The Bush administration announced yesterday that it will not enforce new requirements that would have made it more difficult for states to enroll children in the State Children's Health Insurance Program (SCHIP). USA Today reports that the administration will not be taking "compliance action" at this time on regulations that would have forced states to wait until children are uninsured for one year before being covered by SCHIP and also require states to enroll 95 percent of extremely low-income children in the state before expanding health care coverage to only somewhat low-income families:

The directive was aimed at 15 states that extended health insurance to children in families with incomes above 250% of the federal poverty level — $44,000 for a family of three.

Many governors and Democratic lawmakers criticized the administration's new guidelines as impossible to meet. They said the final result would be that more children would go without health coverage as states rein in their programs.

With the deadline fast approaching, the administration made clear that states were under no immediate threat of losing federal funding.

We commented at the end of July about how Democrats in Congress really dropped the ball in using the Congressional Review Act to impede the Bush administration's efforts to keep kids from having health care. Fortunately, at least for the time being, it looks like they are off the hook.

I posted on Tuesday this week about a new report from the Government Accountability Office that shows a significant number of corporations are playing fast and loose with their U.S. tax liabilities. Giving further evidence that the BudgetBlog is where it is at, I got a call from a reporter (Carolyn Said) at the San Francisco Chronicle within ten minutes of posting my blog. She was working on a story about the GAO report. I was quoted in her well-written story (see Most U.S. firms paid no taxes over 7-year span) as were many other fine analysts and experts.

One quote in particular was from William Ahern, spokesman for The Tax Foundation, a Washington, DC nonpartisan tax research group with a conservative perspective on taxes. Mr. Ahern said that there was nothing wrong with corporations employing armies of accountants and lawyers to exploit every possible tax loophole. Specifically, he said:

In that respect, they are just like individuals. Don't we all fill out our tax returns as aggressively as we know how and take every deduction and credit we're entitled to, even if they're unprincipled, even if they're in the tax code only because Congress thinks we will appreciate them for subsidizing us?

Now my disagreements with some of the perspectives of the fine folks at The Tax Foundation aside, I couldn't agree with Mr. Ahern more when he says corporations can behave just as illegally opportunistically as individuals. In fact, sometimes they work together. Case in point is an AP story that also appeared in the San Fran Chronicle a few weeks ago (mea culpa from the Budget Brigade for missing this story). Seems the U.S. Senate Permanent Subcommittee on Investigations issued a report in July identifying two European banks of assisting wealthy Americans evade U.S. taxes. The two banks, UBS of Switzerland and LGT of Liechtenstein, are part of a larger infrastructure that "aggressively" evades U.S. tax laws, either by exploiting loopholes or just by outright cheating - to the tune of $100 billion annually. Yup, that's $100,000,000,000 each year!

The gut-wrenching horror of this entire situation is that we don't need to figure out whether individuals or corporations are to blame. They both are! These banks are exploiting excessively secretive international finance laws, "aggressively" recruiting wealthy Americans to go to pretty much any lengths to intentionally break U.S. tax laws, and our fellow citizens are going along with it. Patriotism just isn't what it used to be. (btw, you can read the subcommittee report, see documents from a subcommittee hearing on the issue, and even watch archived footage (real player format) of the hearing.)

In case that hasn't made you lose your appetite completely, this will. Ellen Miller at the Sunlight Foundation points us to a Washington Post story from last week that details the large increase in political contributions from UBS's PAC and top executives, and other key figures of the Senate investigation, during the 2008 election cycle. Ellen Miller:

The Post article states that officials with the banks have given more than $2 million this year, $98,000 in June alone, to congressional and presidential campaigns. USB spends close to $1 million a year on lobbying and is traditionally a big campaign giver. But so far this cycle the Swiss bank's contributions have surpassed what it gave in the whole 2006 election cycle. The Post quotes a bank spokesperson as saying the bank's giving is in no way related to the Senate investigation. The article didn't say, however, whether it was said with a straight face.

No, thanks. No dessert for me. I'm full.

The Bureau of Labor Statistics (BLS) released data for inflation and real earnings this morning, while the Labor Department reported on unemployment insurance claims for the past week.

Inflation: Consumer prices continue their steep advance as prices jumped 0.8 percent in July, pushing the annualized rate to 10.6 percent (yikes!). The jump in consumer prices was largely driven by food and energy, and when those items are subtracted inflation clocks in a high, but not scary, 3.5 percent. BLS Release: Consumer Price Index: July 2008 Commentary: Dean Baker at CEPR
Real Earnings: Workers' pay took a hit in July as real average weekly earnings fell by 0.8 percent. The 0.3 percent increase in average hourly earnings couldn't keep up with the 0.3 decrease in aerage weekly hours and the 0.9 percent in prices. BLS Release: Real Earnings in July 2008
Unemployment Insurance Claims: Last week, 450,000 workers claimed unemployment insurance for the first time -- 10,000 fewer than the previous week. The four-week moving average of initial jobless claims rose to 440,500, an increase of 19,500 from the previous week's revised average of 421,000. Workers who continue to collect unemployment insurance advanced to 3,417,000, an increase of 114,000 from the previous week. Department of Labor Release: Unemployment Insurance Weekly Claims Report Commentary: Andrew Samwick at Capital Gains and Games

A Sept. 10 hearing is scheduled for the Real Truth About Obama Inc.'s (RTAO) lawsuit. RTAO is requesting that the Federal Election Commission (FEC) is prohibited from enforcing reporting requirements for independent political groups. The rules being challenged could require a group to disclose its finances, limit contributions to $5,000 per contributor and ban corporate and union money if the group is considered by the FEC to be a "political committee."

The RTAO lawsuit references a Department of Justice letter to Democracy 21 President Fred Wertheimer that said DOJ would "vigorously pursue instances where individuals knowingly and intentionally violate clear commands" of the Federal Election Campaign Act.

According to BNA Money and Politics ($$), the FEC is questioning the assignment of U.S. District Judge James Spencer, a federal judge who has ruled against campaign finance regulations in the past. A motion filed by FEC lawyers details that the plaintiffs had intentionally sought Judge Spencer's assignment to the case and suggested that the case be reassigned through a random process.

Specifically, "a case brought by the Virginia Society for Human Life (VSHL) in 2000, in which the judge ruled against an FEC regulation defining 'express advocacy' more broadly than a few 'magic words' referring to elections. [. . .] RTAO cited the VSHL matter as a 'related case,' apparently helping to ensure that. The FEC indicated that VSHL, a case decided seven years ago involving questions that have been subject to subsequent litigation and rulings by the Supreme Court, could not properly be viewed as 'related' to a new case."