Janet Hook of the Los Angeles Times has a really good piece on how the budget the House and Senate approved yesterday differs from the budget Barack Obama sent them:

Congress has called for ending Obama’s signature campaign promise to the middle class — tax credits of as much as $800 for many families — after two years. And lawmakers did not endorse his proposal to curb tax deductions for the upper class to help pay for healthcare reform, but did keep in place billions of dollars in subsidies to agriculture.

Republicans in both chambers unanimously opposed the budget (as did Republican-turned-Democrat Arlen Specter). But budgets don’t need filibuster-proof majorities to pass, so why did Obama’s redistribution plans die? "Underlying the predictable partisan byplay," Hook writes, "The budget debate has been a monument to the durability of the special interests and political forces that make it hard even for Democrats to curb subsidies to the wealthy."

George W. Bush significantly skewed the distribution of wealth further to the rich with the full backing of a Republican-controlled Senate. Now Obama wants to partly undo some Bush administration policies and his own party trips him up. People compare the changes Obama wants to make with those enacted by FDR. But at this point the Obama administration is stymied in even returning the tax code to what it was in the Bill Clinton administration.-MB 

Laura Meckler and Jonathan Weisman of the Wall Street Journal  report on Barack Obama’s oval office press conference where he addressed what happens when the U.S. taxpayer is the controlling shareholder in a bailed out company:

In addressing the government’s role in the private sector, Mr. Obama said his administration had no choice but to step in as the financial and auto sectors were collapsing and that "our first role should be shareholders that are looking to get out."

"I don’t want to run auto companies. I don’t want to run banks. I’ve got two wars I’ve got to run already. I’ve got more than enough to do. So the sooner we can get out of that business, the better off we’re going to be," he said. "I want to disabuse people of this notion that somehow we enjoy, you know, meddling in the private sector."

Maybe it was the phrase Meckler and Weisman used — "government’s role in the private sector" — because this made me think of a perhaps obvious point: government already subsidizes and dictates the terms of production in an array of industries from aviation to information technology to, of course, security. Multi-billion dollar companies from Lockheed Martin to the corporation formerly known as Blackwater get their marching orders from government.

A major trend of government — sped up since Reagan — is this form of "meddling in the private sector." In 2008, there were 7.5 million people who are government contractors, i.e. they work for Boeing or Booze Allen Hamilton but taxpayers pay their salary. There were 1.8 million people who are government employees.

There are more government contractors in Iraq than U.S. troops. We better hope the government is running these contractors operations.

This is not to scoff at concerns Obama has about essentially running Chrysler, GM or the banks. But it shows maybe that some government control is less radical than Obama makes it out to be — especially if unlike the aforementioned examples it’s done on a temporary basis .-MB

Homeland Security Sec. Janet Napolitano has spoke repeatedly about changing the nature of Immigrations and Customs Enforcement raids of work sites. Now DHS has set new guidelines for these raids, which Ginger Thompson of the New York Times got her hands on: raids will now be centrally directed from Washington and target employers not employees:

Under the Bush administration, the officials said, most raids were conducted largely on the basis of tips that an employer was hiring illegal workers, rather than on information gleaned from audits of employer records or undercover investigations. As a result, agents rounded up thousands of illegal immigrants but rarely developed the evidence necessary to show whether businesses were knowingly using illegal labor.

Last year, for example, nearly 6,000 people were arrested in workplace immigration raids across the country, but only 135 were employers or managers. The new guidelines, meant to provide a road map to agents who have been operating with little guidance and oversight from Washington, instruct them to pursue evidence against the employer before going after the workers.

Even if DHS is not always able to enforce the new guidelines, this is a real change. The Bush administration used the number of detained employees as a yardstick to measure the success of ICE. It’s clear the Obama administration has no interest in continuing that policy.-MB

The swine flu outbreak has collided with state governments in a fiscal crisis and state health departments that are woefully underfunded reports the New York Times’ Kevin Sack:

South Carolina’s Department of Health and Environmental Control, which also staffs local health departments, has lost $30 million in state money and a third of its 6,000 employees over the last decade, said Thom W. Berry, a spokesman. The department is currently investigating several “probable” cases of swine flu.

In New York City, which has the highest concentration of confirmed flu cases, federal grants for emergency preparedness have fallen to $23 million, from $28 million a year ago, said Andrew S. Rein, the city health department’s executive deputy commissioner.

In California, which has 14 confirmed cases, the Department of Public Health recently absorbed a 10 percent budget cut ordered by Gov. Arnold Schwarzenegger to help close a huge budget gap. It did so without laying off workers, instead reducing grants to local health departments, said Dr. Bonnie Sorensen, the chief deputy director of policy and programs. During the fluscare, about 100 state health workers have been diverted from other duties, Dr. Sorensen said.

It is hard to be too upset with state legislatures forced to make across the board cuts to balance their budgets. It’s easy, though, to be upset with the gang of four moderate Senators, especially Maine’s Susan Collins, who watered down the stimulus bill. Collins yanked $900 million in funding for pandemic flu preparation at state health departments. I’m sure health care workers and swine flu patients in South Carolina, New York and California remain ecstatic that Collins and friends sensibly brought the stimulus bill below $800 million.-MB

Justice Dept. criminal division chief Lanny Breuer said at a Senate hearing yesterday that he wants to reduce the grand canyon wide sentencing disparity between getting caught with powdered cocaine and possession of crack cocaine. The current law — written in 1986 by Joe Biden — is the 100:1 ratio where getting caught with 100 grams of cocaine or one gram of crack triggers a mandatory five-year prison sentence.

The Washington Post’s Carrie Johnson reports that Breuer’s approval should impact bipartisan legislation in Congress to change a sentencing disparity that has hurt African Americans: 85 percent of convicted crack cocaine possessors are black. Even Biden has come out in favor of reversing his own legislation.-MB

A program in Los Angeles where city police officers actively go on the lookout for suspicious, potentially terrorist-like behavior and report it to the FBI is going national. Eric Schmitt of the New York Times reports that "state and federal officials intend to have a nationwide reporting system in place by 2014, using a standardized system of codes for suspicious behaviors. It is the most ambitious effort since the Sept. 11 attacks to put in place a network of databases to comb for clues that might foretell acts of terrorism."

Civil liberties groups are up in arms. But I think law enforcement officers should be well:

Cmdr. Joan T. McNamara, assistant commander of the counterterrorism bureau, said her department was vetting information from the some 1,500 reports so far in the year-old program. Commander McNamara said in an interview that police officers, intelligence analysts and top commanders were training in what kind of suspicious behavior to look for, based on a 65-item checklist that she and her staff created, as well as in privacy and civil liberties issues.

Is it the best deployment of  local police officers to provide a 65-item checklist of suspicious terrorist activity? Not to sound like Bob Herbert, but people are killing each other in the streets. Having local law enforcement on the look out for people snapping pictures of tall buildings isn’t just a possible violation of civil liberties but an over-emphasis on the "war on terror" at the expense of overall law and order.-MB

Since the 1970’s the federally administered National Assessment of Education Progress test has measured the reading and math aptitudes of 9, 13 and 17-year-olds. Sam Dillon of the New York Times reports on 2008 results that indicate the achievement gap between white and black students is about as wide as it was circa Watergate: "The 2008 score gap between black and white 17-year-olds, 29 points in reading and 26 points in math, could be envisioned as the rough equivalent of between two and three school years’ worth of learning, said Peggy Carr, an associate commissioner for assessment at the Department of Education."

Dillon’s take away is that No Child Left Behind — still awaiting re-authorization — has failed to challenge "the soft bigotry of low expectations." But the education achievement gap between black and whites is part of the sprawling problem of racial inequality. Inflation-adjusted income has actually decreased for black families in the past three decades while it has remained basically stagnant for white families. Black men — many of them fathers — are ten times as likely to wind up in prison as white men. Black families were three times as likely to take out a subprime loan during the housing bubble as white families.

As New York University education professor Deborah Meier puts it, "“We have only one area in American life, virtually, that we demand equality from, and that is test scores in schools." George W. Bush’s NCLB was a policy that pushed for equality in an administration that otherwise widened the inequality gap between blacks and whites. If a re-authorized NCLB and other Obama administration education reforms are to have any success, they must stop focusing on isolated innovations — performance pay for teachers, teacher accountability based on student test scores — and put education inequality in its broader social context.-MB

Steven Mufson of the Washington Post reports that Barack Obama has not developed a coherent vision for the government as investor and owner in bailed out companies: "The Obama administration, on behalf of American taxpayers, has become — or will soon become — the controlling shareholder of General Motros and Chrysler, mortgage behemoths Freddie Mac and Fannie Maeand insurance giant AIG, not to mention the 29 banks taken over this year by the Federal Deposit Insurance Corp. And that puts the president in the awkward position of balancing public policy goals with the financial interests of taxpayers as investors in these ailing corporations."

Mufson reports that the Federal Housing Finance Agency dictates Freddie and Fannie’s business: "It signs off on major decisions about how much to charge for mortgages and more mundane decisions such as whether executives can attend conferences." But Freddie and Fannie have always partly been government funded and controlled.

Elsewhere, Obama has been selective in asserting the power of a controlling shareholder and there are few clues about how government will act as the majority shareholder of GM and a post-Chapter 11 bankruptcy Chrysler.” Many analysts worry that the administration and Congress will try to influence the carmakers’ decisions on issues like plant closings or their commitment to fuel-efficient or electric vehicles that might not be profitable."

Maybe it will be bad policy if the Obama administration gives specific orders about plant closing or fuel efficient vehicles. But Obama ought to make clear that he is well within his rights to do that: GM and Chrysler would not still be here if it weren’t for government. We’ll see if automakers have the same nerve of bailed out banks like Goldman Sachs and J.P. Morgan who took government money and then balked when government gave them specific instructions to act in the public interest.-MB

Carrie Johnson of the Washington Post reports that three U.S. Court of Appeals Judges ruled that the Obama administration cannot invoke the "state secrets" privilege to prevent a lawsuit from five detainees who were tortured at CIA black sites. The detainees are not suing the federal government but Boeing subsidiary Jeppson Dataplan who they say transported them to black sites knowing torture would happen. The judges noted that the invocation of state secrets is often used not on behalf of national security but to prevent the disclosure of embarrassing and incriminating presidential and CIA behavior.

The Obama administration’s release of the Justice Dept. Office of Legal Counsel "torture memos" that dominated the news the past two weeks was triggered by an ACLU lawsuit to release the documents. Here again, ACLU lawyers have used a civil suit to chip away at the "war on terror," this time the process of "extraordinary rendition" to CIA black sites that those torture memos rationalized. Lawyers at the ACLU, Center for Constitutional Rights and other civil libertarian organizations have done what Obama and most Congress members of both parties would rather not do: keep the issue of Bush administration torture alive.-MB

How do you report in interesting ways on a transit agency that’s doing a pretty decent job?  And how do you look at problems that are coming in 15 years so that they get the attention they need today?  Those were some of the challenges Understanding Government faced in putting together its first report on a regional, multijurisdictional agency — the Washington Metropolitan Area Transit Authority (WMATA).  Reporter Ellen Ramachandran had the opportunity to speak at length to dozens of Metro employees, from General Manager John Catoe to station managers, and from in-house economists to engineers.  The result is "America’s Best Ride?" — a critical look at WMATA’s past, present, and potentially troubled future in a growing region where the agency is the face of public transportation not just for Washington, but for the nation as well.  To learn more about WMATA, please see the full report here. 

Ned Hodgman