Apparently in the 1990s, Christine O’Donnell was a purveyor of Vince Foster conspiracy theories. Allegedly that makes her some kind of nut. But I think people are forgetting how mainstream said theories were—all over the Wall Street Journal editorial page, touted in The New York Post, and part and parcel of the whole then-influential American Spectator scene.
PG&E Never Used $5 Million Rate Hike It Touted For Repairs To Fix Pipeline It Admitted Was ‘High Risk’
Last week, a natural gas pipeline exploded in a San Bruno, California, neighborhood. The explosion, which let loose “a thunderous roar heard for miles,” destroyed scores of homes and killed at least four people.
Now, a consumer advocacy group has discovered that the company that operated the faulty pipeline, Pacific Gas & Energy (PG&E), had classified it as “high risk” and failed to utilize the funds it had collected from a rate hike to repair it. The Utility Reform Network (TURN) has obtained documents detailing the energy giant’s request to the California Public Utilities Commission (PUC) for a rate hike in 2007. PG&E asked the PUC for permission for a $5 million rate hike to “replace a section of the same pipeline that blew up in San Bruno.” The PUC approved PG&E’s request, allowing it to hike its rates so that it could repair the line in 2009.
Yet the energy giant failed to go through with its scheduled repairs. And in 2009, it once again requested a rate hike from the PUC, again for $5 million. In its request, PG&E warned that if “the replacement of this pipe does not occur, risks associated with this segment will not be reduced. Coupled with the consequences of failure of this section of pipeline, the likelihood of a failure makes the risk of a failure at this location unacceptably high.” Despite these admitted risks, the company could only promise to make its repairs by 2013.
Local news station KTVU asked PG&E President Chris Johns why his company failed to make the repairs on schedule, despite recognizing that the pipeline was a considerable risk and using a rate hike on consumer to do it. “Some things happen when we’re going down, and a year later maybe some other item becomes more emergent that we need to fix,” replied Johns. “And so that’s why we will redirect funds to take care of the things that are urgent today, and then go back and say what are the things that are urgent tomorrow.”
While the company failed to spend the $5 million it took from customers in 2009 to repair the faulty pipeline, it did spend that exact same amount in the same year on bonuses for its executives, according to TURN. Many California families are worried about future pipeline disasters, but the company is refusing to reveal the locations of its other underground pipelines, citing possible terror threats. Assemblyman Jerry Hill (D-San Mateo) is considering legislation to force PG&E to reveal the locations.
Update
Calitics notes that while PG&E failed to use the millions it charged consumers in rate hikes to repair its pipeline, it did manage to spend millions of dollars supporting Proposition 16, which would’ve allowed it to secure its monopoly over the power sector in the state.
New START Ratification Should Be Inevitable Now – Reid Should Find The Time
The Senate Foreign Relations Committee just voted 14-4 to approve the New START Treaty. The treaty got strong bipartisan support with Republicans Bob Corker (R-TN), Johnny Isakson (R-GA), and Richard Lugar (R-IN) all voting in support. This is a huge accomplishment and should make the ratification by the full Senate all but inevitable.
The Foreign Relations committee was not friendly territory for this treaty. It is packed on the Republican side with very conservative Senators from Tennessee, Georgia, Mississippi, South Carolina, Oklahoma, Wyoming, Idaho, and Indiana. These states are anything about liberal. While Richard Lugar has long been a leader on nuclear issues, getting Corker and Isakson is a real coup and clears the path for more moderate Senate Republicans to vote for the treaty.
To get to 67 senators, all the Administration needs is at least 5 more Republicans in addition to Lugar, Corker, and Isakson – there are 59 votes from the non-Republican Senators. There are at least three likely votes from Republicans from New England (Snowe (R-ME), Collins (R-ME), Brown (R-MA)), Lamar Alexander (R-TN) and Bob Bennett (R-UT) have already said they hope to support it. With those 8 Republicans the START treaty would pass. In addition to those eight though, Senators Voinovich (R-OH), Hatch (R-UT), Grassley (R-IA), Gregg (R-NH), Murkowski (R-AK), Lemieux (R-FL), McCain (R-AZ), Graham (R-SC), and Cochran (R-MS) are all potential yes votes as well. In other words, now that Corker and Isakson have in a sense broken the dam of Republican resistance, getting to 67 is not as arduous as it may have once seemed.
But there is a chance that the Democrats in the Senate will grab defeat from the jaws of victory.
Instead, of fast-tracking the treaty to the floor and getting it done, Senator Kerry and Senator Lugar both called for it to wait until after the election when the partisan climate will apparently have cooled. This is a mistake. Their argument makes much less sense in the aftermath of the committee vote. We are – at this very moment – in the midst of a heated partisan election environment and the treaty just got two very conservative southern Republicans to vote for it. Also, it is not as if the New START treaty is setting the campaign trail ablaze.
The momentum is on the treaty’s side now and it is unknown how Republicans will react to voting for the treaty in the lame duck. Additionally, after the November election the Republican presidential primary will begin in earnest and, as Mitt Romney op-ed in July reminds us, this could become easy right-wing political fodder.
In fact, the political moment may be ideal for Reid to bring up the treaty. Many Republicans in the Senate are smarting after tea party extremist Christine O’Donnell’s victory, which has only made Republicans look even more extreme. New START could give Republicans an opportunity to demonstrate a degree of moderation and seriousness about governing, especially to pundits inside the beltway like David Broder.
And while Republicans may fear giving Obama a “victory” before the election, if the treaty was backed by the Republican leadership of Kyl and McConnell it would likely garner around 90 votes – essentially denying the Administration its ability to claim a partisan victory. The Administration might point to New START’s ratification as an accomplishment, but Republicans could easily adopt the pro-START talking points – this was a modest treaty that is merely extending a treaty negotiated by Ronald Reagan. New START would hardly be something that the Obama administration could campaign on in the November elections, nor is it that politically salient.
This scenario may sound preposterous, but the fact is that many (if not a majority) of Republicans don’t want to vote against this treaty. A year ago Jon Kyl even warned of the dangers of the expiration of the START treaty and one wonders if Kyl didn’t give tacit approval to Corker and Isakson to vote for the treaty – after all Corker was pretty much in lock step with Kyl before the August recess. It’s clear that Kyl wants to essentially hold this treaty hostage in an effort to kill off Obama’s larger nuclear agenda and if he is able to delay vote into the new year that is exactly what he will do. But Democrats should know that they have the leverage of being able to force a vote on something that the majority of Republicans don’t really want to vote against.
Alan Greenspan Will Have His Revenge on the Social Security Trust Fund
I often here right-of-center people express admiration for Singapore’s pension system and who wonder why liberals can’t get on board for changing Social Security into something like that. I think you can raise various question about the Singaporean system, but the biggest thing that this kind of remark often seems to miss is the issue of transition costs. Among other things, Sinagpore has a pre-funded system. Money actually went into the Central Provident Fund before it came out, and the quantity of payouts is related to the amount of money in the Fund.
US Social Security kinda sorta has this structure in theory, but in practice outlays are financed by current tax revenue. Card-carrying rightwing Social Security hater Andrew Biggs has a good column at the American laying out the way that this constrains present-day policy options:
As I noted in a recent National Review column on why Social Security reform has proved so difficult, shifting from a pay-as-you-go program to a funded system entails significant “transition costs,” which are borne by the very citizens who would decide to make the change. Since today’s Social Security, Medicare, and Medicaid benefits are paid from today’s taxes, if we decide to pre-fund these programs then the current generation must pay twice: first for current beneficiaries, and second for their own benefits. Put simply, to shift from an unfunded program to a funded program, someone must contribute extra funds.
Conservatives and libertarians are free to complain about this set-up if they don’t like it or think it shows midcentury American liberals were foolish. But it can’t be simply wished away.
But if I may complain about conservatives and libertarians for a moment, this is precisely what was so horribly destructive about George W Bush’s tax and budget policies in 2001-2008.
Flash back to the salad days of 1999-2000 and the US government was running budget surpluses. Members of the Clinton administration argued that this was advisable because the country was also facing a predictable one-time demographic transition that would raise Social Security costs. It was prudent, under the circumstances, to save for the future by continuing to run surpluses. At this point, George W Bush and most Republicans began making the argument that “it’s your money” and the existence of surpluses showed the desirability of gigantic regressive tax cuts. Alan Greenspan himself stepped into the breach with a highbrow version of the argument, warning darkly that absent gigantic regressive tax cuts the government might pay off the entire national debt and then start accumulating financial assets.
Conservatives carried the day, rich people got their tax cuts, the short-term surplus was eliminated and the clear and the “danger” of national debt elimination was avoided. Somehow nobody noticed that this nightmare scenario was prefunding of future US pension obligations. We could have had a debate about whether to disburse that prefunding in the form of “private accounts” or a centrally administered fund or what exactly a private account would mean in that context. But instead we had a debate about the desirability of bringing back budget deficits and rescuing the national debt.
Masters: “It appears that this year’s record [sea surface temperatures] have significantly expanded the area over which major hurricanes can exist over the Atlantic.”
2010 hurricane season has already set multiple records
A rare double feature: two simultaneous Category 4 hurricanes in the Atlantic, for only the second time in recorded history.
Uber-meteorologist and former NOAA Hurricane Hunter (!) discussed some of the remarkable records the 2010 season has already set, on his WunderBlog yesterday:
Sunk
Can we grapple briefly with how insane Battleship is, on every level? Basically, people decided to make a toy movie, but unlike with Transformers, the toys weren’t already aliens, so they threw in some aliens, and a bunch of hot people with no particularly discernible acting skills including Rihanna and Brooklyn Decker, and hot people with discernible acting skills like Alexander Skarsgard and Taylor Kitsch (when am I getting my Rogue and Gambit movie, people who are greenlighting Every Damn Superhero Thing In Existence) and now Liam Neeson’s signed on to this nonsense? And Tom Arnold was already? I swear to God, Emma Thompson could sign on to this thing and I would not be surprised. It’s like everyone in Hollywood decided “Hey, could be fun!” and the folks making the damn thing thought “Well, we have a big boat.” And Peter Berg made Hancock, which I actually really liked, which only makes me more confused about this whole situation. I think the solution is probably surrender and a bourbon, but at the moment, my headache over all of this is considerable.
The New Poverty Numbers
We learn today officially what was obvious anyway, thanks to the recession poverty spiked up last year. Obviously that fact reflects poorly on the Obama administration, but the reality is that the American Recovery and Reinvestment Act kept at least six million people out of poverty so it’s not like Obama’s been running around impoverishing folks. These calls to rescind stimulus money or freeze outlays at 2008 levels are calls to impoverish millions of Americans.
Melissa Boteach, my colleague who focuses on poverty issues, points out that congress has the opportunity to act before things get even worse:
In just two weeks a job-creation engine known as the TANF Emergency Fund will expire, forcing states to begin shutting down successful partnerships with the private sector that have already created nearly a quarter-million jobs for low-income families. Congress must act before September 30 to extend the TANF Emergency Fund for another year and allow this innovative jobs program to continue.
Unfortunately, congress is typically more interested in the tax burden of millionaires than in the welfare of the poor and near-poor.
Former Sponsor Of The DREAM Act John McCain Accuses Reid Of ‘Playing Politics’ With Immigration
Sen. John McCain (R-AZ) co-sponsored the Development, Relief and Education for Alien Minors (DREAM) Act in 2005, 2006, and 2007. Yet, when Sen. Harry Reid (D-NV) announced on Wednesday that he would be introducing a defense authorization bill next week that includes the DREAM Act, McCain blasted him:
The Arizona Republican, who is ranking member of the Armed Services Committee, said Democrats were using the defense measure as a tool to push liberal agenda items in the runup to the midterm elections.
“So I intend to block it, unless they agree to remove these onerous provisions,” he said. [...]
“It’s a pure political act for Harry Reid, who is worried about his own re-election and that of the Democrats in the Senate,” McCain said.
Certainly, Reid made a political calculation when he decided to introduce the DREAM Act this September. However, McCain is in no place to call the kettle black. In Nevada, Reid is facing a tough reelection bid against tea party sweetheart Sharron Angle (R-NV). In Arizona, McCain was also fighting for his political livelihood in his primary election against anti-immigrant zealot J.D. Hayworth, which McCain eventually won just a few weeks ago. However, the major difference is that while Reid has traditionally been a supporter of the immigration measures he is embracing this year, McCain’s election strategy has involved a total flip-flop on the immigration issue in an effort to gain votes.
McCain not only co-sponsored DREAM Act legislation in the not-too-distant past, he was also behind comprehensive immigration reform efforts that included a path to legalization. McCain once insisted that a border crackdown would do nothing to solve the nation’s immigration problem, calling an “enforcement-first” strategy an “ineffective and ill-advised approach.” During his 2008 presidential bid, McCain told Latino voters, “I do ask for your trust that when I say, I remain committed to fair, practical and comprehensive immigration reform, I mean it. I think I have earned that trust.”
Throughout the midterm election season, McCain has engaged in political backflips to redefine himself as an immigration hawk. Now, McCain insists that the border must be secured before Congress can undertake immigration reform, telling a group of DREAM students last week that, “We’re going to have to secure the borders first, and then enact comprehensive immigration, but the border has to be secured first.” “There is a lot of flip-flopping going on in the McCain campaign,” said his opponent, Hayworth, during the primary campaign.
In a statement released today, Reid said “Senator McCain should know better than anyone that patriots who step up to serve our grateful nation should be offered a path to citizenship, and that anyone who volunteers to serve should be welcomed regardless of their sexual orientation. I hope that he will do the right thing and support this bill that not only funds critical support for our troops like weapons upgrades and pay raises, but also ensures that our military reflects our nation’s values.”
Rove Backs Off O’Donnell Criticism After Limbaugh Declares He’s ‘In Charge’ Of Saying Who’s Electable
In the early days of the Obama presidency, the Republican Party was so bereft of a leading voice that hate radio host Rush Limbaugh had to fill the vacuum. His reign was so powerful that Republicans dared not cross him, and if they did, they would inevitably beg for forgiveness shortly thereafter.
Karl Rove — who recently guest-hosted Limbaugh’s radio show — appears to be the latest GOPer to bow down before Rush. Rove has taken considerable heat from the right for attacking Delaware’s newly-minted GOP U.S. Senate candidate and Tea Party favorite Christine O’Donnell, saying she’s a bad candidate who has “serious character problems.” Yesterday, Limbaugh joined in:
“This is about conservatives taking back the Republican Party. … Who the hell are they, anyway, to anoint or disanoint somebody as electable or not electable?” Rush Limbaugh asked Wednesday. “I’m in charge of that! … That’s always been my purview and nothing’s changed.” [...]
“Look at the petulant attitude. ‘Screw you – Christine O’Donnell wins, she’s on her own. You’re on your own,’” Limbaugh said. [...]
“We’re going to throw in the towel here?” Limbaugh rhetorically asked his close ally, who spent a day filling in on his program this summer. “Why not fight for it?”
Rove, who just last night criticized O’Donnell for her tax troubles, today tried to paint himself as an O’Donnell supporter. First, Rove bemoaned being called an “establishment Republican,” pleading, “I’m a huge Tea Party fan!” He then reversed course on O’Donnell. “She’s got a shot to win!” Rove said, claiming that he “endorsed her the other night.” Watch it:
Perhaps Limbaugh is again taking up the mantle as the GOP’s de facto leader, considering the Party still has no ideas, and it appears he no longer thinks highly of its “architect.”
Recess Appointments for the Fed?
One journalist who doesn’t underrate the importance of Federal Reserve decision-making is Neil Irwin who reports today on how the prospect of additional monetary stimulus is “likely to be the focus of a vigorous debate at a Fed policy meeting next week, setting the stage for a definitive decision in November or December on whether to purchase hundreds of billions of dollars of bonds in an effort to strengthen the economy.”
But who will attend the meeting? As Robin Harding reviews, not Barack Obama’s appointees whose presence would be valuable. On the one hand, their votes would count and “more important than their votes is having their voices at the FOMC to counterbalance more hawkish regional Fed presidents.” This is especially important since Donald Kohn—who, as she observes, is one of the few actual monetary policy specialists on the board—has already stepped down.
Brad DeLong suggests it’s time for recess appointments. If so, I’d like to throw my own hat in the ring, since I think tapping some random blogger is likely to raise short-term inflation expectations and currency depreciation all on its own. Realistically, I think it’s hard to imagine the White House going from zero to sixty on this topic. The other day Tim Fernholz got a quote about the section 13(3) nightmare scenario from Treasury spokeman Steve Adamske that was by far the strongest statement I’ve heard from the administration about the obstructionism that’s leaving the national economy in shambles. Ready for the quote? Here goes:
“All the more reason why the Senate should approve the president’s nominees,” Treasury spokesman Steve Adamske says.
Hott.
So while there’s something to be said for DeLong’s proposal, at this point I’d settle for “mild but consistent political pressure” as a huge step forward.
