Trade Deficit Reaches All-Time High in February

The New York Times
April 12, 2005
Trade Deficit Reaches All-Time High in February
By THE ASSOCIATED PRESS

Filed at 11:52 a.m. ET

WASHINGTON (AP) -- The U.S. trade deficit, aggravated by surging imports of oil and textiles, soared to an all-time high of $61.04 billion in February.

The Commerce Department said Tuesday that the February imbalance was up 4.3 percent from a $58.5 billion trade gap in January as a small $50 million rise in U.S. exports of goods and services was swamped by a $2.58 billion increase in imports.

The surging trade deficit is leading to an increase in protectionist pressures as American textile and clothing manufacturers are lobbying the administration to limit imports of Chinese textile and clothing goods to ward off a flood of products now that global quotas have expired.

For February, imports of textiles and clothing from China rose by 9.8 percent even though America's overall trade gap with China actually narrowed to $13.9 billion, down by 9.2 percent from a January deficit of $15.3 billion. The improvement reflected an increase in U.S. exports to China and declines in other import categories outside of textiles.

For the first two months of this year, the trade deficit is running at an annual rate of $717.2 billion, a full $100 billion above the record imbalance of $617.1 billion set for all of 2004.

Wall Street was jolted by February's record deficit, which was worse than had been expected. The Dow Jones industrial average was down 70 points in late-morning trading.

Economists said the sharp deterioration in the trade deficit would trim economic growth in the January-March quarter, reflecting the fact that so much consumer demand is being met with foreign goods.

``Oil prices are surging and it is likely that we will see more trade deficit records set,'' said Joel Naroff, chief economist at Naroff Economic Advisors.

Trade deficits of this magnitude have raised worries among economists about America's ability to continue to attract the foreign financing needed to cover the shortfall between exports and imports. If foreigners decided to hold fewer dollar-denominated investments such as stocks and bonds, it could trigger steep declines in U.S. stock prices and a sharp increase in interest rates.

Critics point to the soaring deficits as evidence that President Bush's free trade policies are not working and have instead contributed to the loss of 3 million American manufacturing jobs since 2000.

The Bush administration argues that the deficit primarily reflects the fact that the U.S. economy has been growing at a much faster pace than the economies of its major trading partners, pushing up imports while dampening demand for U.S. exports. Treasury Secretary John Snow was expected to use a Saturday meeting of finance officials from the Group of Seven major industrial countries to once again lobby for Europe and Japan to pursue more growth-oriented policies.

The U.S. dollar has been declining for three years, a fact that should help narrow the trade deficit by making imports more expensive to American consumers while making U.S. exports cheaper. However, economists say the dollar needs to fall further to deal with the widening trade deficit, and they are predicting a further increase in the trade gap this year.

The record February deficit of $61.04 billion surpassed the old record of $59.4 billion set last November.

Imports of goods and services rose by 1.6 percent to an all-time high of $161.5 billion.

Demand for foreign petroleum products shot up 10.3 percent to $18.2 billion, the second highest level on record, surpassed only by $19.6 billion in imports of petroleum last November.

The February increase reflected higher prices as crude oil climbed to $36.85 per barrel, compared to $35.25 in January, offsetting a drop in the volume of oil imports. Analysts said America's foreign oil bill is likely to climb even further in months ahead, reflecting further increases in global oil prices.

Exports were up by $50 million to a record $100.48 billion in February, reflecting increases in shipments of drilling and oilfield equipment, civilian aircraft and pharmaceutical products. These gains offset declines in sales of U.S.-made cars and auto parts and food.

The administration, at the urging of U.S. textile and clothing manufacturers, has begun investigations into whether to re-impose quotas on Chinese imports of various products to protect the domestic industry from market disruptions following the removal of global quotas that had restricted shipments to the United States for more than three decades.

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Falling Fortunes of Wage Earners

The New York Times
April 12, 2005
Falling Fortunes of Wage Earners
By STEVEN GREENHOUSE

Beginning in the mid-1990's, pay increases for most workers slowly but steadily outpaced the rate of inflation, improving the living standards for nearly all Americans. But an unexpected reversal last year in those gains has set off a vigorous debate among economists over whether the decline is just a temporary dip or portends a deeper shift that may cause the pay of average Americans to lag for years to come.

Even though the economy added 2.2 million jobs in 2004 and produced strong growth in corporate profits, wages for the average worker fell for the year, after adjusting for inflation - the first such drop in nearly a decade.

"Pay increases are not rebounding, even though the factors normally associated with higher pay have rebounded," said Peter LeBlanc of Sibson Consulting, a division of Segal, a human resources consulting firm.

The problem is not with the jobs themselves. Most economists dismiss as overblown the widespread fear that the number of jobs will shrink in the United States because of foreign competition from China, India and other developing nations. But at the same time many of these economists argue that the increasing exposure of the American economy to globalization, along with other forces - including soaring health insurance costs that leave less money for raises - is putting pressure on wages that could leave millions of workers worse off.

"We're in for a long period where inflation-adjusted wages will be under acute pressure," said Stephen S. Roach of Morgan Stanley. "That's a most unusual development in a period of high productivity growth. Normally, real wages track productivity."

But some economists are more optimistic, saying that the wage sluggishness is temporary and that real wages have slipped only because a sudden spike in oil prices has briefly left workers behind the curve. These economists assert that wage stagnation will end soon, as normal growth brings a tighter labor market.

"What we're seeing now is not atypical; employers can't pay the wage bill to keep up with the oil price increase," said Allan H. Meltzer, an economist at Carnegie Mellon University. "I think the long-term trend will be that wages will right themselves and look like productivity growth on average."

The most commonly used yardstick of wages - the Bureau of Labor Statistics' measure of nonsupervisory private-sector workers, covering 80 percent of the labor force - fell 0.5 percent last year, after inflation. Real wages for these workers are now lower, on average, than two years ago. A broader measure, the employment cost index, which includes supervisors, managers and most government workers, dropped 0.9 percent.

At a Sprint call center in North Carolina, 180 customer service representatives are well aware of how such forces are squeezing them. Their jobs have not migrated overseas, but the employees just concluded their most bruising battle ever over wages.

The Sprint workers in Fayetteville emerged from negotiations that lasted months with a contract that left them with a pay freeze for last year and no definite increase for 2005. While the best performers are promised 2 percent merit raises, even those are likely to lag inflation.

"It's like their wages are in a severe coma," said Rocky Barnes, president of the union local. "Sprint said they had to restrain wages because the company's performance wasn't so good, but we think a lot of it has to do with offshoring."

Sandra J. Price, a Sprint vice president, took issue with union leaders. She said Sprint sought the freeze not because of low-wage competition overseas, but because benefit costs were soaring and the company felt the call center's compensation was generous for the area.

Whatever the explanation for Sprint's action, many economists, liberal and conservative, are perplexed by two unusual trends. Wage growth has trailed far behind productivity growth over the last four years, and the share of national income going to employee compensation is low by historic standards.

Mr. Roach of Morgan Stanley said wages were being held down by foreign competition; corporations that are moving jobs offshore; the uncertainty of businesses over demand; and management's ability to substitute computers and other devices to replace workers.

"These factors aren't going to go away," he said. "The competitive pressures for companies to hold the line on labor costs are intense, and the alternatives they have - technological substitution and offshoring labor - are growing."

The overall wage figures hide a split, with an elite group getting relatively large gains. In a study of census data, the Economic Policy Institute, a liberal research group, found that for the bottom 95 percent of workers, after-inflation wages were flat or down in 2004, but for the top 5 percent, wages rose by an average of 1 percent, with some gaining much more.

The upper-income group enjoyed strong pay increases largely because of bonuses, stock options and other inducements and because of robust demand in certain fields, like law and investment banking.

J. Bradford DeLong, an economist at the University of California, Berkeley, said that current wage patterns, while perhaps only temporary, did not conform to traditional economic explanations.

"You'd think that with the unemployment rate near 5 percent and productivity growth so strong, employers would be anxious to raise payrolls and would have plenty of headroom to raise wages," he said. "But they're not."

Since 2001, when the recovery began, productivity growth has averaged 4.1 percent a year; overall compensation - wages and benefits - has risen about one-third as fast, by 1.5 percent a year on average. By contrast, over the previous seven business cycles, productivity rose by 2.5 percent a year on average while compensation rose roughly three-fourths as fast, by 1.8 percent a year.

"The question is not whether corporations are seeking higher profits; the question is how come they're getting them to such a degree at the expense of compensation," said Jared Bernstein, an economist with the Economic Policy Institute. "I'm struck at how successful they've been at restraining labor costs."

Labor unions' declining bargaining power has given corporations a stronger hand to hold down wages, he argued, but more recent trends, including the emergence of Wal-Mart Stores as a central force in the economy, now play crucial roles, too.

Laurie Piazza, a Safeway cashier in Santa Clara, Calif., said she reluctantly voted to approve a pay freeze in the first two years of her union's three-year contract because Safeway insisted that it needed to hold down costs to compete with Wal-Mart. Her take-home pay will fall $20 a week because the contract reduces the premium for working on Sundays to 33 percent of regular pay, from 50 percent.

"We tried to get weekly pay increases, but the company wouldn't do it," said Ms. Piazza, who earns $19 an hour after 18 years on the job. "I think Wal-Mart has a lot to do with this. They're setting the model."

With Wal-Mart moving aggressively into California with supercenters, Safeway officials say they need to clamp down on what they consider high labor costs to meet the challenge.

Last year's double-digit rise in health costs helped squeeze wages as well; many companies also required employees to cover more of the premiums out of their own pay.

"Benefit costs are rising fairly substantially, and that may explain the tendency to hold down wages," said Sylvester J. Schieber of Watson Wyatt, a human resources consulting firm. "If you throw an extra 10 percent into your health plan, that can suck 1 percent out of your budget for compensation."

Many executives say they are offering raises that do not exceed inflation. Pitney Bowes, which provides mail and document-management systems, plans to offer merit raises averaging 3 percent this year, about equal to the expected inflation rate, compared with recent merit raises, also in line with inflation, averaging 2 percent to 2.5 percent.

"The past couple of years we've maintained a moderation of our wages," said Johnna G. Torsone, the company's chief human resources officer, who noted that the company has had to greatly increase spending on health and pensions.

While agreeing that these factors are important, Richard B. Freeman, a Harvard economist, predicted that new competition in the form of millions of skilled Chinese, Indian and other Asian workers entering the global labor market will increasingly pull down American wages.

"Globalization is going to make it harder for American workers to have the wage increases and the benefits that we might have expected," he said.

Facing intense foreign competition, Delphi, the auto parts manufacturer, has decided against any merit raises this year for its salaried workers. And at its air bag and door panel factory in Vandalia, Ohio, it persuaded unionized workers to accept a three-year pay freeze, warning that the plant would be closed otherwise.

"The majority of workers felt they had to agree to this," said Earl Shepard of the United Steelworkers local in Vandalia. "People here say the big problem is competition from Asia."

Lindsey C. Williams, a Delphi spokesman, said the company was seeking to keep the Vandalia factory "viable" and was working with the union.

Many economists say the nation may be returning to a period like 1973 to 1996, when inflation-adjusted wages stagnated or rose glacially. That era was a reversal from the golden years of 1947 to 1973, when wages marched steadily upward.

From 1996 to 2001, wages grew strongly again because of an unusually low jobless rate, caused in part by the high-technology boom. In the late 1990's, the tight labor market pressured companies to give sizable raises to attract and retain workers even as a surge in productivity helped business afford them without substantially cutting into profits.

Thomas A. Kochan, an economist at the Massachusetts Institute of Technology, said wages could once again rise, but only if there was especially robust economic growth.

"To produce real wage gains now, it takes sustaining a very tight labor market," he said. "Without that, we're going to continue to see what we're seeing now: abysmal growth in real wages."

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Federal Prosecutors Indict 15 Traders at Stock Exchange

The New York Times
April 12, 2005
Federal Prosecutors Indict 15 Traders at Stock Exchange
By TERENCE NEILAN
and COLIN MOYNIHAN

Fifteen former and current New York Stock Exchange specialist traders were indicted today on charges that they traded to benefit themselves and their firms at the expense of their customers in deals worth millions of dollars.

The 15, if convicted, face jail terms of 5 to 20 years and fines of at least $250,000 to $5 million, according to federal prosecutors.

The defendants, who worked for five leading specialist firms at the exchange, had a duty to investors "to execute their trades fairly and to put the investors' interests above their own," the United States Attorney for the Southern District of New York, David N. Kelley, said at a news conference today.

"Instead, these defendants are alleged to have systematically cheated the investors by putting their own interests and the interests of their firms before the interests of the unwitting investors."

In a brief explanation of the key role of specialist traders on the stock exchange floor, Mr. Kelley said purchases and sales were transmitted to the traders in one of two ways: either orally or electronically over the stock exchange computer system.

The traders are expected to buy and then sell within the same price range, Mr. Kelley said, and have what he called a unique knowledge of what the stock can sell for and what clients are willing to pay.

"Today's indictments allege that the named traders systematically violated" the rules of the exchange that they are obliged to follow in a variety of ways, Mr. Kelley said.

The traders traded ahead, by buying or selling stock for their companies' accounts, at prices that would be better than the public would get, Mr. Kelley said. They would also engage in inter-positioning, in which they buy the stock at one price and then turn around and sell it at a profit to another client, instead of executing a direct sale between interested parties, he added.

"The harm to investors by each of these specialists trading ahead ranged from some $400,000 to $5 million, for a total of nearly $20 million," Mr. Kelley said.

"The defendants functioned at the heart of the New York Stock Exchange," he said.

At the news conference, an official of the Securities and Exchange Commission, Mark K. Schonfeld, said the agency had instituted and at the same time settled today what he called an enforcement action against the New York Stock Exchange.

For almost four years, he said, the exchange failed to police the specialists, who he said "showed a disregard for their legal duty that was both profound and, at times, profane."

The stock exchange has not admitted or denied the S.E.C. findings, but it has agreed to several measures, including include an undertaking to set up a $20 million fund to finance audits of the regulatory program every two years through 2011.

The agency has also agreed to implement a pilot program for video and audio surveillance for the trading floor for at least 18 months.

The S.E.C. said it would bring an enforcement action against the 15 defendants named today, and five others who were not identified. The 20 will face civil administrative charges.

Fourteen of the traders named have turned themselves in and will be arraigned today in Federal District Court, Southern District. The 15th is believed to be living in the Netherlands and has not turned himself in.

The criminal case grew out of a civil action against seven firms, in which they agreed last year to pay $247 million for profiting from unnecessary trades that short-changed clients from 1999 to 2003. The traders, a number of whom were later fired, were said to have taken advantage of their knowledge of which way the market was moving.

Four of the defendants worked for Fleet Specialists Inc., now known as Banc of America Specialists; two worked for Bear Wagner Specialists; one worked for LaBranche and Company; another was employed by Spear, Leeds and Kellogg Specialists.

Seven others worked for Van der Moolen Specialists USA.

Seven of the defendants worked as floor officials, supervising and regulating trading floor activities, and another served as one of only 20 senior floor officials known as governors.

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The Bolton Nomination: An Effort to Derail?

The Bolton Nomination: An Effort to Derail?
Newsweek

April 18 issue - Are efforts to derail John Bolton's nomination as U.S. ambassador to the United Nations progressing? NEWSWEEK has learned that in a closed-door interview with Senate intelligence-committee staffers last week, Stuart Cohen, former acting chief of the National Intelligence Council, a panel of senior intel analysts, said Bolton had visited his CIA office to demand that the council's top Latin America expert be removed from his post. Sources say the expert, who can't be identified because he serves undercover overseas, tangled with Bolton about the draft of a speech Bolton made in 2002 claiming that Cuba was pursuing a germ-warfare program. A Senate intel-committee report last year quoted another WMD analyst from the State Department as saying that Bolton had also tried to have him transferred because he raised questions about the same speech. (Neither analyst was reassigned.)

Senate Democrats expect a witness will appear at Bolton's delayed confirmation hearing this week to testify about Bolton's alleged attempts to intimidate intel professionals. Intel sources say a review last fall of Cuban WMD programs by the entire U.S. intel community vindicated the analysts who questioned the draft of Bolton's speech. The review concluded that U.S. agencies had reason to doubt the accuracy of a 1999 intel estimate which Bolton used to justify his claim that Cuba had "at least a limited offensive biological warfare research and development effort." Senate Republicans don't believe that Bolton's criticism of analysts was out of bounds. Bolton declined to comment.

—Mark Hosenball

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2 in GOP Take Aim at DeLay

latimes.com

2 in GOP Take Aim at DeLay

House majority leader, facing questions over trips he took, is urged to 'lay out what he did.'

By Mary Curtius
Times Staff Writer

April 11, 2005

WASHINGTON — The near-solid wall of public support that Republicans have displayed for beleaguered House Majority Leader Tom DeLay began to crack Sunday, with a Senate leader saying the Texas Republican needed to "lay out what he did and why he did it" and a House member calling on him to step down from his leadership post.

DeLay, who last year was admonished three times by the House Permanent Select Committee on Ethics for his hardball political tactics, has been the subject of recent news reports involving trips he took that were indirectly funded by lobbyists or foreign agents — a violation of House rules.

DeLay's staff has said that the congressman knew only that the trips were paid for by nonprofit groups and that he had reported that on disclosure forms.

He also has been criticized for his association with a lobbyist who is under federal investigation.

Sen. Rick Santorum of Pennsylvania, a conservative who is the third-ranking Republican in the Senate, told ABC's "This Week" that DeLay needed to explain his actions.

"I think he has to come forward and lay out what he did and why he did it and let the people then judge for themselves," Santorum said. "From everything I've heard … everything he's done was according to the law."

In an interview Sunday with Associated Press, Rep. Christopher Shays of Connecticut — a moderate who is one of DeLay's most outspoken critics among House Republicans — was more blunt.

"Tom's conduct is hurting the Republican Party, is hurting this Republican majority, and it is hurting any Republican who is up for reelection," he said.

"My party is going to have to decide whether we are going to continue to make excuses for Tom to the detriment of Republicans seeking election."

Shays declined Sunday to elaborate on his views. But his press secretary, Sarah Moore, confirmed that the quotes were accurate and said that Shays intended them to be understood as a call for DeLay to resign as majority leader.

Moore said Shays was questioned by constituents about DeLay during town hall meetings in his district over the weekend.

During one of those meetings, in Greenwich, Conn., on Saturday, Shays was quoted by the Greenwich Time newspaper as saying: "Do I think Tom DeLay will be the majority leader by the end of this term? No."

Party strategists and some Republican members of Congress have said privately for weeks that DeLay's position as majority leader would be threatened only if the questions raised about his trips and his business associations began to resonate in Republican districts.

Both Santorum and Shays face reelection battles next year. Watchdog groups and Democrats have promised to target Republicans in advertising campaigns urging them to demand DeLay's ouster as majority leader.

Some groups have already started running ads and placing calls about DeLay to voters in targeted Republican districts.

Dan Allen, a spokesman for DeLay, refused to say whether Santorum's and Shays' comments were politically damaging.

"Congressman DeLay has been very effective in helping to build and strengthen the House majority, and for that reason alone the liberal groups funded by George Soros are attacking him," Allen said in a telephone interview Sunday. "The House Republican conference, as a whole, realizes that the attack is not just on DeLay alone, but a full-out attack on the House Republicans."

Soros is a billionaire activist who finances pro-democracy organizations in the U.S. and abroad and who poured millions into trying to defeat President Bush in November.

DeLay's troubles began last year, when the House Permanent Select Committee on Ethics admonished him for transgressions that included allegedly involving a federal agency in a Texas partisan matter and staging a fundraiser in a way that appeared to link access to the congressman with political donations.

In recent weeks, newspaper articles have detailed trips DeLay took to Russia, South Korea and Scotland that he had reported were funded by nonprofit organizations but that were directly or indirectly paid for by lobbyists or foreign agents. House rules prohibit members from taking trips funded by such entities.

DeLay has responded with an aggressive defense, rallying the support of House Republicans and conservative groups. In recent weeks, he led the congressional effort to involve the federal courts in the case of Terri Schiavo.

The brain-damaged Florida woman died March 31 after a state court sided with her husband and ordered her feeding tube removed.

DeLay has repeatedly rejected any notion that he violated House ethics rules by taking a golf trip to Scotland sponsored by Jack Abramoff, a onetime associate. Abramoff, a lobbyist, is under federal investigation for his dealings with Indian gaming interests.

The majority leader has said that all of his trips have been accounted for and that he looks forward to meeting with the chairman and the vice chairman of the House ethics committee to answer questions about his travels and business associations.

One House Republican leadership aide, speaking on condition of anonymity, said Shays' public attack on DeLay was not surprising.

"Chris Shays is watching his backside in a very tough district — he's the first person anyone would suspect who would distance himself from Tom DeLay, and the only one who has spoken on the record," the aide said.

But Santorum, the aide continued, "was off message. There are no questions for DeLay to answer. There are questions that lobbyists who are connected to him have to answer."

Shays won reelection to a 10th term in November by 4 percentage points amid criticism from his Democratic opponent that he had moved closer to the conservative DeLay and was no longer a moderate.

Shays told the Connecticut Post newspaper, in an article published Sunday, that the Democratic Party was calling voters in his district and urging them to ask him about DeLay and why Republicans kept him in power.

The Campaign for America's Future, a nonprofit organization supported by civil rights, labor and women's organizations, is running television ads in Washington and in DeLay's Texas district calling on Republicans to demand their leader's resignation.

The Public Campaign Action Fund, a campaign finance watchdog group, is running ads in three Republican districts, including that of the House ethics committee chairman, Rep. Doc Hastings (R-Wash.).

David Donnelly, the Public Campaign Action Fund's political director, said Sunday that Santorum's and Shays' comments showed there were "Republicans putting some distance between themselves and Tom DeLay. It creates some safe space for others who are contemplating doing the same."

Donnelly said Shays' call was not a surprise. He noted that the Connecticut lawmaker was the only House Republican to oppose — during a closed-door session in November — a move by DeLay to rewrite House GOP rules to ensure that he could stay on as majority leader even if he was indicted by a Texas grand jury.

Three fundraisers with ties to DeLay have been accused in Texas of funneling illegal corporate contributions to GOP candidates for state office.

House Republicans adopted the rules change, then rescinded it at DeLay's request two months later.

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A Tax Increase That Bush Didn't Mention

The New York Times
April 10, 2005

A Tax Increase That Bush Didn't Mention
By EDMUND L. ANDREWS

WASHINGTON

CYNICS have long predicted that the Bush administration, plagued by budget deficits, will eventually start raising taxes. But now it is becoming clear how it would do so: the alternative minimum tax.

Baffling in its complexity and often bizarre in its impact, the alternative minimum tax is a giant undeclared tax increase that will ensnare tens of millions of moderate-income families in the next several years.

It was created in 1969 to prevent the very rich from using tax deductions to avoid paying a fair share of taxes. But when the deadline for filing income tax returns arrives on Friday, the alternative minimum tax will require 2.9 million families to pay an average of about $6,000 more than what they would owe under traditional calculations

That is just the start. If current law remains unchanged, the alternative minimum tax is expected to wring an extra $33.9 billion from 18 million households in 2006. In 2010, it will rake in an additional $100 billion, and by 2015 an extra $200 billion.

Make no mistake: no one says they want that to happen. But it is one thing to rein in or eliminate the tax itself, and an entirely different matter to give up the money that it would generate.

President Bush has promised to fix the alternative minimum tax as part a fundamental overhaul of the tax code, and he has ordered a bipartisan advisory panel to come up with recommendations by the end of July.

But in giving the panel its marching orders, White House officials made it clear that they are counting on the extra money regardless of what happens to the alternative tax. Under the president's instructions, the panel's recommendations on addressing the alternative minimum tax are supposed to be "revenue neutral," neither raising nor lowering taxes, and to assume that his income-tax cuts will be made permanent rather than expire in 2010, as required under current law.

Making those ordinary income-tax cuts permanent would reduce the amount of available revenue by about $1.8 trillion over 10 years. But White House officials told the panel that any change to reduce or eliminate the alternative minimum tax would have to be offset by higher taxes someplace else.

"My understanding is that any reform in the A.M.T. that loses money would have to be made up with offsetting revenue," said Elizabeth Garrett, a panel member and a professor of law at the University of Southern California.

Jeffrey F. Kupfer, executive director of the tax panel and a former Treasury official, confirmed that interpretation. "Our mandate is to be revenue-neutral, and we are interpreting that with respect to the president's policy baseline, which does not include a permanent fix to the A.M.T.," he said in an interview last week.

Tax experts have long complained that the alternative minimum tax is a "stealth tax increase," one that Congress never intended and that is likely to catch millions of taxpayers by surprise. But a tax increase through tax reform could be even stealthier. If the alternative tax is reduced, the offsetting revenue increases are likely to be buried in so many other changes that most people would never know what hit them.

Seen or unseen, the looming tax increases are almost as large as the president's tax cuts. Leonard E. Burman, a senior fellow at the Urban Institute, estimated that the government would have to raise ordinary income tax rates substantially in every bracket to offset the money lost in each bracket by the elimination of the alternative minimum tax. People in today's 28 percent bracket, for example, would have to pay a top rate of 35 percent. Those who now pay a top rate of 33 percent would pay 41.4 percent.

"The A.M.T. is a huge tax increase built into current law," Mr. Burman said. "What the current law assumes is that over time we move to a tax that is much less progressive, that has atrocious marriage penalties and penalizes people with children who live in high-tax states."

Taylor Griffin, a spokesman for the Treasury Department, said the administration's goal was to prevent a hidden tax increase by replacing the alternative tax with something that was easier to understand and more predictable. "What we are trying to do is prevent a stealth tax that sneaks up on you," he said. "If we don't do something, millions of Americans will be facing unanticipated tax increases."

The alternative minimum tax is similar in some ways to a flat tax that blocks people from using most of the big deductions that reduce their taxable income under the normal rules. A married couple with a gross income of $100,000, for example, must first calculate its tax bill the traditional way, then again under the A.M.T. In the alternative calculation, the couple gets to exclude $58,000 from taxation, but it must also strip out all the personal exemptions and most itemized deductions.

The prohibited deductions include those for state and local taxes, medical expenses, employee business expenses and interest on home-equity loans. The A.M.T. would then apply a flat tax of 26 percent (28 percent for couples who earn more than $175,000). The couple must pay whichever is higher, the tax calculated under the traditional method or the one under the A.M.T.

The huge looming tax increase is caused by two things. The first is that the exclusion level for the alternative minimum tax is not adjusted for inflation, so the tax affects more people each year as nominal incomes go up. The second, paradoxically, stems from Mr. Bush's tax cuts of 2001 and 2003.

Those cuts reduced regular tax rates at all income levels but did not change the alternative minimum tax. At the same time, some of the cuts came in the form of expanded deductions - the child tax credit, child care tax credits and bigger exemptions for married couples - that are not allowed under the alternative formula.

The effect of making Mr. Bush's ordinary income tax cuts permanent would be significant. Mr. Burman, at the Urban Institute, estimated that the alternative minimum tax would generate about $69.2 billion in extra tax revenue in 2015 if the president's income tax cuts expired on schedule. But if the White House persuaded Congress to make the cuts permanent, the alternative minimum tax would raise a staggering $200.8 billion in that one year.

If the A.M.T. itself is pared back, how would that tax increase show up in practice? The possibilities are almost limitless, from higher tax rates for everybody to the abolition of popular tax deductions.

Administration officials are almost certain to insist that any tax reform result in lower tax rates and fewer deductions. Many Republicans long for a flat tax or a national sales tax, but that would mean abolishing or reducing sacred cows like the tax deduction for mortgage interest.

A potential trade-off, but a politically explosive one, would be to eliminate deductions for state and local taxes, which cost the Treasury about $40 billion a year and are a big reason that many people become subject to the alternative tax. But getting rid of those deductions would cause howls of protest in Democratic-leaning states like New York and California, which tend to have above-average tax burdens.

Thus far, the issues have been so tangled and vexing that both the White House and Congress have simply opted to block increases in the alternative minimum tax with one-year and two-year patches.

But that will become expensive. By about 2008, Mr. Burman estimates, the alternative minimum tax will generate so much money that it would be cheaper to abolish the regular income tax.

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** Save Phil **

Terrific presentation of the issue surrounding the filibuster:

(Turn on your sound before clicking the link below.)

Save Phil

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Democrats Seek to Block Bolton as UN Ambassador

Yahoo! News

Reuters

Democrats Seek to Block Bolton as UN Ambassador

By Saul Hudson

WASHINGTON (Reuters) - Democrats hope to block President Bush's pick to be the U.N. ambassador at a hearing on Monday expected to focus on allegations that nominee John Bolton sought to fire intelligence analysts who disagreed with him.


Bush's choice of a blunt-speaking, longtime detractor of the United Nations has been a lightning rod for criticism of the president from those who perceive he has forged a "go-it-alone" approach to U.S. foreign policy.

"When the country chooses an ambassador to the United Nations, it ought to avoid picking someone whose bullying style of leadership symbolizes everything that created the current estrangement between the United States and most of the world," the New York Times, said in an editorial last week.

Bolton is currently the top U.S. diplomat for nonproliferation. He said in 1994, "it wouldn't make a bit of difference" if the U.N. headquarters building lost 10 stories.

His supporters say Bolton will help shape a more effective United Nations which acts with strong U.S. leadership.

Democrats have denounced the choice as divisive and capable of jeopardizing Bush's attempts this year to repair diplomatic ties frayed in his first term over the Iraq war.

Leading up to the confirmation hearing at the Senate Foreign Relations Committee, they have zeroed in on accusations Bolton pressed for two intelligence analysts to be fired after they appeared soft on Cuba with assessments that contradicted his position.

"There's very credible information that Mr. Bolton tried to have analysts -- intelligence analysts, in at least two cases -- removed from their jobs because he was going to state a position which was in contradiction to the information that the intelligence community believed was correct," Sen. Christopher Dodd, a Democrat from Connecticut, told ABC.

Sen. Joseph Biden, the committee's ranking Democrat from Delaware, said of Bolton's alleged pressure, "In the post-9/11 environment, that's a very bad idea."

Senators' aides have conducted interviews in recent days to try and confirm the allegations, but committee chairman Richard Lugar, an Indiana Republican, told CNN they had failed to produce evidence supporting the accusations.

State Department spokesman Richard Boucher dismissed as "old stories" attacks on Bolton ahead of the hearing, which could stretch beyond Monday.

Democrats are trying to persuade at least one Republican on the committee to vote against Bolton in hopes of blocking the nomination, which would not advance on a committee tie.

Bolton's nomination sparked a flurry of lobbying.

A group made up mostly of former diplomats and arms control officials in a letter urged the committee to reject him, saying he "cannot be an effective promoter of U.S. interests at the U.N."

However, a group made up mostly of former defense officials countered with a letter that Bolton has Bush's confidence and would show "the sort of assertive representation of U.S. interests" that it said has been the hallmark of some of the most effective U.S. ambassadors to the world body.

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Shays: DeLay Should Quit As House Leader

Yahoo! News
AP
Shays: DeLay Should Quit As House Leader

By LOU KESTEN, Associated Press Writer

WASHINGTON - Private GOP tensions over Tom DeLay's ethics controversy spilled into public Sunday, as a Senate leader called on DeLay to explain his actions and one House Republican demanded the majority leader's resignation.

"Tom's conduct is hurting the Republican Party, is hurting this Republican majority and it is hurting any Republican who is up for re-election," Rep. Chris Shays, R-Conn., told The Associated Press in an interview, calling for DeLay to step down as majority leader.

DeLay, R-Texas, who was admonished by the House ethics committee last year, has been dogged in recent months by new reports about his overseas travel funded by special interests, campaign payments to family members and connections to a lobbyist who is under criminal investigation.

A moderate Republican from Connecticut who has battled with his party's leadership on a number of issues, Shays said efforts by the House GOP members to change ethics rules to protect DeLay only make the party look bad.

"My party is going to have to decide whether we are going to continue to make excuses for Tom to the detriment of Republicans seeking election," Shays said.

Rick Santorum, the No. 3 Republican in the Senate, said Sunday that DeLay needs to explain his conduct to the public.

"I think he has to come forward and lay out what he did and why he did it and let the people then judge for themselves," Santorum told ABC's "This Week." "But from everything I've heard, again, from the comments and responding to those, is everything he's done was according to the law.

"Now you may not like some of the things he's done," said Santorum, who is up for re-election next year in Pennsylvania. "That's for the people of his district to decide, whether they want to approve that kind of behavior or not."

DeLay's spokesman, Dan Allen, told AP that the congressman "looks forward to the opportunity of sitting down with the ethics committee chairman and ranking member to get the facts out and to dispel the fiction and innuendo that's being launched at him by House Democrats and their liberal allies."

Responding specifically to Shays' remarks later, Allen added that DeLay's "effective leadership has helped to build and maintain the Republican majority in the House and that's exactly why liberal groups funded by George Soros have set their sights on him."

The majority leader was admonished three times last year by that committee. The committee has been in limbo since March, when its five Democrats balked at adopting Republican-developed rules.

House Democratic leader Nancy Pelosi, D-Calif., said last week that the controversy was distracting DeLay from dealing with more pressing problems before Congress.

Santorum, however, said DeLay is "very effective in leading the House" and "to date, has not been compromised."

A senior Democratic senator, Christopher Dodd of Connecticut, had this advice for the Republicans who control both the House and Senate: "Be careful about how closely you embrace Mr. DeLay."

Dodd cited the new rules for the ethics committee that House Republicans rammed through in the wake of DeLay's difficulties. Those rules require a bipartisan vote before an investigation can be launched. DeLay's office also helped mount a counterattack last fall against Rep. Joel Hefley (news, bio, voting record), R-Colo., who was the ethics committee chairman when it came down against DeLay.

"Unfortunately, in his particular case, there's a process that he's tried to change so they could actually reach a determination as to whether or not he's innocent or guilty of the things he's been charged with," Dodd said. "But this is not going to go away."

DeLay "becomes the poster child for a lot of the things the Democrats think are wrong about Republican leadership. As long as he's there, he's going to become a pretty good target," Dodd said on ABC.

DeLay, who took center stage in passing legislation designed to keep alive Terri Schiavo, also has found that President Bush and congressional colleagues are distancing themselves from his comments, after her death, about the judges involved in her case.

"The time will come for the men responsible for this to answer for their behavior," DeLay said, raising the prospect of impeaching members of a separate and independent branch of government. Later, he complained of "an arrogant and out of control judiciary that thumbs its nose at Congress and the president."

Bush, declining to endorse DeLay's comments, said Friday that he supports "an independent judiciary." He added, "I believe in proper checks and balances."

Senate Majority Leader Bill Frist of Tennessee said last week that the judges "handled it in a fair and independent way," although he had hoped for a different result.

Democrats have said DeLay's remarks were tantamount to inciting violence against judges.

___

Associated Press Writers Lolita C. Baldor and Suzanne Gamboa contributed to this report.

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Average Retail Gas Prices Soar 19 Cents

Yahoo! News
AP
Average Retail Gas Prices Soar 19 Cents

By ALICIA CHANG, Associated Press Writer

LOS ANGELES - Gas prices soared an average 19 cents in the past three weeks due to lingering high crude oil prices, growing demand and higher refining costs, an industry analyst said Sunday.

The average retail price for all three grades increased 18.95 cents to $2.32 per gallon between March 18 and Friday, said Trilby Lundberg, who publishes the semimonthy Lundberg Survey of 7,000 gas stations around the country.

The most popular grade, self-serve regular, was priced at $2.29 a gallon, while customers paid $2.38 for midgrade. Premium averaged $2.48 a gallon for the period.

Crude prices, which briefly reached $58 last week, are likely to stay above $50 a barrel well into next year, Lundberg said.

"It's very possible that unless crude oil prices show another upsurge, then gas prices may have hit their peak already or will soon," she said.

Last week, the Energy Department said it expects gasoline prices to average $2.35 a gallon nationwide in May, the dawn of the heavy summer driving season. The Energy Information Administration reported that gasoline demand for this summer is projected to be 9.3 million barrels a day, up 1.8 percent over last summer, and the highest on record.

The highest average gas price in the nation for regular unleaded was $2.62 a gallon in Bakersfield. The lowest price was $2.06 in Newark, N.J.

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Bush's UN choice faces scrutiny

BBC NEWS
Bush's UN choice faces scrutiny
By Justin Webb
BBC News, Washington

US President George W Bush's controversial candidate for the US ambassadorship to the UN, John Bolton, will appear before senators today.

He will try to persuade them he is the right man for the job.

Mr Bolton, a senior State Department official, is an outspoken critic of the United Nations.

This is going to be an explosive session of the senate foreign relations committee, and could end in a political showdown with the White House.

At least one Republican on the committee has signalled that he might vote against Mr Bolton.

If all the Democrats opposed him as well that would be enough to hold up his appointment.

'Pragmatic'

Mr Bolton is one of the toughest campaigners in the Bush administration for a foreign policy based on American power and catering to narrowly define American interests.

Mr Bolton has made it plain that he dislikes the United Nations.

He once said that if 10 of the 38 stories of the UN building in New York were lost it would not make any difference.

Mr Bolton's supporters say he is intellectually capable and achieves results.

His boss, Secretary of State Condoleezza Rice, said of his nomination: "We've asked John because he gets things done."

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Most Area Terrorism Funding Not Spent

washingtonpost.com
Most Area Terrorism Funding Not Spent
Washington Last in U.S.; $120 Million Still Unused

By Spencer S. Hsu and Sarah Cohen
Washington Post Staff Writers
Sunday, April 10, 2005; Page A01

The Washington area has not spent the majority of $145 million in anti-terrorism grants awarded by the federal government over the past three years, including funds earmarked for such critical items as hospital beds and protective gear for rescue workers.

Long after the 2001 attacks on New York and Washington, homeland security spending across the country remains bogged down by administrative problems, back orders for equipment and long timelines to implement new technology, such as communications systems.

Although the Washington area is designated as high-risk, it has not spent $120 million of the federal aid it received between 2002 and 2004, according to the Department of Homeland Security. Local authorities said that spending fell behind in 2003 and that more time was needed to coordinate plans with Maryland, Virginia and 16 suburban jurisdictions.

The area, which has a spending rate of 17 percent, ranks last compared with the 50 states, according to data released to Congress and obtained by The Washington Post and CBS's "60 Minutes," which is scheduled to air a report tonight on waste in homeland security grants. The national spending average is 44 percent.

Local authorities said the ranking is misleading because it does not reflect that they have committed 80 percent of their funds, or $115 million, to projects underway for the District and its suburbs in Maryland and Northern Virginia. The inclusion of obligated funds, they said, is a fairer measure than counting dollars spent only after the work is completed.

Still, Washington will miss a June 30 deadline for spending $46 million that has been available for two years, the D.C. government said. Officials have asked for a half-year extension from the Department of Homeland Security to avoid losing the money.

The area's record in using federal dollars illustrates a major flaw in a homeland security grant funding system that doles out cash first and requires plans later, said Rep. Christopher Cox (R-Calif.), chairman of the House Homeland Security Committee. Cox is proposing legislation that would award more money to certain jurisdictions based on threat assessments and require states and regions to coordinate plans before applying for aid.

"The growing pains that we have experienced in the national capital region teach us valuable lessons for the rest of the country," Cox said. "One of the significant failings of the current system . . . is the lack of consistency in the way monies are spent. Across the country, there are notorious examples -- and too many of them -- of what can only be called government waste."

U.S. funding for first responders -- rescue workers -- flows mainly through a State Homeland Security Grant program, awarded mainly based on population and, increasingly, through an Urban Area Security Initiative aimed at 50 metropolitan centers designated as high-risk.

Under federal rules, the District receives the bulk of its funding through the program for high-risk centers. Responsibility for the money is shared across the region by advisers to the mayor and governors of Maryland and Virginia and the Department of Homeland Security.

Some of the region's unspent funds are earmarked for creating hospital-surge capacity for mass casualty events and equipping emergency workers with more breathing gear and protective clothing for attacks involving weapons of mass destruction. An additional $90 million in aid for this year became available Friday.

The region has made some progress. Local governments spent $25 million for baseline needs of police, fire and medical workers, including: obtaining 1,000 radios; starting a public emergency alert system; developing a disease surveillance network; and teaching preparedness to schoolchildren through a Masters of Disaster program.

Matt Mayer, acting executive director of the U.S. Homeland Security Department's preparedness office, said Washington faced a unique burden in having to bridge the federal, state and local governments.

"Frankly, I would expect the national capital region to be at a slower pace than other places," said Mayer, who declined to characterize the region's performance. "It is a learning process for all of us. . . . The key is for us to be working together."

So much federal money has flowed to the region in a short period of time that officials have veered between spending the money quickly and spending it carefully. After the terrorist strikes on the World Trade Center and Pentagon, the region received an initial $324 million in security funds with few guidelines or restrictions. In spending those funds, officials said speed was more important than coordination.

A Washington Post review of the spending found cases of duplication, waste and diversion of federal aid to pay for such items as leather jackets for police, a summer jobs program for D.C. teenagers, lucrative consulting contracts for political figures and redundant purchases of emergency command centers and vehicles across the region. Nearly 60 percent of the money, however, was spent within 22 months.

Edward D. Reiskin, deputy Washington mayor for public safety and justice, said that when a second wave of funds arrived in 2003, regional leaders knew they needed to slow the pace and improve coordination, but they lost focus. "We didn't organize quickly as a region to manage and plan for these expenditures as we might have," he said.

He said officials now move faster, spending in consultation with chief administrators from every jurisdiction and emergency operations chiefs. "It may be a little cumbersome, but it's what we want to do to make sure we hear from all voices," Reiskin said.

Nationwide, U.S. aid to first-responders -- which the Bush administration estimates at $13 billion -- has been beset with bureaucratic problems since increasing 30-fold in the year after the Sept. 11, 2001, attacks. Funds became stalled for months in federal and state administrative pipelines. Analysts warned that sparsely populated states received more per-capita aid than states with many targets such as New York. Cash-poor jurisdictions complained that they lacked the budgets to tackle big projects on a reimbursement basis, as required. Planning and accountability at all levels lagged.

In response to a series of critical reports by Congress and its own inspector general, the Homeland Security Department streamlined grant procedures last year; imposed deadlines for spending; approved checklists for equipment purchases; and increased state reporting requirements. The department just released a report setting interim national preparedness goals.

Dennis R. Schrader, homeland security adviser to Maryland Gov. Robert L. Ehrlich Jr. (R), said that though planning took "longer than what we would have liked," the region's many partners have learned to work together. "That, to me, is the first step. Those relationships are what is going to allow us to be effective."

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Failure as proof of good intent

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Bite as needed

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Political Capital

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Man gets nine years for spamming

BBC NEWS

Man gets nine years for spamming

A man has been sentenced to nine years in jail by a Virginia judge for sending millions of junk emails, or "spamming".

Jeremy Jaynes, 30, is the first person in the US to get a prison term in a spam case. He is said to have been the world's eighth most prolific spammer.

By selling sham products and services advertised in his messages, he earned up to $750,000 (£398,000) per month.

Jaynes has appealed, and the court has put off the start of his prison term because the new law raises questions.

Under Virginia law, sending bulk email using fake addresses is a crime.

"It was not just sending bulk emails, he was falsifying the routing information, disguising the origin," said prosecutor Lisa Hicks Thomas.

"The end user couldn't say: don't send this to me," she added.

Ms Thomas said she was pleased with the ruling and hoped it would be upheld.

'Never again'

Jaynes was operating though an America Online (AOL) server in Loudoun County, where the world's largest Internet services provider is based, and is believed to have sent some 10m unwanted emails a day.

Products advertised in his emails included a "Fed-Ex refund processor" which he claimed would have allowed people to earn $75 an hour by working from home.

Jaynes, who is from North Carolina, will appeal on the grounds that he has been charged as an out-of-state resident under a Virginia law that has only just come into effect.

His sentence is the harshest punishment handed down so far for junk emailing in the US, and appears to be a strong signal that authorities will not tolerate the spamming business.

Jaynes has pledged that regardless of the final outcome of his trial, he will never again be involved in what he called the "email marketing business".

It is believed that 70% of all emails are spam.

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US airline security chief quits

BBC NEWS

US airline security chief quits

The head of the agency responsible for airline security in the US has resigned after warnings that aircraft are still at risk from terrorist attack.

Transportation Security Administration (TSA) chief David Stone quit after just eight months in the job.

He is the third TSA boss to resign since the 11 September 2001 attacks.

Last month, an official US report said airliners were still vulnerable to terrorism, despite $12bn spent by the TSA on improving security.

The TSA gave no reason for Mr Stone's departure.

'Holes and weaknesses'

In a brief statement, TSA spokesman Mark Hatfield said: "Admiral Stone has informed [Homeland Security] Secretary [Michael] Chertoff of his intention to step down from TSA and has agreed to the department's request to remain until June to assist with the transition of a successor."

It follows the revelation in March that a confidential report compiled by the Department of Homeland Security and the Federal Bureau of Investigation (FBI) concluded airlines remained at risk to terrorist attacks, despite a raft of security improvements.

The report said commercial airliners were ''likely to remain a target and a platform for terrorists,'' and that the al-Qaeda terror network appeared determined to study and test new American security measures to ''uncover weaknesses".'

It also warned that terrorists could target helicopters and corporate jets or private planes parked at small airports where security is relatively weak.

Another report, by the Coalition of Airline Pilots (CAP), warned of "gaping holes" in aviation security.

The CAP report said screening of airport staff and cargo had not improved in the wake of 11 September 2001.

"The technology exists, or could be updated, to address many of these security problems, but neither the airlines, the airports nor government officials have given these issues the priority they deserve," the report warned.

The TSA has spent more than $12bn since the 2001 attacks on improving security, including new baggage screeners, more air marshals and making cockpit doors bullet-proof.

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Iraqis stage huge anti-US protest

BBC NEWS

Iraqis stage huge anti-US protest

Tens of thousands of protesters have marched through Baghdad denouncing the US occupation of Iraq, two years after the fall of Saddam Hussein.

Demonstrators loyal to Shia cleric Moqtada Sadr rallied in the square where the ousted Iraqi leader's statue was toppled in 2003.

The protest was the largest since the 30 January elections.

Earlier, insurgents killed 15 Iraqi soldiers travelling in a convoy south of the capital, police said.

'No to the occupiers'

Mr Sadr's supporters streamed from the Sadr City district to Firdos Square, where the statue was brought down on 9 April 2003, symbolically marking the end of Saddam Hussein's regime.


TWO YEARS ON
More than 130,000 US troops remain in Iraq
Unofficial estimates of civilian deaths range from at least 15,000 to almost 100,000
Iraqis face fuel shortages and have to buy essential goods at black market prices
Unemployment is estimated at between 25% and 50%

Protesters chanted anti-Western slogans such as "No, no to the occupiers", and "No America! No Saddam! Yes to Islam!"

The square was packed with demonstrators waving Iraqi flags and holding aloft effigies of US President George W Bush, UK Prime Minister Tony Blair and Saddam Hussein.

Iraqi security forces kept watch, while US troops were out of sight. There were no reports of violence

"I came from Sadr City to demand a timetable for the withdrawal of the occupation," one protester, named Abbas, was quoted by Reuters news agency as saying.

"The Americans wanted time and we gave them time, now we want to rule ourselves," he said.

Moqtada Sadr did not attend the rally. He is believed to have remained in Najaf since agreeing a truce with the US following clashes between US-led forces and Mr Sadr's Mehdi Army militia last August.

'Triangle of death'

Earlier on Saturday, the bodies of 15 Iraqi soldiers were found near the town of Latifiya, in a lawless area known as the "triangle of death".

There are conflicting accounts of how the soldiers died.

Police in the nearby town of Mahmudiya told Reuters news agency that gunmen forced the soldiers' truck to stop before shooting and killing them.

However, an Iraqi defence ministry official told AFP news agency that they were blown up by a roadside bomb.

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A Culture of Death, Not Life

The New York Times
April 10, 2005

A Culture of Death, Not Life
By FRANK RICH

IT takes planning to produce a classic chapter in television history. "We've rehearsed," Thom Bird, a Fox News producer, bragged to Variety before Pope John Paul II died. "We will pull out all the stops on this story."

He wasn't kidding. On the same day that boast saw print, a Fox anchor, Shepard Smith, solemnly told the world that "facts are facts" and "it is now our understanding the pope has died." Unfortunately, this understanding was reached 26 hours before the pope actually did die, but as Mr. Smith would explain, he had been misled by "Italian reports." (Namely from a producer for Sky Italia, another fair-and-balanced fief of Rupert Murdoch.) Fox's false bulletin - soon apotheosized by Jon Stewart, now immortalized on the Internet - followed the proud tradition of its sister news organization, The New York Post, which last year had the scoop on John Kerry's anointment of Dick Gephardt as his running mate.

Yet you could also argue that Fox's howler was in its way the most honest barometer of this entire cultural moment. The network was pulling out all the stops to give the audience what it craved: a fresh, heaping serving of death. Mr. Smith had a point when he later noted that "the exact time of death, I think, is not something that matters so much at this moment." Certainly not to a public clamoring for him to bring it on.

Mortality - the more graphic, the merrier - is the biggest thing going in America. Between Terri Schiavo and the pope, we've feasted on decomposing bodies for almost a solid month now. The carefully edited, three-year-old video loops of Ms. Schiavo may have been worthless as medical evidence but as necro-porn their ubiquity rivaled that of TV's top entertainment franchise, the all-forensics-all-the-time "CSI." To help us visualize the dying John Paul, another Fox star, Geraldo Rivera, brought on Dr. Michael Baden, the go-to cadaver expert from the JonBenet Ramsey, Chandra Levy and Laci Peterson mediathons, to contrast His Holiness's cortex with Ms. Schiavo's.

As sponsors line up to buy time on "CSI," so celebrity deaths have become a marvelous opportunity for beatific self-promotion by news and political stars alike. Tim Russert showed a video of his papal encounter on a "Meet the Press" where one of the guests, unchallenged, gave John Paul an A-plus for his handling of the church's sex abuse scandal. Jesse Jackson, staking out a new career as the angel of deathotainment, hit the trifecta: in rapid succession he appeared with the Schindlers at their daughter's hospice in Florida, eulogized Johnnie Cochran on "Larry King Live" and reminisced about his own papal audience with MSNBC's Keith Olbermann.

What's disturbing about this spectacle is not so much its tastelessness; America will always have a fatal attraction to sideshows. What's unsettling is the nastier agenda that lies far less than six feet under the surface. Once the culture of death at its most virulent intersects with politicians in power, it starts to inflict damage on the living.

When those leaders, led by the Bush brothers, wallow in this culture, they do a bait-and-switch and claim to be upholding John Paul's vision of a "culture of life." This has to be one of the biggest shams of all time. Yes, these politicians oppose abortion, but the number of abortions has in fact been going down steadily in America under both Republican and Democratic presidents since 1990 - some 40 percent in all. The same cannot be said of American infant fatalities, AIDS cases and war casualties - all up in the George W. Bush years. Meanwhile, potentially lifesaving phenomena like condom-conscious sex education and federally run stem-cell research are in shackles.

This agenda is synergistic with the entertainment culture of Mr. Bush's base: No one does the culture of death with more of a vengeance - literally so - than the doomsday right. The "Left Behind" novels by Tim LaHaye and Jerry B. Jenkins all but pant for the bloody demise of nonbelievers at Armageddon. And now, as Eric J. Greenberg has reported in The Forward, there's even a children's auxiliary: a 40-title series, "Left Behind: The Kids," that warns Jewish children of the hell that awaits them if they don't convert before it's too late. Eleven million copies have been sold on top of the original series' 60 million.

These fables are of a piece with the violent take on Christianity popularized by "The Passion of the Christ." Though Mel Gibson brought a less gory version, with the unfortunate title "The Passion Recut," to some 1,000 theaters for Easter in response to supposed popular demand, there was no demand. (Back-of-the-envelope calculations suggest that at many screens the film sold fewer than 50 tickets the entire opening weekend.) "Passion" fans want the full scourging, and at the height of the protests outside the Schiavo hospice, a TV was hooked up so the assembled could get revved up by watching the grisly original on DVD.

As they did so, Mr. Gibson interjected himself into the case by giving an interview to Sean Hannity asserting that "big guys" could "whip a judge" if they really wanted to stop the "state-sanctioned murder" of Ms. Schiavo. He was evoking his punishment of choice in "The Passion," figuratively, no doubt. It was only a day later that one such big guy, Tom DeLay, gave Mr. Gibson's notion his official imprimatur by vowing retribution against any judges who don't practice the faith-based jurisprudence of which he approves.

This Wednesday the far right's cutting-edge culture of death gets its biggest foothold to date in the mainstream, when NBC broadcasts its "Left Behind" simulation, "Revelations," an extremely slick prime-time mini-series that was made before our most recent death watches but could have been ripped from their headlines. In the pilot a heretofore nonobservant Christian teenage girl in a "persistent vegetative state" - and in Florida, yet - starts babbling Latin texts from the show's New Testament namesake just as dastardly scientists ("devil's advocates," as they're referred to) and organ-seekers conspire to pull the plug. "All the signs and symbols set forth in the Bible are currently in place for the end of days," says the show's adult heroine, an Oxford-educated nun who has been denounced by the Vatican for her views and whose mission is underwritten by a wealthy "religious fundamentalist." Her Julie Andrews affect notwithstanding, she is an extremist as far removed from the mainstream as Mel Gibson, whose own splinter Traditionalist Catholic sect split from Rome and disowned the reforms of Vatican II, not the least of which was the absolution of Jews for collective guilt in the death of Jesus.

It's all too fitting that "Revelations," which downsizes lay government in favor of the clerical, is hijacking the regular time slot of "The West Wing." Perhaps only God knows whether it will prove as big a hit as "The Passion." What is clear is that the public eventually tires of most death watches and demands new meat. The tsunami disaster, dramatized by a large supply of vivid tourist videos that the genocide in Darfur cannot muster, was so completely forgotten after three months that even a subsequent Asian earthquake barely penetrated the nation's Schiavo fixation. But the media plug was pulled on Ms. Schiavo, too, once the pope took center stage; the funeral Mass her parents conducted on Tuesday was all but shunned by the press pack that had moved on to Rome. By the night of his death days later, even John Paul had worn out his welcome. The audience that tuned in to the N.C.A.A. semifinals on CBS was roughly twice as large as that for the NBC and ABC papal specials combined. The time was drawing near for the networks to reappraise the Nielsen prospects of Prince Rainier.

If there's one lesson to take away from the saturation coverage of the pope, it is how relatively enlightened he was compared with the men in business suits ruling Washington. Our leaders are not only to the right of most Americans (at least three-quarters of whom opposed Congressional intervention in the Schiavo case) but even to the right of most American evangelical Christians (most of whom favored the removal of Ms. Schiavo's feeding tube, according to Time magazine). They are also, like Mel Gibson and the fiery nun of "Revelations," to the right of the largely conservative pontiff they say they revere. This is true not only on such issues as the war in Iraq and the death penalty but also on the core belief of how life began. Though the president of the United States believes that the jury is still out on evolution, John Paul in 1996 officially declared that "fresh knowledge leads to recognition of the theory of evolution as more than just a hypothesis."

We don't know the identity of the corpse that will follow the pope in riveting the nation's attention. What we do know is that the reality show we've made of death has jumped the shark, turning from a soporific television diversion into the cultural embodiment of the apocalyptic right's growing theocratic crusade.

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Revising the Patriot Act

The New York Times
April 10, 2005

Revising the Patriot Act

When Attorney General Alberto Gonzales, who is not exactly a renowned civil libertarian, says the Patriot Act may need some adjustments, it clearly has serious problems. The act, which was rushed through Congress after the Sept. 11 attacks, gives government too much power to invade the privacy of ordinary Americans and otherwise trample on their rights. Congress, which is now reviewing the act, should rewrite the parts that violate civil liberties. But it is important to realize that most of the worst post-Sept. 11 abuses did not stem from the Patriot Act. If Congress wants to restore the civil liberties Americans have lost in the last three and a half years, it must also look more broadly at the problems that have emerged from the war on terror.

After Sept. 11, Congress was in such a rush to pass the Patriot Act that, disturbingly, many members did not even read it before they voted for it. Fortunately, Congress made some of the most controversial provisions expire by the end of 2005. Last week, it began a series of hearings on the act, focusing on the parts that need to be reauthorized.

The debate over the Patriot Act is too often conducted in bumper stickers, in part because the details are so arcane. Parts of the law are reasonable law enforcement measures that have generated little controversy. But other parts unquestionably go too far, and invite the F.B.I., the C.I.A. and the White House to spy on Americans, and suppress political dissent, in unacceptable ways.

Libraries and Medical Records Section 215, often called the "library provision," is one of the most criticized parts of the act, with good reason. It allows the government to demand library, medical, and other records, and makes it a crime for the record holders to reveal that the request was made. Section 215 is written far too broadly. It lets the government seize an entire database - all the medical records of a hospital, all of the files of an immigration group - when it is investigating a single person. It also is far too invasive; it is hard to believe the F.B.I. needs to monitor library book circulation. If the searches are allowed, Section 215 should be tightened to give the government access only to records of a specific person it has legitimate reason to believe is involved in terrorism, not an entire database.

The "gag rule" that makes it illegal for the record holder to talk publicly about the search also is disturbing, because it prevents the public from knowing if the government is abusing these sweeping powers. If the gag rule remains, it should be limited, so record holders can speak about the search after a suitable period of time, or talk about it right away without revealing who the target was.

Secret Searches Section 213, the "sneak and peek" provision, lets the government search a person's home and delay telling him about it. These delayed-notification searches fly in the face of the strong American tradition that the government must announce when it is entering a home. Delayed-notification searches were of questionable legality before the Patriot Act, and Section 213 - which does not expire this year, but is still generating considerable debate - clearly goes too far. At the very least, it should apply only to terrorism cases, and not, as it now does, to all investigations. It should also have clear guidelines for how long notice can be delayed.

Secret searches are an area where focusing only on the Patriot Act misses the larger picture of civil liberties violations. There is another law, the Foreign Intelligence Surveillance Act, that allows a worse kind of secret search - one in which, unlike the delayed notification of Section 213, the subject may never be told about the search at all.

One way for Congress to deal with searches under the Foreign Intelligence Surveillance Act - as well as those under Sections 213 and 215 of the Patriot Act - is to monitor them closely, which is not being done now. Congressional staff members with appropriate security clearance should review all requests for warrants or subpoenas, and should follow up on the results of the searches. If the F.B.I., C.I.A. or other units of government are using these tools to spy on Americans without sufficient justification, Congress needs this information to rein them in.

Information Sharing Giving different units of government more power to share information about suspected terrorists is a laudable goal, but the Patriot Act's approach is flawed. It authorizes the F.B.I., the C.I.A., and even the White House sweeping access to confidential information gathered about Americans, including telephone and e-mail intercepts. The access is not limited to officials working on terrorism. And it sweeps in information, like confidential material acquired by grand juries, that has always been closely guarded. There is a real danger that the new regime established by the act could produce a massive database on Americans, freely available to all units of government.

The Patriot Act makes the same mistake the F.B.I. and C.I.A. have long made: favoring information quantity over quality. The universe of data that is shared should be narrowed, to focus on information closely related to suspected terrorism, and rather than being indiscriminately dumped, it should be given only to officials, at whatever agency, engaged in investigating terrorism. In the case of data collected subject to the special powers of a court, such as wiretaps and secret grand jury material, a judge's approval should be required before it is simply dumped into a general database.

Beyond the Patriot Act At last week's hearings, Mr. Gonzales conceded that the Patriot Act may need some adjustment, while the Justice Department is largely standing by the law, and the F.B.I. is even seeking to expand it. But a coalition of Republicans and Democrats in Congress, backed by such unlikely allies as the American Civil Liberties Union and the American Conservative Union, is pushing for changes. In the coming weeks, there will be more hearings on how the act can be improved.

These hearings should look beyond the Patriot Act, to the larger picture of civil liberties and the war on terror. After Sept. 11, the government rounded up illegal immigrants, and put hundreds with no ties to terrorism behind bars for months, often in deplorable conditions. The Justice Department's own inspector general found that the government made "little attempt" to distinguish people with ties to terrorism from those without. In conducting this roundup, the Bush administration gave itself far more power than the Patriot Act does. Under the act, aliens are to be held no more than seven days before immigration or criminal charges are brought.

Nor did the Bush administration rely on the Patriot Act for its lawless "enemy combatant" doctrine, the basis for holding American citizens suspected of terrorism indefinitely, without access to family members or lawyers. And the administration now claims that the C.I.A. has the right to secretly transfer suspected terrorists to foreign countries for interrogation. Critics of the process, known as rendition, say it is being used to subject these suspects to torture. The authority for rendition comes not from the Patriot Act, but from a classified directive that President Bush signed shortly after 9/11.

If Congress becomes too bogged down in the minutiae of the Patriot Act in coming weeks, it will be in danger of missing the larger picture. Revising the law should be the start, not the end, of its work.

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