Wednesday, December 3, 2008

Obama warns US governors of “hard choices”

Obama warns US governors of “hard choices”

By Tom Eley

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Barack Obama spoke to some 40 governors of US states on Tuesday, the second day of the annual conference of the National Governors Association at Philadelphia’s Independence Hall. The conference was dominated by the economic crisis, which has imposed significant budget deficits on most states. Yet in his brief remarks, the president-elect presented not a single concrete proposal and made only a few vague references to the social problems engulfing state governments.

Obama’s sharpest comments served as public notice that his administration will be a regime of fiscal austerity. “Make no mistake,” Obama warned, “these are difficult times, and we’re going to have to make hard choices in the months ahead about how to invest precious tax dollars and how to save them—hard choices like the ones you’re making right now. I won’t stand here and tell you that you’ll like all the decisions I make. You probably won’t.”

The “hard choices” being made by the governors are sharp cuts in social spending, such as assistance programs for the poor, funding for public education, and unemployment benefits.

The governors are requesting a portion of whatever stimulus package the new president signs into law after his inauguration. At the moment, the high-end figure being cited for the plan is $500 billion, although Congressional Democrats have hedged their bets by warning that any final legislation would be dependent upon Republican Party support, even though the latter saw its minority reduced further in November’s general election.

There is little chance that the Obama administration will deliver to the states anything approaching the governors’ full request of $160 billion, of which $120 billion would go toward funding infrastructure development and $40 billion to fund rising Medicaid costs. Whatever resources the Obama administration makes available will prove woefully inadequate to meet the unfolding social crisis. Furthermore, the figure will be a pittance compared to the sum allocated to bail out Wall Street by the Bush administration with the support of Obama and leading Congressional Democrats.

The states confront a cascading fiscal crisis. Including cuts already made in the current fiscal year, it is anticipated that the collective 2009-2010 budget deficit for US states will be a minimum of $140 billion. This figure could run higher than $200 billion by the middle of 2010, threatening infrastructure spending, unemployment benefits, public education at all levels, and social assistance programs such as Medicaid—the health insurance program for low-income people.

States have already collectively trimmed $53 billion from budgets for the 2008-2009 fiscal year, according to statistics gathered by the National Conference of State Legislatures. So far, for fiscal year 2010, 25 states anticipate around $60 billion in combined deficits.

Most states are prohibited from deficit spending, due to the enactment of reactionary “pay-as-you-go” laws over the past few decades—the legislative equivalent of the “no new tax” pledges crafted to benefit the rich. State budgets have been left particularly vulnerable to the economic crisis in part due to decades of shifting the tax burden onto working class families. This has resulted in state tax regimes in which financial resources are dependent upon regressive forms of taxation such as the “sales tax,” whereby a flat percentage fee is tied to most purchases, as well as other forms of consumption taxes. These sources of tax revenue are susceptible to cutbacks in consumer spending. The collapse of the housing market has also sharply cut into tax receipts based on property values and sales.

The economic crisis is hitting states from two sides. Due to layoffs, foreclosures and evictions, states face increased demand for the provision of social services. Due to the same conditions, however, they have seen a steep decline in tax revenue. The problem is particularly severe for the provision of health care services through Medicaid, as more unemployed workers, having lost their privately funded insurance and medical benefits, turn to state programs. As a national average, the federal government contributes 57 percent of a state’s Medicaid costs, while the state budget provides the rest. But when state funding is removed, so are federal matching funds, meaning that state cutbacks in Medicaid are effectively doubled.

An estimated forty-one states face budget shortfalls in the next two years. Leading the way is California, the nation’s most populous state, and estimated to rank as the world’s sixth largest economy. On Monday, Republican Governor Arnold Schwarzenegger declared a fiscal “state of emergency,” convening the state legislature in special session in order to force new spending cuts. Publicly funded construction projects have now ground to a halt in California, throwing more people out of work. The state’s total two-year budget deficit is $31.7 billion, of which $11.2 billion is a current revenue shortfall.

New York, the third most populous state, faces the second largest deficit—$6.4 billion for this year and next. New York has been hammered by mass layoffs in the financial sector, centered in New York City. Neighboring New Jersey has been similarly affected, with a shortfall is $2.9 billion. Florida, the fourth most populous state, is $5.1 billion short on its budget. The sixth most populous state, Illinois, Obama’s home state, faces a deficit of nearly $2 billion.

The budget deficits are already devastating social programs and educational funding. The following are only a handful of examples reported over the last few days:

• New York Governor David Patterson, a Democrat, has demanded cuts of over 10 percent from most state agencies. Some have been unable to comply, such as the Department of Motor Vehicles, which stated that such large cuts would threaten its ability to generate income for the state. The Department of Transportation insists that it cannot realize the full cut, as winter snow removal would cease. The state police and prison system have been the only state agencies to be exempted from the 10.3 percent mandatory cuts.

• Florida has seen 100,000 people request food stamps in the last year, while about 1 million people applied for unemployment insurance in October alone.

• A Kentucky newspaper reports: “Out-of-work Kentuckians who want to contest their unemployment benefits before Christmas are out of luck: They may have to wait up to two months to get their appeals heard.” The decision results in part from a rapid increase in the number of appeals.

As bleak as the situation with state budgets is now, it is likely that current predictions underestimate the crisis. At the same time, states are less prepared than at any moment in recent history to confront the social consequences of the economic crisis. After decades of cuts to social spending—including the Clinton-era “welfare reform,” eviscerating assistance to the poor—state and local governments find themselves with few tools or resources.

Obama’s appearance at the National Governors Association conference—and his appeal for state governors to prepare for the “hard choices” ahead—underscores that whatever the specifics of the incoming Democratic administration’s stimulus plan, the full brunt of the economic crisis will be borne by working people and the poor across the US.

Colonial style empire-building is making a huge comeback

The Great Land Giveaway: Neo-Colonialism by Invitation

Colonial style empire-building is making a huge comeback

by James Petras

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"The deal South Korea's Daewoo Logistics is negotiating with the Madagascar Government looks rapacious…The Madagascan case looks neo-colonial…The Madagascan people stand to lose half of their arable land." Financial Times Editorial, November 20, 2008

"Cambodia is in talks with several Asian and Middle Eastern governments to receive as much as $3 billions US dollars in agricultural investments in return for millions of hectares of land concessions…" Financial Times, November 21, 2008

"We are starving in the midst of bountiful harvests and booming exports!: Unemployed Rural Landless Workers, Para State, Brazil (2003)

Introduction

Colonial style empire-building is making a huge comeback, and most of the colonialists are late-comers, elbowing their way past the established European and US predators.

Backed by their governments and bankrolled with huge trade and investment profits and budget surpluses, the newly emerging neo-colonial economic powers (ENEP) are seizing control of vast tracts of fertile lands from poor countries in Africa, Asia and Latin America, through the intermediation of local corrupt, free-market regimes. Millions of acres of land have been granted – in most cases free of charge – to the ENEP who, at most, promise to invest millions in infrastructure to facilitate the transfer of their plundered agricultural products to their own home markets and to pay the ongoing wage of less than $1 dollar a day to the destitute local peasants. Projects and agreements between the ENEP and pliant neo-colonial regimes are in the works to expand imperial land takeovers to cover additional tens of millions of hectares of farmland in the very near future. The great land sell-off/transfer takes place at a time and in places where landless peasants are growing in number, small farmers are being forcibly displaced by the neo-colonial state and bankrupted through debt and lack of affordable credit. Millions of organized landless peasants and rural workers struggling for cultivatable land are criminalized, repressed, assassinated or jailed and their families are driven into disease-ridden urban slums. The historic context, economic actors and methods of agro-business empire-building bears similarities and differences with the old-style empire building of the past centuries.

Old and New Style Agro-Imperial Exploitation

During the previous five centuries of imperial domination the exploitation and export of agricultural products and minerals played a central role in the enrichment of the Euro-North American empires. Up to the 19th century, large-scale plantations and latifundios, organized around staple crops, relied on forced labor – slaves, indentured servants, semi-serfs, tenant farmers, migrant seasonal workers and a host of other forms of labor (including prisoners) to accumulate wealth and profits for colonial settlers, home country investors and the imperial state treasuries.

The agricultural empires were secured through conquest of indigenous peoples, importation of slaves and indentured workers, the forcible seizure and dispossession of communal lands and the rule through colonial officials. In many cases, the colonial rulers incorporated local elites ('nobles', monarchs, tribal chiefs and favored minorities) as administrators and recruited the impoverished, dispossesed natives to serve as colonial soldiers led by white Euro-American officers.

Colonial-style agro-imperialism came under attack by mass-based national liberation movements throughout the 19th and first half of the 20th centuries, culminating in the establishment of independent national regimes throughout Africa, Asia (except Palestine) and Latin America. From the very beginning of their reign, the newly independent states pursued diverse policies toward colonial-era land ownership and exploitation. A few of the radical, socialist and nationalist regimes eventually expropriated, either partially or entirely, foreign landowners, as was the case in China, Cuba, Indochina, Zimbabwe, Guyana, Angola, India and others. Many of these 'expropriations' led to land transfers to the new emerging post-colonial bourgeoisie, leaving the mass of the rural labor force without land or confined to communal land. In most cases the transition from colonial to post-colonial regimes was underwritten by a political pact ensuring the continuation of colonial patterns of land ownership, cultivation, marketing and labor relations (described as a 'neo-colonial agro-export system). With few exceptions most independent governments failed to change their dependence on export crops, diversify export markets, develop food self-sufficiency or finance the settlement of rural poor onto fertile uncultivated public lands.

Where land distribution did take place, the regimes failed to investejidos') or imposed centrally controlled large-scale state enterprises, which were inefficiently run, failed to provide adequate incentives for the direct producers, and were exploited to finance urban-industrial development. As a result, many state farms and cooperatives were eventually dismantled. In most countries great masses of the rural poor continued to be landless and subject to the demands of local tax collectors, military recruiters and usurious money lenders and were evicted by land speculators, real estate developers and national and local officials.

Neo-Liberalism and the Rise of New Agro-Imperialism
sufficiently in the new forms of rural organization (family farms, co-ops or communal '

Emblematic of the new style agro-imperialism is the South Korean takeover of half (1.3 million hectares) of Madagascar's total arable land under a 70-90 year lease in which the Daewoo Logistics Corporation of South Korea expects to pay nothing for a contract to cultivate maize and palm oil for export.1 In Cambodia, several emerging agro-imperial Asian and Middle Eastern countries are 'negotiating' (with hefty bribes and offers of lucrative local 'partnerships' to local politicians) the takeover of millions of hectares of fertile land.2 The scope and depth of the new emerging agro-imperial expansion into the impoverished countryside of Asian, African and Latin American countries far surpasses that of the earlier colonial empire before the 20th century. A detailed account of the new agro-imperialist countries and their neo-colonial colonies has recently been compiled on the website of GRAIN3.

The driving forces of contemporary agro-imperialist conquest and land grabbing can be divided into three blocs:

    1. The new rich Arab oil regimes, mostly among the Gulf States (in part, through their 'sovereign wealth funds).
    2. The newly emerging imperial countries of Asia (China, India, South Korea and Japan) and Israel
    3. The earlier imperial countries (US and Europe), the World Bank, Wall Street investment banks and other assorted imperial speculator-financial companies.

Each of these agro-imperial blocs is organized around one to three 'leading' countries: Among the Gulf imperial states, Saudi Arabia and Kuwait; in Asia – China, Korea and Japan are the main land grabbers. Among the US-European-World Bank land predators there are a wide range of agro-imperialist monopoly firms buying up land ranging from Goldman Sachs, Blackstone in the US to Louis Dreyfuss in the Netherlands and Deutschbank in Germany. Upward of several hundred million acres of arable land have been or are in the process of being appropriated by the world's biggest capitalist landowners in what is one of the greatest concentration of private landownership in the history of empire building.

The process of agro-imperial empire building operates largely through political and financial mechanisms, preceded, in some cases, by military coups, imperial interventions and destabilization campaigns to establish pliable neo-colonial 'partners' or, more accurately, collaborators, disposed to cooperate in this huge imperial land grab. Once in place, the Afro-Asian-Latin American neo-colonial regimes impose a neo-liberal agenda which includes the break-up of communal-held lands, the promotion of agro-export strategies, the repression of any local land reform movements among subsistence farmers and landless rural workers demanding the redistribution of fallow public and private lands. The neo-colonial regimes' free market policies eliminate or lower tariff barriers on heavily subsidized food imports from the US and Europe. These policies bankrupt local market farmers and peasants increasing the amount of available land to 'lease' or sell-off to the new agro-imperial countries and multinationals. The military and police play a key role in evicting impoverished, indebted and starving farmers and preventing squatters from occupying and producing food on fertile land for local consumption.

Once the neo-colonial collaborator regimes are in place and their 'free market' agendas are implemented, the stage is set for the entry and takeover of vast tracts of cultivable land by the agro-imperial countries and investors.

Israel is the major exception to this pattern of agro-imperial conquest, as it relies on the massive sustained use of force against an entire nation to dispossess Palestinian farmers and seize territory via armed colonial settlers – in the style of earlier Euro-American colonial imperialism.4

The sellout usually follows one of two paths or a combination of both: Newly emerging imperial countries take the lead or are solicited by the neo-colonial regime to invest in 'agricultural development'. One-sided 'negotiations' follow in which substantial sums of cash flow from the imperial treasury into the overseas bank accounts of their neo-colonial 'partners'. The agreements and the terms of the contracts are unequal: The food and agricultural commodities are almost totally exported back to the home markets of the agro-imperial country, even as the 'host country's' population starves and is dependent on emergency shipments of food from imperial 'humanitarian' agencies. 'Development', including promise of large-scale investment, is largely directed at building roads, transport, ports and storage facilities to be used exclusively to facilitate the transfer of agricultural produce overseas by the large-scale agro-imperial firms. Most of the land is taken rent-free or subject to 'nominal' fees, which go into the pockets of the political elite or are recycled into the urban real estate market and luxury imports for the local wealthy elite. Except for the collaborationist relatives or cronies of the neo-colonial rulers, almost all of the high paid directors, senior executives and technical staff come from the imperial countries in the tradition of the colonial past. An army of low salary, educated, 'third country nationals' generally enter as middle level technical and administrative employees – completely subverting any possibility of vital technology or skills transfer to the local population. The major and much touted 'benefit' to the neo-colonial country is the employment of local manual farm workers, who are rarely paid above the going rate of $1 to 2 US dollars a day and are harshly repressed and denied any independent trade union representation.

In contrast, the agro-imperial companies and regimes reap enormous profits, secure supplies of food at subsidized prices, exercise political influence or hegemonic control over collaborator elites and establish economic 'beachheads' to expand their investments and facilitate foreign takeover of the local financial, trade and processing sectors.

Target Countries

While there is a great deal of competition and overlap among the agro-imperial countries in plundering the target countries, the tendency is for the Arab petroleum imperial regimes to focus on penetrating neo-colonies in South and Southeast Asia. The Asian 'Economic Tiger' countries concentrate on Africa and Latin America. While the US-Europe Multinationals exploit the former communist countries of Eastern Europe and the former Soviet Union as well as Latin America and Africa.

Bahrain has grabbed land in Pakistan, the Philippines and Sudan to supply itself with rice. China, probably the most dynamic agro-imperial country today, has invested in Africa, Latin America and Southeast Asia to ensure low cost soybean supplies (especially from Brazil), rice production in Cuba (5,000 hectares), Burma, Cameroon (10,000 hectares), Laos (100,000 hectares), Mozambique (with 10,000 Chinese farm-worker settlers), the Philippines (1.24 million hectares) and Uganda.

The Gulf States are projecting a $1 billion dollar fund to finance land grabs in North and Sub-Saharan Africa. Japan has purchased 100,000 hectares of Brazilian farmland for soybean and maize. Its corporations own 12 million hectares in Southeast Asia and South America. Kuwait has grabbed land in Burma, Cambodia, Morocco, Yemen, Egypt, Laos, Sudan and Uganda. Qatar has taken over rice fields in Cambodia and Pakistan and wheat, maize and oil seed croplands in Sudan as well as land in Vietnam for cereals, fruit, vegetables and raising cattle. Saudi Arabia has been 'offered' 500,000 hectares of rice fields in Indonesia and hundreds of thousands of hectares of fertile land in Ethiopia and Sudan.

The World Bank (WB) has played a major role in promoting agro-imperial land grabs, allocating $1.4 billion dollars to finance agro-business takeovers of 'underutilized lands'. The WB conditions its loans to neo-colonies, like the Ukraine, on their opening up lands to be exploited by foreign investors.5 Taking advantage of neo-liberal 'center-left' regimes in Argentina and Brazil, agro-imperial investors from the US and Europe have bought millions of acres of fertile farmlands and pastures to supply their imperial homelands, while millions of landless peasants and unemployed workers are left to watch the trains laden with beef, wheat and soy beans head for the foreign MNC-controlled port facilities and on to the imperial home markets in Europe, Asia and the US.

At least two emerging imperial countries, Brazil and China, are subject to imperial land grabs by more 'advanced' imperial countries and have become 'agents' of agricultural colonization. Japanese, European and North American multinationals exploit Brazil even as Brazilian colonial settlers and agro-industrialists have taken over wide swathes of borderlands in Paraguay, Uruguay and Bolivia. A similar pattern occurs in China where valuable farmlands are exploited by Japanese and overseas Chinese capitalists at the same time that China is seizing fertile land in poorer countries in Africa and Southeast Asia.

Present and Future Consequences of Agro-Imperialism

The re-colonization by emerging imperialist states of huge tracts of fertile farmland of the poorest countries and regions of Africa, Asia and Latin America is resulting in a deepening class polarization between, on the one hand, wealthy rentier Arab oil states, Asian billionaires, affluent state-funded Jewish settlers and Western speculators and, on the other hand, hundreds of millions of starving, landless, dispossessed peasants in Sudan, Madagascar, Ethiopia, Cambodia, Palestine, Burma, China, Indonesia, Brazil, the Philippines, Paraguay and elsewhere.

Agro-imperialism is still in its early stages – taking possession of huge tracts of land, expropriating peasants and exploiting the landless rural workers as day laborers. The next phase which is currently unfolding is to take control over the transport systems, infrastructure and credit systems, which accompany the growth of agro-export crops. Monopolizing infrastructure, credit and the profits from seeds, fertilizers, processing industries, tolls and interest payments on loans further concentrates de facto imperial control over the colonial economy and extends political influence over local politicians, rulers and collaborators within the bureaucracies.

The neo-colonized class structure, especially in largely agricultural economies are evolving into a four tier class system in which the foreign capitalists and their entourage are at the pinnacle of elite status representing less than 1% of the population. In the second tier, representing 10% of the population are the local political elite and their cronies and relatives as well as well placed bureaucrats and military officers, who enrich themselves, through partnerships ('joint ventures') with the neo-colonials and via bribes and land grabs. The local middle class represents almost 20% and is in constant danger of falling into poverty in the face of the world economic crises. The dispossessed peasants, rural workers, rural refugees, urban squatters and indebted subsistence peasants and farmers make up the fourth tier of the class structure with close to 70% of the population.

Within the emerging neo-colonial agro-export model, the 'middle class' is shrinking and changing in composition. The number of family farmers producing for the domestic market is declining in the face of state-supported foreign-owned farms producing for their own 'home markets'. As a result market vendors and small retailers in the local markets are falling behind, squeezed out by the large foreign-owned supermarkets. The loss of employment for domestic producers of farm goods and services and the elimination of a host of 'commercial' intermediaries between town and country is sharpening the class polarization between top and bottom tiers of the class structure. The new colonial middle class is reconfigured to include a small stratum of lawyers, professionals, publicists and low-level functionaries of the foreign firms and public and private security forces. The auxiliary role of the 'new middle class' in servicing the axis of colonial economic and political power will make them less nation-oriented and more colonial in their allegiances and political outlook, more 'free market' consumerist in their life style and more prone to approve of repressive (including fascistic) domestic solutions to rural and urban unrest and popular struggles for justice.

At the present moment, the biggest constraint on the advance of agro-imperialism is the economic collapse of world capitalism, which is undermining the 'export of capital'. The sudden collapse of commodity prices is making it less profitable to invest in overseas farmland. The drying up of credit is undermining the financing of grandiose overseas land grabs. The 70% decline in oil revenues is limiting the Middle East Sovereign Funds and other investment vehicles of Gulf oil foreign reserves. On the other hand, the collapse of agricultural prices is bankrupting African, Asian and Latin American elite agro-producers, forcing down land prices and presenting opportunities for imperial agro-investors to buy up even more fertile land at rock-bottom prices.

The current world capitalist recession is adding millions of unemployed rural workers to the hundreds of millions of peasants dispossessed during the expansion period of the agricultural commodity boom during the first half of the current decade. Labor costs and land are cheap, at the same time that effective consumer demand is falling. Agro-imperialists can employ all the Third World rural labor they want at $1 dollar a day or less, but how can they market their products and realize returns that cover the costs of loans, bribes, transport, marketing, elite salaries, perks, CEO bonuses and investor dividends when demand is in decline?

Some agro-imperialists may take advantage of the recession to buy cheaply now and look forward to long-term profits when the multi-trillion dollar state-funded recovery takes effect. Others may cut back on their land grabs or more likely hold vast expanses of valuable land out of production until the 'market' improves – while dispossessed peasants starve on the margins of fallow fields.

The new agro-imperials are banking on the new imperialist states committing resources (money and troops) to bolster the neo-colonial gendarmes in repressing the inevitable uprisings of the billions of dispossessed, hungry and marginalized people in Sudan, Ethiopia, Burma, Cambodia, Brazil, Paraguay, the Philippines, China and elsewhere. Time is running out for the easy deals, transfers of ownership and long-term leases consummated by local neo-colonial collaborators and overseas colonial investors and states. Currently imperial wars and domestic economic recessions in the old and emerging imperial countries are systematically draining their economies and testing the willingness of their populations to sacrifice for new style colonial empire building. Without international military and economic backing, the thin stratum of local neo-colonial rulers can hardly withstand sustained, mass uprisings of the destitute peasantry allied with the downwardly mobile lower middle class and growing legions of unemployed university-educated young people.

The promise of a new era of agro-imperial empire building and a new wave of emerging imperial states may be short-lived. In its place we may see a new wave of rural-based national liberation movements and ferocious competition between new and old imperial states fighting over increasingly scarce financial and economic resources. While downwardly mobile workers and employees in the Western imperial centers gyrate between one and another imperial party (Democrat/Republican, Conservative/Labor) they will play no role for the foreseeable future. When and if they break loose…they may turn toward a demagogic nationalist right or toward a currently invisible (at least in the US and Europe) 'patriotic nationalist' socialist left. In either case, current imperial pillage and the subsequent mass rebellion will start elsewhere with or without a change in the US or Europe.

NOTES

  1. Financial Times November 20, 2008 page 3
  2. Financial Times November 21, 2008 page 7

  3. http://www.grain.org (November 22, 2008)
  4. Stephen Lendman, "Another Israeli West Bank Land Grab Scheme", Counterpunch. Org. October 10, 2008; Guardian.co.uk, October 10, 2008.
  5. See GRAIN.org, op.cit.

Chevron in the White House

Chevron in the White House

Class Bigotry Mars Auto Debate

Class Bigotry Mars Auto Debate

Afghanistan in Crisis

Afghanistan in Crisis

Bush’s 11th-Hour Bid for Secrecy

Bush’s 11th-Hour Bid for Secrecy

Political coup in Canada; Dion to replace Harper as new PM

Political coup in Canada; Dion to replace Harper as new PM

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In a political coup, Canada's three opposition parties have joined hands to oust the just elected minority government of Prime Minister Stephen Harper.

In a deal signed by the Liberal Party and the New Democratic Party (NDP) and backed by the separatist Bloc Quebecois in Ottawa on Monday, the first two parties will form a new government, with the third supporting them from outside.

Under the deal, Liberal Party leader Stephane Dion will become the new prime minister till May when his party chooses a new leader to replace him.

Dion has sent a letter to Governor-General Michaelle Jean - who is away in Europe - about the decision of the combined opposition to defeat the current government in the House and form a coalition government.

The coalition deal will last till June 30, 2011, when the two parties will review their relationship. But the Bloc Quebecois, which is supporting them from outside, said it will back the coalition only till June 30, 2010, and then review the arrangement.

The cabinet will have 18 ministers from the Liberal Party and six from the NDP. It will be the first time since 1926 that a Canadian government will be replaced without an election.

In the 308-member House of Commons, the ruling Conservative Party has 143 MPs, the Liberal Party 77, the NDP 37 and the Bloc Quebecois 49.

In the Oct 14 general election, Prime Minister Stephen Harper's Conservative Party was returned with a tally of 143 seats in the 308-member House of Commons. But it fell short of the 155-seat majority mark, leading to the current crisis.

Curiously, the man (Dion) who will be Canada's new prime minister had led his Liberal Party to its worst-ever defeat in decades, reducing its tally from 95 to 77 in parliament.

He is scheduled to step down in May when his party chooses a new leader who will then become the prime minister.

What brought the opposition parties together was the last week's economic update by the ruling party which failed to announce any package to stimulate the economy and cut public funding for political parties.

An outraged Prime Minister Stephen Harper said Canadians will not like the overturning of ``the results of an election a few weeks later in order to form a coalition nobody voted for and everybody denied.''

Federal Workers Unions Want 'Burrowers' Lists

Federal Workers Unions Want 'Burrowers' Lists

By Carol D. Leonnig

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Two powerful employee organizations are pressing the Bush administration to prove that in its final weeks, political aides are not improperly winning career government jobs at the expense of more qualified workers.

Leaders of the American Federation of Government Employees, the largest union of federal workers, and the Senior Executives Association, the group representing federal executives, said they want the government to release lists of political appointees who have been hired for career jobs and show whether agencies sought competition for the positions.

The two groups said they are pressing the Office of Personnel Management for this information because they are concerned the agency is not carefully overseeing last-minute hires of political aides. They point to recent reports in The Washington Post and other evidence suggesting political aides are leaping over qualified candidates or avoiding competition as they "burrow" into the civil workforce.

"The recent Post articles raise the possibility that political candidates are being placed in Senior Executive positions for which they may be unqualified or less qualified than other candidates, or that their service as political appointees was given undue weight," SEA President Carol Bonosaro and general counsel William L. Bransford wrote to the OPM. Such favoritism "is a disservice to those Senior Executives who were selected purely for merit without political assistance."

The OPM reviews the hiring by most government agencies of political appointees into permanent career posts from March until Inauguration Day. Hires made within this time frame are viewed with some suspicion by federal employee unions because they cover a period when many loyal political aides face losing their jobs and may be searching for more secure positions.

OPM Associate Director Kevin Mahoney declined last week to provide The Post with a list of political appointees his agency had approved to be moved into career jobs from March to Nov. 3. Though such hires and job titles are public, Mahoney said it was not the "general practice" of the OPM to release them. The White House did not respond to a request for the same information.

In one case The Post found, the Drug Enforcement AdministrationJustice Department initially raised concerns about the DEA's plans to hire the employee with no competition. The DEA advertised the job for two weeks starting Oct. 26 and announced its selection Nov. 13. director hired a political aide to a career Senior Executive Service job -- the highest rank in federal service -- about a year after the same candidate was rejected as unqualified for a lower-level position. The

Bonosaro and Bransford said veterans know that jobs can be tailored for political friends and competition can be manufactured on paper by limiting the qualifications that will be considered, advertising the job briefly and narrowly defining duties. Political influence and pressure help clinch an unfair hiring selection, they said.

"I think OPM has just turned their back on their obligation," said John Gage, president of AFGE. "If OPM would do its job, they could make sure there weren't any musical chairs to land political people in SES and other positions."

Gage said he is disturbed by reports from members that the OPM has not warned agencies this year to avoid moving around senior executives in the final months of the administration in an effort to avoid the appearance of political influence. Gage said such warnings have gone out in past turnovers, most notably during the exit of the Carter administration, when there was a freeze on such moves.

"The prevailing thought that this kind of thing happens in every administration is just not good enough for me," he said of burrowing. "It has to stop."

GOP rush to change voting rules is ruse

GOP rush to change voting rules is ruse

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Before the election, there was lots of fretting that things could go really badly in Ohio and that the state could end up looking like Florida in 2000.

People said that in 2004, too, and what do you want to bet that they'll say it in 2012?

But Election Day went fine, thank you very much, and, for that, Secretary of State Jennifer Brunner and the 88 county boards of elections deserve kudos. Even though turnout wasn't as heavy as the predictions suggested, there were lawsuits and directives to respond to and conspiracy theorists to counter. Meanwhile, implementing the change that allowed people to vote early — without having to offer an explanation — put huge new demands on elections officials as they were trying to gear up for Election Day itself.

Notwithstanding the success, some lawmakers want Ohioans to believe that something needs to be fixed — right now. They're proposing to make changes in the early voting law in a lame-duck session of the legislature, rather than follow Secretary Brunner's request that everyone sit tight until after a December conference designed to be a bipartisan post-game wrap-up.

She wants to put together one piece of legislation and make any fixes all at once, when the new legislature takes over next year.

Republicans are not prepared to wait. They're adamant about changing a law that they themselves wrote in 2005 that — inadvertently — allows people to register and vote in the same visit for a one-week window about a month before the actual election. They say this opportunity to kill two birds with one stone opens the door to fraud because there's no time for boards of elections to check out a new registrant's information.

The rush to pass the legislation stems from two things. Democrats are taking over the Ohio House of Representatives in January. They're more supportive of so-called "instant voting" rules. So, even though Secretary Brunner, a Democrat, says she'll support eliminating the short time when people can register and vote, Republicans know she can't control Democratic lawmakers.

Moreover, Republicans have been eager to make Secretary Brunner out to be inept and/or corrupt in anticipation of trying to take her down in two years. She's up for re-election then, and if she and Gov. Strickland are both re-elected, Democrats would have the upper hand in a group that draws state legislative district boundaries. The dominant party in that process tries to draw districts that will give it a better chance of winning seats in the Ohio Legislature.

The Republicans' leading candidate to run against Secretary Brunner is Ohio House Speaker Jon Husted, of Kettering. He's already starting to compile his list of criticisms of Secretary Brunner. If he helps pass a law that remedies the potential "fraud" that Republican partisans have been hyping, that would be good for his political resume.

(But, again, remember it was the Republicans who didn't check the calendar to determine what they were doing three years ago when they created the overlap allowing registration and voting simultaneously.)

Another issue at hand is whether to allow county boards of elections to set up more than one polling place for early voters to cast their ballots.

Having just one spot — which is all the law allows now — makes for long lines. And one thing is for sure: Many people who voted early this year will want to do so again. No sense making the process a cattle call.

Elections are supposed to be political. The administration of them, however, should be resolutely nonpartisan. Rushing piecemeal bills through just so Republicans can say they fixed something is overstating the problem and overreacting.

High Court Case Tests Power Plants' Water Rules

High Court Case Tests Power Plants' Water Rules

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The U.S. Supreme Court hears an important environmental case Tuesday, testing whether utilities must use the best technology available to minimize harm to the nation's waterways. At issue is the physical impact on fish and the financial impact on companies.

The nation's 550 power plants use water — lots of water in some instances — that comes from lakes and rivers. Each day, more than 214 billion gallons of water is sucked into power plants across the country. That's tens of trillions of gallons each year.

The water cools the steam used in the electric generating process. And all the fish and aquatic organisms in the water are killed in the process.

In modern plants, little or no water is needed. Instead, the cooling is done with air, or sometimes with a different water system that uses small amounts of water and recycles it. The question in this case involves whether older plants must install new technology to minimize the harm to the nation's lakes and rivers.

The companies say installing the best technology is too expensive — the Bush administration adopted a rule that would allow utilities to get a variance from the Environmental Protection Agency if they can show that the cost of complying is greater than the environmental benefits.

Environmentalists contend that Congress specifically rejected the cost-benefit approach because Congress itself concluded the costs were worth the benefits to the environment. Opponents also say a case-by-case cost-benefit analysis would be too prone to manipulation.

"The Clean Water Act doesn't fare well if it becomes a cost-benefit statute," says Georgetown University law professor Lisa Heinzerling. "Lots of fish aren't really worth that much when it comes down to trying to put a dollar value on them."

Six states and environmental groups challenged the Bush administration's approach, contending that the language of the statute requiring the best technology available is clear and unequivocal. They won in the lower courts, and the utilities appealed to the Supreme Court.

The states point out that the utility plants sit on state lakes and rivers and use their water for free. In Rhode Island, for example, the Brayton utility plant takes in a billion gallons of water a day, killing every living thing in the water, says state Assistant Attorney General Tricia Jedele.

"Our fin fish and winter flounder populations have collapsed, and we've lost a viable commercial and recreational fishing resource that has been used by Rhode Islanders for millennia," Jedele says.

Environmental lawyer Reid Super adds that utility plants are enormously profitable. "The company never said it couldn't afford it," Super says. "They just said they didn't want to do it."

But the utilities counter that Congress never intended to impose new technology costs on the industry without weighing costs against benefits.

Carter Phillips, an attorney who represents a number of utilities, says, "If you don't have at least some cost-benefits analysis that's incorporated into this approach, the possibility of having to spend literally ... hundreds of millions of dollars to save a handful of fish strikes me as palpably absurd."

If you say no cost-benefit analysis is appropriate, he adds, "then you end up with this wildly out-of-sync regulatory scheme."

Phillips contends that weighing costs and benefits is something federal and state agencies do every day, and he thinks a Democratic Obama administration may weigh costs and benefits quite differently than the Bush administration did.

"Who's running the EPA may make a big difference in terms of what the cost-benefit analysis is going to look like," Phillips says.

So, if the standards for measuring costs and benefits are going to change anyway with a new administration, does it matter what the Supreme Court says in this case? You bet it does.

For more than a quarter-century, industry has tried to put a cost-benefit overlay on environmental regulations.

In the past, that effort has often come a cropper in the courts. Now, with the Supreme Court's new conservative composition, industry thinks it has a good shot at winning — and winning in a way that will affect all environmental regulations.

States Want $176 Billion Slice of Stimulus

States Want $176 Billion Slice of Stimulus

Governors to Ask Obama to Set Aside Federal Funds to Boost Local Economies

By Ceci Connolly

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When President-elect Barack Obama arrives at Philadelphia's Independence Hall today to meet with the nation's governors, the main question will be not whether he will deliver fast fiscal relief to the states, but how much?

Obama and congressional Democrats have promised that soon after Inauguration Day he will sign an economic stimulus bill that could exceed $500 billion. The governors intend to request about $176 billion of that -- $136 billion for infrastructure projects and $40 billion to bolster Medicaid health programs that serve the poor and disabled.

"The slowing economy is resulting in growing unemployment, increased demand for state services and significant declines in state revenues," said Gov. Jim Douglas (R-Vt.), who is vice chairman of the National Governors Association. "It's critical this happen as soon as possible."

As the economic downturn has swept from the housing market to financial institutions to the automobile industry, Obama has begun sketching out plans to address a recession that most experts project will be deep and long lasting. At the heart of his approach is a massive infusion of federal tax dollars.

"We have a consensus, which is pretty rare, between conservative economists and liberal economists, that we need a big stimulus package that will jolt the economy back into shape," he said recently. "Across the board, people believe that this stimulus is critical."

In a sign of the importance Obama is placing on relief to the states, the meeting with 40 current and newly elected governors will be his first trip outside Chicago since Election Day, with the exception of a brief visit to the White House.

The day before their meeting with Obama, Douglas and Gov. Edward Rendell (D-Pa.) were in Washington making the case for immediate federal aid. Already, 43 of the 50 states face budget shortfalls, they said. Gov. Arnold Schwarzenegger (R-Calif.) yesterday declared a fiscal emergency, estimating a gap of between $11 billion and $28 billion.

"Without immediate action, our state is headed for a fiscal disaster," Schwarzenegger said.

Unlike the federal government, which can run a deficit, most states are required to balance their budgets. In tough financial times, Medicaid often faces a double squeeze, said Diane Rowland, executive director of the nonprofit, nonpartisan Kaiser Commission on Medicaid and the Uninsured. Just as the money is drying up, more people are in need of assistance.

"When the economy is bad, the social service net demands grow," said Rendell, who is chairman of the governors association.

On average, the federal government pays 57 percent of Medicaid costs and states cover the rest. That means that for every $1 a state trims from its Medicaid budget, more than $2 is lost in health-care services.

Conversely, pumping money into Medicaid "has a double impact," Rowland said, by providing care to the neediest citizens and keeping local medical providers in business.

In response to the last economic downturn, Congress in May 2003 temporarily increased its Medicaid grants by $20 billion. A survey by the Kaiser commission found that the money "helped states to both balance their budgets and maintain Medicaid eligibility."

But a report by the Government Accountability Office concluded that the increase came too late after the 2001 recession to serve as an economic stimulus.

Steven Malanga, a senior fellow at the market-oriented Manhattan Institute, said it is unwise to bolster a program that has already stretched beyond its intended target of the very poor.

"Why don't states plan for this when the economy is good?" he said. "Why do they expand their subsidized health programs?"

Obama has taken a different approach, arguing throughout the campaign that expanding enrollment in government-subsidized health programs such as Medicaid and Medicare is one step toward ensuring that every American has health insurance.

In its most recent stimulus legislation, the Senate requested an additional $40 billion over two years -- an 8 percent increase -- in Medicaid funding. The bill died, but congressional Democrats and sources close to Obama said they expect to see a similar figure in legislation that will be debated shortly after the new year.

Similarly, it appears there is growing support for a sizable federal investment in infrastructure, which Rendell and Douglas said goes beyond the traditional road and bridge repairs to include public transit, water and sewer projects and even broadband Internet. The two governors said states have $136 billion worth of "ready-to-go" projects.

One voice of dissent in the Philadelphia meeting will likely come from Gov. Mark Sanford (R-S.C.).

"We're just putting off the day of reckoning," he said in an interview. "A problem created as a consequence of too much debt probably will not be solved by issuing more debt."

Rendell countered that there are different kinds of debt.

"This is the type of debt that actually produces something -- it produces an investment in our states and our economy," he said. "It produces jobs, it produces orders for businesses."

If Congress passes an economic stimulus bill of $500 billion to $700 billion, as Sen. Charles E. Schumer (D-N.Y.) expects, then $150 billion for infrastructure is "not outlandish," Schumer said.

"If we want to avoid a steep downward spiral, we need a strong injection quickly," he said. Spending on infrastructure "has a multiplier effect; it causes other people to be employed."

By Rendell's estimate, every $1 billion in infrastructure spending generates 40,000 "good, sustaining" jobs.