Wednesday, June 10, 2009

Foreign, private sources paid for Pentagon travel

WASHINGTON (Reuters) - Pentagon employees have received millions of dollars in travel expenses from foreign countries and private industry, raising conflict of interest concerns, according to a study released on Wednesday.
The Center for Public Integrity study found that outside benefactors paid for more than 22,000 trips worth at least $26 million for U.S. military personnel and Pentagon civilian employees from 1998 to 2007.
The U.S. medical industry, manufacturing sector and the Chinese and Russian governments were among those who paid for the trips, often to popular vacation spots like Paris, Rome and Honolulu, according to the study.
"This is riddled with conflicts of interest and it is creating relationships that are worth an awful lot of money to these companies for relatively little spending," said Bill Buzenberg, executive director of the Washington-based interest group.
The Pentagon said the trips appeared to have been vetted through legal counsel to ensure compliance with travel and ethics regulations designed to avoid conflict of interest for defense employees who oversee billions of dollars in programs.
"Of course, the reason you know about this is because of the transparency of the system," Pentagon spokesman Bryan Whitman said.
The study cited a $24,000 trip taken by a deputy director of the Defense Security Cooperation Agency and his wife, which was paid for by Saudi Prince Miteb bin Abdullah bin Abdulaziz. The agency is responsible for programs through which foreign governments buy advanced U.S. weapons systems.
Foreign governments including Australia, Singapore, Japan and the United Arab Emirates paid more than $2.6 million for 1,500 trips during the nine-year period, it said.
The U.S. medical industry was the leading travel sponsor, paying out $10 million for some 8,700 trips taken by military pharmacists, doctors and others responsible for a $6 billion Pentagon prescription-drug budget, the study said.
Whitman said he was unaware of any change in Defense Department travel policy since 2007, the final year included in the study, which was produced in conjunction with Northwestern University's Medill School of Journalism.
(Reporting by David Morgan; editing by Paul Simao)

Source: Reuters

Obama focus on coalitions may buoy U.S. arms exports

By Andrea Shalal-Esa
WASHINGTON (Reuters) - The Obama administration's focus on building coalitions may spur more global arms sales for the world's leading weapons exporter, a welcome prospect for U.S. defense contractors facing a shrinking defense budget at home.
The global recession may dampen or delay the foreign appetite for weapons orders somewhat, but many countries' arsenals are in urgent need of modernization.
Even in tough economic times, countries generally view defense accounts as a top priority, particularly given mounting concerns about enemy missile attacks and other threats, said Eric Edelman, who served as undersecretary of defense for policy during the Bush administration.
Edelman, a former U.S. ambassador to Turkey and Finland, said demand would likely remain high for cutting-edge U.S. products such as precision munitions, unmanned aerial vehicles and missile defense capabilities.
"A lot of countries are going to be looking for American goods and services," said Edelman, a fellow at the Center for Strategic and Budgetary Assessments. "There is a good market out there."
U.S. defense cuts announced by Defense Secretary Robert Gates in April are also spurring American companies to pursue foreign orders more aggressively, he said.
BIG-TICKET COMPETITIONS
U.S. companies are already vying for huge fighter and helicopter orders from India, helicopter work in Australia and shipbuilding work for Saudi Arabia and others.
Exports should also be buoyed as orders materialize from Britain, Italy, the Netherlands, Turkey, Canada, Australia, Denmark and Norway -- the partner countries helping to develop Lockheed Martin Corp's F-35 fighter jet. Valued at over $200 billion, the radar-evading jet is the world's biggest weapons program.
Israel, Singapore, Japan and Spain were also interested in ordering the fighter, said Marine Corps Brigadier General David Heinz, head of the F-35 program. Work could start on pricing airplanes for Israel by the end of the year, he said.
Some lawmakers, keen to maintain production of the F-22 fighter, also built by Lockheed, have revived the idea of exporting that fighter to a select few allies, such as Japan.
At the same time, Lockheed's C-130 transport plane and Boeing Co's C-17 could pick up extra orders in Europe, given delays in the A400M plane developed by EADS.
Raytheon Co, which says big demand for Patriot missiles from the United Arab Emirates, Kuwait and Taiwan boosted global sales by 20 percent last year, forecasts even greater growth of 22 percent to 24 percent in 2009.
U.S. arms deals soared nearly 50 percent to $24.8 billion in 2007, accounting for 41.5 percent of all such agreements. The top five buyers were Australia, Turkey, Egypt, the United Arab Emirates and Iraq, according to the nonpartisan Congressional Research Service. [ID:nN04224011]
Analysts and industry executives say President Barack Obama is likely to continue the Bush administration's focus on training and equipping foreign militaries. Sales may even get a boost from Obama's drive to build coalitions and partnerships. Continued...
Source: Reuters

Senate Democrats unveil healthcare bill

Senate Democrats unveil healthcare bill
Lining up for free healthcare
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By Donna Smith
WASHINGTON (Reuters) - Leading Senate Democrats unveiled on Tuesday a plan to reshape U.S. healthcare that calls for sweeping insurance market reforms and prohibits insurers from denying coverage or charging more due to medical history.
The measure also would require individuals to buy insurance, provide subsidies to help make coverage affordable and set up a new government plan to help provide medical coverage for the uninsured.
The Senate Health, Education, Labor and Pensions Committee's bill is one of at least three healthcare proposals brewing in Congress, which Democrats hope will lead to legislation that President Barack Obama can sign into law by October.
"Our goal is to strengthen what works and fix what doesn't," Senator Edward Kennedy, chairman of the committee, said in a statement that accompanied the bill's unveiling.
Democrats in the U.S. House of Representatives and a second group of U.S. senators led by Senate Finance Committee Chairman Max Baucus are developing similar proposals. Baucus has been working with Kennedy's panel and is expected to unveil his version of the bill in the coming days.
Meanwhile Democratic members of the House Ways and Means Committee, one of three panels writing the House version of the bill, met with Obama to discuss the legislation. The White House issued a statement saying the group agreed that the cost of the overhaul, which some estimates put at about $1.2 trillion, should not add to budget deficits.
The White House said Obama -- under pressure from critics over his huge spending and deficit plans -- would soon spell out more cost savings for the Medicare and Medicaid health programs for the elderly and poor.
MORE WORK NEEDED
The Kennedy panel will hold a public hearing on its bill on Thursday and will begin considering amendments in public sessions beginning on June 16, the committee said.
"Much work remains, and the coming days and weeks won't be easy. But we have a unique opportunity to give the American people, at long last, the health care they need and deserve," said Kennedy, who is in his second year of fighting brain cancer.
Obama has called on Congress to pass legislation this year to overhaul the $2.5 trillion healthcare system, aiming to cut costs and ensure that millions of Americans now without health insurance get coverage.
But many congressional Republicans have criticized Democratic proposals for including a public insurance program that would compete with private insurers.
In a bow to Republican concerns, Kennedy's committee bill leaves open the details of how such a plan would operate. Panel Democrats and Republicans are set to meet this week to try to work out differences over the public plan.
Also still to be worked out are details on whether employers would be required to offer insurance to workers.
The House and Senate bills would establish an exchange, a kind of clearinghouse, where people and small businesses could shop for insurance. Lawmakers want the proposed new public plan to be an option offered in that exchange. Continued...
Source: Reuters

Geithner: Recovery efforts to dominate G8 talks

Geithner: Recovery efforts to dominate G8 talks
Geithner sees signs of improvement
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By David Lawder
WASHINGTON (Reuters) - Treasury Secretary Timothy Geithner said on Tuesday the main goal of this weekend's meeting of Group of 8 finance ministers is to "take stock" of efforts to stimulate economies and stabilize financial systems.
Geithner told a briefing that efforts to ensure an economic recovery takes hold are "still the dominant preoccupation of policy everywhere" despite signs that the economic crisis may be starting to ease.
Geithner will meet with his counterparts from the Group of Eight top industrial countries in Lecce, Italy, on Friday and Saturday. The ministers will to try to build consensus for financial reforms ahead of a G8 leaders' summit in Italy in July.
Geithner said he would discuss the U.S. experience with stress-testing the capital levels of banks, but did not plan to judge other countries' standards for examining their banks.
"Mostly what I'll do is explain what we've done here, and I'd expect they will do the same," he said.
"They're going to make different judgments than we are partly because they are going to have different systems, different constraints and different opportunities and what matters to all of us, are they going to achieve enough? That's the standard we should be held to and that's the standard that I think we'll hold them to,"
Geithner said he will underscore that the tests of the top 19 U.S. banks provided a level of disclosure and clarity that has improved confidence in the U.S. financial system and attracted private investment flows into bank shares.
Canadian Finance Minister Jim Flaherty said earlier that the G8 ministers would continue to apply pressure for stress testing at the weekend talks.
Edwin Truman, who until recently was an adviser to Geithner on international issues, said he believed it would be useful for Geithner to discuss the benefits of the stress tests and how they could be applied to European countries.
"It's not wise to go around finger pointing, but it's fair to say that we think what we did was beneficial and we learned a number of lessons from that," said Truman, a senior fellow at the Peterson Institute for International Economics in Washington.
REFORM AGENDA
Geithner said he believed the appetite for regulatory reform among his G8 counterparts had not been diminished by signs of stabilization. The Obama administration on June 17 is expected to unveil legislative proposals for sweeping new rules aimed at preventing future financial crises.
"One reason we want to move quickly is that we don't lose the motivation for reform that's provided by the...knowledge of the extent of the damage from basic failures" of the current system, he said.
Geithner believes the Treasury has a lot of support among U.S. lawmakers, among the financial community to reform the core of problems that made the U.S. system vulnerable. He said he plans to discuss these issues with his counterparts.
Regarding rising concerns about deficits, he said he will reiterate the Obama administration's views that stimulus actions are "necessary temporary (and) would be reversed as soon as a foundation for recovery was put in place.
(Editing by Leslie Adler)

Source: Reuters

Senator Dodd urges Fed to act soon on overdraft fees

Senator Dodd urges Fed to act soon on overdraft fees
WASHINGTON (Reuters) - Senate Banking Committee Chairman Christopher Dodd said on Tuesday that he is pressing the Federal Reserve to act quickly to prohibit banks from automatically charging overdraft fees on debit card and ATM transactions.
The Connecticut Democrat said in a letter to Fed Chairman Ben Bernanke that consumers should be given the opportunity to "opt-in" to these fee-based overdraft programs instead of automatically applying them.
"I am concerned that some financial institutions may be increasing overdraft fees or creating new ones, which often take consumers by surprise and may bear little relation to the actual amount of overdraft," Dodd said in a statement.
The central bank is mulling new rules on whether customers should be allowed to choose whether they want to participate in the overdraft program which can involve fees and charges if a customer withdraws more money than is in the bank account when using a debit card or an automatic teller machine.
The Fed is expected to issue a set of final rules by the end of the year, as Dodd and other congressional Democrats pile on the pressure to help consumers struggling in the current economy, as they did with the credit card reform legislation.
The Fed is considering whether to allow the consumer to opt-in or opt-out, which would automatically place the customer in the overdraft protection unless the bank is notified.
Currently many banks automatically include customers in overdraft plans on their debit and ATM transactions.
"I ask that you adopt the opt-in approach to overdraft fees in the final rule," Dodd said in his letter to Bernanke.
Banks, which are facing new credit card rules, also have been criticized for manipulating the sequence of transactions to maximize fees.
In the House of Representatives, Carolyn Maloney, a New York Democrat, has introduced legislation to rein in overdraft fees.
The public comment period on the Fed's proposals closed on March 30. The Fed is expected to evaluate the comments and conduct additional consumer testing, as it did with credit card practices, before issuing final rules.
(Reporting by John Poirier; editing by Carol Bishopric)

Source: Reuters

Top California lawmaker aims to tap rainy-day funds

Top California lawmaker aims to tap rainy-day funds
By Jim Christie
SAN FRANCISCO (Reuters) - A top California lawmaker on Tuesday countered Gov. Arnold Schwarzenegger's budget plan that would slash spending and scrap various programs to fill a $24.3 billion gap with a proposal that requires spending cuts but also taps reserves to help narrow the deficit.
Revenues of the most populous U.S. state have plunged amid recession and rising unemployment, swelling the budget gap and forcing state officials to agree to some form of austere budget for the fiscal year beginning in July.
Schwarzenegger, a Republican, has urged dramatic spending cuts that would include eliminating the state's welfare program, a proposal too severe for Democrats who control the state's Legislature.
They agree there is a need to pare spending but would use rainy-day funds to keep the welfare program and other human-services programs in business, State Senate President Pro Tem Darrell Steinberg told reporters.
"The purpose of a rainy-day fund is to provide reserves for a rainy day," Steinberg said. "It is thunder and lightning in California right now."
Steinberg would cut $13 billion in spending and use up to $4 billion of the estimated $4.5 billion reserve that Schwarzenegger has in his budget plan to help fill California's budget shortfall.
Additionally, Steinberg said he aims to have a budget through the Legislature by the end of this month and that it would not include borrowing $2 billion from local governments as Schwarzenegger's plan proposes.
"We are not going past July 1. We're getting it done. We have to," Steinberg said.
NEED FOR SPEED
California lawmakers typically disregard their June 15 budget deadline and routinely let the state government start its new fiscal year without a budget in place, a perennial irritant to credit rating analysts evaluating California's general obligation debt rating, the lowest of any U.S. state.
Schwarzenegger and lawmakers this year, however, may buck the habit of late budgets because California's financial situation is so pressing to its bond holders, Wall Street and the U.S. government, which some analysts say may need to mount a financial rescue because the state is "too big to fail."
Last month, Fitch Ratings warned California its 'A' long-term credit credit rating may be lowered, another blow helping to focus the Legislature's attention on the budget.
Last month's special statewide election also sent a message to the Legislature. Voters rejected a number of budget-related ballot measures, effectively telling state officials to tackle fiscal policy on their own, according to analysts.
"I'm hearing from folks there is more intensity" among lawmakers, said Steven Frates of Claremont McKenna College's Rose Institute of State and Local Government. "I'm sensing a different vibe this time ... The 'fed-upness,' to coin a term, of the population is starting to manifest itself."
California's budget woes are not confined to the state capital of Sacramento. Local officials are bracing for spending cuts and the potential for Sacramento to borrow funds. Continued...
Source: Reuters

Senate Democrats unveil healthcare reform bill

Senate Democrats unveil healthcare reform bill
By Donna Smith
WASHINGTON (Reuters) - Leading Senate Democrats unveiled on Tuesday a plan to revamp U.S. healthcare that calls for sweeping insurance market reforms and prohibits insurers from denying coverage due to pre-existing medical conditions.
The bill from Democrats on the Senate Health, Education, Labor and Pensions Committee is one of at least three major healthcare proposals brewing in Congress, which Democrats hope will lead to landmark legislation that can be sent to President Barack Obama to sign into law by October.
"Our goal is to strengthen what works and fix what doesn't," Massachusetts Sen. Edward Kennedy, chairman of the committee, said in a statement that accompanied the bill's public unveiling.
"Over the next few days, we will continue working with our Republican colleagues on common sense solutions that reduce skyrocketing healthcare costs, assure quality care for all and provide affordable health insurance choices," Kennedy said.
Democrats in the U.S. House of Representatives and a second group of U.S. senators led by Senate Finance Committee Chairman Max Baucus are developing similar proposals. Baucus has been working with Kennedy's panel and is expected to unveil his version of the bill in the coming days.
The Kennedy panel will hold a public drafting session on the bill next week, an aide said.
"Much work remains, and the coming days and weeks won't be easy. But we have a unique opportunity to give the American people, at long last, the healthcare they need and deserve," Kennedy said.
Obama has called on Congress to pass legislation this year to overhaul the $2.5 trillion healthcare system, aiming to cut costs and ensure that millions of Americans now without health insurance get coverage. The government said 46 million Americans went without any health insurance in 2007.
Healthcare costs burden many U.S. businesses and families and eat away at federal and state budgets.
Many congressional Republicans have criticized Democratic proposals for a new government-run insurance program that would compete with private insurers. People 65 and older, the disabled and the poor already are eligible for the public Medicare and Medicaid insurance plans.
INSURANCE CLEARINGHOUSE
The House and Senate bills would establish an exchange, a kind of clearinghouse, in which individuals and small businesses could shop for insurance. Democratic lawmakers want the new public insurance program to be an option offered in the exchange.
Democrats say a public plan that would compete with private insurers is the only way to ensure cost containment and low premiums. Republicans and insurers argue that would drive insurance companies out of business and lead to a government-run U.S. healthcare system.
Both the House and Senate versions of the bill are expected to include a requirement for individuals and businesses to obtain insurance, but a Senate aide said some details of the requirement still need to be worked out in the Senate bill.
In a sign of the high priority given the healthcare legislation, the Senate Democratic leadership has moved back consideration of reform of financial services regulations in order to concentrate on healthcare, a Senate Banking Committee aide said.
(Writing by John Whitesides; editing by Will Dunham)

Source: Reuters

U.S. Senate panel oks drilling near Florida coast

By Jasmin Melvin
WASHINGTON (Reuters) - The U.S. Senate Energy and Natural Resources Committee adopted an amendment to an energy bill that would allow drilling within 45 miles of Florida's Gulf coast.
Florida now bans oil and gas drilling within 125 miles of its coasts in the Gulf of Mexico with the aim of protecting its tourism from pollution and ruining views from its beaches.
The new language offered by Senator Byron Dorgan passed by a 13-10 vote and would also open the Destin Dome area 24 miles south of Pensacola to drilling.
The American Petroleum Institute estimates the Destin Dome area has at least 2 trillion cubic feet of natural gas, enough to heat 2 million homes for 15 years.
The agency said the entire area in the eastern portion of the Gulf of Mexico that would be opened to drilling under this legislation could contain 3.7 billion barrels of oil and 21.5 tcf of natural gas.
The Senate panel also approved an amendment that clarifies that federal agencies are not barred from purchasing fuels developed from Canadian oil sands. The 2007 energy bill included a measure that blocked the federal government from buying alternative fuels with greenhouse gas emissions higher than conventional sources. It was aimed at liquid fuel derived from coal, but unintentionally affected oil sands.
The committee is expected to approve the entire energy package later in the week. Senate Majority Leader Harry Reid said earlier this year that he wanted to combine the energy bill with legislation addressing climate change. Committee Chairman Jeff Bingaman said he would support whatever decision Reid makes on how to move the bill through the chamber.
But the bill may face a rocky road on the Senate floor as both Democrats and Republicans on the committee had objections to certain proposals.
Democratic Senator Mary Landrieu made an impassioned plea for revenue sharing for states, offering a second degree amendment.
Her proposal, which was defeated, would have given 37.5 percent of the revenues the government receives from oil and gas leases to coastal states, specifically Alabama, Florida, Louisiana, Mississippi and Texas.
Senator Jeff Bingaman pointed out that the proposal would, over the life of offshore drilling, take some $653 billion to $790 billion away from the U.S. Treasury Department, already struggling to handle a massive deficit.
Florida Democratic Senator Bill Nelson, though not a member of the committee, said the amendment would cut into the U.S. military's largest testing and training area in the world.
"We will have a bunch of senators filibuster this if we have to protect the interest of the U.S. military," he told reporters.
The panel voted down an amendment that would have allowed energy companies to tap oil in Alaska's Arctic Natural Wildlife Refuge through directional drilling based outside the refuge's boundaries, going under the reserve at an angle.
(Additional reporting by Ayesha Rascoe; Editing by Marguerita Choy)

Source: Reuters
 

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