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History > 2012 > USA > Politics > White House /
President (I)
Prisoner in Iraq Tied to Hezbollah
Faces U.S. Military Charges
February 23, 2012
The New York Times
By CHARLIE SAVAGE
WASHINGTON — The Obama administration has approved military
commission charges against a Lebanese man accused of helping kill United States
troops in Iraq, expanding the scope of the current tribunal system to include a
defendant who is not accused of being part of the war with Al Qaeda.
The defendant, Ali Musa Daqduq, is accused of being a Hezbollah operative and
was the last detainee held by American forces in Iraq. He was turned over to
Iraqi custody in December before they withdrew. On Jan. 3, military prosecutors
swore out an eight-page charge sheet for Mr. Daqduq, a copy of which was
obtained by The New York Times, accusing him of murder, perfidy, terrorism and
espionage, among other war crimes.
A military spokesman, Lt. Col. Todd Breasseale, confirmed the charges and said
the government was “working with Iraq to effect Daqduq’s transfer to a U.S.
military commission consistent with U.S. and Iraqi law.”
“We are seeking the fastest possible way to bring him to justice,” he said.
He provided no explanation for why the charges were kept quiet, including not
being posted on the military commissions system Web site. The White House
declined to comment.
It is not clear whether the administration was actively seeking Mr. Daqduq’s
extradition, or whether the charges were prepared as a backup measure in hopes
of keeping him locked up should Iraqis fail to prosecute him or should he be
acquitted by an Iraqi court. Officials have expressed concerns that the
government of Iran may pressure Iraq to release him.
While prosecutors have submitted the sworn charges to the official in charge of
the commissions, the retired Vice Adm. Bruce MacDonald, he has not yet approved
a trial. But whether or not Mr. Daqduq ever comes before a tribunal, the charges
are a significant precedent.
Every previous defendant in the current system — the first version of which was
established by President George W. Bush after the terrorist attacks of Sept. 11,
2001 — has been a detainee at Guantánamo Bay, Cuba, who was linked to the war
against Al Qaeda and the Taliban.
“Mr. Daqduq’s alleged crimes are serious violations of the law of war that were
committed against U.S. service members in Iraq in association with ongoing
hostilities,” the chief prosecutor of the military commissions system, Brig.
Gen. Mark S. Martins, said in a statement.
It was also not clear whether Mr. Daqduq had been notified of the charges. A
military lawyer assigned last month to represent him, Cmdr. Patrick J. Flor of
the Navy, said he had asked the Pentagon for permission to visit his client in
Iraq, and to see the evidence, but had received no answer.
Mr. Daqduq is accused of conspiring with several groups, including the Quds
Force of Iran’s Islamic Revolutionary Guards Corps, to train Shiite militias to
use roadside bombs and other insurgent tactics. The most serious charges stem
from what prosecutors say was his role in helping organize a raid in January
2007 by insurgents who wore American-style uniforms and carried forged identity
cards. They killed five American soldiers in Karbala, Iraq; one in the raid, and
four others who were captured and whose bodies later dumped by a road.
Mr. Daqduq was captured later that year, and is said to have confessed during
interrogations that did not include harsh techniques.
As the deadline for withdrawing from Iraq neared last year, the administration
wrestled with taking Mr. Daqduq out of Iraq for prosecution. But under an
agreement signed by the Bush administration, the Iraqi government controlled
decisions about such prisoners.
Prime Minister Nuri Kamal al-Maliki would not let American forces summarily
remove Mr. Daqduq from Iraq, insisting that formal legal processes had to be
followed. American officials did not want to violate Iraqi sovereignty at the
moment of transition, and the United States transferred Mr. Daqduq to Iraqi
custody in mid-December.
David Lucas, whose brother was one of the victims of the raid Mr. Daqduq is
accused of orchestrating, said his family had not been informed of the charges.
“It’s good the government didn’t give up on it totally, but obviously I’m still
skeptical,” he said. “We’ve been kept out of the loop, and it’s tough to make a
decision about how I feel about it.”
Were Mr. Daqduq to be extradited, it would raise the question of where a
commission trial would take place. The administration last year explored the
possibility of holding a tribunal at a military base in Charleston, S.C., while
Republicans called for taking him to Guantánamo, where the other trials so far
have been held. But the administration, which has resisted adding to the inmate
population there, said Iraqis would not consent to transferring anyone there.
“We have long understood that the transfer of Daqduq to Guantánamo is a
nonstarter for our Iraqi partners and would only prevent us from obtaining
custody of him,” Colonel Breasseale said.
This article has been revised to reflect the following
correction:
Correction: February 24, 2012
Due to a web production error, a headline with an earlier version of this
article
on the home page gave the wrong nationality of Ali Musa Daqduq.
He is from Lebanon, not Iraq, as correctly stated in the article.
Prisoner in Iraq Tied to Hezbollah Faces
U.S. Military Charges, NYT, 23.2.2012,
http://www.nytimes.com/2012/02/24/world/middleeast/us-approves-military-tribunal-case-for-detainee.html
Obama Sends Apology as Afghan Koran Protests Rage
February 23, 2012
The New York Times
By ALISSA J. RUBIN
KABUL, Afghanistan — The potential scope of the fallout from
the burning of several copies of the Koran by American military personnel this
week became chillingly clear on Thursday as a man in an Afghan Army uniform shot
and killed two American soldiers, while a crowd nearby protested the desecration
of the Muslim holy book.
In the third successive day of deadly violence over the Koran burning, seven
Afghans were killed in three provinces on Thursday and many more were injured,
most in skirmishes with Afghan security forces. The Afghan government, which had
responded slowly on the first day of protests, was in high gear on Thursday as
officials tried to tamp down emotions ahead of the Friday day of prayer. Western
and Afghan authorities feared that there could be emotional demonstrations after
the prayer that the Taliban and extremist elements would try to exploit.
Afghan officials quoted from a letter from President Obama in which he, among
other things, apologized for the Koran burning. For President Hamid Karzai, the
episode has fast become a political thicket. He and other government officials
share with the Afghan populace a visceral disgust for the way American soldiers
treated the holy book, but they recognize that violent protests could draw
lethal responses from the police or soldiers, setting off a cycle of violence.
Complicating matters is that some of Mr. Karzai’s allies in Parliament and
elsewhere, including former mujahedeen leaders, have openly encouraged people to
take to the streets and attack NATO forces. Mr. Karzai has not spoken out
against them publicly, but his government’s overall message on Thursday
suggested that he did not want more violence.
Mr. Karzai met with members of both houses of Parliament at the presidential
palace and urged them to help to try to contain the protests.
“The president said that ‘according to our investigation we have found that
American soldiers mistakenly insulted the Koran and we will accept their
apology,’ ” said Fatima Aziz, a lawmaker from Kunduz who attended the meeting.
“He said, ‘Whoever did this should be punished, and they should avoid its
repetition. Insulting holy books and religion is not acceptable at all.’ ”
Ms. Aziz, who said she wept when told of the Koran burning, also said Mr. Karzai
told Parliament members that the protesters’ violent response was “‘not proper.’
”
Ms. Aziz, along with many educated Afghans, some of whom registered their views
on Facebook, said she was dismayed by the exploitation of the incident for
political gain and accused Iran and Pakistan of behind-the-scenes manipulation.
Both countries would like to see the American military under pressure, and the
reaction to the Koran burning has accomplished that.
The Taliban released two statements on Thursday: one urged Afghans to attack
foreign troops and installations as well as Afghan forces who are defending
them, and the second urged Afghan security forces to turn their guns on their
NATO colleagues.
“The Islamic Emirate of Afghanistan calls on all the youth present in the
security apparatus of the Kabul regime to fulfill their religious and national
duty,” the statement said, “to repent for their past sins and to record their
names with gold in the history books of Islam and Afghanistan by turning their
guns on the foreign infidel invaders instead of their own people.”
Mohammed Salih Suljoqi, a lawmaker from Herat, said the episode “has been used
as a tool of propaganda.”
“The noble and pure emotions of our fellow countrymen are being misused by the
intelligence agencies of neighboring countries,” he said, adding that some
groups “are trying to destabilize the situation and lead the country into
chaos.”
“All these tragic incidents can spread a dark shadow and negatively impact the
relationship of Afghanistan and the United States,” Mr. Suljoqi said.
President Karzai’s office quoted from what it called a letter of apology from
Mr. Obama that was delivered Thursday by Ambassador Ryan C. Crocker to signal to
the Afghan public that the United States understood the distress the episode had
caused.
In the letter, according to Mr. Karzai’s press office, Mr. Obama wrote: “I wish
to express my deep regret for the reported incident. I extend to you and the
Afghan people my sincere apologies.” Mr. Obama’s office would not release the
text of what it called a three-page letter on a “host of issues” between the two
countries, “several sentences of which relate to this issue.”
One of the Republican candidates for president, Newt Gingrich, issued a
statement that harshly criticized Mr. Obama for his apology, calling it an
“outrage.”
“It is Hamid Karzai who owes the American people an apology, not the other way
around,” the statement said.
Four Afghans were killed in confrontations with the police in Oruzgan Province
and one in Baghlan Province. In Nangarhar Province, two Afghans protesting the
Koran burning were shot to death outside an American base in Khogyani District,
said Mujib Rahman, the doctor on duty at the hospital in the district center.
It was unclear whether they were shot by Afghan soldiers or NATO troops, but a
NATO spokesman, Lt. Cmdr. James Williams, said NATO troops would shoot only if
they were in mortal danger, and the protesters did not constitute mortal danger.
About the same time as the protest and the shootings outside the base, an Afghan
Army soldier turned his gun on NATO soldiers at the base, according to other
protesters and elders. Two American soldiers were killed. Mr. Karzai and the
religious leaders and elders he had assigned to investigate how the Koran
burning came about released a statement calling for restraint by the Afghan
people and demanding that those responsible be tried swiftly.
“In view of the particular security situation in the country, we call on all our
Muslim citizens of Afghanistan to exercise self-restraint and extra vigilance in
dealing with the issue and avoid resorting to protests and demonstrations” that
could be used by extremist groups to incite violence, the statement said, adding
that NATO officials had “agreed that the perpetrators of the crime be brought to
justice as soon as possible” in an open trial.
A NATO inquiry into the burning continues, a spokesman said, adding that the
United States would take disciplinary action if “warranted.”
Reporting was contributed by Sangar Rahimi, Sharifullah Sahak
and Jawad Sukhanyar from Kabul, and an employee of The New York
Times
from Nangarhar Province.
Obama Sends Apology as Afghan Koran
Protests Rage, NYT, 23.2.2012,
http://www.nytimes.com/2012/02/24/world/asia/koran-burning-afghanistan-demonstrations.html
Obama Offers to Cut Corporate Tax Rate to 28%
February 22, 2012
The New York Times
By JACKIE CALMES
WASHINGTON — President Obama will ask Congress to scrub the
corporate tax code of dozens of loopholes and subsidies to reduce the top rate
to 28 percent, down from 35 percent, while giving preferences to manufacturers
that would set their maximum effective rate at 25 percent, a senior
administration official said on Tuesday.
Mr. Obama also would establish a minimum tax on multinational corporations’
foreign earnings, the official said, to discourage “accounting games to shift
profits abroad” or actual relocation of production overseas.
With the framework for changes that the Treasury secretary, Timothy F. Geithner,
will outline on Wednesday, Mr. Obama will enter an election-year debate with
Republicans in Congress and in the presidential race who seek even lower taxes
for businesses. But an overhaul of the corporate code is unlikely this year,
given that political backdrop and the complexity of an undertaking that would
generate a lobbying frenzy as businesses vie to defend old tax breaks or win new
ones.
The campaign of Mitt Romney, a Republican candidate for president, signalled
that he would outline on Wednesday an expanded version of his own tax proposals,
which he said on Tuesday would call for a “flatter, fairer, broader-based tax
system” that would do more to encourage economic growth. The various Republican
candidates, who are scheduled to debate on Wednesday night, have called for
cutting the corporate income tax, differing somewhat in the details.
The administration plan to revamp a corporate code that is widely derided as
inefficient and anticompetitive has been in the works at Treasury for two years,
and is a priority of Mr. Geithner. Yet he has been preoccupied with crisis
management, and is unlikely to see the project through since he plans to leave
office after this year.
The proposed overhaul “will help level the playing field for businesses and
allow the government to collect needed revenue while promoting economic growth,”
Mr. Geithner told a Congressional committee last week, without details.
Republicans and business groups complain that the 35 percent corporate tax rate
is among the highest in the world, leaving American companies at a competitive
disadvantage. They typically seek a 25 percent rate, with many of them saying
that the current tax breaks should be kept in place as well.
Nonpartisan tax analysts consistently find that corporations here on average pay
just slightly more than their competitors in other developed countries after
exploiting the many tax breaks and loopholes. Recent news accounts have
highlighted the low effective rates paid by companies like Google, Boeing and
General Electric.
One analysis concluded that 115 of the 500 companies in the Standard and Poor’s
stock index paid a total corporate tax rate — federal and otherwise — of less
than 20 percent over a five-year period. A study by the Government
Accountability Office in 2008 found that 55 percent of American companies paid
no federal income taxes during at least one year in a seven-year period it
studied.
“Under the current tax system, the United States will soon have the highest
statutory corporate tax rate among developed countries, within a system that
features a large number of tax expenditures for special interests,” said a
senior administration official, who did not want to speak ahead of Mr. Geithner
except on condition of anonymity.
“This puts American businesses — especially those in areas like manufacturing
that are subject to more intense international competition — at a disadvantage.
And this system is also unnecessarily complicated for America’s small
businesses.”
Earlier this year, Mr. Obama proposed to end tax breaks for companies that move
jobs overseas and to create new breaks for those that bring jobs back.
Corporate taxes make up an increasingly small share of the federal government’s
revenue, in part because of tax-avoidance maneuvers by businesses.
Mr. Obama is proposing that the simplification of the corporate code should not
add to the deficit, and that most or all revenue raised by closing tax breaks
should be used to lower rates or offset the cost of new or existing tax breaks
favoring manufacturing, clean energy, and research and development activities,
according to administration officials.
Mr. Obama is not proposing to overhaul the tax code for individuals, though he
was spoken of it as a goal. Both codes were last revamped a quarter-century ago
and the accretion of tax breaks in recent years has given rise to widespread
calls, including from Mr. Obama’s 2010 Bowles-Simpson fiscal commission, to
overhaul the tax systems in a way that raises enough revenue to both lower rates
and reduce annual budget deficits.
But every tax break has its defenders, from homeowners who want their
mortgage-interest deduction to corporations protective of depreciation tax
breaks.
In October, Dave Camp of Michigan, the chairman of the House Ways and Means
Committee, proposed a 25 percent corporate rate without saying how he would
offset the sizable revenue loss.
An analysis in November from Congress’s nonpartisan Joint Committee on Taxation,
which was requested by House Democrats, reported that even if every corporate
tax break were scrapped, the 35 percent corporate rate could not be reduced
below 28 percent without adding to deficits. Republicans disputed that, citing a
group of relatively obscure tax breaks that the Congressional analysts did not
count.
Even so, the administration and Congress would have a political and mathematical
challenge in eliminating or reducing tax breaks enough to lower corporate rates
as they propose to do without adding to deficits. Underscoring the difficulty,
just two popular tax breaks — for accelerated depreciation of businesses’
capital investments and write-offs of research and experimentation costs —
account for the bulk of the revenue the government foregoes to benefit
corporations.
Not only are those two provisions unlikely to be repealed; the Obama
administration and both parties in Congress also support making a separate
research credit permanent.
While Mr. Obama has emphasized federal policies to help manufacturers since he
took office at the height of the recession — most prominently by rescuing the
auto industry — his attention has become even more pronounced as he seeks
re-election in battleground states like those in the Midwest where manufacturing
is a mainstay.
For tax purposes, however, the administration would have a challenge in defining
manufacturing to determine what companies would benefit from a lower rate.
While details were sketchy, an official said Mr. Obama’s tax framework would
“refocus the manufacturing deduction and use the savings to reduce the effective
rate on manufacturing to no more than 25 percent, while encouraging greater
research and development and the production of clean energy.”
For multinational corporations, officials say the administration will oppose any
shift to a territorial system of taxing offshore profits, which could exempt
most of corporations’ foreign earnings from American income taxes. Mr. Camp and
many other Republicans and corporations favor such a change, and are certain to
oppose Mr. Obama’s proposal for a minimum tax on foreign earnings.
While the United States is virtually alone in taxing multinational companies’
foreign earnings, it allows the companies to avoid taxes indefinitely by keeping
profits overseas. But that encourages accounting schemes and offshore
investments, critics say.
Obama Offers to Cut Corporate Tax Rate to
28%, NYT, 22.2.2012,
http://www.nytimes.com/2012/02/22/business/economy/obama-offers-to-cut-corporate-tax-rate-to-28.html
Obama to Return Major Donations Tied to Fugitive
February 6, 2012
The New York Times
By MIKE McINTIRE
Two American brothers of a Mexican casino magnate who fled
drug and fraud charges in the United States and has been seeking a pardon
enabling him to return have emerged as major fund-raisers and donors for
President Obama’s re-election campaign.
The casino owner, Juan Jose Rojas Cardona, known as Pepe, jumped bail in Iowa in
1994 and disappeared, and has since been linked to violence and corruption in
Mexico. A State Department cable in 2009 said he was suspected of orchestrating
the assassination of a business rival and making illegal campaign donations to
Mexican officials.
When The New York Times asked the Obama campaign early Monday about the
Cardonas, officials said they were unaware of the brother in Mexico. Later in
the day, the campaign said it was refunding the money raised by the family,
which totaled more than $200,000.
As recently as January of last year, one of Mr. Cardona’s brothers in Chicago,
Carlos Rojas Cardona, arranged for the former chairman of the Iowa Democratic
Party to seek a pardon from the governor for Pepe Cardona, according to
prosecutors in that state. None was forthcoming.
Last fall, Carlos Cardona and another brother in Chicago, Alberto Rojas Cardona,
began raising money for the Obama campaign and the Democratic National
Committee. The Cardona brothers, who have no prior history of political giving,
appeared seemingly out of nowhere in the world of Democratic fund-raising,
Democratic activists said.
The money Alberto Cardona raised put him in the upper tiers of fund-raisers
known as bundlers, according to a list released last month by the campaign. He
and Carlos Cardona each gave the maximum $30,800 to the Democratic National
Committee, and a lesser amount to a state victory fund. A sister, Leticia Rojas
Cardona of Tennessee, donated $13,000 to the national committee, and another
relative in Illinois gave $12,600, records show. There is no record of Pepe
Cardona making a donation.
Although the two brothers live and work in Chicago, they maintain ties to Pepe
Cardona in Mexico. Alberto Cardona operates an advertising agency in Mexico that
has worked for political candidates backed by his brother, according to public
records and Mexican news reports. Public records also show that the domain name
for the Web site of a restaurant Pepe Cardona owns is registered to Alberto
Cardona.
Obama campaign officials said most of the money raised by the Cardona brothers
came from themselves and other relatives, donations of about $200,000. In
addition, the campaign was identifying other donations, believed to total less
than $100,000, that was bundled from other people.
“On the basis of the questions that have been raised, we will return the
contributions from these individuals and from any other donors they brought to
the campaign,” said Ben LaBolt, a spokesman for the Obama campaign.
Pepe Cardona is one of the largest players in Mexico’s violent and tumultuous
casino trade. In 2007, he survived an assassination attempt that was attributed
to members of organized crime. The State Department cable, which was part of the
cache made public by WikiLeaks, said he was suspected of illegally funneling $5
million into Mexican political campaigns in 2006.
Multiple messages left for Alberto and Carlos Cardona over several days were not
returned. A sister-in-law, Sarah Westall of Minnesota, said in a telephone
interview that it would be wrong to tar other members of the family with the
negative publicity surrounding Pepe Cardona.
Ms. Westall, who is married to another Cardona brother, Gabriel, said Alberto
and Carlos took up Democratic fund-raising because their extended family had
long been involved in helping the Latino community and because they supported
the president. There were no other reasons beyond those, she said. “I understand
that it looks real bad,” she said. “But the rest of the family are really good
people. Pepe is actually a good person too.”
Whatever the family’s motivation, the president cannot pardon someone for state
crimes. On Monday, Democratic fund-raisers who have had encounters with Alberto
and Carlos Cardona expressed surprise upon learning about their family history.
Manuel Sanchez, a Chicago lawyer who is deeply involved in Latino outreach for
the Obama administration, said he first met them in December at a finance
committee meeting for the president’s campaign in Washington.
He said he had been told that they were involved in “marketing and advertising.”
They impressed him as “very smart young guys who wanted to support the
president,” he said.
“I did get the distinct impression that both of them are very well-to-do and
successful in their businesses,” Mr. Sanchez said, adding that he “had no idea”
they had a brother in Mexico or what his background was.
In Johnson County, Iowa, the authorities are well acquainted with Pepe Cardona’s
past.
One of nine children of Mexican parents who grew up in Iowa, Pepe Cardona, who
was born in Mexico, was active in civil rights issues at the University of Iowa
and became president of the Student Senate. While at the university in 1990, he
was accused of misspending student government money, and a year later he was
criminally charged with defrauding associates in a telemarketing company he
started, according to court records.
He was sentenced to five years in prison, and while free pending an appeal, he
was arrested in New Mexico on charges of trying to smuggle marijuana across the
border, court records show. He pleaded guilty to federal drug charges in 1994,
but disappeared while out on bail, later surfacing in Mexico.
In 1998, federal prosecutors obtained approval from a judge to quash the drug
indictment, wiping clean Pepe Cardona’s federal court record. However, his
current legal status in Iowa, where a county judge had ordered him jailed in
1992, is more precarious.
On Monday, the Johnson County attorney, Janet Lyness, said there was still an
outstanding warrant for his arrest on a probation violation charge. She said
that at least twice over the last four years, a lawyer approached the Iowa
governor’s office asking about a pardon for Pepe Cardona.
The last such request came in the final days of the term of Gov. Chet Culver, a
Democrat, and was filed by Gordon Fischer, a lawyer who is a former chairman of
the Iowa Democratic Party. In his pardon application, Mr. Fischer explained that
he knew Pepe Cardona from his days at the University of Iowa. Mr. Fischer
declined to comment on Monday, citing attorney-client privilege.
Ms. Lyness, also a Democrat, said she had been told that the application had
been initiated by members of Pepe Cardona’s family in the United States. She
opposed it, and it was not granted.
“I can think of few people who are less deserving of a pardon than Pepe
Rojas-Cardona,” Ms. Lyness wrote in her response to the pardon request, adding
that it would be “a travesty of justice.”
The first campaign donations by Alberto and Carlos Cardona came shortly after
news articles revealing Pepe Cardona’s criminal past appeared in the United
States and Mexico last fall.
One of them, a long exposé in September by a Mexican magazine, Proceso,
chronicled Pepe Cardona’s relatively swift rise to fortune and notoriety in
Mexico after fleeing the American authorities. He obtained Mexican gambling
licenses, and with help from investors in Louisiana, he started opening casinos
in and around Monterrey, eventually becoming known as Mexico’s “casino czar.”
The article reported that Tango Media, an advertising company it said is owned
by Alberto Cardona, worked on the campaigns of politicians favored by Pepe
Cardona in communities where he owned casinos. It also said Carlos Cardona was
involved in one of Pepe Cardona’s business deals.
A review of public records found that several of the Cardona brothers’ business
activities have intersected in the United States and in Mexico, sharing common
addresses and doing work for one another’s companies. For instance, another
brother, Arturo Rojas Cardona — Pepe’s main business partner in his casino and
entertainment businesses — has an architecture and design firm that has done
work for his brothers in the United States, including Alberto Cardona.
The nature of Alberto Cardona’s business is not exactly clear. On campaign
finance reports, he listed his employer as Tango Latin, a Chicago company that
seems to be connected to Tango Productions, a small video production, marketing
and photography studio that Carlos Cardona listed as his employer.
A check of public records found that Alberto Cardona is the registered owner of
domain names for the Web sites of Tango Media and 40 West, a restaurant owned by
Pepe Cardona, both in Mexico.
Ms. Westall, the sister-in-law, said she did not know what sort of dealings
Alberto and Carlos had with Pepe Cardona, but she added that it would not be
unusual for large families to help each other in their business activities.
“If someone in the family does Web design, and Pepe needed someone to do that,
he would hire that person first,” she said. “In Mexico, that’s the way it
works.”
Obama to Return Major Donations Tied to
Fugitive, NYT, 6.2.2012,
http://www.nytimes.com/2012/02/07/us/politics/major-obama-donors-are-tied-to-pepe-cardona-mexican-fugitive.html
White House Offers Plan to Lure Jobs to America
February 2, 2012
The New York Times
By ANNIE LOWREY
WASHINGTON — In his State of the Union address, President
Obama called for a wide-ranging package of policies to help create American
manufacturing jobs, including trade enforcement measures, business tax breaks
and worker training programs.
In many ways, the proposal is surprising, as few economists now consider
manufacturing a potent engine for job growth in the United States. Manufacturers
have added about 330,000 jobs in the country in the last two years. But the
growth followed three decades of decline, during which companies like automakers
and textile companies slashed payrolls by about 7.5 million. That has led many
economists to say the recent turnaround might be nothing more than a correction
from the depths of the recession.
But the administration argues that big trends — like rising wages in developing
countries, falling wages in America and a weaker dollar — have made moving work
to or keeping work in the United States a much more viable option. And they say
that manufacturers will continue to add jobs domestically, especially with a
little help from Washington.
“We have a huge opportunity, at this moment, to bring manufacturing back,” Mr.
Obama said in his address to Congress. “But we have to seize it. Tonight, my
message to business leaders is simple: Ask yourselves what you can do to bring
jobs back to your country, and your country will do everything we can to help
you succeed.”
The proposal stems from a belief that after “a long period where people felt the
wind was in our face, the wind is with us,” said Gene Sperling, director of the
White House National Economic Council. “It’s not fighting against the trends.
It’s actually working with them.”
Workers might command relatively high wages in the United States, but wages are
climbing rapidly in countries like China and Brazil. High energy prices have
increased shipping costs. And manufacturers argue that American workers
frequently produce higher-quality goods and that American factories are closer
to the markets for more sophisticated goods.
Those trends have led some companies to repatriate manufacturing jobs in the
last few years, a development called on-shoring. General Electric has decided to
move production of a water heater to Louisville, Ky., from China, for instance.
NCR, a maker of self-service kiosks and automated teller machines, has shifted
jobs to Columbus, Ga.
It is difficult to determine how many jobs American manufacturers are sending
overseas or bringing back. But in a November survey by MFG.com, a site that
connects manufacturers with suppliers, one in five North American manufacturers
said they had brought production back from a “low-cost” country, up from about
one in 10 manufacturers in early 2010.
Economists said that the administration could help sustain the trend. But they
warned that the administration’s proposal seemed unlikely to lead to major job
growth, and said that many businesses would still hire lower-cost workers
overseas.
“We’re not going to get very labor-intensive, relatively low-skilled jobs in
America, and I don’t think we want them,” said A. Michael Spence, a professor at
New York University and Nobel laureate in economics. “But sometimes it makes
sense to have a little help developing technologies that will make us
competitive. And sometimes public support for upgrading workers’ skills makes
sense.”
“The best we could possibly get is continued modest growth in manufacturing
jobs,” said C. Fred Bergsten, director of the Peterson Institute for
International Economics, a research group in Washington.
Mr. Bergsten noted that manufacturing continued to become more efficient,
meaning companies needed fewer and fewer workers. American manufacturers
produced roughly the same amount of goods in 2010 as they did a decade before,
but they did so with six million fewer employees on their payrolls. Mr. Bergsten
also argued that sending jobs to other countries continued to make sense for
many global firms. “You’re trying to buck two major trends,” he said.
Some economists also questioned whether Washington should be giving
manufacturing a hand at all.
“It’s totally implausible to think that there’s going to be a surge in
manufacturing jobs,” said Lawrence F. Katz, an economist at Harvard. Broader
measures to improve American infrastructure and education, he said, would be
more effective in creating middle-class jobs.
But the White House says that manufacturing offers significant potential for new
jobs — jobs that require more skills and offer better pay than the assembly
lines 30 or 40 years ago. And it says that even modest incentives might make a
difference.
To that end, the administration has put together a far-ranging set of proposals:
cutting taxes for manufacturers that produce goods in the United States, taking
away tax breaks for businesses that move jobs offshore, doubling a tax deduction
for makers of high-tech goods, providing support to businesses investing in
areas where factories are closing, expanding worker training programs and
creating a new task force to better enforce trade rules and intellectual
property rights. Closing a loophole that allows companies to shift profits
abroad would pay for the tax credits, the White House says.
It all adds up to what economists might call an industrial policy, the
out-of-favor practice of using tariffs, taxes and other measures to help a
particular industry. The White House avoids the term because it implies that the
government is picking winners and losers. It argues that its proposals are a
moderate plan to aid businesses deciding whether to move jobs overseas.
Countries like Germany, Japan and China offer far larger tax breaks and
financing support to their manufacturers, the administration argues. Such
countries have “been in a bear hug” with manufacturers, said Fred P. Hochberg,
president of the Export-Import Bank of the United States, a federal agency.
“We’ve held them at arm’s length.”
Mr. Hochberg said a focus on manufacturing and exports might lead to more
sustainable growth. “For the last three decades, we’ve relied on the U.S.
consumer for growth,” he said. “But now we’re seeing growth coming from an
investment in infrastructure happening in the emerging economies,” where
American companies should be selling their wares and expertise.
The administration also called for a focus on manufacturing because of its
spillover effects on the economy. “We do believe that manufacturing punches
above its weight economically,” said Mr. Sperling of the National Economic
Council. “Advanced manufacturing is critical to your innovative capacity as a
country.”
White House Offers Plan to Lure Jobs to
America, NYT, 2.2.2012,
http://www.nytimes.com/2012/02/03/business/economy/a-lure-to-keep-jobs-made-in-america.html
Civilian Deaths Due to Drones Are Not Many, Obama Says
January 30, 2012
The New York Times
By MARK LANDLER
WASHINGTON — President Obama on Monday defended the use of
drones to strike suspected terrorists in Pakistan and elsewhere, saying the
clandestine program was “kept on a very tight leash” and enabled the United
States to use “pinpoint” targeting to avoid more intrusive military action.
Mr. Obama, in an unusually candid public discussion of the Central Intelligence
Agency’s covert program, said the drone strikes had not inflicted huge civilian
casualties. “We are very careful in terms of how it’s been applied,” he said.
“It is important for everybody to understand that this thing is kept on a very
tight leash.”
The president made the remarks in answer to questions posed by people during a
live Web interview sponsored by Google Plus, the social media site of Google. He
also spoke about the economy, laughed at a comedian’s impersonation of him, and
declined a woman’s request to sing or do a dance.
The subject of drones came up when a viewer asked Mr. Obama about a report in
The New York Times on Monday about the State Department’s use of drones for
surveillance purposes to protect its diplomatic installations in Iraq. Mr. Obama
confirmed their use for surveillance, but said he thought the article was “a
little overwritten.” He added that drones were a key part of the country’s
offensive against Al Qaeda.
The C.I.A.’s drone program, unlike the use of armed unmanned aircraft by the
military in Afghanistan and previously in Iraq, is a covert program,
traditionally one of the government’s most carefully-guarded secrets. But
because of intense public interest — the explosions cannot be hidden entirely —
American officials have been willing to discuss the program on condition of
anonymity.
Until Monday, Mr. Obama, who has overseen a dramatic expansion of the use of
drones in Pakistan and on a smaller scale in Yemen and Somalia, had spoken only
indirectly about the program. For example, after a C.I.A. drone strike in
September killed Anwar al-Awlaki, the American-born Qaeda propagandist hiding in
Yemen, Mr. Obama never mentioned the agency, its unmanned aircraft or the
missiles they fired.
Instead, speaking at a Virginia military base, he said Mr. Awlaki “was killed”
in what he said was “a tribute to our intelligence community.” The secrecy has
prevented an open debate on legal and ethical questions surrounding the strikes,
since neither intelligence officials nor members of Congress can speak openly
about them.
Scott Shane contributed reporting.
Civilian Deaths Due to Drones Are Not Many,
Obama Says, NYT, 30.1.2012,
http://www.nytimes.com/2012/01/31/world/middleeast/civilian-deaths-due-to-drones-are-few-obama-says.html
President to Offer Way for Easing Home Debt
January 25, 2012
The New York Times
By BINYAMIN APPELBAUM
WASHINGTON — The White House plans to propose legislation that
could allow a few million homeowners to reduce monthly mortgage payments by
refinancing their current loans into new ones guaranteed by the Federal Housing
Administration.
The program would broaden the availability of government-backed mortgages to
include many borrowers whose loans are held by private companies and who have
been unable to persuade those lenders to reduce their interest rates. Existing
federal programs focus mostly on borrowers whose loans are owned by the
government.
The new plan would require Congressional approval, a difficult hurdle for any
legislation in the current polarized environment. Still, some Republicans have
expressed support for expanding the availability of refinancing, and White House
officials insisted that the plan was not an act of theater.
“I’m sending this Congress a plan that gives every responsible homeowner the
chance to save about $3,000 a year on their mortgage, by refinancing at
historically low interest rates,” Mr. Obama said Tuesday night in his State of
the Union address. “No more red tape. No more runaround from the banks.”
Administration officials said they would release the full proposal in the near
future.
The new program will be directed at people whose mortgage debts exceed the value
of their homes, according to a senior administration official who spoke on the
condition of anonymity because the details have not yet been finalized. The
official estimated that the program could benefit two million to three million
homeowners who have loans that are not guaranteed by the government, and that
the program’s cost would not exceed $10 billion.
The proposal is the latest in a long series of largely unsuccessful efforts by
the administration to bolster the housing market. Like most of its predecessors,
the plan is focused not on borrowers facing foreclosure but on those who have
been able to keep making the payments on their homes. Reducing housing payments
for those borrowers will allow them to spend more money on other things. It also
could help to stabilize housing prices by encouraging them to stay in their
homes.
In October, the administration announced that it would increase eligibility for
an existing refinancing program for homeowners whose loans were held by the
government-owned mortgage finance companies Fannie Mae and Freddie Mac. Those
changes did not require Congressional approval, but many Republicans expressed
opposition.
“The right course is to let markets work,” the Republican presidential candidate
Mitt Romney said at the time. Mr. Romney has since suggested he would be open to
working with lenders to stabilize the housing market.
This new program would extend a similar refinancing opportunity to borrowers
whose loans are held by private companies.
Many such borrowers already have refinanced, taking advantage of interest rates
below 4 percent, among the lowest ever available for mortgage loans. But
millions more have been unable to do so, because their financial profiles are no
longer strong enough to qualify or because their mortgage debts exceed the value
of their homes.
The F.H.A. is a government program that guarantees loans made by private
companies, allowing the companies to offer lower interest rates. The program
historically focused on lower-income borrowers, but its role has expanded
dramatically since the collapse of the housing market began in 2006, and it now
guarantees about 30 percent of new loans.
The proposal requires legislation because current law restricts the ability of
the F.H.A. to refinance loans that exceed the value of the borrower’s home. Such
loans are considered riskier because borrowers have no equity to lose if they
stop payments. If the F.H.A. loses money on such loans, taxpayers could be on
the hook. The program covers losses from fees on the loans it guarantees, but
its reserves already are on the verge of exhaustion.
To limit the risk to taxpayers, the administration will propose that any costs
should be covered with part of the proceeds from a fee on the banking industry.
That, too, is waiting for Congressional approval.
President to
Offer Way for Easing Home Debt, NYT, 25.1.2012,
http://www.nytimes.com/2012/01/25/us/politics/obama-mortgage-plan-would-broaden-government-backed-loans.html
A Tax Proposal Is Brought Out Again
January 25, 2012
The New York Times
By JONATHAN WEISMAN
WASHINGTON — President Obama, stymied for three years on his
promise to end tax incentives that move jobs overseas, went back to the well on
Tuesday night with tax proposals that he said would promote domestic corporate
growth.
Ever since his 2008 presidential campaign, Mr. Obama has vowed to change tax
measures that he says lure American companies to invest and expand overseas. It
was a huge applause line on the campaign trail, but for three years the
proposals have gone nowhere in the face of stiff, often angry opposition from
corporations — especially high-tech firms — that say the proposals would kill
their economic competitiveness.
The proposals tied to his State of the Union address on Tuesday night would
simplify those earlier measures while adding carrots to the sticks of higher
taxes on overseas profits. Mr. Obama proposed creating an international minimum
tax that companies with overseas profits would have to pay. An administration
official said the White House would not specify that rate. Instead it will be a
principle enshrined in a broader corporate tax package that will be released
next month with the president’s budget plan for the 2013 fiscal year.
In that way, it is a business analogue to his “Buffett Rule,” which stipulates
that wealthy taxpayers should not pay a smaller percentage of their income in
taxes than middle-class households but does not prescribe how that tenet would
be achieved.
“My message is simple: It’s time to stop rewarding businesses that ship jobs
overseas and start rewarding companies that create jobs right here in America.
Send me these tax reforms, and I’ll sign them right away,” he said.
Currently, companies with overseas operations can park their foreign profits
offshore indefinitely and tax free. Those profits face the 35 percent United
States corporate tax rate only if and when they are brought into the country.
Mr. Obama’s first budget, and every budget since, has tried to curb the value of
what is known as deferral. For instance, companies would not be able to deduct
from their taxes the interest on loans from overseas expansions.
The thinking has been that if tax breaks are more generous at home, companies
would keep more operations domestic. But all Mr. Obama has to show for those
proposals are some of the earliest public fights between his White House and the
business community.
To the stick of an international minimum tax, Mr. Obama would add a carrot, a
lower tax rate for domestic manufacturers and additional tax breaks for
high-tech manufacturing. He would also offer a new tax credit to help finance
the construction of facilities at shuttered military bases or in regions hit
hardest by companies moving overseas. And he would deny tax deductions for
moving expenses when businesses shift facilities abroad, while creating a new
tax credit for moving production back home.
Jared Bernstein, a former Obama White House economist, said the proposals
sounded like a strategic retreat.
“The rhetoric sounds like something designed to perhaps go down easier than the
measures that had been in the budgets before, such as ending deferrals,” Mr.
Bernstein said in an interview.
The administration official said that was not so. The earlier proposals will be
repeated in the coming budget but will be supplemented, the official said.
The business and trade proposals of the address seemed at least attuned to the
presidential race if they were not directly inspired by them. Rick Santorum has
also proposed sharp reductions in tax rates for domestic manufacturers as he
campaigns for the Republican nomination. And Mitt Romney has made unfair trade
practices on the part of China a centerpiece of his economic policy
prescriptions.
On that, too, Mr. Obama followed suit, proposing a new trade enforcement unit
charged with investigating unfair trade practices. He pointedly singled out
China.
“There will be more inspections to prevent counterfeit or unsafe goods from
crossing our borders,” the president said. “And this Congress should make sure
that no foreign company has an advantage over American manufacturing when it
comes to accessing finance or new markets like Russia.”
But Mr. Obama also circled back to unfinished business that has weighed down his
political prospects.
For at least the third time, he proposed a plan to get the housing market going.
He promised an effort to help “responsible” homeowners refinance their mortgages
at record low rates. “No more red tape, no more runaround from the banks,” he
promised, holding out the hope that beleaguered homeowners would save about
$3,000 a year.
On smaller matters, Mr. Obama was remarkably prescriptive. He said states should
be allowed to simply make it illegal for students to leave high school until
they are 18, a command solution to the dropout problem. And he threatened to
withhold federal assistance from universities that do not control their rising
tuition costs.
Gov. Mitch Daniels of Indiana hit on that prescriptive theme in the Republican
response when he said Mr. Obama “seems to sincerely believe we can build a
middle class out of government jobs paid for with borrowed dollars.”
“In fact, it works the other way: a government as big and bossy as this one is
maintained on the backs of the middle class, and those who hope to join it,” Mr.
Daniels said.
A Tax Proposal Is Brought Out Again, NYT,
25.1.2012,
http://www.nytimes.com/2012/01/25/us/politics/in-state-of-the-union-address-a-tax-proposal-is-brought-out-again.html
Obama Urges Tougher Laws on Financial Fraud
January 24, 2012
The New York Times
By EDWARD WYATT
WASHINGTON — President Obama called on Congress Tuesday to
toughen laws against securities fraud and to strengthen the ability of the
Securities and Exchange Commission to punish Wall Street firms that repeatedly
violate antifraud statutes.
In his State of the Union address, Mr. Obama also said he would ask the attorney
general to establish a special financial crimes unit to prosecute cases of
large-scale financial fraud.
It is not clear how that effort would differ from the Financial Fraud
Enforcement Task Force, a cross-agency group that Mr. Obama established in
November 2009. Its mission, as the White House put it then, was to “hold
accountable those who helped bring about the last financial crisis and to
prevent another crisis from happening.”
The two initiatives represent an attempt to give financial regulators a greater
ability to police the financial markets. In addition, the proposals seek to
acknowledge the continuing frustration among many Americans — exemplified by the
Occupy Wall Street movement — that few financial executives have been prosecuted
for their actions leading up to the crisis.
Given the election-year pressures and the continuing gridlock on Capitol Hill,
neither measure is certain to win approval in this session of Congress.
The issue of how to deal with Wall Street firms that repeatedly violate
securities laws has come into focus in recent months as the S.E.C. has stepped
up its efforts to bring cases related to the financial crisis. Many of those
cases involve financial companies that have violated the same laws many times
before.
A New York Times analysis of S.E.C. enforcement actions over the last 15 years,
published in November, found at least 51 cases in which the S.E.C. concluded
that Wall Street firms had broken antifraud laws that, as part of settlements of
earlier fraud cases, they had pledged never to breach. The 51 cases spanned 19
firms, including nearly all of the biggest financial companies — Goldman Sachs,
Morgan Stanley, JPMorgan Chase & Company and Bank of America among them.
Mr. Obama first outlined his plans to crack down on repeat offenders in an
economic speech in December in Osawatomie, Kan. “Too often, we’ve seen Wall
Street firms violating major antifraud laws because the penalties are too weak
and there’s no price for being a repeat offender,” Mr. Obama said. “No more.
I’ll be calling for legislation that makes those penalties count so that firms
don’t see punishment for breaking the law as just the price of doing business.”
Mary Schapiro, the chairwoman of the S.E.C., similarly called on Congress in
November to raise the maximum penalties the commission could assess for
securities laws violations, and to allow it to assess greater fines for repeat
violations of antifraud statutes.
Currently, the S.E.C. can try to bring contempt charges only if a company has
broken previous vows not to violate the law. In a letter to members of the
Senate Banking Committee, Ms. Schapiro said that enhancing the S.E.C.’s ability
to crack down on repeat offenders would “substantially enhance the effectiveness
of the commission’s enforcement program by addressing existing limitations that
have resulted in criticism regarding the adequacy of commission actions against
those who violate the securities laws.”
The S.E.C. has also been criticized recently for its practice of allowing
companies to settle allegations of securities fraud while neither admitting nor
denying the charges. That is a standard practice used for years by the S.E.C. as
well as other regulatory agencies, but it has come under increasing scrutiny
since the financial crisis.
Most recently, Judge Jed S. Rakoff of the Federal District Court in Manhattan
rejected a proposed $285 million settlement in a case between the S.E.C. and
Citigroup over a complex mortgage security that it marketed in 2007, as the
housing market was beginning to crumble.
In his opinion, Judge Rakoff said the settlement’s “neither admit nor deny”
terms left him with no conclusive evidence with which to determine whether the
proposed punishment was just.
Judge Rakoff said such settlements, which often involve penalties of tens or
hundreds of millions of dollars, were frequently viewed by the settling
companies “as a cost of doing business imposed by having to maintain a working
relationship with a regulatory agency, rather than as any indication of where
the real truth lies.”
In the State of the Union address, Mr. Obama said that banks and financial
companies should be held accountable for their actions and should face the same
type of consequences as anyone else who has been charged with breaking the law.
Obama Urges Tougher Laws on Financial
Fraud, NYT, 24.1.2012,
http://www.nytimes.com/2012/01/25/business/obama-urges-tougher-laws-on-financial-fraud.html
Critiques for Capitalists in Obama’s Speech,
With One in Particular in His Sights
January 25, 2012
The New York Times
By MARK LANDLER
WASHINGTON — President Obama did not mention Mitt Romney on
Tuesday evening, but he didn’t need to. Mr. Romney, whom the president’s aides
still view as his most likely opponent in the fall, was the unspoken adversary
in Mr. Obama’s call for a more equitable society — the natural foil for his
proposals to level the playing field for middle-class Americans, from taxes to
trade policy.
When Mr. Obama talked about levying a millionaires’ tax, he might have been
referring to Mr. Romney’s newly released tax return, which disclosed he paid a
tax rate of 13.9 percent on income of more than $20 million in 2010.
When he referred to his administration’s bailout of the auto industry, noting
that “some even said we should let it die,” he could have been talking about Mr.
Romney’s argument that the carmakers should have been allowed to fail. And when
he said he would oppose “any effort to return to the very same policies that
brought on this economic crisis in the first place,” he could have been
referring to Mr. Romney’s call for a rollback of regulations on Wall Street.
Nine months before he faces the voters, Mr. Obama seized what is likely to be
one of his most prominent platforms of the year to draw a bright line between
himself and Mr. Romney — and, in the process, try to appeal to those frustrated
by the deepening economic divide.
Gone was the soaring language of his last State of the Union address, when the
president spoke of winning the future — a challenge he likened to “our
generation’s Sputnik moment.” With the tents of the Occupy protesters catching
snow in American cities, he was tapping into a national sense of grievance.
“When Americans talk about folks like me paying my fair share of taxes, it’s not
because they envy the rich,” Mr. Obama said, answering Mr. Romney’s charge that
the president engages in the “bitter politics of envy.” “It’s because they
understand that when I get tax breaks I don’t need and the country can’t afford,
it either adds to the deficit or somebody else has to make up the difference.”
It is a theme he has struck repeatedly as his campaign has geared up, and
nowhere more forcefully than last month in Osawatomie, Kan., where he invoked
the spirit of Theodore Roosevelt, a Republican aristocrat who nevertheless broke
up monopolies and campaigned for a progressive income tax.
Mr. Obama’s appeal on Tuesday, studded as it was with the policy proposals that
fill these addresses, did not match that populist fury. But in the august
setting of the Capitol, squaring off against an often-hostile Congress, the
president rolled out an election-year message that offers voters a stark choice
between his vision and what he paints as the Darwinian approach of Mr. Romney
and other Republicans.
To some extent, Mr. Obama was also aiming his words at Florida, where Mr. Romney
and the rest of the Republican field are competing in a primary next week over
the right to challenge the president.
Every word in a State of the Union address is carefully chosen. So it was no
accident that when the president discussed the auto industry and the future of
American manufacturing, he said: “What’s happening in Detroit can happen in
other industries. It can happen in Cleveland and Pittsburgh and Raleigh.”
Those cities happen to be in Michigan, Ohio, Pennsylvania and North Carolina —
battleground states totaling 69 electoral votes.
But much of the president’s message was clearly intended to push back at his
Republican rivals and their critiques of his record.
Lest anyone forget Mr. Romney’s background at Bain Capital as an avid buyer and
seller of companies, Mr. Obama offered a paean to permanence — to companies
built on a sturdy foundation of manufacturing and skilled workers. These
businesses, he said, are the basis of a competitive economy.
Mr. Obama also seemed to have Mr. Romney in mind when he announced new housing
assistance and declared that “responsible homeowners shouldn’t have to sit and
wait for the housing market to hit bottom to get some relief.” Last year, Mr.
Romney went to Nevada, the state hardest hit by foreclosures, and told a Las
Vegas newspaper that the housing market needed to bottom out.
Mr. Obama also said he would oppose efforts to repeal financial regulations, and
he drew a direct link between the policies of his predecessor, George W. Bush,
and the economic mess that has consumed his own presidency.
In recent weeks, Mr. Obama has had a useful surrogate in Newt Gingrich, the
former House speaker, who has accused Mr. Romney of destroying jobs while at
Bain and pressured him to release his tax returns.
But Mr. Gingrich, whose victory in the South Carolina primary has turned him
into a real competitor, did not escape a few jabs Tuesday night. Mr. Obama
called for new rules to reduce the influence of lobbyists. Left unsaid was Mr.
Gingrich’s disclosure on Monday that he had been paid $1.6 million to advise the
mortgage giant Freddie Mac.
Mr. Romney was not silent on Mr. Obama’s big day, earlier laying out his own
case for leadership in a speech at a shuttered factory in Tampa, Fla. He argued
that his 25 years in business had given him the skills to turn around the
economy. The president, Mr. Romney said, “puts his faith in government; we put
our faith in the American people.”
“Ours is the party of free enterprise, free markets and consumer choice,” he
said. “The Republican Party stands for personal responsibility and equal
opportunity. We don’t demonize prosperity; we celebrate success.”
Mr. Obama countered that he had turned things around, pointing to the revived
auto industry, a recovering economy and three million private-sector jobs. And
he flatly rejected the contention of Mr. Romney, Mr. Gingrich and other
Republicans that he is presiding over a country in decline.
“Anyone who tells you otherwise,” the president said, “anyone who tells you that
America is in decline or that our influence has waned, doesn’t know what they’re
talking about.”
Jonathan Weisman contributed reporting.
Critiques for Capitalists in Obama’s
Speech, With One in Particular in His Sights, NYT, 25.1.2012,
http://www.nytimes.com/2012/01/25/us/politics/obama-sets-sights-on-romney-in-state-of-the-union.html
In Address, Obama Makes Pitch for Economic Fairness
January 24, 2012
The New York Times
By HELENE COOPER
WASHINGTON — President Obama pledged on Tuesday night to use
government power to balance the scale between America’s rich and the rest of the
public, trying to present an election-year choice between continued leadership
toward an economy “built to last” and what he called irresponsible policies of
the past that caused an economic collapse.
Declaring that “we’ve come too far to turn back now,” the president used his
final State of the Union address before he faces the voters to showcase the
extent to which he will try to contrast his core economic principles with those
of his Republican rivals in a time of deep economic uncertainty. While many
Americans remain disappointed with the state of the economy and the president’s
handling of it, Mr. Obama nonetheless tried to bring into relief the difference
between where the country was when he took over and where it is now.
“The state of our union is getting stronger,” he declared in time-honored
tradition. “In the last 22 months, businesses have created more than three
million jobs.” He pointed to renewed hiring by American manufacturers and —
borrowing the “built to last” phrase from the auto industry he helped save — he
sketched out, albeit vaguely, what he called a blueprint for economic growth in
which the wealthy play by the same rules as ordinary Americans.
Republicans challenged Mr. Obama’s assessment of the economy, and asserted that
his policies had made the situation worse. But with their own poll numbers
diving, Congressional Republicans were subdued in their response to the speech,
careful not to boo or seem disrespectful. And the president disputed their claim
that he was practicing the politics of division.
“You can call this class warfare all you want,” Mr. Obama said of his call to
create a more even economic playing field. “Most Americans would call that
common sense.” He characterized the choice as one between whether “a shrinking
number of people do really well while a growing number of Americans barely get
by” or his own vision — “where everyone gets a fair shot.”
In returning to his 2008 campaign motif of these being “not Democratic values or
Republican values, but American values,” Mr. Obama presented a somewhat modest
list of initiatives he could enact through executive authority coupled with more
ambitious proposals unlikely to advance in Congress. It was an address meant to
show a president still interested in governing and a leader putting the
interests of the American middle class at the top of his agenda.
Many of his proposals centered on changes to the tax code, including limiting
deductions for companies that move jobs overseas, rewarding companies that
return jobs to the United States and increasing taxes on wealthy Americans.
Taking aim at financial institutions that engaged in risky lending practices
that many believe tipped the country into financial crisis, Mr. Obama said he
was asking Attorney General Eric H. Holder Jr. to create a special unit of
federal prosecutors and state attorneys general to expand investigations into
abusive lending. The new unit, he said, “will hold accountable those who broke
the law, speed assistance to homeowners and help turn the page on an era of
recklessness that hurt so many Americans.”
Mr. Obama also proposed a new trade enforcement unit that would add to the
number of government investigators pursuing unfair trade practices and that
would be responsible for filing lawsuits against foreign countries, namely
China. He called for new legislation to make it easier for Americans to
refinance their homes if their interest rates are above market rates. And he
proposed a bound-to-be-contentious way to allocate any savings from ending the
war in Iraq and winding down the war in Afghanistan: by using half of the war
savings on infrastructure projects and the other half to reduce the deficit.
“We will not go back to an economy weakened by outsourcing, bad debt and phony
financial profits,” Mr. Obama said. Though his advisers have vowed a campaign
against Congress, he expressed a willingness to “work with anyone in this
chamber” and said he would “oppose any effort to return to the very same
policies that brought on this economic crisis in the first place.”
In an emotional moment, Representative Gabrielle Giffords, an Arizona Democrat
who was wounded in the Tucson shooting last year, returned for the speech before
her imminent resignation from the House to concentrate on her recovery. Although
the president is often criticized for his aloofness, he embraced Ms. Giffords
for a long 10 seconds, rocking and almost seeming to be dancing with her.
Mr. Obama again proposed changes to the tax code so the wealthy pay more, a
position he has indicated he will continue to press in this election year
against Republican opposition. He called for Congress to put into place his
“Buffett Rule” — named after the Berkshire Hathaway chairman Warren E. Buffett —
whereby people making more than $1 million a year would pay a minimum effective
tax rate of at least 30 percent in income taxes.
To illustrate his point, he provocatively used Mr. Buffett’s secretary, Debbie
Bosanek, as one of his props, seating Ms. Bosanek — whose effective tax rate is
higher than Mr. Buffett’s, he has said — in the chamber with the first lady,
Michelle Obama.
Mr. Obama’s income tax proposal on Tuesday night was particularly charged,
coming as it did less than 24 hours after Mitt Romney, a Republican presidential
candidate, released tax returns showing that he and his wife, Ann, had an
effective federal income tax rate in 2010 of 13.9 percent and an income ranking
among the top one-10th of 1 percent of all taxpayers in 2010.
Mr. Obama would like the new tax to replace the alternative minimum tax, which
was created decades ago to make sure that the richest taxpayers with plentiful
deductions and credits did not avoid income taxes, but which now affects
millions of Americans who are considered upper middle class.
An upbeat Mr. Obama delivered his remarks standing in the chamber of the House
of Representatives, an arena ruled by his political adversaries, given the
Republican majority that the president and fellow Democrats have criticized as
blocking much of the White House agenda.
But in the official Republican response to the address, Gov. Mitch Daniels of
Indiana said it had been Congressional Republicans who had acted to improve the
economy, only to be thwarted by the president.
“The president did not cause the economic and fiscal crisis that continue in
America tonight,” Mr. Daniels said. “But he was elected on a promise to fix
them, and he cannot claim that the last three years have made things anything
but worse.”
While he was addressing Congress and assembled dignitaries, Mr. Obama was trying
to reach the far greater national television audience of American voters, and
his speech, while deep in policy initiatives, served in many ways as a
prime-time kickoff of his re-election campaign.
In fact, most of the first lady’s guests on Tuesday night came from states that
figure heavily in Mr. Obama’s re-election plans. Included were North Carolina,
from where Mr. Obama selected both a worker and an employer, to demonstrate the
benefits of public-private partnerships, and Florida, from where he chose a
homeowner who was able to keep her house thanks to Mr. Obama’s housing refinance
program.
Mr. Obama said a major part of his agenda would be the expansion of domestic
energy supplies, both from traditional fuels like oil and natural gas and from
cleaner sources like wind and the sun. He singled out the rapid growth of
domestic natural gas production through the technique known as hydraulic
fracturing, or fracking, which the government says has unlocked a 100-year
supply that now makes the United States the Saudi Arabia of natural gas.
Reflecting the heavy emphasis on the economy in an election year, the
president’s speech was relatively short on national security, where most
political observers and indeed his own aides believe his performance has been
much stronger than on the economy. In fact, Mr. Obama ended his speech with the
American assault last year that finally, after 10 years, killed Osama bin Laden,
and talked of that fateful day last May when he monitored the attack from the
White House.
He called on the country to emulate the unity of the Navy Seal team that
conducted the raid. “When you’re marching into battle, you look out for the
person next to you,” the president said, “or the mission fails.”
John M. Broder contributed reporting.
In Address, Obama Makes Pitch for Economic
Fairness, NYT, 24.1.2012,
http://www.nytimes.com/2012/01/25/us/politics/state-of-the-union-2012.html
Obama at
Pentagon to Outline Cuts and Strategic Shifts
January 5,
2012
The New York Times
By ELISABETH BUMILLER and THOM SHANKER
WASHINGTON
— President Obama outlined a broad new military strategy for the United States
on Thursday, one that refocuses the armed forces on threats in Asia and the
Pacific region, continues a strong presence in the Middle East but makes clear
that American ground forces will no longer be large enough to conduct prolonged,
large-scale counterinsurgency campaigns like those in Iraq and Afghanistan.
In an unusual appearance in the Pentagon briefing room, Mr. Obama put his mark
on a military strategy that moves away from the grinding wars he inherited from
the Bush administration and relies more on naval and air power in the Pacific
and the Strait of Hormuz as a counterbalance to China and Iran.
Mr. Obama’s strategy embraces hundreds of billions of dollars in cuts to the
military, making it an awkward codicil to the uneasy relationship he has shared
with the military since his first days in office.
In a letter accompanying the new strategy, the president wrote, “We must put our
fiscal house in order here at home and renew our long-term economic strength.”
But in an election year when he has been under assault from Republican
presidential candidates for cutting the military budget and for what they say is
his weak response to Iranian threats, Mr. Obama also said that the United States
would “avoid repeating the mistakes of the past when our military was left
ill-prepared for the future.”
To that end, the president wrote, his administration will continue to invest in
counterterrorism, intelligence gathering, cyberwarfare and countering the
proliferation of nuclear weapons.
Mr. Obama arrived at the Pentagon early Thursday to describe the new strategy
with his defense secretary, Leon E. Panetta, and with Gen. Martin E. Dempsey,
the chairman of the Joint Chiefs of Staff. Officials said it was the first time
in history that a president had held a news conference at the Pentagon.
“Now, we’re turning the page on a decade of war,” Mr. Obama said in his prepared
remarks.
He said the country needed to remain prepared. “We cannot afford to repeat the
mistakes of the past—after World War II, after Vietnam—when our military was
left ill-prepared for the future,” he said. “So, yes, our military will be
leaner, but the world must know—the United States is going to maintain our
military superiority.”
Mr. Panetta has concluded that the Army has to shrink even below current
targets, dropping to 490,000 soldiers over the next decade, but that the United
States should not cut any of its 11 aircraft carriers, according to Pentagon
officials and military analysts briefed on the secretary’s budget proposals.
The new military strategy is driven by at least $450 billion in Pentagon budget
cuts over the next decade. An additional $500 billion in cuts could be ordered
if Congress follows through on plans for deeper reductions.
As part of the new reality, Mr. Panetta is expected to propose cuts in coming
weeks to next-generation weapons, including delays in purchases of the F-35
Joint Strike Fighter jet, one of the most expensive weapons programs in history.
Delaying the F-35 would leave its factories open, giving the manufacturer,
Lockheed Martin, a chance to work out continuing problems in developing the
plane while freeing up money that otherwise would be devoted to buying it in the
next year or two.
In the past few days, senior aides to both Mr. Panetta and General Dempsey said
few specific details on Pentagon budget cuts would be released before the final
budget proposal is finished later this month. But a number of Pentagon
officials, military officers and military budget specialists briefed on Mr.
Panetta’s plans discussed specific programs on the chopping block on the
condition of anonymity.
The defense secretary has made clear that troop reductions should be carried out
carefully, and over several years, so that combat veterans are not flooding into
a tough employment market and military families do not feel that the government
is breaking trust after a decade of sacrifice, officials said.
A smaller Army would be a clear sign that the Pentagon does not anticipate
conducting another expensive, troop-intensive counterinsurgency campaign, like
those waged in Afghanistan and Iraq. Nor would the military be able to carry out
two sustained ground wars at one time, as was required under past national
military strategies.
Instead, the military would be required to fight and win one war, spoil the
military aspirations of another adversary in a different region of the world,
and all the while be able to conduct humanitarian relief operations and other
contingencies, like continuing counterterrorism missions and enforcing a no-fly
zone.
The size of the Marine Corps is also expected to be reduced, although it would
be expected to benefit from a renewed focus on the Asia-Pacific region, with
Marines deployed aboard ships as well as at bases west of Hawaii.
Mr. Panetta is also examining personnel costs, with cuts to future retirement
benefits and fees for health care offered to Defense Department retirees on the
table.
Some areas of Pentagon spending will be protected. The defense secretary will
not advocate cuts in financing for defense and offense in cyberspace, for
Special Operations forces or for the broad area of intelligence, surveillance
and reconnaissance.
In general, the new “Defense Strategic Review” outlined Thursday will try to
define American national security interests in what officials said would be more
realistic, narrow terms — to allow the acquisition of required military
capabilities with a reduced budget.
Obama at Pentagon to Outline Cuts and Strategic Shifts, NYT, 5.1.2012,
http://www.nytimes.com/2012/01/06/us/obama-at-pentagon-to-outline-cuts-and-strategic-shifts.html
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