Archive for July, 2009

The F-22 Vote: What Are America’s Spending Priorities?

Posted on July 27, 2009. Filed under: F-22, Uncategorized |

f22_09

With some of its most powerful backers losing their resolve to continue the fight for the F-22 Raptor, questions remain about the administration’s funding priorities.

The administration won a Capitol Hill victory last week when the Senate voted to accept Defense Secretary Robert Gates plans to stop production of the radar-evading aircraft after 187 planes have been completed.

The saving: $1.75 billion. At the same time, however, the Pentagon said it planned to spend $1 billion on a new media outreach program.

Gates and Obama said the cut is a concession to budget constraints, but this comes just months after the administration championed a $787 billion stimulus package to create jobs and rescue the economy. Cutting the F-22 program is expected to result in the loss of 25,000 direct and 75,000 indirect jobs across America.

This makes no sense. When Obama vowed to end “business as usual,” did he actually mean he wanted to bring an end to business, period?

Then there’s the political capitol the President had to expend to win in the Senate, including the first veto threat of his presidency (which, by the way, Gates reiterated on the eve of the vote). Not only did the administration plan anger members of Congress whose districts will lose irreplaceable jobs, Obama also ignored pleas from some of his core constituencies, including the AFL-CIO, the Steelworkers and the International Association of Machinists and Aerospace Workers.

The IAM vowed to continue the dog fight.

“Ending the F-22 will result in immediate layoffs in the supplier base and begin the costly dismantling of a vital part of our defense industrial base — at a time when our nation is facing the most severe economic crisis since the Great Depression and unemployment continues to rise month after month,” said IAM President Tom Buffenbarger.

Gates said the Pentagon doesn’t need any more F-22s, which were designed as a successor to the F-15A and are the world’s most advanced fighter jets. They are faster, can fly higher, and have better stealth capabilities than any other fighter.

The administration’s plan came despite repeated statements from the Air Force that ending the program at 187 planes would threaten U.S. air dominance. There were several high ranking voices inside the Pentagon who said they believe cutting the program would be foolhardy.

The measure moves now to a House-Senate conference where conferees will decide if the Senate language to strip funding for the planes will win out over the House version of the bill that would invest $369 million next year on parts to build 12 more F-22s.

What will happen in conference is unclear, but Rep. John Murtha (D-Pa.), the Defense Appropriations Subcommittee chairman, said he has given up hope for the F-22 in the wake of the Senate 58-40 vote. “That ended the debate,” Murtha said.

Still with so many jobs at stake, that may not be true.

As the Chicago Tribune said in an editorial, the F-22 “has subcontractors in 44 states — giving innumerable members of Congress an incentive to keep the dollars coming. So even though the administration won this vote, we would be surprised if it’s the last word.”

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Top Obama Military Backer Breaks With President Over Cuts in Funding for the F-22 Raptor

Posted on July 18, 2009. Filed under: Uncategorized |

Another respected military voice is chiming in against the administration’s plan to end production of the F-22 Raptor fighter.

Retired Gen. Merrill McPeak, who was the Air Force chief of staff during the 1991 Operation Desert Storm and who credited air power with winning the war, was one of Obama’s strongest military backers during his run for the White House.

FoxNews.com reports that now McPeak is breaking with Obama on the president’s most contentious defense budget decision: ending production of the Air Force’s top-line fighter at 187 aircraft. Both the House and Senate have signaled support for continuing the program, but Obama has threatened to veto any bill that contains new F-22 funding.

“I think it’s a real mistake,” McPeak told FOXNews.com. “The airplane is a game-changer and people seem to forget that we haven’t had any of our soldiers or Marines killed by enemy air since 1951 or something like that. It’s been half a century or more since any enemy aircraft has killed one of our guys. So we’ve gotten use to this idea that we never have to breathe hostile air.”
“We do not want to field an Armed Forces that can be defeated by someone simply by topping our capability,” he said. “The F-22 is at the top end. We have to procure enough of them for our ability to put a lid on, to dictate the ceiling of any conflict.”
The radar-evading fighter/bomber’s role is needed to control the skies in a future war against a major foe. McPeak and F-22 backers in Congress say 187 planes are simply not enough to do that job given the fact that some will be needed to train pilots and others will be in regular depot maintenance. That may leave only about 100 planes available for a war.

“We certainly need some figure well above 200,” said McPeak. “That worries me because I think it is pennywise and pound foolish to expose us in a way this much smaller number does … That’s taking too much high-end risk.”
Designed as a successor to the F-15A, the F-22 is the world’s most advanced fighter. It is faster, can fly higher, and has better stealth capabilities than any other fighter. The Air Force has stated repeatedly that ending the program at 187 planes would threaten U.S. air dominance.

Defense Secretary William Gates has proposed ending production of the F-22 at 187 planes, though Air Force and Air National Guard brass have said a minimum of 250 are needed. President Obama said again this week he will veto any measures that would continue the F-22 program.

While the Pentagon says jobs are not part of its procurement calculations, ending production of the F-22 would cost 25,000 direct and 75,000 indirect jobs at 1,000 vendors in 44 states.  Unions representing steelworkers, machinists and other workers have urged continued funding for the fighter.

McPeak is at least the third major military voice to speak against the Pentagon plan.

Gen. John D.W. Corley, commander of the Air Force’s Air Combat Command, said in a recent letter to Congress that ending production of the F-22 at 187 planes “puts execution of our current national military strategy at high risk in the near to mid-term.”  He added that “a moderate risk force can be obtained with an F-22 fleet of approximately 250 aircraft.”

Lt. Gen. Harry M. Wyatt III, director of the Air National Guard, also defends the program, saying in a separate letter that “the current and future asymmetric threats to our nation, particularly from seaborne missiles, requires a fighter platform with the requisite speed and detection to address them….The F-22’s unique capability in this arena enables it to handle a full spectrum of threats.”

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Another House Victory for Backers of F-22 Funding

Posted on July 16, 2009. Filed under: Uncategorized |

Defying a veto threat from President Obama, the House Appropriation Defense subcommittee has voted to invest $369 million next year on parts to build 12 more F-22 Raptor fighter jets.
The funding level for fiscal 2010, which begins Oct. 1, is the same included in a separate authorization bill that already has passed the House.
The action comes as the Senate heads toward a crucial floor vote next week on plans to authorize $1.75 billion for seven more of the radar-evading F-22s.
Designed as a successor to the F-15A, the F-22 is the world’s most advanced fighter. It is faster, can fly higher, and has better stealth capabilities than any other fighter. The Air Force has stated repeatedly that ending the program at 187 planes would threaten U.S. air dominance.
Defense Secretary William Gates has proposed ending production of the F-22 at 187 planes, though Air Force and Air National Guard brass have said a minimum of 250 are needed. President Obama said again this week he will veto any measures that would continue the F-22 program.
While the Pentagon says jobs are not part of its procurement calculations, ending production of the F-22 would cost 25,000 direct and 75,000 indirect jobs at 1,000 vendors in 44 states. Unions representing steelworkers, machinists and other workers have urged continued funding for the fighter.
The Hill reports Rep. John Murtha (D-Pa.), the chairman of the House Appropriations Defense subcommittee, acknowledged the President’s veto threat and said if there are not enough votes for an override: “We’ll have to back down on the damn thing.”
Murtha said he hopes to convince the White House to at least agree to advance procurement to keep spare parts producers and subcontractors alive to be able to provide materials in case there will be more F-22s

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Sweeping Changes On the Way For Financial Industry

Posted on July 7, 2009. Filed under: Uncategorized |

In June President Obama delivered to Congress his recommendations to dramatically revamp the U.S. financial regulatory system.

Now, it is up to first the House and then the Senate, to tweak and some are hoping, completely overhaul, the White House’s regulatory proposal and have it ready for the President’s signature before years’ end.

These next few months promise to be highly contentious and filled with political rancor as Congress crafts new rules for the financial market. Whatever the final provisions, the financial regulatory reform bill will be the most sweeping remake of the government’s role to oversee financial institutions since the 1930s.

One of the major proposed changes will have direct significant impact on hedge funds, private equity funds and venture capital firms. Specifically, the President wants rules requiring advisers to hedge funds and other private pools of capital to register with the Securities and Exchange Commission (SEC). The largest of these funds, those with at least $30-million under management, could actually see regulation.

According to the Wall Street Journal, in addition to the hedge fund and private equity requirements, the financial regulation reform bill being considered by Congress would:

– Authorize the Federal Reserve to oversee almost all financial institution in the U.S., including firms’ foreign affiliates.

– Give the Fed more power over payments and settlement systems.

– Allow the Fed to oversee any commercial company that owns a banking charter.

– Give the federal government power to take over and wind down a large financial company.

– Mandate that large financial institutions raise more capital and meet higher liquidity standards.

– Create a financial services oversight council to fill gaps in supervision, coordinate data collection and coordination among bank regulators.

– Set up a new consumer protection agency with the ability to write rules related to mortgages, credit cards and other consumer products.

– Abolish the Office of Thrift Supervision and create a new national regulator for financial institutions.

– Suggest there be some sort of federal coordination of insurance regulation.

– Give the SEC and the Commodity Futures Trading Commission more authority to police and prevent fraud in the derivatives market. (List courtesy of the Wall Street Journal).

Both U.S. Sen. Chris Dodd (D-Conn.), chair of the Senate Banking Committee and his House counterpart, Rep. Barney Frank (D-Mass.), House Financial Services Committee chairman, acknowledge finalizing a bill of this magnitude won’t be easy.

It is expected the House will debate the bill over the next two months and call for a vote when it returns from summer recess in September.

The Senate could vote on the package in October.

“We will have it done this year,” promised Dodd.

(Sources: White House Press Office, NYT, Wall Street Journal, Politico, Web sites of Senators Dodd and Reed, Rep. Frank, Washington Post and Boston Globe)

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Early Passage of Health Care Reform Unlikely As Obama Continues to Seek Action

Posted on July 7, 2009. Filed under: Uncategorized |

As the Congress races toward its August recess, President Obama’s demand for early passage of legislation to guarantee all American’s health care coverage faces serious challenges.
“Now is the time for us to finally do something about health care. We have been talking about it enough, we have had commissions, we have had white papers we have had blue ribbons. We have talked about it and talked about it, and now it’s time to act,” Obama said at a fund raiser last week in Washington.
Still, the White House appeared to step back from its demand the Congress complete work on a health care reform package this summer. Said White House Press Secretary Robert Gibbs: “We’re going to make progress on health care reform. And I think you’ll see a reform bill come to his desk later this year, and one that he will sign.”
While there is general agreement that the need for reform is critical, the President’s plan to provide a government option for those who cannot afford private health care coverage is among the most challenging hurdles.

Also fueling the debate is the possibility that employers would be required by law to provide health care coverage for their workers. Obama has said the nation’s 46 million uninsured must be covered and that he would support mandatory coverage with an exemption for small businesses.

But at the core of the debate is a fundamental question: Who’s going to pick up the tab. The Congressional Budget Office examined the two main Senate bills and found that one offered by Sen. Ted Kennedy (D-Mass.) would cost $1 trillion while a second measure being developed by Finance Committee Chairman Max Baucus (D-Mont.) would cost $1.6 trillion.

Obama, who has said the reform package must not add to the nation’s budget deficit, says much of the plan will be paid for through the elimination of wasteful Medicare and Medicaid spending. Also on the table are new taxes on health care benefits for the rich and new sin taxes.

The so-called government option, which would put the federal government in the business of insuring Americans for the first time, has been maligned by Republicans because they believe it will create unfair competition for the insurance industry.

“If there is a government competitor, you will not be able to keep what you have,” said Rep. Roy Blunt (R-Mo.), who heads the Health Care Solutions Group for House Republicans, which is drafting its own measure.

“For those that say it’s just another competitor in the field…, there’s no fact ever that bears that out. Government will not compete fairly. We believe there’s a bigger marketplace beyond today’s marketplace we can help create fairly,” he said.

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Concessions on energy bill expected in Senate

Posted on July 7, 2009. Filed under: Uncategorized |

The American Clean Energy and Security Act of 2009, a centerpiece of President Obama’s agenda, won narrow House passage on June 26, setting the stage for a battle in the Senate, where all 58 Democrats and two independents will be needed to bring the measure to a vote.

Democrats laud the landmark legislation, which passed on a 219-212 vote, as a jobs creator. Republicans label it a domestic job killer. The differing views are expected to play out in the 2010 mid-term election.

The bill aims to reduce greenhouse gas emissions such as carbon dioxide by 17 percent below 2005 levels by 2020 by:
• capping emissions beginning in three years;
• establishing a large-scale vehicle electrification program;
• developing a nationwide “smart grid” to deliver electricity using digital technology;
• requiring the president to set motor vehicle emissions standards; and
• creating a permit program for companies that emit greenhouse gases. Under such a cap-and-trade program, companies could trade, bank, borrow or sell unused permits with other companies.
To win support for the bill from coal-state members and other representatives concerned about jobs in their districts, House leaders gave away free emission allowances to industry and interest groups, including coal-fired utilities, oil firms, algae makers and superconductor manufacturers, The Washington Post reported.

More concessions are expected in the Senate, where supporters are scrambling to garner 60 votes, the number needed to advance the measure to a full Senate vote. Before the legislation reaches such a test vote, it faces five Senate committees this summer. A vote on the bill, sponsored by Rep. Henry Waxman, D-Calif., and Rep. Edward J. Markey, D-Mass., could come as early as the fall.

European countries are pushing the U.S. to cap greenhouse emissions before a climate change summit in Copenhagen in December.

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