It’s semi-official:  Sec. of State Hillary Clinton told reporters that the administration isn’t using the phrase "war on terror." Jay Solomon of the Wall Street Journal reports that Clinton said there had been no specific directive but that "the administration has stopped using the phrase."

At the risk of reading too much into this, abandoning the "war on terror" phrase has two possible — and quite different — implications. It could show that the Obama administration has progressed beyond the fear-mongering of the Bush administration and administration policies like torture and warrantless wiretapping.

But it might also be sign that Obama has more symbolically than substantially distanced himself from his unpopular predecessor. He announced that Guantanamo will close and has denounced the "war on terror." But Obama has largely not given up the executive powers the Bush administration gave itself under "war on terror" auspices. This includes refusing to cooperate with lawsuits filed by terrorist detainees — citing "state secrets" — and the Justice Dept not investigating allegedly criminal behavior of White House, Pentagon and CIA officials.-MB

Mary Williams Walsh and Jonathan Glater of the New York Times have an excellent piece today on the government ripping up the employee contracts of private companies, and, in one case at least, municipal workers. The most prominent example of this is Barack Obama and Treasury Sec. Tim Geithner curtailing the retiree benefits of GM and Chrysler employees. And Geithner wants the Treasury Dept. to have even greater power to take over private companies and re-negotiate their employee contracts. This is already happening in cities like Vallejo, California where the city government actually filed for bankruptcy and decided to "tear up its contracts with firefighters and other workers."

But unless done as carefully and sensitively as possible, ripping up employee contracts is sure to stir popular anger. For one, which employees are having their contracts ripped up? Geithner infamously said it was against the rules to halt bonuses for A.I.G. executives, but he has aggressively made sure the Treasury Dept. has authority over GM and Chrysler workers. Also, as Williams Walsh and Glater explain, it’s easier to tear up employee contracts than untangle bonded debt and credit default swaps. There are fewer "market consequences" for ripping up an autoworker’s pension; it’s really terrible only for the autoworker. Wiping out GM debt, though, affects an array of different Wall Street bondholders. Wiping out insurance owed on worthless securities also affects an array of different Wall Street interests.

So the path of least resistance is to rip up employee contracts. And this seems to be the path both Geithner and the city of Vallejo are taking, with how unfair or painful it might be a secondary concern.-MB

The normally strong Elisabeth Bumiller of the New York Times pens a love letter to Defense Sec. Robert Gates this morning. This part was especially curious:

Mr. Gates, a stolid, white-haired son of Wichita who does not look like he could play forward on the new president’s basketball team, has become pivotal to the administration’s overhaul of policy for Afghanistan and Pakistan, called Afpak at the White House, which Mr. Obama announced last week.

It was lost on no one during a recent crunch of Afpak meetings in the Situation Room that as the No. 2 at the C.I.A. in the late 1980s, Mr. Gates helped funnel covert Reagan administration aid and weapons through Pakistan’s spy agency, Inter-Services Intelligence, or ISI, to the Islamic fundamentalists who ousted the Russians from Afghanistan.

Some of those same fundamentalists are now enemies of the United States trying to overthrow the government in Kabul, a disastrous consequence that produced the problem the Obama administration confronts today. At the same time, American officials say a wing of the ISI is providing money and military aid to the Taliban.

Mr. Gates does know jihad from both sides.

“Bob has enormous influence because of his experience,” said Richard C. Holbrooke, the administration’s special envoy to Afghanistan and Pakistan, who first worked with Mr. Gates when both were in the Carter administration

Is this really the right take away — that Gates funneling covert arms to Islamic fundamentalists in the 1980′s shows his wisdom and experience? It’s odd that Bumiller doesn’t present a contrasting viewpoint to Holbrooke’s — that this was a tremendously risky and ultimately disastrous policy that played a pivotal part in creating the current "Afpak" situation. Indeed, this work for the Reagan administration was the topic de jour in Gate’s contentious Senate confirmation hearings in 1991 when the first George Bush nominated him for CIA Director. Eighteen years later, though, he’s a wise old man bestowing jewels of foreign policy realism, loved by a Washington establishment he, of course, claims to be uncomfortable with.-MB

Here’s an unpleasant irony. Steve Vogel of the Washington Post reports that an arbitrator ruled that the Equal Employment Opportunity Commission, which makes sure that employees’ workplace and civil rights are not violated, was itself in violation of the Fair Labor Standards Act. EEOC employees were consistently denied overtime pay — the employer’s rationale was that the employees were provided time off equal to their overtime work. The arbitrator, though, called this "forced volunteering."

Violating FLSA marks a nadir for the already overworked and understaffed EEOC. Vogel writes:

The dispute comes at a time when the agency is handling what it terms an "unprecedented" level of discrimination charges. The EEOC received more than 95,400 charges of job bias in the private sector in fiscal 2008, up 15.2 percent from 2007 and 26 percent from 2006.

But over the past eight years the EEOC has lost about 25 percent of its staff, including investigators and lawyers who handle the cases.

The arbitrator’s ruling also comes a week after a GAO report that the Labor Dept’s Wage and Hour Division ignored complaints from employees across the country that they hadn’t received their overtime pay or even their normal paycheck. Advocates of more robust labor laws are keeping the flame alive for the Employee Free Choice Act, which strengthens Labor Dept sanctions on employers who retaliate against employees interested in starting a union. But the Labor Dept. isn’t enforcing the decades-old labor laws on the books. And now we learn that its sister agency, the EEOC, has disregarded these laws even when it comes to its own employees. -MB

There’s an old joke in a lot of places around America:  "we have two seasons:  winter and road repair."  Now that the stimulus money is starting to flow — and summer’s coming — it’s going to be road repair season everywhere.  And contractors are finding creative ways to get their part of the stimulus funds, reports the New York Times‘s Michael Cooper. 

One such creative approach is to keep prices unexpectedly low for major road rebuilding projects.

This might seem like a good thing.  But when contractors’ bids are coming significantly lower than states have budgeted for projects, there could be something fishy going on.   Transportation secretary Ray LaHood cites "pent-up demand" and says "people are raring to go."  That’s certainly true.  But Cooper cites Barry LePatner, an expert on the construction industry who says that

it is common for a company to try to undercut its competition with a low bid and then, once it has won the job, try to eke out a profit by putting in numerous change orders that drive up the price and delay the project.

That happens during good times, so why should things change when times are tough?  It’s going to take a lot of eyes on these contracts around the country to make sure we’re not paying more just because we’re spending more. -NH

The Government Accountability Office released a scathing report stating that cost overruns in Pentagon weapons systems total near $300 billion, report Ellen Nakashima and Dana Hedgepath of the Washington Post. Nakashima and Hedgepath write: "cost estimates for 10 of the Pentagon’s 96 largest weapons programs have grown by 32 percent, rising to $177 billion."

The GAO report comes a year after . . . the GAO released a scathing report that cost overruns in Pentagon weapons systems total near $300 billion. Things are different now, though, because Barack Obama has pledged to reform defense contracting. Tune in this time next year to see whether Obama, Defense Secretary Robert Gates and Office of and Management and Budget Director Peter Orszag can enact meaningful reform that cut into the billions the Pentagon doles out to companies like Lockheed Martin and Boeing.-MB

Fran Spellman of the Chicago Sun-Times reports that the city of Chicago won a competive bid to use $12.3 million in federal stimulus cash to expand the O’Hare international airport. Mayor Richard Daley, however, strenously lobbied Washington for $50 million for the O’Hare modernization project and grumbled that the federal money is "better than nothing." This was also the turn of phrase Daley used for the $1 billion in automatic stimulus bill funding for Chicago.

As I wrote last week, Daley seems interested in two things: O’Hare modernization by 2014 and the Summer Olympics by 2016. The goals are connected — promising the International Olympic Committee that O’Hare will be bigger and better will supposedly help Chicago’s Olympic bid. They are also part of a city hall that sometimes seems most interested in its international reputation. Stimulus money was meant to be used for the bedrock tasks of local government: paving the roads, hiring police officers, running the schools. It’s not clear how much interest any of those things are to Daley.-MB

Spencer S. Hsu had an excellent piece in the Washington Post yesterday that looked at whether DHS Sec. Janet Napolitano will shift the priorities of DHS’s Immigrations and Customs Enforcement from raiding workplaces to prosecuting employers of illegal immigrants and combating violence at the U.S.-Mexico border. Napolitano has already launched an internal investigation against Leigh Winchell, an ICE special agent in Seattle. She says Winchell should not have raided an engine-parts maker in Bellingham, Washington. Winchell has staunchly defended the conduct of his staff and, in an email to ICE employees, called Napolitano’s policy backwards.

Lawmakers like Sen. Robert Byrd are also upset by Napolitano’s desire to de-emphasize raids. Byrd actually proposed $34 million more to the $127 million ICE has for workplace raids, even though the agency has been forced to deal with the much more deadly problem of Mexican drug cartels crossing the border.

As Hsu points out, the Bush administration resisted prosecuting employers partly out of anti-immigration Republican ideology but also because — it’s hard. It’s much easier for an agency getting its bearings to grab the low-hanging fruit of raiding a few meatpacking plants than it is to go after white collar crimes. But with immigrant employers resistant to workplace standards and the looming specter of drug violence, the publicity-friendly raids look like a gross misuse of law enforcement resources.-MB

If the Treasury Dept. must pay more money for General Motors and Chrysler to avoid bankruptcy, where will this money come from? Maya Jackson Randall of the Wall Street Journal reports that it could from what’s left of the $700 billion Troubled Asset Relief Program. Treasury Sec. Tim Geithner says that there is still $134.5 billion (which is 19 percent of $700 billion) left in TARP money and that the Treasury Dept. will not have to ask Congress for more. But Geithner’s estimate assumes that the banks that got TARP money will soon pay back $25 billion to the Treasury Dept — which hasn’t happened yet.

Geithner’s statements also seem to ignore his own massively expensive plan to have the government subsidize purchases by hedge funds and private equity firms of subprime mortgage securities now held by banks. The Obama administration had asked Congress to set aside $250 billion in the new budget for financial rescue money. But Congress ignored the request. Judging from Geithner’s latest bank rescue plan, the GM and Chrysler restructuring plan, and talk of helping credit unions and insurance companies, it’s hard to see how Obama and Geithner can execute their economic policies without substantially more money. And it’s far from clear Congress will approve more money.-MB

Despite his penchant for czars, Barack Obama had resisted the appointment of a car czar to deal with the dilapidated auto industry. Until today. In his address on government plans to restructure General Motors and Chrylster, Obama announced that Edward Montgomery, dean of the University of Maryland’s College of Behavioral and Social Sciences and (very briefly) a former Labor Dept. deputy secretary, would be Director of Recovery for Auto Communities and Workers.

Montgomery might have a narrow role: helping communities with GM and Chrysler plants and extolling people to buy cars (Obama announced that car purchases are tax deductible through the end of they year — he didn’t say whether that meant just American cars or all cars). Montgomery might not be the point man on giving GM 60 more days to restructure or getting Chrysler to merge with Fiat. Ultimate responsibility could lie more with National Economic Council head Larry Summers and Treasury Sec. Tim Geithner, the leaders of Obama’s auto task force.

But Montgomery is a new face to an administration with not enough faces to deal with Detroit. There’s a staff shortage at Treasury, though the Senate just confirmed Gary Locke to head the Commerce Dept. Unlike Locke and top Treasury officials, Montgomery will circumvent the Senate confirmation process. For Obama, this might have been the most compelling reason to create a new position. -MB