Michael Sullivan, the U.S. Government Accountability Office’s top analyst on Lockheed Martin’s jet fighter, also known as the F-35 Lightning II, told the Senate Armed Services Committee in a hearing that the cost of the program has increased substantially and that development is 2 1/2 years behind schedule.

The United States plans to buy about 2,400 of the fighter jets for the Air Force, the Marine Corps and the Navy. The projected cost for the program appears to have increased to $323 billion from $231 billion in 2001, when Bethesda-based Lockheed won the deal, according to Sullivan.

The Pentagon currently has no estimate of  what the F-35 will eventually cost. Like most questionable Pentagon programs, the F-35 is not an “earmark,” in that it was a project requested by one legislator and tacked on to the final appropriations bill. Instead, it’s a project that has stayed alive partly thanks to Lockheed Martin’s clout and partly thanks to lawmakers who have constituents that work for the defense contractor. Earmarks are easy to attack. But programs like the F-35 that have slowly grown  over time are a greater misuse of taxpayer money.

Lindsey Graham

So writes the New York Times’ Julia Preston, reporting on talks between Barack Obama and South Carolina GOP Sen. Lindsey Graham — the one senate Republican in support of immigration reform:

But Mr. Graham, in a statement, said he had told Mr. Obama “in no uncertain terms” that the immigration debate “could come to a halt for the year” if the president moved to pass health care legislation by a method known as reconciliation, which requires a majority of 51 senators instead of 60 and would in practice require no Republican votes.

The White House has been laying the groundwork for a possible reconciliation vote since losing its supermajority in January after the Massachusetts Senate election and finding no Republican support. There was no indication Thursday that Mr. Obama would reconsider that in light of Mr. Graham’s warning.

I reported a month ago that the push for a comprehensive immigration reform bill — one that would provide more uniform punishments to illegal immigrants, but also a path to citizenship to some undocumented workers — is on death’s doorstep. The reflexive opposition of senate Republicans to Democratic legislative proposals is the main reason. However, the Obama administration has hardly focused on the injustices of current immigration law enforcement. Like the Employee Free Choice Act and cap-and-trade legislation, immigration reform is part of the Obama administration/Democratic party platform that the Senate will likely never even vote on. At least not this year.

I’m not a big fan of attaching provisions to bills that have little to do with the overall bill. But the current student loan system is notably bad and the upper chamber’s recent track record suggests they might not otherwise do an up-down vote on stand-alone student loan reform.

Obama Delays Foreign Trip to Work on Health Care – Rachel Weiner and Michael D. Shear report on President Obama’s decision to delay trip to Indonesia due to final push on stalled health care legislation

Justice Department Picks ex-Brooklyn Prosecutor to Lead Public Integrity Unit – Carrie Johnson reports that the Justice Department has chosen Jack Smith, a veteran federal prosecutor with experience in death penalty and corruption cases, to lead the public integrity section

Obama’s Ambitious Export Plan May Rekindle Free Trade Battle – Howard Schneider looks into President Obama’s plan to double U.S. exports in the next five years in effort to increase job growth

IRS Investigates Flurry of Threats Against its Workers and Facilities – Ed O’Keefe reports that the IRS is investigating more than 70 reported recent instances of inappropriate comments made to agency workers by taxpayers

Director says NHTSA Responded Properly on Toyota’s Problems – Peter Whoriskey outlines testimony given by David L. Strickland, the administrator of the National Highway Traffic Safety Administration, the agency accused of responding too slowly to complaints about Toyotas

The New York Times

Obama Links Immigration Overhaul in 2010 to G.O.P. Backing – Julia Preston explains that President Obama is hoping for substantial Republican backing in order to proceed with an overhaul of the immigration system

Births to Minorities Are Approaching Majority in U.S. - Sam Roberts introduces new data that suggests births to Asian, black, and Hispanic women are close to surpassing those of non-Hispanic white women

Obama Social Secretary Ran Into Sharp Elbows – Peter Baker outlines the rise and fall of White House social secretary Desirée Rogers

U.S. Falters in Screening Border Patrol Near Mexico – Randal Archibold reports that federal anticorruption investigators are struggling to screen newly hired US law enforcement officers working on the Mexican border

FCC Ponders Action on Cable Fee Disputes – Edward Wyatt looks into the FCC’s promise to ensure cable customers with uninterrupted service despite fee disputes between broadcasters and cable companies

In a Surprise, U.S. Retail Sales Rose in February – The AP reports that Commerce Department data shows that retail sales rose 0.3 percent in February

The Wall Street Journal

Natural-Gas Group Opposes EPA Greenhouse Gas Rules – Siobhan Hughes reports that natural gas companies are against proposed EPA regulations

Obama ‘Fully Committed’ to Revising Immigration Laws – Laura Meckler looks into President Obama’s plans to reform immigration policy.

Retail Sales Post Strong Gain – Jeff Bater and Judith Burns report that U.S. retail sales have risen 0.3 percent, according to the Commerce Department

Cost to Build U.S. Fighter Jet Soars – The AP reports on the troubled F-35 Joint Strike Fighter program, whose cost has doubled since its inception in 2001

– compiled by Alison Baitz

When it comes to protecting citizens from unfair credit card and lending practices, what does the chair of the panel overseeing the $700 billion bailout of Wall Street want? She wants Congress to cut through the “complexity machine” created by the financial industry – in the form of hidden fees, arbitrary rate hikes, and unintelligible, lengthy, one-sided contracts for credit cards, homes loans and cars. Elizabeth Warren wants to make obtaining credit simple, clear, and fair.

Elizabeth Warren

“I expect to pay for what I get, but I don’t want to be tricked.”  That was the message, delivered with extraordinary clarity by the Harvard Law School professor, a noted expert on bankruptcy law and chair of Congress’ TARP oversight panel, to an audience March 11 at the New America Foundation’s Washington, D.C. offices.

According to Warren, the “complexity machine” got started in the 1980s as banks began complicating and increasing the small print in credit card and other lending agreements. It reached its zenith in recent years with the packaging and repackaging of complex financial instruments, such as derivatives and credit-default swaps, that even Wall Street CEOs now admit they didn’t understand.

How can Congress crush the complexity machine, protect consumers and avoid a repeat of the systemic financial meltdown that the U.S. just experienced?   Warren called for need simple rules like the regulations enacted after the Great Depression. She noted that a few small changes at that time – including the Glass-Steagall Act, which stopped lenders from speculating — kept the economy sound for 50 years. To restore the understandable approach to credit and investing that helped keep America’s economy grow for decades on end, Warren called for creating a “cop on the beat” in the form of a Consumer Financial Protection Agency, an agency with “functional independence” and real enforcement power (currently, seven federal agencies have some authority over financial institutions, including some that are financed by the banks they regulate).

Warren noted that the financial industry has hired legions of Washington lobbyists to defeat a central consumer agency with authority over financial products.  To add insult to injury, they’re doing it while benefiting from free taxpayer (bailout) money.

If federal agencies like the Federal Trade Commission and the Consumer Product Safety Commission can regulate products and still allow the marketplace to work, Warren asked, why can’t an agency that regulates financial products similarly operate alongside a vibrant financial marketplace?

Above all, Warren said, financial agreements between consumers and lenders to be clear and fair – and no more than two pages.

When asked what we should learn from the recession, Warren responded “we need meaningful rules” and “the government needs to be squarely on the side of people.”  She noted that simple, clear credit agreements could start a sea change in consumer affairs, spreading to cell phone contracts, car loans, and many other sectors.

In December, the House passed a financial reform bill that includes a consumer protection agency.  The Senate Banking Committee is in the midst of considering a bill, which may or may not include a similar agency. As Warren said yesterday, “the world is watching.”

The earmark ban is a worthy response to a recent Office of Congressional Ethics Report that documented the snug relationship between defense lobbyists and lawmakers on the House appropriations subcommittee on defense. But it’s hardly a landmark for either lobbying and ethics reform or fiscal responsibility.

For one, the Senate doesn’t approve of the ban. But even if the Senate did go along, these earmarks account for only $1.7 billion. The overall defense budget alone is $636 billion and the overall national debt is $11.4 trillion. Earmarks are simply not a big deal — not compared to wasteful weapons systems or Medicare costs or farm subsidies or any number of budget items that aren’t specifically “earmarked” by lawmakers. Instead, earmark-bashing continues to be an insidious pastime of lawmakers — and journalists and government watchdog groups — only superficially concerned about fiscal responsibility.

Democratic leaders met for a second day Wednesday with administration officials, including White House Chief of Staff Rahm Emanuel, in the office of House Speaker Nancy Pelosi (D-Calif.), but reached no decision on the student loan measure. One participant said a consensus appeared to be emerging that it would be unwise to risk the health-care bill by including the education measure.

This makes sense in theory: student loan reform has very little to do with health care reform. But Obama and Congress better accomplish student loan reform in 2010.

Currently, the federal government fully subsidizes loans that banks make to students. The banks collect interest on the loans, but if the student defaults the federal government pays back the banks. There is no risk, only reward, for banks. Besides getting free coffee and cookies in a bank foyer, students in no way benefit from going to the bank instead of directly to the federal government. (Some banks, of course, do make independent loans to students in addition to these federally subsidized loans.)

Lawmakers opposed to student loan reform, like Nebraska’s Ben Nelson, have banks in their districts that benefit from the current arrangement. Between these lawmakers and lobbyists of the student lending industry, there are enough powerful interests here to keep the status quo if Obama and Congress dither. But there’s no defense of the status quo — student loan reform should be an easy and important triumph for Obama this year.

Pat Quinn

The Chicago Tribune’s Ray Long, Monique Garcia and Bob Secter have a good report on Illinois Gov. Pat Quinn’s proposal to raise the state income tax rate from three percent to four percent (or as the paper more dramatically puts it: a 33 percent raise). Quinn is proposing this because on July 1, the deadline for the Illinois governor to sign a balanced budget, the state is expected to have a $13 billion deficit. That’s an astonishing deficit for a state government that spends about $26 billion a year.

Quinn, up for election this year, has predictably run into opposition from state Republican lawmakers also up for reelection. But even the Illinois Democratic Speaker of the House, Mike Madigan, (speaker of the house since 1983), says, “The people of America don’t want tax increases…they’re hurting.” The Tribune, though, outlines why Illinois needs to raise taxes. A proposed no-tax hike budget would, for example, result in 17,000 teachers getting laid off.

Illinois is one of just six states with a flat income tax — and it has the lowest tax rate of the six. By comparison, California, facing its own budget doomsday, has a progressive income tax requiring the wealthiest citizens to pay 9.3 percent. Also, the Tribune reports that Quinn’s tax proposal would only raise $2.8 billion for Illinois. So the state still would have to come up with $10 billion worth of spending cuts and borrowing.

The tax hike is a modest part of the solution to an enormous problem. No serious Illinois budget policy analyst says we can do without a higher taxes. Yet the urgency of the fiscal situation doesn’t publicly register with lawmakers — and they might claim it to be a political liability if it did.

Politics, shaky economy create no rush to restructure Fannie and Freddie – Zachary A. Goldfarb reports that the Treasury Department has no immediate plans to reform government-run housing lenders that play big role in recovery

Compromise would shield payday lenders, pawnbrokers and car dealers from oversight – Binyamin Applebaum reports on exemptions from consumer regulation for non-bank lenders in Senate financial reform bill

Rise in Washington area unemployment seen as good sign for economy’s recovery – V. Dion Haynes reports on Bureau of Labor Statistics figures, interpreted as more people returning to job hunting because more optimistic about economy

Use of private security guards at government buildings comes under scrutiny – Ed O’Keefe reports that upcoming hearing will examine oversight, training of private guards under contract with Homeland Security Department’s Federal Protective Service

NHTSA chief says rate of Toyota complaints was ‘unremarkable’ – In advance of congressional hearing on NHTSA’s response to unintended acceleration complaints, Peter Whoriskey reports that new head of the agency defends response because no defect was identified, previous agency head disagrees

Overworked U.S. embassy in Kabul straining to meet administration’s demands – Karen DeYoung reports that State Department Inspector General report says huge expansion of largest U.S. mission strains resources, security

New York Times

TARP panel finds fault with GMAC bailout – Sewell Chan reports that congressional panel overseeing TARP raises questions about Bush administration’s $17.2 billion bailout of auto finance arm

More messages link Senator to job effort – Eric Lichtblau and Eric Lipton report that emails turned over to the F.B.I., Senate ethics committee damaging to Senator Ensign (R-Nev.)

Goldman deal-maker now advocates regulation – Graham Bowley reports on “conversion” of CFTC chief, former Wall Street executive, now pushing for regulation

Panel urges new look at Caesarean guidelines – Denise Grady reports on new recommendations at National Institutes of Health conference

Antitrust and your vote – Editorial Board urges Justice Department to do more to prevent anticompetitive behavior by voting machine manufacturers

Wall Street Journal

U.S. monthly budget deficit balloons to a record – Meena Thiruvengadam and Jeff Bater cover Treasury Department’s budget report showing deficit largest ever in February, up 10.5% from last year, some positive revenue developments

Census jobs tough to fill – Ana Campoy reports that the U.S. Census Bureau needs workers in “hard-to-count,” largely Spanish-speaking communities

Monsanto draws antitrust scrutiny – Scott Kilman reports on Justice and Agriculture Departments’ joint public “workshops” to air complaints about anticompetitive behavior in farm industry as Justice investigates biotechnology company Monsanto

Toyota complaints surged after first recall – Alexandra Berzon and Gabriel Kahn say NHTSA records show spike in complaints to agency after Toyota recall in September

Sebelius cautions health insurers about premium increases – Patrick Yoest reports on Health and Human Services Secretary’s remarks at insurance policy meeting

– compiled by Marci Greenstein

The hardest part of his job, Geithner often says, is getting people to comprehend the inner logic of a financial-rescue operation, and the unpopular actions it entails. In fact, his problem may be not economic illiteracy but its opposite: Americans understand all too well what has happened. Financial crises have a way of revealing aspects of our economic system that otherwise remain obscured, such as the symbiotic relationship between Wall Street and Washington, the hidden subsidies that financial firms sometimes receive from the Fed and other government agencies, and the fact that the vast profits that firms like JPMorgan Chase and Goldman generate depend in part on an implicit guarantee from the taxpayer. When ordinary Americans are confronted with these realities, they get angry. “People just don’t get how these institutions got bailed out and their people are still making big bonuses,” Mark Zandi noted. “It just does not compute. No matter what you say, you can’t persuade them it’s right.”

In other words, the system’s unfair and people understand that. It seems appropriate then to be upset at Geithner. Yes, Geithner has managed the Troubled Asset Relief Program surprisingly well and, yes, he has averted a larger, more expensive financial catastrophe. But why hasn’t Geithner used his position of power to change an American economic system that has become increasingly top-down and dependent on Wall Street?

The ultimate success of Geithner’s tenure will only partly be judged by his ability to rescue an unfair and unsustainable American economy. It will also be judged on whether he spends the next two years or six years or however longer he’s Treasury secretary pushing for changes like financial regulatory reform and revisions of the tax code. Geithner’s expertise is cleaning up after disasters — it’s not clear if he has what it takes to prevent the next disaster.