Justin Elliot of Talking Points Memo has a nice pick-up of two reports critical of the Defense Contract Audit Agency, which is supposed to police all dealings between military and industry — or $501 billion worth of government contracts. It’s hard to audit that many contracts, but what the Government Accountability Office and Pentagon Inspector General find most problematic is not that the auditors are overwhelmed, or even incompetent. It’s that the auditors become friends with the military and private contractors, and don’t make serious audits. Pruning the Pentagon budget is one the biggest ways curtail government waste and reduce the national debt. But the DOD bureaucracy still seems far away from internal reform.

Peter Finn of the Washington Post has a good piece about retired military officials who want to shut down Guantanamo Bay. The officials are baffled that Congress and the Obama administration wouldn’t work to close the detention camp, which they say are giant recruiting tools for terrorists. But the officials also don’t understand why Barack Obama and AG Eric Holder want to continue with a system of prolonged detention for some detainees.

Given the scandal that Guantanamo was under the Bush administration, you would think Washington would do everything in its power to get rid of the potent symbol of U.S. abuse of power. But Congress can’t help but prove its anti-terror bona fides and Obama can’t help but keep the executive powers accrued by his predecessor.

The Washington Post’s Karen DeYoung and Walter Pincus report that the U.S. successfully weakened al-Qaeda, killing leaders of the terrorist networks as well as isolating members and preventing a big new wave of al-Qaeda recruits. A lot of this is due to spy work in Pakistan and Somalia.

This is good news — if you haven’t heard, al-Qaeda is the no. #1 national security threat to America according to almost everyone in Washington, D.C. and also the reason the Obama administration has escalated the Afghanistan War. DeYoung and Pincus’s piece should serve as a handy reference tool to combat platitudes that changing our Afghanistan strategy or “war on terror” policies will weaken American resolve against a nefarious and ever-strengthening foreign enemy. Al-Qaeda has had an even worse last eight years than the U.S.

The New York Times’ Julia Preston reports that American Apparel fired 1,800 of its workers, a quarter of its workforce, because of pressure from Immigration and Customs Enforcement to fire workers without legit citizenship documents. ICE had started to audit the high-profile retailer and 654 other companies suspected of employing undocumented immigrants.

Preston describes the audits and firings as part of an Obama ICE strategy to focus on employers who hire illegal immigrants. This is supposed to contrast with the Bush focus of ICE raiding workplaces. But in the American Apparel example it’s again the employees who are being punished. American Apparel CEO Dov Charney can speak with reporters like Preston about the unfairness of immigration laws but Charney personally benefits from the status quo — he faces no federal sanctions. Meanwhile, the undocumented employees he purports to help are left out to dry. While less sensational than raids, the consequences of the American Apparel audit is a similar brand of the immigration justice meted out in the Bush administration.

In Nevada, where’s there’s plenty of sun, a problem is brewing: new solar energy projects are demanding so much water that farmers and others, who rely on well water for irrigation and household use, are starting to argue against the big solar project that just a year ago was greeted like a savior in the job-strapped state.   Todd Woody explains in the New York Times that the cheapest solar projects, which generate steam to drive turbines that generate electricity, end up expending huge amounts of water — when the steam cools, most of it ends up evaporating.  But as Woody points out, this problem could be an opportunity for photovoltaic solar energy manufacturers.

Across the Atlantic, as John Tagliabue reports in the Times, a village on a Danish island (Denmark is dominating the news this week) appears to have solved its energy problems.  Samso residents use energy from a range of renewables, including straw burned in special stoves, solar, wind, and geothermal energy.   Could this patchwork approach become the fabric of tomorrow’s energy solutions here in America? -NH

NYT
Banks to Prepay Assessments to Rescue FDIC – Stephen Labaton
Immigration Crackdown With Firings, Not Raids – Julia Preston
General Says Iraq Troop Reductions May Quicken – Thom Shanker
From McChrystal’s Mouth to Obama’s Ear – Peter Baker
Nano-materials Under Study by the EPA – Cornelia Dean
Cash Squeeze Said to Deny Legal Aid to Poor – John Schwartz
In Harsh Reports on SEC’s Fraud Failures, a Watchdogs Urges Sweeping Changes – Zachery Kouwe

Washington Post
Employees Face Big Hike in Health-Care Costs – Steve Vogel
Success Against al-Qaeda Cited – Karen DeYoung and Walter Pincus
Retired Officers Push to Close Guantanamo Prison – Peter Finn
US, Cuba Held Extended Talks – Mary Beth Sheridan
FDIC Seeks Fees to Shore Up Reserve – Zachary Goldfarb
Pentagon Set To Vaccinate Troops, Assist In Flu Crisis – AP
Foreclosure Rate Rises 17 Percent – Renae Merle
Internet Speeds Are Often Slower Than What Consumers Pay For, FCC Finds – Cecilia Kang

WSJ
Firms Warn of Delays From FDA Scrutiny – Alicia Mundy
US General Says Iraq Exit Is on Track – Yochi Dreazen
Schools Push Hits the Road – Neil King Jr.
House Panel Set to Start Work on Consumer-Finance Agency – WSJ
Clinton Site Gets a Taste of the Stimulus Pie – Louise Radnofsky (GIMBY)
EPA to Delay 79 Mountaintop-Coal-Mining Permits – AP
SEC Faults GOP Fund-Raiser – Craig Karmin and John Emshwiller
Full Web Access Is Pegged at $20 Billion – Amy Schatz

Washington Times
US Holds Hush-Hush Talks With Cuba – AP
FEMA Rushes To Help Tsunami Victims in South Pacific – AP
‘Myth’ of Gitmo Closure Dismissed – Ben Conery

Bloomberg News
Fed Proposes Rules to Implement Credit Card Law – Jeff Plungis
‘Clunkers’ Hangover May Trim US September Car Sales – Katie Merx and Keith Naughton
Odierno Accelerates US Troop Withdrawal as Iraqis Take Charge – Viola Gienger
Federal Reserve Appeals Order to Disclose Emergency Bank Loans – Mark Pittman

A big-time voice against the Federal Reserve getting even more power — The Washington Post’s Peter Whoriskey reports that World Bank President Robert Zoellick doesn’t want the Fed to have increased powers to regulate the U.S. financial system. Zoellick worked for the Treasury Dept. under the Reagan administration and he wants Treasury to have more power, not the Fed’s “independent and powerful technocrats.”

Zoellick also points out that the Fed royally messed up in not realizing the catastrophic consequences of the housing bubble. But so did Treasury and the Securities and Exchange Commission. The better argument against increased Fed power is the “independent and powerful technocrats” one — the Fed is unique in not reporting to Congress or the president. They were established to be exclusively concerned with monetary policy — what is the right interest rate that will spur bank lending without also leading to inflation. This is an important function but it shouldn’t be dictate our government’s entire economic policy (as it largely did in the Bill Clinton and George W. Bush administration). Separate federal agencies — whether the pre-existing Treasury and SEC or a new Financial Product Safety Commission — need to regulate the interplay between monetary policy and its effects on both individual consumers and the long-term health of the market. No single federal agency, especially an undemocratic one, should be tasked with protecting individual banks, individual consumers and also the entire economy.

NYT
Abortion Fight Complicates Debate on Health Care – David Kirkpatrick
In Some States, a Push to Ban Mandate on Insurance – Monica Davey
In Pitch for Games, a Gamble for Obama – Peter Baker and Juliet Macur
Guantanamo Deadline May Be Missed – Peter Baker and David Johnston

Washington Post
Senate Finance Committee Rejects Both Public Option Amendments – William Branigin
Federal Employee Health Care Costs to Jump 8.8% – Ed O’Keefe
Defense Bill, Lauded by White House, Contains Billions In Earmarks – R. Jeffrey Smith
Farmers See Ray of Hope in USDA Bias Case – Kari Lydersen
In Building Afghan Army, It’s Back to Basics – Walter Pincus
Equal Raises for Defense Employees in 2010, No Matter the Pay System – Steve Vogel
Report Questions Security at National Parks – Ed O’Keefe
FDIC Proposes Collecting Prepaid Insurance Fees From banks – Zachary Goldfarb
More Help Coming to Clean Up Crisis – Renae Merle and David Cho

WSJ
SEC Weighs New Rules For Lending of Securities – Kara Scannell and Craig Karmin
Senate Committee Rejects Public Option for Health Overhaul – Patrick Yoest
Dodd Presses Case for Single Banking Regulator – Jessica Holzer
FCC Puts Universal Fast-Internet Cost at $350 Billion – Fawn Johnson
FDIC Fund to Be in Red for Years – Damian Paletta and Michael Crittenden
Michigan Broker Charged in Ponzi Case – Sarah Lynch and John Kell (GIMBY)
Road Project Tests Power of Stimulus – Tamara Audi
Foes Take On ‘Uptick’ Rule – Scott Patterson
EPA Tells Schools to Test Aging Caulk for PCBs – AP

Washington Times
US Eyes New Sanctions Against Iran – AP
Public Option Fails in Senate Committee – Jennifer Haberkorn
Obama’s Protectionist Policies Hurting Low-Income Americans – Daniel Griswold
Obama Pushes Longer School Days, Shorter Breaks – AP
FDIC: Bank Failures To Cost Around $100B – AP
FDIC Mulls Banks Coverage – AP
Porn Surfing Rampant at US Science Foundation – Jim McElhatton

Bloomberg News
Banker-Pay Limits May Hurt Citigroup, Bank of America – Ian Katz and Christine Harper
Housing Agencies May Get $35 Billion in Treasury Aid – Dawn Kopecki
CVS, Medco Profits May Narrow on Contract Overhaul – Carol Wolf
Fed’s Strategy Reduces US Bailout to $11.6 Trillion – Mark Pittman and Bod Ivry
FDIC Proposes Banks Prepay Deposit Fees Through 2012 – Alison Vekshin
Federal Reserve Proposes Rules to Implement Card Law – Jeff Plungis