 09:04:47 AM

Tuesday, October 04, 2005

Latest Watcher
Be sure to check out the latest issue of our biweekly newsletter, The Watcher. Articles related to Hurricane Katrina and the aftermath include the following:

EPA May Be Next for Power to Waive Law

Scrambling to Offset Katrina Costs, Republicans Continue Dangerous Fiscal Policy

Katrina Update: Government's Inadequate Response Continues

Early Reports of FEMA Reimbursement Policy Misleading

Posted by Robert Shull, 08:05:53 PM

Monday, October 03, 2005

Time to... NOT Invest in America?
Business as usual after Hurricane Katrina? The tragedy of Katrina revealed the consequences of failing to invest in what it takes to keep America safe. The anti-government agenda hasn't gotten the message: a subcommittee of the House Government Reform Committee held a hearing last week on a White House proposal to force agencies to stop their work every 10 years and spend precious resources on justifying the need for their continued existence. Unless Congress affirmatively acts to save them, programs would automatically die. In other words, despite the obvious need for investments that keep America safe, some congressional conservatives are pushing a disinvestment strategy.

Related to the sunset proposal is a proposal to give the White House sweeping powers to reorganize government and force reorganization proposals through Congress on a fast-track, take-it-or-leave-it basis. Of course, as we saw with FEMA's reorganization inside Homeland Security, reorganization is not a merely technical issue: it can have real consequences.

OMB Watch testified at the hearing:

> >Read the press release

> >Download the testimony

Posted by Robert Shull, 05:49:48 PM

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