U.S. Spurned Iran Offers to Turn Over Bin Laden's Son

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Bobby Ghosh
July 30, 2009 - Time

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It may have been a case of hitting the target but missing the opportunity. Reports last week said Saad bin Laden, Osama bin Laden's fourth son and a mid-ranking al-Qaeda operative, was killed by a recent CIA Predator strike. But six years ago, the U.S. had an opportunity to get him alive, but lost it when the Bush administration decided to pull away from cooperation with Iran.

Saad's death has not yet been confirmed, but U.S. officials believe he was one of the victims of a missile strike earlier this year in northern Pakistan. A counterterrorism official tells TIME: "There are some indications that he may be dead, but it's not 100% certain."

Believed to be in his late 20s, Saad is one of two bin Laden sons known to be actively involved in their father's jihadi enterprise; his older brother Mohammed is still at large, believed to be in Pakistan. (Osama has at least nine other sons, and six daughters.) Saad had only recently returned to the Afghan-Pakistani border after nearly six years under house arrest in Iran. He was one of several al-Qaeda commanders, including military chief Saif al-Adel, captured by Iranian authorities in the spring and summer of 2003, as they tried to sneak across the border from Afghanistan.

At the time, the Bush administration and the Iranian regime were secretly cooperating in the fight against al-Qaeda and the Taliban. In February of that year, Iranian officials gave their U.S. counterparts photocopies of the passports of over 200 Arabs - including Saad bin Laden - who had been turned away at the Afghan border. The Iranians worried that many of them would likely enter the country illegally, through the porous border. Hillary Mann Everett, then an official with the National Security Council and one of a handful of Americans involved in negotiations with Tehran, says the Iranians were concerned that if Saad did sneak in, they would not be able to repatriate him to his native Saudi Arabia, because authorities in Riyadh were unwilling to accept any of Osama's kin.

What the Iranians wanted was a multilateral mechanism, initiated by the U.S., to get the Arab intruders off their hands. Such a mechanism would have given U.S. interrogators access to the al-Qaeda operatives (whom the Iranians would presumably have detained if they once again tried to cross the border). But, says Everett, the Bush administration insisted that the Iranians deport the Arabs without any preconditions. By May, negotiations between the two countries broke down, and the chance was lost. Shortly thereafter, Saad bin Laden succeeded in crossing the border. Details of what happened next are murky, but he didn't get far: the Iranian authorities seem to have nabbed him almost immediately.

Later that summer, after the U.S.-led coalition had toppled the Saddam Hussein regime in Iraq, the Iranians came up with another offer: they would trade their Arab captives, including Saad, for members of the Mujahidin-e-Khalq (MEK), an Iranian terrorist group that was given sanctuary by Saddam. "It was a straightforward swap, your terrorists for ours," says a Western intelligence official familiar with the Tehran's offer. The official says the offer included assurances that the MEK operatives would not be tortured and that international human-rights organizations would have access to them. "They said, 'We'll let the Red Cross or Amnesty [International] monitor the MEK prisoners, and we won't put them into some Guantanamo-like prison,'" says the official.

But the Bush administration was having none of it. "The Americans just couldn't bring themselves to trust the Iranians, even though they had been pretty straight in their dealings over al-Qaeda and the Taliban," says the official. Instead, the U.S. decided to protect the MEK, even over the objections of Iraq's elected government.

Now, with the U.S. military presence in Iraq beginning to draw down, the government in Baghdad has made it clear it will evict the MEK, though not to Iran. (Iraqi troops forced their way into the MEK's camp north of Baghdad on Tuesday.) Given the decline of MEK fortunes in Iraq, Tehran seems to have decided in late 2008 that the al-Qaeda commanders under house arrest had lost their value as bargaining chips. Several of them, including Saad bin Laden, appear to have been taken to the border with Pakistan, and released. For Saad, however, freedom lasted only a few weeks before he was allegedly killed by a Hellfire missile.

How might the U.S. have benefited from interrogating Saad instead of killing him? We may never know. Saad "was a small player with a big name," says the counterterrorism official. "He has never been a major operational figure." (His brother Mohammed bin Laden is thought to be more influential.) But terrorism analyst Peter Bergen, author of the book Holy War Inc.: Inside the Secret World of Osama bin Laden, points out that having Saan bin Laden in custody "would have been a great propaganda victory" for the U.S., greater than his death could be. Adds the Western intelligence official: "Think of how Americans would feel about Guantanamo if one of Osama's sons was among the detainees."

TOONS

Act On Getting A Public Option

Visit http://wewantthepublicoption.com/ and add your name to the list. It's free. You can donate if you choose and for every three $50 donations they're able to run another spot on MSNBC.

How Corporate Media, Sellouts in Congress and Industry Bigs Have Hijacked the Health Care Debate

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If we let these powerful interests get their way, we'll see more outlandish increases in premiums, and millions more people being denied care.

Joshua Holland 
July 29, 2009 - AlterNet

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If you can frame the terms of a debate, you've gone a long way towards winning it before you've begun. Tragically, Republicans, the health care industry and business-friendly Blue Dog Democrats have largely been able to do exactly that, with a substantial assist from the corporate-owned media.

They've successfully focused the health care debate on the short-term costs to the federal government's bottom line, obscuring the potential impact that a meaningful realignment of the health care system would have on the economy as a whole. In so doing, opponents of reform have hoodwinked much of the public into believing that investments in America's national health care system will wind up costing individuals more than they'd gain from the effort.

In fact, they've done such a good job that much of the discourse has revolved around what is arguably one of the least relevant aspects of the proposals being debated in Congress: whether they "cost too much" or are "deficit neutral" in terms of their impact on the federal budget over the next 10 years.

Much of that discussion has been fueled by a series of estimates issued by the Congressional Budget Office (CBO) -- estimates based on incomplete drafts of the legislation now moving through Congress. Yet by and large the mainstream media have dutifully repeated the spin without mentioning that the critics are touting the CBO's preliminary projections as definitive and final.

Even worse, a study of cable news reporting by the media watchdog group Media Matters found that when the CBO issued a follow-up to an earlier, more pessimistic projection of the bill passed by the Senate Health, Education, Labor and Pension (HELP) Committee, it went all but unreported by the cable news networks. CBO projected it would cost $611 billion, while an earlier estimate -- which was dissected eight ways to Sunday by the same cable networks -- suggested it would run an even trillion.

There are also benefits contained within the proposals that are impossible to score in limited budgetary terms. For example, if the House bill were passed as it stands today, it would all but eliminate health-care related bankruptcies by capping the amount of out-of-pocket expenses with which a family or individual can be burdened. A group of researchers from Harvard studied over 2,300 bankruptcies filed in 2007 and concluded that more than 6 in 10 were due to medical causes. What is it "worth" to our society to ease that kind of pain? It's not in the purview of the CBO to say.

That's just one of several reasons why the budgetary impact over 10 years of a program of long-term reforms is such a poor metric for judging its value. First, the very same preliminary CBO estimates that are being used to gin up fear of a budget-busting boondoggle that will saddle our grandkids with debt for generations to come also suggest that the proposals would extend health coverage to tens of millions of uninsured Americans. Why such a significant improvement in the health and economic security of so many real people should be expected to come at no cost to the government's balance sheet is a mystery.

Second, it fundamentally obscures the actual terms of the debate in Congress. Leaders in both the House and Senate have promised that the final legislation will be fully-funded -- "deficit neutral" -- and the battle lines have in fact been drawn not only around what form the final bill will take, but also how to pay for it.

Moreover, the narrative is based only on the impact of the proposals on the federal budget in isolation, all but ignoring the larger effect that fixing the system (if done right) might have on the economy as a whole. Under consideration are various proposals designed to rein in the spiraling cost of health care across the entire system.

So these are not sunk costs, but investments that analysts expect will have a significant pay-off. A study by David Cutler of Harvard and the Rand Corporation's Melinda Beeuwkes Buntin estimated that just three elements within the larger proposals offered by Democrats so far -- all of which come with start-up costs in the beginning -- would result in $550 billion in savings to the larger health care system over the next 10 years (PDF):

http://www.americanprogress.org/issues/2009/06/pdf/2trillion_solution.pdf

Those kinds of savings are desperately needed over the longer term -- the status quo, if allowed to continue on track, threatens to undermine the competitiveness of American business and leave more and more people without coverage (researchers have found that fast-rising premiums, more than any other factor, has driven the decades-long growth in the number of uninsured Americans).  And skyrocketing premiums force employers to squeeze wages, which impacts communities' tax revenues and deprives the economy of consumer dollars.

So the more salient question is: how can we possibly afford not to fix the current system? In 1960, we spent less than 5 percent of GDP on health care and all but a small number of working-age Americans had access to care. Today, health care spending represents around 17 percent of our economic output, and about one in six lack coverage. And, according to virtually every projection out there, it's only going to get worse unless we make substantial reforms soon.

In 2007, the U.S. spent an average of $7,290 per person on health in total (both public and private care). The average costs in other wealthy countries -- generally with better outcomes -- was $2,964. Here's a graphic representation of where we're likely to go in terms of costs if we leave things as they stand:

http://www.alternet.org/images/managed/blogimage_cbohealth.gif

As economist Josh Bivens of the Economic Policy Institute wrote, the non-budgetary effects of fixing the system "will pay off big for American families in the form of lower premiums, co-pays, and space for wage growth."

Bivens adds, "The reason is simple: health care is an area where the more costs are loaded up on the federal government, the more efficiently care tends to be delivered overall." Bivens points out that although the U.S. spends far more than other advanced countries on health care, far fewer of those dollars are in the public sector, and suggests that the difference is a major reason why we get far worse results (in terms of access, life expectancy at birth, our chances of living until age 60 and most other meaningful metrics).

To illustrate the savings built into public-sector health spending, he goes on to cite an analysis by the Lewin Group of competing approaches to reform that measures the impact on both federal spending and overall health spending. The results are summarized in this graphic:

http://www.alternet.org/images/managed/storyimage_lewin.jpg

On the left, is Pete Stark's, D-Calif., proposal for a single-payer system (one that closely mirrors John Conyers', D-MICH., HR 676, which has 85 co-sponsors in the House). As you can see, while it extends coverage to everyone -- which obviously costs money -- it is the only approach studied that would also result in a reduction of health care spending overall.

In the middle is a hybrid along the lines of the House bill (the Lewin Group used a similar proposal promoted by the Commonwealth Fund). According to Bivens' analysis, although "federal health spending [would] rise" as the system was first implemented, the "increases in federal spending … are accompanied by large reductions in spending by households and businesses. Net total health spending would rise by less than $18 billion, an amount that is more than explained" by new funding to cover the previously uninsured.

The right column, appropriately, shows the impact of Mike Enzi's, R-WYOM., plan, a boilerplate conservative proposal based on offering tax cuts to those who purchase private insurance and slightly expanding eligibility for Medicaid. It does increase federal spending by slightly less than the other approaches analyzed, but in the process it also increases total health care costs more than the amount of tax dollars sunk into the plan, while insuring only the relatively small number of people who make just a bit more than the current cut-off for Medicaid.

But even that standard doesn't tell the whole story. Looking only at how the current proposals impact health spending over a 10-year window ignores the longer-term impact they might have. For example, contained within both the Senate and House bills are provisions that would create more incentives for preventive care. Most analysts agree that prevention costs a lot less than waiting for people to develop serious illnesses and then treating them, as we now do, but those savings can only be fully realized over the long term. If a young obese person visits a doctor whom he or she might not have seen because of a lack of insurance, and as a result of that visit makes changes that prevent him or her from developing diabetes -- with all its attendant complications -- it will save the health care system a small fortune, but probably not for several decades.

Finally, there's a sad irony to this whole discussion -- one that few commenters have bothered to note. It is true that the potential savings contained in the proposals currently on the table are limited, but it is also true that the reason for that shortcoming is that Congressional leaders have ushered through a series of bills that are far less expansive than progressive reformers have long advocated, and that's only been done to mollify the very same Dems and Republicans -- those ideologically opposed to the effort and/or especially cozy with the "disease-care" industry -- who are now complaining about the limited potential for savings (It's enough to make your head spin).

Just consider the "public insurance option." While progressives were promised a "robust" public insurance program that would be open to all comers, what emerged from the Senate HELP Committee and from the leaders of three House committees was a pale shadow of what had been touted during last fall's campaign season. Instead of insuring as many as 130 million Americans as candidate Obama suggested his public option would, lawmakers restricted eligibility for the program in such a way that the CBO's preliminary estimate suggested that just 10 million Americans would be enrolled in the public insurance plan by 2019. (That's out of about 30 million who could buy insurance -- either public or private -- through the publicly-run insurance exchanges.) This was a nod to the power of the insurance industry -- nothing more, nothing less.

In designing a (pretty good) system, but then tightly controlling who could gain access to it, the potential for cost-containment -- through greater economies of scale, more bargaining power with providers and a decrease in the shuffling of paperwork that's estimated to account for about 30 percent of our health spending -- has been greatly diminished.

So, next time you see some congressional meat-puppet on TV discussing how much a plan will cost, or lamenting its limited potential for cost-containment, keep in mind that it's his or her ideology that is directly to blame for those shortcomings.

It's only because of pressure from industry groups, Republicans and Blue Dog Dems that congressional leaders took single-payer off the table (and threw advocates out of the room) and gave us a limited public insurance option -- a pale shadow of what reformers had been promised. Now, those same forces are bent on killing an already watered-down proposal. If they succeed, we can expect more human suffering, more outlandish increases in premiums, more people being denied care, an increase in the numbers of uninsured and a continued drag on the American economy.

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Joshua Holland is an editor and senior writer at AlterNet.

The Truth about Socialized Medicine

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Audrey Mayer
July 28, 2009 - CommonDreams.org

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I have been hearing a lot of pundits and politicians bemoan "socialized medicine" and its supposed inefficiencies and inequities. These horror stories are never accompanied by data, just hearsay and anecdotes from "a friend of a friend" in Canada or the United Kingdom. Rarely have I heard from people who have themselves experienced a universal public health care system. As one of those people, I thought I should speak up.

While living in Finland for three years, I experienced socialized medicine up close and personal. I gave birth to my son there.

Finland's public health care system is run by a government agency called KELA, and the doctors, nurses, dentists, and other health care workers are government employees. KELA usually covers 100% of the cost of most services at public clinics, with small copayments for prescriptions and hospital stays that are scaled to a patient's income. Finland also has many private clinics that are available to those who want to use them, where patients pay the extra cost of the private service (KELA will pay up to what the service would cost at a public clinic). When you visit a clinic or hospital you present your KELA card at the reception desk, and if a payment is necessary you can pay at the clinic, or a bill can be sent to your home.

All Finnish citizens and permanent residents are eligible for KELA benefits, as are immigrants on work and political asylum visas. I was eligible for the KELA system because I was in Finland on a work visa, and I paid income and social services taxes from my paychecks. Yes the taxes were high, about 40% of my gross pay. However, it is comparable to my take-home pay here in the US once I factor in my health insurance premiums, deductibles, and copayments, along with my income and social security taxes.

The care that I received in Finland throughout my pregnancy and childbirth, and for the first 9 months of my son's life, was simply amazing. I saw the same nurse and doctor for monthly pregnancy checks (and later they were my son's primary medical caregivers); their offices were in the same hallway. Both women knew us by name and by sight, and always remembered what we had discussed for the previous visit. Routine ultrasounds were performed at the maternity hospital; my nurse made each appointment for me and I simply showed up at the hospital for the procedure. When my labor started I headed to the maternity hospital, and the hospital's nurses and doctors knew exactly who I was, as my medical files were available to them through KELA's computerized filing system. (Patients must sign a form that allows their medical files to be accessible by other medical facilities, so a patient's privacy rights are protected.) Every nurse coming on duty
reviewed my file before seeing me, and so my discussions with them were focused on what my son and I needed at the moment, not what had been done during the previous shifts. After my emergency Cesarean operation and a four day stay in the hospital, only one bill was waiting for us when we got home, for a total of 260 Euros.

I never had to wait to see a medical professional, nor was any necessary procedure delayed or denied. Every nurse and doctor I saw was caring and knowledgeable, and spent whatever time was necessary to make sure that I received the care I needed.

I have now been living and working back in the US for 6 months, and already I have had problems with my health insurance plan through my employer. I found out the hard way (that is, at the doctor's office after my son's vaccination visit) that my son had been arbitrarily dropped from my plan months before, even though I had been paying the premiums for the family plan all along. It took almost a week of phone calls to get him reinstated. All the while, I privately wondered if the two ear infections he had had in the spring had prompted some computer at the health insurance company to calculate that he was "overusing" the system, and automatically drop his coverage.

That may seem like paranoid thinking, but I have seen it all before. In 2001, my mother was diagnosed with aggressive breast cancer. Instead of focusing her strength and attention on recovering from a double mastectomy, chemotherapy, and radiation, she spent much of her time arguing with the health insurance company and the hospital over bills she had already paid, and routine treatments that should have been covered by her insurance plan. Ultimately she lost her insurance altogether when she lost her job, and she has since been living in remission, uninsured.

When these pundits and politicians go onto national television and spew all sorts of false rhetoric about the evils of socialized medicine, it makes my blood boil. They are doing an incredible disservice to their fellow Americans, both those with and without health insurance. For every anecdote they have about a Canadian waiting six months for necessary open heart surgery, I can find twenty Americans for whom that equally necessary surgery is completely out of reach. Now is the time for an honest assessment about what (if anything) can be salvaged from our current system, and to put a system in place that does what it is supposed to do: provide health care.

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Audrey Mayer is an assistant professor at Michigan Technological University, focused on sustainability research and education.

The 'Bipartisan Compromise' Scam

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Cenk Uygur
July 28, 2009 - Huffington Post

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So, some of the top corporatist Democrats and Republicans in the Senate sat around a table in the Finance Committee for awhile pretending to sweat out a compromise and then came out with exactly what we thought they would -- a health care proposal that benefits the health care companies above all. Shocking. What did we expect?

Max Baucus is the ring leader of this merry band of six senators. Seven out of his top ten donors are ... health care companies (he has received close to $4 million from the health care industry). You don't say? And then he crafts a proposal that screws the average citizen and helps those same companies. I never could have predicted.

Look at the two Democratic proposals they decided to jettison: The public option and employer mandates. The public option would clearly make health insurance cheaper for the average American and for the government overall. But it would also give the private insurance companies real competition -- so, we can't have that.

Employer mandates might bother some of the top corporations in the country, so we can't have that either. Better to let employees get siphoned off into government subsidies. But wait, wouldn't that make our budget problem worse and not better? Aren't all of these senators pretending to care about the budget and deficit? Oh I forgot, as long as the corporations get their way, none of the rest of this really matters.

In fact, if it turns out health care reform costs more in the long run, well, that's great because then you can kill real reform easier the next time around by pretending it costs too much. Everyone wins -- except you.

So, why are the Democratic senators going along with this scam? Because they get paid by the same guys as the Republicans. That's how life usually works -- you follow the orders of whoever paid you. In this case, the politicians get elected by raising more money than their competitors, and they get their money from corporate lobbyists. So, whose orders do you think they're going to follow?

Given this state of affairs, it's a minor miracle there are as many Democrats for the public option as there are now. But the ones who actually care to get this done are not the ones coming up with fake compromises with Republicans and the health care industry. They are the ones insisting on a public option. If you negotiate that away, you never had any real interest in reform.

Saying you're going to do health care reform without a public option is kind of like saying you're going to fight Al Qaeda in Afghanistan by invading Iraq. It misses the point -- on purpose. It promises to do more harm than good. And it's what was planned all along.

So, will this be our Waterloo if we allow the American people to be tricked into a "bipartisan compromise" that actually compromises real reform?

It will be so easy for the politicians to pretend to be brave and sign on to this as if they are doing something magnanimous by compromising and getting some sort of health care package through. And you can bet your bottom dollar the press will go along with the charade.

So, that only leaves us to object. And we can't do it meekly. We have to scream it from the rooftops. Otherwise, they will be perfectly happy to ignore us and sign on to this fraudulent proposal as if it's real health care reform. So, are you going to let them do it? Or are you going to insist on real reform and real change this time around?

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Cenk Uygur is host of The Young Turks, the first ever live, daily web television talk show. The Young Turks are now on XM Satellite Radio 8-10AM ET (XM 167).

TOON

World Will Warm Faster Than Predicted in Next Five Years

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New estimate based on the forthcoming upturn in solar activity and El Niño southern oscillation cycles is expected to silence global warming sceptics

Duncan Clark
July 27, 2009 - The Guardian/UK

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The world faces record-breaking temperatures as the sun's activity increases, leading the planet to heat up significantly faster than scientists had predicted for the next five years, according to a study.

The hottest year on record was 1998, and the relatively cool years since have led to some global warming sceptics claiming that temperatures have levelled off or started to decline. But new research firmly rejects that argument.

The research, to be published in Geophysical Research Letters, was carried out by Judith Lean, of the US Naval Research Laboratory, and David Rind, of Nasa's Goddard Institute for Space Studies.

The work is the first to assess the combined impact on global temperature of four factors: human influences such as CO2 and aerosol emissions; heating from the sun; volcanic activity and the El Niño southern oscillation, the phenomenon by which the Pacific Ocean flips between warmer and cooler states every few years.

The analysis shows the relative stability in global temperatures in the last seven years is explained primarily by the decline in incoming sunlight associated with the downward phase of the 11-year solar cycle, together with a lack of strong El Niño events. These trends have masked the warming caused by CO2 and other greenhouse gases.

As solar activity picks up again in the coming years, the research suggests, temperatures will shoot up at 150% of the rate predicted by the UN's Intergovernmental Panel on Climate Change. Lean and Rind's research also sheds light on the extreme average temperature in 1998. The paper confirms that the temperature spike that year was caused primarily by a very strong El Niño episode. A future episode could be expected to create a spike of equivalent magnitude on top of an even higher baseline, thus shattering the 1998 record.

The study comes within days of announcements from climatologists that the world is entering a new El Niño warm spell. This suggests that temperature rises in the next year could be even more marked than Lean and Rind's paper suggests. A particularly hot autumn and winter could add to the pressure on policy makers to reach a meaningful deal at December's climate-change negotiations in Copenhagen.

Bob Henson, of the National Centre for Atmospheric Research in Colorado, said: "To claim that global temperatures have cooled since 1998 and therefore that man-made climate change isn't happening is a bit like saying spring has gone away when you have a mild week after a scorching Easter." Temperature highs and lows

1998

Hottest year of the millennium

Caused by a major El Niño event. The climate phenomenon results from warming of the tropical Pacific and causes heatwaves, droughts and flooding around the world. The 1998 event caused 16% of the world's coral reefs to die.

1957

Most sunspots in a year since 1778

The sun's activity waxes and wanes on an 11-year cycle. The late 1950s saw a peak in activity and were relatively warm years for the period.

1601

Coldest year of the millennium

Ash from the huge eruption the previous year of a Peruvian volcano called Huaynaputina blocked out the sun. The volcanic winter caused Russia's worst famine, with a third of the population dying, and disrupted agriculture from China to France.

An Incoherent Truth

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Paul Krugman
July 27, 2009 - The New York Times

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Right now the fate of health care reform seems to rest in the hands of relatively conservative Democrats — mainly members of the Blue Dog Coalition, created in 1995. And you might be tempted to say that President Obama needs to give those Democrats what they want.

But he can't — because the Blue Dogs aren't making sense.

To grasp the problem, you need to understand the outline of the proposed reform (all of the Democratic plans on the table agree on the essentials.)

Reform, if it happens, will rest on four main pillars: regulation, mandates, subsidies and competition.

By regulation I mean the nationwide imposition of rules that would prevent insurance companies from denying coverage based on your medical history, or dropping your coverage when you get sick. This would stop insurers from gaming the system by covering only healthy people.

On the other side, individuals would also be prevented from gaming the system: Americans would be required to buy insurance even if they're currently healthy, rather than signing up only when they need care. And all but the smallest businesses would be required either to provide their employees with insurance, or to pay fees that help cover the cost of subsidies — subsidies that would make insurance affordable for lower-income American families.

Finally, there would be a public option: a government-run insurance plan competing with private insurers, which would help hold down costs.

The subsidy portion of health reform would cost around a trillion dollars over the next decade. In all the plans currently on the table, this expense would be offset with a combination of cost savings elsewhere and additional taxes, so that there would be no overall effect on the federal deficit.

So what are the objections of the Blue Dogs?

Well, they talk a lot about fiscal responsibility, which basically boils down to worrying about the cost of those subsidies. And it's tempting to stop right there, and cry foul. After all, where were those concerns about fiscal responsibility back in 2001, when most conservative Democrats voted enthusiastically for that year's big Bush tax cut — a tax cut that added $1.35 trillion to the deficit?

But it's actually much worse than that — because even as they complain about the plan's cost, the Blue Dogs are making demands that would greatly increase that cost.

There has been a lot of publicity about Blue Dog opposition to the public option, and rightly so: a plan without a public option to hold down insurance premiums would cost taxpayers more than a plan with such an option.

But Blue Dogs have also been complaining about the employer mandate, which is even more at odds with their supposed concern about spending. The Congressional Budget Office has already weighed in on this issue: without an employer mandate, health care reform would be undermined as many companies dropped their existing insurance plans, forcing workers to seek federal aid — and causing the cost of subsidies to balloon. It makes no sense at all to complain about the cost of subsidies and at the same time oppose an employer mandate.

So what do the Blue Dogs want?

Maybe they're just being complete hypocrites. It's worth remembering the history of one of the Blue Dog Coalition's founders: former Representative Billy Tauzin of Louisiana. Mr. Tauzin switched to the Republicans soon after the group's creation; eight years later he pushed through the 2003 Medicare Modernization Act, a deeply irresponsible bill that included huge giveaways to drug and insurance companies. And then he left Congress to become, yes, the lavishly paid president of PhRMA, the pharmaceutical industry lobby.

One interpretation, then, is that the Blue Dogs are basically following in Mr. Tauzin's footsteps: if their position is incoherent, it's because they're nothing but corporate tools, defending special interests. And as the Center for Responsive Politics pointed out in a recent report, drug and insurance companies have lately been pouring money into Blue Dog coffers.

But I guess I'm not quite that cynical. After all, today's Blue Dogs are politicians who didn't go the Tauzin route — they didn't switch parties even when the G.O.P. seemed to hold all the cards and pundits were declaring the Republican majority permanent. So these are Democrats who, despite their relative conservatism, have shown some commitment to their party and its values.

Now, however, they face their moment of truth. For they can't extract major concessions on the shape of health care reform without dooming the whole project: knock away any of the four main pillars of reform, and the whole thing will collapse — and probably take the Obama presidency down with it.

Is that what the Blue Dogs really want to see happen? We'll soon find out.

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Paul Krugman is professor of Economics and International Affairs at Princeton University and a regular columnist for The New York Times. Krugman was the 2008 recipient of the Nobel Prize in Economics. He is the author of numerous books, including The Conscience of A Liberal, and his most recent, The Return of Depression Economics.

New Rule: Not Everything in America Has to Make a Profit

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Bill Maher
July 24, 2009 - Huffington Post

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How about this for a New Rule: Not everything in America has to make a profit. It used to be that there were some services and institutions so vital to our nation that they were exempt from market pressures. Some things we just didn't do for money. The United States always defined capitalism, but it didn't used to define us. But now it's becoming all that we are.

Did you know, for example, that there was a time when being called a "war profiteer" was a bad thing? But now our war zones are dominated by private contractors and mercenaries who work for corporations. There are more private contractors in Iraq than American troops, and we pay them generous salaries to do jobs the troops used to do for themselves ­-- like laundry. War is not supposed to turn a profit, but our wars have become boondoggles for weapons manufacturers and connected civilian contractors.

Prisons used to be a non-profit business, too. And for good reason --­ who the hell wants to own a prison? By definition you're going to have trouble with the tenants. But now prisons are big business. A company called the Corrections Corporation of America is on the New York Stock Exchange, which is convenient since that's where all the real crime is happening anyway. The CCA and similar corporations actually lobby Congress for stiffer sentencing laws so they can lock more people up and make more money. That's why America has the world;s largest prison population ­-- because actually rehabilitating people would have a negative impact on the bottom line.

Television news is another area that used to be roped off from the profit motive. When Walter Cronkite died last week, it was odd to see news anchor after news anchor talking about how much better the news coverage was back in Cronkite's day. I thought, "Gee, if only you were in a position to do something about it."

But maybe they aren't. Because unlike in Cronkite's day, today's news has to make a profit like all the other divisions in a media conglomerate. That's why it wasn't surprising to see the CBS Evening News broadcast live from the Staples Center for two nights this month, just in case Michael Jackson came back to life and sold Iran nuclear weapons. In Uncle Walter's time, the news division was a loss leader. Making money was the job of The Beverly Hillbillies. And now that we have reporters moving to Alaska to hang out with the Palin family, the news is The Beverly Hillbillies.

And finally, there's health care. It wasn't that long ago that when a kid broke his leg playing stickball, his parents took him to the local Catholic hospital, the nun put a thermometer in his mouth, the doctor slapped some plaster on his ankle and you were done. The bill was $1.50, plus you got to keep the thermometer.

But like everything else that's good and noble in life, some Wall Street wizard decided that hospitals could be big business, so now they're run by some bean counters in a corporate plaza in Charlotte. In the U.S. today, three giant for-profit conglomerates own close to 600 hospitals and other health care facilities. They're not hospitals anymore; they're Jiffy Lubes with bedpans. America's largest hospital chain, HCA, was founded by the family of Bill Frist, who perfectly represents the Republican attitude toward health care: it's not a right, it's a racket. The more people who get sick and need medicine, the higher their profit margins. Which is why they're always pushing the Jell-O.

Because medicine is now for-profit we have things like "recision," where insurance companies hire people to figure out ways to deny you coverage when you get sick, even though you've been paying into your plan for years.

When did the profit motive become the only reason to do anything? When did that become the new patriotism? Ask not what you could do for your country, ask what's in it for Blue Cross/Blue Shield.

If conservatives get to call universal health care "socialized medicine," I get to call private health care "soulless vampires making money off human pain." The problem with President Obama's health care plan isn't socialism, it's capitalism.

And if medicine is for profit, and war, and the news, and the penal system, my question is: what's wrong with firemen? Why don't they charge? They must be commies. Oh my God! That explains the red trucks!

TOON

The Secret Evidence of Global Warming Bush Tried to Hide

Satellite images of polar ice sheets taken in July 2006 and July 2007 showing the retreating ice during the summer.

.....

Photos from US spy satellites declassified by the Obama White House provide the first graphic images of how the polar ice sheets are retreating in the summer.

Suzanne Goldenberg and Damian Carrington
July 26, 2009 - The Guardian/UK

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Graphic images that reveal the devastating impact of global warming in the Arctic have been released by the US military. The photographs, taken by spy satellites over the past decade, confirm that in recent years vast areas in high latitudes have lost their ice cover in summer months.

The pictures, kept secret by Washington during the presidency of George W Bush, were declassified by the White House last week. President Barack Obama is currently trying to galvanize Congress and the American public to take action to halt catastrophic climate change caused by rising levels of carbon dioxide in the atmosphere.

One particularly striking set of images - selected from the 1,000 photographs released - includes views of the Alaskan port of Barrow. One, taken in July 2006, shows sea ice still nestling close to the shore. A second image shows that by the following July the coastal waters were entirely ice-free.

The photographs demonstrate starkly how global warming is changing the Arctic. More than a million square kilometers of sea ice - a record loss - were missing in the summer of 2007 compared with the previous year.

Nor has this loss shown any sign of recovery. Ice cover for 2008 was almost as bad as for 2007, and this year levels look equally sparse.

"These are one-meter resolution images, which give you a big picture of the summertime Arctic," said Thorsten Markus of NASA's Goddard Space Flight Center. "This is the main reason why we are so thrilled about it. One-metre resolution is the dimension that's been missing."

Disappearing summer sea ice poses considerable dangers, scientists have warned. Ice shelves are used by animals such as polar bears as platforms for hunting seals and other sea creatures. Without them, they could starve. In addition, ice reflects solar radiation. Without that process, the Arctic sea could warm up even more. The phenomenon threatens to set off runaway heating of the planet, say climatologists.

The latest revelations have triggered warnings from scientists that they no longer have the funds to keep a comprehensive track of climate change. Last week the head of the US's National Oceanic and Atmospheric Administration (NOAA), Professor Jane Lubchenco, warned that the gathering of satellite data - crucial to predicting future climate changes - was now at "great risk" because America's aging satellite fleet was not being replaced.

"Our primary focus is maintaining the continuity of climate observations, and those are at great risk right now because we don't have the resources to have satellites at the ready and taking the kinds of information that we need," said Lubchenco, who was appointed by Obama. "We are playing catch-up."

Even before her warning, scientists were saying that America, the world's scientific superpower, was virtually blinding itself to climate change by cutting funds to the environmental satellite programs run by the Oceanic and Atmospheric Administration and NASA. A report by the National Academy of Sciences this year warned that the environmental satellite network was at risk of collapse.

In February, a NASA satellite carrying instruments to produce the first map of the Earth's carbon emissions crashed near Antarctica only three minutes after lift-off.

The satellite would have measured carbon emissions at 100,000 points around the planet every day, providing a wealth of data compared to the 100 or so fixed towers currently in operation in a land-based network.

The NOAA is under additional pressure to provide environmental data because of the re-emergence of the El Niño climate phenomenon, where warming of the tropical Pacific causes heatwaves, droughts and flooding around the world. June's land and sea surface temperatures were the second hottest on record, and scientists are predicting this will be the warmest decade in recorded history. The last major El Niño was in 1998, the hottest year in recorded history.

The Obama administration has already taken steps to tackle America's flagging scientific lead. The president's economic recovery plan allotted $170m (£100m) to help close the gaps in climate modelling. The NOAA is seeking an additional $390m in its 2010 budget to upgrade environmental satellites, and help make data more available to researchers and government officials.

Why Nuclear Energy Is Not the Answer to Climate Change

.....

Ben Williams
July 26, 2009 - Examiner.com

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It's funny. People really believe that nuclear power is emissions free. Powering cities with nuclear, they propound, is the panacea to climate change. And yet, if you really take a look at the fuel cycle, it is obvious nuclear energy is, in fact, emissions intensive.

First off the ore needs to be mined. This involves drilling, explosions, heavy equipment. Even at the EPA standard of 15 grams of carbon per break horsepower engine hour, this translates to a lot of carbon. Then the ore needs to be shipped to a processing facility, or mill.

Here, twenty-four hours a day, heavy equipment loads the ore into a hopper, the intake into the semi-autogenous grinding mill. This grinding mill uses electricity (coal) to turn an enormous steel drum filled with metal tumbling balls. Additionally, tons -- yes tons -- of concentrated sulfuric acid are needed to help leach the uranium from the ore, among quantities of other highly caustic chemicals, all of which must be prepared on industrial scales and shipped to the facility.

After a number of other mechanical operations, all of them energy intensive, the ore must be dried in an oven, where, twenty-four hours a day, countless kilo-watt hours are burned heating the rock to temperature.

Finally, the processed ore, now 'yellow cake', has to be boxed up, sealed in steel drums (refined and produced industrially), and then shipped to market.

Then, of course, it needs to be reacted with hexaflourine, or some other chemical, to be refined and turned into the uranium rods that are used in the reactor core. Only now can the power be said to be emissions free: once the rods are installed and operational, powering generators with their nuclear heat.

Of course, after a few months the rods are spent. They then need to be safely disposed of -- or, more accurately, buried somewhere where no one will notice them, contained for 1,000 years, after which they become someone else's problem (probably the DOE or EPA). They must be safely interred for over four billion years. Yes, they need to be baby-sat for an amount of time that exceeds the current age of the Earth.

Because a nuclear core demands fresh, refined uranium, there is a constant use-cycle -- an unstoppable appetite -- that, ultimately pollutes in manifold ways:

1.The diesel burned in extracting the ore produces CO2, CO, NOX, SOX, dioxins, VOCs among the other expected particulates from incomplete combustion of fossil fuels.

2.The dust produced from mining becomes airborne and settles on downwind communities, increasing the cancer rate noticeably.

3.The diesel burnt in shipping the heavy rock to processing produces the same slew of pollutants as the heavy mining machinery, while trailing radioactive dust along the way.

4.The mill itself burns up millions of KWh every year, KWh generated, in this day and age, almost exclusively from burning coal -- high SO2, H2SO3 and H2SO4 meet heavy metals like Hg with the clouds of greenhouse gases.

5.The mill must vent many toxic gases as it processes the ore. It must store radioactive slurry in the ground, hoping it will evaporate so the tailings can be capped. Groundwater and runoff pollution occurs. Once capped, the tailings are radioactive for billions of years. Future contamination becomes a certainty. (Just, the mill operators hope, not in their lifetime.)

6.Shipping the yellow cake to market. There are only two enrichment plants in the Northern United States, and one of them is in Canada. Long trips equal large emissions. Much of the yellow cake will be shipped overseas, adding emissions from large container vessels and potential maritime spills to the list.

7.The enrichment facility then vents toxic gases from the reagents used in reducing the yellow cake to weapons-grade uranium.

8.The rods are shipped to power plants, necessitating the fourth round of distribution-related emissions.

9.The rods are used, then spent, sealed up, and transported to a nuclear waste dump -- more emissions, more radioactive decay along public roads and waterways.

10.Countless emissions result from policing the waste site.

Of course, none of this includes the emissions from the industrial-scale production of the reagents needed by the uranium refining cycle. Not to mention their weekly delivery to processing mills and enrichment facilities.

Nor does it take into account the 'depleted' uranium used as munitions (which, despite what you might infer from its name, is actually enriched -- it is depleted of the less radioactive isotopes). That causes enough pollution to contaminate our armed-forces personnel before it's even fired! Let alone the land where it is unleashed.

The whole thing is utterly non-sustainable. And no model on which to base future, responsible energy production. So why all the hoo-ha? Simple. Uranium allows, not so much for clean energy, but centralized energy production. Centralized energy production -- aside from being grossly inefficient from the distribution angle, losing more than 7% of all energy generated -- means centralized profits. Same, boring story we're all tired of hearing about. Corporate profits should no longer trump the public right to choose viable, alternative energy. Making the right choice means sharing the benefits of energy production: Not letting a small group of corporate elitists eat the whole pie while pushing the future costs (which approach infinity) onto every subsequent generation of human beings, ever.

Wake up. This is madness. And it won't stop until we hold CORPORATE GREED accountable. Haven't you had enough of this yet?

.....

Ben Williams is the executive Director of the Colorado Renewable Energy Cooperative and Manager of the Energy Services and Consulting company, Getting Climate Change Handled, LLC (GCCH). He lives in Southwest Colorado, in San Miguel County, at the fork in the road – between a sustainable future & the wreckage of an unchecked energy agenda.

Top 1% Receive One-Third Of All Pay In The U.S., But Congress Is Still Afraid Of A Surtax

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Pat Garofalo
July 21,2009 - ThinkProgress.org

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The New York Times reported today that Democratic leaders, "bowing to unease among lawmakers and governors in their own party," are reconsidering the House Ways and Means committee's proposal to implement a surtax on the richest one percent of Americans as a way of financing a portion of health care reform.

There has indeed been a lot of pushback against the surtax proposal, which prompted Speaker of the House Nancy Pelosi (D-CA) to suggest that only households making more than $1 million should be subject to it, instead of the graduated scale starting at $350,000 that Ways and Means proposed.

But those feeling squeamish about the tax should take a look at this analysis in the Wall Street Journal, which shows how big a slice of the income pie the rich are currently receiving:

Executives and other highly compensated employees now receive more than one-third of all pay in the U.S., according to a Wall Street Journal analysis of Social Security Administration data — without counting billions of dollars more in pay that remains off federal radar screens that measure wages and salaries. Highly paid employees received nearly $2.1 trillion of the $6.4 trillion in total U.S. pay in 2007, the latest figures available. The compensation numbers don't include incentive stock options, unexercised stock options, unvested restricted stock units and certain benefits.

In the five years ending in 2007, earnings for American workers rose 24 percent, while the highest-paid saw a 48 percent increase. So as Kevin Drum noted, "in other words, the executives got a 48% increase, the rest of us got approximately nothing, and it all averaged out to 24%." And to top it all off, median pay raises for this year and next are set to be the lowest in decades.

Income growth in America for the last few decades has been overwhelmingly concentrated at the top. Between 1979 and 2006, the inflation-adjusted after-tax income of the richest 1 PERCENT of households increased by 256 percent, compared to 21 percent for families in the middle income quintile. According to the Center on Budget and Policy Priorities, households in that richest one percent "had $617 billion more income in 2006 (or $656 billion more if measured in 2009 dollars) than they would have had if the 1979 income distribution still prevailed."

Increasing taxes on this small percentage of people — who have done very well for a very long time — would raise revenue to put toward health reform, which is the single biggest problem for America's bottom line. As Sen. Bernie Sanders (I-VT) said, "it certainly is okay for me to tell my friends on Wall Street, who just got a bonus of $600,000, they're going to pay more in taxes so we can lower health care costs in America."

TOON

Sorta nice but also creepy and disturbing.

In a trend so rich in weirdness it deserves a John Prine song, D.C. lobbyists are hiring homeless people to stand in line for them in order to get coveted seats at key hearings. The practice – complete with a website – gives money and stature to people who desperately need it, while using them to facilitate policies that often work against their interests.

"I'm a part of something today and I'm very happy about that," says Williams Howard Johnson Jr., in line since midnight for a 10 a.m. climate-change bill hearing.

- Common Dreams

Morgan Stanley Sets Aside 72% of Revenue for Employees’ Pay

.....

Christine Harper
July 22, 2009 - Bloomberg

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Morgan Stanley set aside 72 percent of its second-quarter revenue for compensation and benefits, more than Goldman Sachs Group Inc. or JPMorgan Chase & Co., amid a "war for talent" with rivals that generate more money.

"It was a very good quarter to be a Morgan Stanley employee," said Brad Hintz, an analyst at Sanford C. Bernstein & Co. in New York. "I'm not so sure it was so good to be a Morgan Stanley shareholder."

The average ratio of compensation to revenue at securities firms this decade has been about 48 percent, Hintz said, calling Morgan Stanley's figure "pretty extraordinary." Chief Executive Officer John Mack, 64, is under pressure to increase pay after Goldman Sachs set aside a record $11.4 billion for salaries, benefits and bonuses in the first half and JPMorgan Chase & Co. boosted investment-bank compensation by 37 percent.

First-half compensation expenses at Morgan Stanley, the biggest U.S. brokerage, dropped 14 percent to $5.91 billion as revenue plunged 40 percent. (See table, below.) The firm reported a second-quarter loss from continuing operations of $159 million that was bigger than analysts estimated. Goldman Sachs last week posted record earnings of $3.44 billion.

"The war for talent seems to be as hot as ever, I'm not sure that's sustainable," Colm Kelleher, Morgan Stanley's chief financial officer, said in an interview today.

The number of employees rose to 62,215 at the end of June, which included 20,004 people from the company's new Morgan Stanley Smith Barney retail brokerage joint venture with Citigroup Inc.

Repaying TARP

Morgan Stanley last month repaid $10 billion to the U.S. government plus dividends to shake off restrictions on the size of bonuses it can award.

"If it's seen that Goldman's the place where you're going to get compensated, that's obviously going to lead to some type of a talent drain at some point," said Ben Wallace, an analyst at Grimes & Co. in Westborough, Massachusetts, which manages $750 million in assets. "Morgan Stanley's big challenge, whether it's compensation or risk or earnings outlooks, is going to be differentiating themselves from Goldman Sachs."

Last year Morgan Stanley slashed compensation costs by 26 percent, including a 50 percent average reduction in bonuses for all employees except for financial advisers, as the firm's revenue tumbled 12 percent. The firm also changed pay practices so it can recoup a portion of employees' cash bonuses if problems arise in subsequent years.

This year, as competition for workers increased, Morgan Stanley raised base salaries for top executives to make up for a decline in bonuses.

Six Months

In the second quarter, Morgan Stanley's compensation expense of $3.88 billion was 72 percent of the quarter's $5.41 billion of revenue. For the first six months of the year, the firm's $5.91 billion expense was 71 percent of the $8.36 billion of revenue.

Goldman Sachs's first-half expenses for pay were up 33 percent from a year earlier and was enough to give each worker at Goldman Sachs $386,429 for the period. Goldman set aside 49 percent of revenue in the first six months of the year for salaries, benefits and bonuses.

JPMorgan Chase & Co. set aside $6.01 billion in the first half for investment bank employees' compensation, up 37 percent from a year earlier, even as the number of people employed at the investment bank fell 30 percent. The division's compensation makes up 38 percent of the revenue it generated in the six-month period, down from 51 percent in the same period a year earlier.

Investment banks have traditionally awarded a large portion of employees' compensation in the form of year-end bonuses tied to the performance of the firm and the individual. The more senior an employee, the bigger percentage of their pay typically comes in the form of the year-end bonus. Payments are often made in restricted stock that can't be cashed out for several years.

The following table compares revenue, compensation and employee numbers at Morgan Stanley, Goldman Sachs and JPMorgan Chase's investment bank in the first half:

First-Half Revenue, Compensation and Head Count:

               Revenue       Comp       Employees Comp/Employee

Morgan Stanley $8.36 bln     $5.91 bln  62,215*   $95,009

Goldman Sachs  $23.2 bln     $11.4 bln  29,400    $386,429

JPMorgan
Investment
Bank           $15,672 bln   $6.01 bln  25,783    $232,983

*Includes 20,004 employees related to the Morgan Stanley Smith
Barney joint venture with Citigroup Inc.

Source: Company reports.

US Withheld Data on Risks of Distracted Driving

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Matt Richtel
July 21, 2009 - The New York Times

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In 2003, researchers at a federal agency proposed a long-term study of 10,000 drivers to assess the safety risk posed by cellphone use behind the wheel.

They sought the study based on evidence that such multitasking was a serious and growing threat on America's roadways.

But such an ambitious study never happened. And the researchers' agency, the National Highway Traffic Safety Administration, decided not to make public hundreds of pages of research and warnings about the use of phones by drivers - in part, officials say, because of concerns about angering Congress.

On Tuesday, the full body of research is being made public for the first time by two consumer advocacy groups, which filed a Freedom of Information Act lawsuit for the documents. The Center for Auto Safety and Public Citizen provided a copy to The New York Times, which is publishing the documents on its Web site.

In interviews, the officials who withheld the research offered their fullest explanation to date.

The former head of the highway safety agency said he was urged to withhold the research to avoid antagonizing members of Congress who had warned the agency to stick to its mission of gathering safety data but not to lobby states.

Critics say that rationale and the failure of the Transportation Department, which oversees the highway agency, to more vigorously pursue distracted driving has cost lives and allowed to blossom a culture of behind-the-wheel multitasking.

"We're looking at a problem that could be as bad as drunk driving, and the government has covered it up," said Clarence Ditlow, director of the Center for Auto Safety.

The group petitioned for the information after The Los Angeles Times wrote about the research last year. Mother Jones later published additional details.

The highway safety researchers estimated that cellphone use by drivers caused around 955 fatalities and 240,000 accidents over all in 2002.

The researchers also shelved a draft letter they had prepared for Transportation Secretary Norman Y. Mineta to send, warning states that hands-free laws might not solve the problem.

That letter said that hands-free headsets did not eliminate the serious accident risk. The reason: a cellphone conversation itself, not just holding the phone, takes drivers' focus off the road, studies showed.

The research mirrors other studies about the dangers of multitasking behind the wheel. Research shows that motorists talking on a phone are four times as likely to crash as other drivers, and are as likely to cause an accident as someone with a .08 blood alcohol content.

The three-person research team based the fatality and accident estimates on studies that quantified the risks of distracted driving, and an assumption that 6 percent of drivers were talking on the phone at a given time. That figure is roughly half what the Transportation Department assumes to be the case now.

More precise data does not exist because most police forces have not collected long-term data connecting cellphones to accidents. That is why the researchers called for the broader study with 10,000 or more drivers.

"We nevertheless have concluded that the use of cellphones while driving has contributed to an increasing number of crashes, injuries and fatalities," according to a "talking points" memo the researchers compiled in July 2003.

It added: "We therefore recommend that the drivers not use wireless communication devices, including text messaging systems, when driving, except in an emergency."

Dr. Jeffrey Runge, then the head of the highway safety agency, said he grudgingly decided not to publish the Mineta letter and policy recommendation because of larger political considerations.

At the time, Congress had warned the agency not to use its research to lobby states. Dr. Runge said transit officials told him he could jeopardize billions of dollars of its financing if Congress perceived the agency had crossed the line into lobbying.

The fate of the research was discussed during a high-level meeting at the transportation secretary's office. The meeting included Dr. Runge, several staff members with the highway safety agency and John Flaherty, Mr. Mineta's chief of staff.

Mr. Flaherty recalls that the group decided not to publish the research because the data was too inconclusive.

He recalled that Dr. Runge "indicated that the data was incomplete and there was going to be more research coming."

He recalled summing up his position as, the agency "should make a decision as to whether they wanted to wait for more data."

But Dr. Runge recalled feeling that the issue was dire and needed public attention. "I really wanted to send a letter to governors telling them not to give a pass to hands-free laws," said Dr. Runge, whose staff spent months preparing a binder of materials for their presentation.

His broader goal, he said, was to educate people about the dangers of distracted driving. "Based on the research, there was a possibility of this becoming a really big problem," he said.

But "my advisers upstairs said we should not poke a finger in the eye of the appropriations committee," he recalled.

He said Mr. Flaherty asked him, "Do we have enough evidence right now to not create enemies among all the stakeholders?"

Those stakeholders, Dr. Runge said, were the House Appropriations Committee and groups that might influence it, notably voters who multitask while driving and, to a much smaller degree, the cellphone industry.

Mr. Mineta, who left as transportation secretary in 2006, said he was unaware of the meeting.

"I don't think it ever got to my desk," he said of the research. Mr. Ditlow, from the Center for Auto Safety, said the officials' explanations for withholding the research raised concerns. He said the research did not constitute lobbying of states.

And he said it was consistent with the highway safety agency's research in other areas, like seat belts.

Mr. Ditlow said that putting fears of the House panel ahead of public safety was an abdication of the agency's responsibility.

"No public health and safety agency should allow its research to be suppressed for political reasons," he said. Doing so "will cause deaths and injuries on the highways."

State Senator Joe Simitian of California, who tried from 2001 to 2005 to pass a hands-free cellphone law over objections of the cellphone industry, said the unpublished research would have helped him convince his colleagues that cellphones cause serious - deadly - distraction.

"Years went by when lives could have been saved," said Mr. Simitian, who in 2006 finally pushed through a hands-free law that took effect last year.

The highway safety agency, rather than commissioning a study with 10,000 drivers, handled one involving 100 cars. That study, done with the Virginia Tech Transportation Institute, placed cameras inside cars to monitor drivers for more than a year.

It found that drivers using a hand-held device were at 1.3 times greater risk of a crash or near crash, and at three times the risk when dialing compared with other drivers.

Not all the research went unpublished. The safety agency put on its Web site an annotated bibliography of more than 150 scientific articles that showed how a cellphone conversation while driving taxes the brain's processing power, reducing reaction time. But the bibliography included only a list of the articles, not the one-page summaries of each one written by the researchers.

Chris Monk, who researched the bibliography for 18 months, said the exclusion of the summaries took the teeth out of the findings.

"It became almost laughable," Mr. Monk said. "What they wound up finally publishing was a stripped-out summary."

Mr. Monk and Mike Goodman, a division head at the safety agency who led the research project, theorize that the agency might have felt pressure from the cellphone industry. Mr. Goodman said the industry frequently checked in with him about the project and his progress. (He said the industry knew about the research because he had worked with it to gather some data).

But he could offer no proof of the industry's influence. Mr. Flaherty said he was not contacted or influenced by the industry.

The agency's current policy is that people should not use cellphones while driving. Rae Tyson, a spokesman for the agency, said it did not, and would not, publish the researchers' fatality estimates because they were not definitive enough.

He said the other research was compiled as background material for the agency, not for the public.

"There is no report to publish," he said.

TOON

Subprime Brokers Resurface as Dubious Loan Fixers

.....

Peter S. Goodman
July 20, 2009 - The New York Times

.....

LOS ANGELES - From the ninth floor of a downtown office building on Wilshire Boulevard, Jack Soussana delivered staggering numbers of mortgages to homeowners during the real estate boom, amassing a fortune.

By Mr. Soussana's own account, his customers fared less happily. He specialized in the exotic mortgages that have proved most prone to sliding into foreclosure, leaving many now scrambling to save their homes.

Yet the dangers assailing Mr. Soussana's clients have yielded fresh business for him: Late last year, he and his team - ensconced in the same office where they used to broker mortgages - began working for a loan modification company. For fees reaching $3,495, with most of the money collected upfront, they promised to negotiate with lenders to lower payments on the now-delinquent mortgages they and their counterparts had sprinkled liberally across Southern California.

"We just changed the script and changed the product we were selling," said Mr. Soussana, who ran the Los Angeles sales office of Federal Loan Modification Law Center. The new script: You got a raw deal, and "Now, we're able to help you out because we understand your lender."

Mr. Soussana's partners at FedMod, as the company is known, were also products of the formerly lucrative world of high-risk lending. The managing partner, Nabile Anz, known as Bill, previously co-owned Mortgage Link, a California subprime lender, now defunct, that once sold $30 million worth of loans a month.

Jeffrey Broughton, one of FedMod's initial partners, served as director of business development at Pacific First Mortgage, a lender that extended so-called Alt-A mortgages for borrowers with tarnished credit for Countrywide Financial, which lost billions of dollars on bad mortgages before being rescued in an acquisition.

FedMod is but one example of how many of the same people who dispensed risky mortgages during the real estate bubble have reconstituted themselves into a new industry focused on selling loan modifications.

Despite making promises of relief to homeowners desperate to keep their homes, FedMod and other profit making loan modification firms often fail to deliver, according to a New York Times investigation based on interviews with scores of former employees and customers, more than 650 complaints filed with the Better Business Bureau, and documents filed by the Federal Trade Commission in a lawsuit against the company.

The suit, filed in California federal court, asserts that FedMod frequently exaggerated its rates of success, advised clients to stop making their mortgage payments, did little or nothing to modify loans and failed to promptly refund fees. The suit seeks an end to FedMod's practices, and compensation for customers.

"Our job was to get the money in and then we're done," said Paul Pejman, a former sales agent who worked out of FedMod's two-story headquarters in Irvine, Calif. He recounted his experience, he said, because "I really feel bad."

"I had people calling me crying, and we were telling them, 'You can pay me or you can lose your house,' " Mr. Pejman said. "People were giving me every dime they had, opening credit cards. But I never saw one client come out of it with a successful loan modification."

Mr. Anz, who is challenging the F.T.C. lawsuit, acknowledged that FedMod's business went "horribly wrong," but he maintains the company made genuine efforts to help delinquent borrowers. He said FedMod has refunded fees to 3,000 dissatisfied customers, while modifying 1,500 mortgages.

A New Mission

FedMod is among dozens of similar companies that have been accused by state and federal authorities of fraudulent business practices. On the same day in April that the F.T.C. sued FedMod, it brought action against four similar companies and sent letters of warning to 71 others. Last week, the commission brought lawsuits against four more loan modification companies, advancing an enforcement campaign involving 23 states.

Many of the companies formerly operated as mortgage brokers, The Times found. Since October, the California Department of Real Estate has ordered 210 businesses and individuals to stop offering loan modification or foreclosure prevention services, because they lacked a real estate license, as required by the state. In fact, nearly half the people have roots in the mortgage industry or other areas of real estate, according to public records.

Debt Barter Inc. is among them. A loan modification company based in Irvine that was cited by the state in January for collecting upfront fees without a license, it is owned by Sean R. Roberts, who formerly headed Instafi, a mortgage broker that closed $2 billion worth of loans a year at its peak. Since February, customers have filed 17 complaints against Debt Barter with the Better Business Bureau. Most accused the company of charging upfront fees, then failing to lower their payments.

"We can't please everyone all the time," said Mr. Roberts, who added that the company had modified loans for nearly 300 of its roughly 500 clients.

In Aliso Viejo, Calif., the Citywide Mortgage Corporation, which previously brokered Alt-A and subprime loans, last year became a loan modification company, USMAC. The company has not received a cease and desist order, but complaints on numerous consumer Web sites assert that it fails to deliver.

"I'm saving homes," said the company's president, Scott Gimbel, who claimed a success rate above 70 percent.

Chris Mozilo, nephew of Angelo R. Mozilo, the former chief executive of Countrywide Financial - a name synonymous with the subprime disaster - recently started a new business, eModifyMyLoan. It sells software that homeowners can use to apply for loan modifications.

Chris Mozilo worked at Countrywide for 16 years. "I'm very proud of my career in mortgage lending," he said. "We helped millions of people achieve the goal of homeownership."

From its inception in the middle of 2008, FedMod aimed to dominate the loan modification industry, growing swiftly with the aid of a national advertising campaign.

Mr. Broughton, 49, had worked in the mortgage industry since the mid-1980s. As the market ground to a halt in 2008, he founded FedMod with two Los Angeles entrepreneurs, Steven Oscherowitz and Boaz Minitzer.

Mr. Broughton sought to distinguish his company from the unscrupulous ventures that dominate the industry.

"You had a lot of these modification companies that were subprime guys," he said. "All they cared about was making quick dollars."

But the partners behind FedMod had their own questionable backgrounds. In the mid-1990s, Mr. Oscherowitz settled an F.T.C. lawsuit that accused his company, Universal Merchants, of falsely marketing the weight-loss benefits of a dietary supplement.

The partners entrusted Mr. Soussana with FedMod's Los Angeles sales office precisely because he had proved adept at selling the sorts of loans that now required modification. In 2006, Mr. Soussana, then 30, was listed as the nation's sixth most prolific mortgage broker by Mortgage Originator, a trade magazine, brokering $318 million worth of loans. The same year, he paid $1.8 million for a house near Beverly Hills.

"He was one of the biggest guys in subprime mortgages," Mr. Minitzer said. "He basically wanted to get back to his old days of 50, 60, 70 guys in his office, and we could help because we were basically taking over the market."

Bringing in the Law

The three original partners brought in Mr. Anz to gain a crucial asset: his law license. Having a lawyer in charge enabled them to market their venture as a law firm and thus collect upfront payments under California rules.

"Jeff asked me how I could, for lack of a better word, legitimize it," Mr. Anz said.

The California Department of Real Estate warns consumers that many dubious loan modification companies have organized themselves as law firms solely to allow them to collect upfront fees, even though the lawyers have little, if anything, to do with the services provided. The department cautions consumers against hiring such companies.

In its lawsuit against FedMod, the F.T.C. contends that the company's advertisements implied it had the backing of the federal government. "If you're like the millions of Americans out there who are struggling to pay a mortgage, you may be eligible for the Federal Loan Modification Program," radio ads beckoned.

Aggressive marketing ensured that Mr. Pejman, 22, never lacked for calls when he started at the Irvine sales office in January. He had worked at three wholesale mortgage brokerages. Now, a trainer emphasized he was at a law center.

"Our big sales pitch was that an attorney could do a better job with your loan modification," Mr. Pejman said. "If you told them these were basically washed-up people from the mortgage industry, or just people sending in paperwork, they would say, 'Well, why bother? I might as well do this myself.' "

He went on: "It was misleading to the client. Attorneys never touched those files."

Among the 700-plus full-time employees who worked for FedMod this spring, only nine were lawyers, Mr. Anz said, though the company retained a lawyer in every state.

Mr. Pejman and his fellow agents urged homeowners to send FedMod $3,495; the agents were promised a 30 percent commission for fees they took in. Most clients could not come up with more than $1,000 and agreed to a payment schedule for the rest. Assurances of relief from a homeowner's loan terms were typically extravagant, Mr. Pejman said.

"A big grabber was that your loan will be reduced to 2.5 percent to 5 percent on a 30-year fixed rate loan," he said. "They'd print out all these mythical success stories for us to read over the phone."

Under FedMod's policies, agents were prohibited from making false claims, counseling clients not to pay their mortgages or providing success rates, Mr. Anz said. New clients received follow-up compliance calls to ensure they understood nothing was guaranteed.

But sales agents were told of such policies with a wink, Mr. Pejman said.

"They basically told us, 'Do whatever you need to do,' " he said. " 'It's a sales floor. You're here to sell.' People would quote success rates and just pull them out of thin air. People would say 60 percent, 80 percent, 90 percent. To the average Joe in Kansas, that sounded great. But the reality is that 50 percent were immediately declined by the lender."

What shocked Mr. Pejman was how readily customers handed over their credit card numbers. Sales agents tapped into a deep vein of anxiety.

"I'd hear people say, 'Would you pay $1,000 to save your home? To save your marriage? Your kids' education?' " he recalled. "I'd hear people say, 'Yeah, we're the federal government.' There were a lot of corrupt people working there."

In Charlotte, N.C., Joshua Garland telephoned FedMod in March after seeing one of its television commercials. Mr. Garland's wife had been laid off from her hospital job. He had lost his job as a chef and was now bartending. Their monthly income had plunged from $3,200 to less than $1,000. They were already three months behind on their mortgage.

A FedMod agent confidently described how his company could cut their monthly payments from $1,200 to $532, Mr. Garland recalled. But first, he had to pay a $995 "retainer fee."

This was nearly as much as Mr. Garland earned in two weeks. Dental bills were piling up for his three children. He was behind on his utilities.

"I told him, 'We have $1,200 left to make our mortgage payment, and if we give that money to you, we're going to get further behind,' " Mr. Garland recalled. "He said, 'Go ahead and make the $995 payment, because once you're under our plan, the bank can't foreclose on you.' "

After several follow-up calls from the agent, Mr. Garland paid. Then, months passed with no contact from FedMod, he said. He left countless messages seeking updates, demanding a refund. His lender foreclosed on his house, scheduling a sale for Aug. 26.

"This guy hounds me for the $1,000, and then as soon as I pay him he disappears," Mr. Garland said. "I usually don't fall for stuff like this. I can usually tell if it's a scam. But this guy, I mean he came with his guns loaded."

Overwhelmed by Cases

FedMod was drowning in cases. The pipeline swelled by 8,000 clients from December to March, according to Mr. Anz.

Once sales agents took in applications, they passed files on to the processing department, where case managers were supposed to assemble documents and submit them to lenders. But their offices were hopelessly underequipped.

"The owners didn't want to invest in software, so everything was tracked manually," said Rachelle Cochems, who took over as operations manager on Jan. 19 and left the company in May after FedMod stopped paying her. "We couldn't handle the volume we were taking in. The system was broken."

Each case manager was responsible for as many as 200 files at a time, Ms. Cochems said, making it impossible to keep in regular touch with customers. Some files floated in limbo, because sales agent did not bother handing them over.

"You're paying the sales agent upfront," Ms. Cochems said. "So what motivation does he have to get it closed?"

In February, Mr. Anz shut the Los Angeles sales office, uncomfortable with reports that Mr. Soussana had filled it with "unsavory types" from the mortgage industry, he said.

"I'm not a shady person," Mr. Soussana said.

By March, sales agents were inundated by calls from furious clients who had paid long ago, but not heard from anyone. Some called from motels, their belongings piled in boxes, weeping as they recounted losing their homes.

The agents let most calls go to voicemail, playing the most dramatic messages over speakerphones for communal amusement, Mr. Pejman said.

"Guys would sit there and laugh," he said. " 'This lady's going crazy,' that sort of thing."

The next month, Mr. Anz took full control of the company, banishing his partners and blaming them for "a train wreck." He ceased marketing, he said, and concentrated on processing the backlog of files.

In April, the F.T.C. filed its lawsuit, prompting credit card companies to freeze their accounts with FedMod. The court imposed a temporary restraining order, barring FedMod from acquiring new customers.

By the time Rana Hajjar began working there on April 13 as a client representative, she found the company utterly chaotic.

"They just handed me 70 files and told me to call these people because they're very upset," Ms. Hajjar recalled. "The majority of them had paid three or four months earlier and had never heard from anyone. I was yelled at from today until tomorrow."

Several times a week, clients called to report that the police were at their door, ordering them out for foreclosure sales, Ms. Hajjar said. When she alerted negotiators, they sometimes called banks and postponed sales, but usually they ignored her messages, she said.

When Ms. Hajjar cashed her first paycheck, it bounced, she said. Over the next three weeks, she never received payment. On Monday, May 11, her manager told her and dozens of other employees to take the rest of the week off because the company had no money for payroll.

She was never called back, later adding her name to a file of more than 120 wage disputes leveled against FedMod with the California Labor Commissioner.

Today, FedMod has only 40 employees, said Mr. Anz, pledging to plow through the company's 4,200 remaining files.

"We're doing what we can," he said. "I'm the bad boy of loan mods."

Yet as television advertisements attest, many other companies remain aggressive in what amounts to perhaps the last growth industry left in American real estate.