Despite Food Assistance Programs, Many American Children Experience Hunger

Approximately 49 million people, including 17 million children, experience household food insecurity – the lack of resources required to sustain the nutritional needs of family members – according to the U.S. Department of Agriculture. However, this number may be even higher when examining the specific food needs of children. In a recent University of Missouri study, researchers found that food insecurity and hunger among children still persist, even in food secure households and despite food assistance programs and efforts to increase food security.

Children are considered food insecure if, in the last year, they did not eat enough, did not eat for a day, skipped a meal or were hungry because their family could not afford adequate food. In the study, ManSoo Yu, assistant professor in the MU School of Social Work and Master of Public Health Program, examined different factors related to food security among households and children, including racial comparisons among vulnerable households, participation in the food stamp program and informal food supports.

“We found that household food security does not equate to food security for children within those households,” Yu says. “Therefore, children who experience food insecurity may live in households that are defined as food secure. This is alarming considering previous research that indicates food insecure children are more at-risk for being overweight, having poor health, poor academic performance and poor psychosocial functioning.”

Yu finds that informal assistance through churches, food pantries and soup kitchens, was related to improved child food security. Participation in the food stamp program was related to increased food security among children in Caucasian households, but not in African-American households.

Yu suggests strengthening informal and community-based food assistance programs to be more responsive to the specific nutritional needs of children. He recommends that policy makers examine formal food assistance programs, such as the food stamp program, to improve the response to needs of families in different communities.

“This study provides a better understanding of different factors related to issues of hunger and inadequate nutrition in children,” Yu says. “National and community-level programs need to address the relationship among household food security, child food security and the health of children in vulnerable households.”

The study, “Food Stamp Program Participation, Informal Supports, Household Food Security and Child Food Security: A comparison of African-American and Caucasian households in poverty,” was published in the May issue of Children and Youth Services Review.

Data for the study was collected from the Food Security Supplement and the 2003 Current Population Survey, conducted by the U.S. Census Bureau for the U.S. Bureau of Labor Statistics.

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After 2008 Meltdown, Fla. Researcher Considers Role of Morality in Modern Economic Theory

The worldwide financial crisis in 2008, which led to what many in the United States now call the “Great Recession,” has caused researchers to rethink traditional economic theories of financial markets and the corporate world. Even renowned financial theorist Michael Jensen, whose widely cited work has laid the foundation for the broad use of stock options as an executive compensation tool, has called on his fellow researchers to incorporate “integrity” into their economic models.

Douglas Stevens, an associate professor of accounting at The Florida State University, is among those who for years have proposed incorporating morality within traditional economic theory. He has published a number of experimental studies documenting that economic decision-makers frequently factor morality into their judgments and behavior.

The 2008 financial meltdown led to more than $1 trillion in taxpayer-funded bailouts of the financial industry and U.S. automakers.

Now, Stevens and a colleague have published a paper that incorporates morality into the economic theory of the firm that Jensen made dominant in accounting and finance. The paper, by Stevens and Alex Thevaranjan, an associate professor of accounting at Syracuse University, is titled “A Moral Solution to the Moral Hazard Problem.” It was recently published in the peer-reviewed journal Accounting, Organizations and Society.

In that dominant economic theory of the firm, known as principal-agent theory, a principal must hire an agent to perform some productive effort. A “moral hazard” arises, however, because the principal cannot observe the effort of the agent and the agent is motivated to shirk. Under the traditional assumptions of the model, the principal must pay the agent a financial incentive to induce any effort from the agent.

The principal-agent model has been useful in accounting and finance because it addresses conflicts of interest that arise within the firm, according to Stevens. However, a common complaint is that it relies too heavily on financial incentives to solve the moral hazard problem. The high-powered financial incentives prescribed by the theory have been criticized for generating excessive executive compensation and risk-taking — which analysts say precipitated the recent financial crisis.

Stevens and Thevaranjan extend the traditional principal-agent model by endowing the agent with “moral sensitivity” — that is, a disutility for breaking a previous agreement. Thus, their model answers Jensen’s call to incorporate integrity into economic theory. This is significant because principal-agent theory, the most mathematically formal economic theory of the firm, has previously been closed to moral content.

Incorporating moral sensitivity into the traditional principal-agent model allows Stevens and Thevaranjan to make several contributions to the theory. First, they are able to contrast the efficiency of their moral solution with the traditional incentive solution that becomes necessary when moral sensitivity is assumed to be zero. Second, they are able to demonstrate the benefit of the agent’s moral sensitivity to both the principal and the agent, and thereby point out the potential cost of ignoring this moral sensitivity.

Stevens and Thevaranjan conclude that adding moral sensitivity increases the descriptive, prescriptive, and pedagogical usefulness of the model.

“We know from simple observation that the traditional principal-agent model is not fully descriptive of real-world behavior,” Stevens says. “A majority of people are paid a fixed salary in their jobs and yet provide sufficient effort for their pay. This is particularly true in professions and nonprofit firms where the financial incentives required by the traditional model are difficult if not impossible to arrange. The traditional principal-agent model can’t explain this behavior. Our model, however, demonstrates that a principal can pay a morally sensitive agent a fixed salary that is increasing in the productivity of the agent’s effort.”

Their model also demonstrates the value of moral sensitivity to the firm and society.

“Our model suggests that moral sensitivity increases the efficiency of principal-agent relationships within the firm — which makes more of these relationships possible — and allows the agent to receive a fixed salary that is increasing in his or her productivity or skill,” Stevens says. “Thus, moral sensitivity increases the general welfare of society by decreasing unemployment and increasing the productivity and pay of those who are employed. This explains the emphasis placed on moral training within the firm and society at large. This also provides a warning against letting moral sensitivity diminish.”

Stevens and Thevaranjan have used their model to teach accounting and MBA students the importance of professional ethics. Whether the traditional approach of ignoring morality and emphasizing financial incentives caused the financial meltdown is debatable, but Stevens believes it is time for business schools to return to emphasizing professional ethics.

“Every financial crisis and scandal is a wake-up call — for both practitioners and academics,” Stevens says. “Hopefully, we won’t waste yet another financial crisis.”

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Obama Group Readies For Senate GOP's Planned 'Don't Ask, Don't Tell' Obstruction

President Obama is mobilizing the network of millions of Web-connected supporters he built in the 2008 campaign to counter threats Republicans are making to block a repeal of the military's "Don't Ask, Don't Tell" policy.

Organizing for America (OFA), a Democratic advocacy group built from Obama's campaign apparatus, emailed the president's supporters Friday, asking them to join an Internet pledge to back the repeal of "Don't Ask, Don't Tell," the 17-year-old policy which allows gays to serve in the military only if they keep their sexuality hidden.

Obama promised to do away with "Don't Ask, Don't Tell" during his 2008 campaign, and vowed in January during his State of the Union address to make good on that commitment this year. Supporters of repeal have noted that more than 250 gays and lesbians have been discharged from the armed forces since Obama's 2009 inauguration.

It's estimated some 65,000 gays and lesbians currently serve in uniform.

The full House and the Senate Armed Services Committee on Thursday separately approved legislation that would repeal "Don't Ask, Don't Tell" and allow gays to serve in uniform openly.

The full Senate must now approve the legislation and send it to Obama to sign into law, which would end the ban on gays serving openly.

In his email, OFA Director Mitch Stewart says Senate Republicans plan an attempt to block Democrats from bringing the repeal legislation to a vote. Social conservatives have been working vigorously to try to derail a repeal of "Don't Ask, Don't Tell."

"The full Senate will soon start its debate on repeal. But some Republicans are digging in their heels," says Stewart, who was an architect of Obama's primary and general election campaigns in 2008. "Senator John McCain said, 'I'll do everything in my power' to block a vote. And Mississippi Senator Roger Wicker called the repeal bill 'a major mistake' -- announcing that the GOP plans to filibuster.

"We can defeat those who'd stand in the way of history. But we must show our senators that Americans -- in every state -- overwhelmingly support repeal," Stewart adds.

With 41 Republicans in the chamber, the Senate GOP has enough members to sustain a filibuster of legislation as long as all Republicans hold together for such obstruction.

Since Obama's election, OFA has been folded into the national Democratic National Committee. The group, which sends its emails using the barackobama.com Internet domain, has worked to mobilize the president's supporters a number of times to advance his priorities, including to push passage of healthcare reform and financial reform legislation. OFA emails reach an estimated 13 million email addresses collected during Obama's White House bid.

Stewart says that repealing "Don't Ask, Don't Tell" is about more than Obama keeping a campaign promise, but rather because "it's the right thing to do."

"Any policy that punishes brave men and women who step forward to serve their country simply for being who they are isn't just misguided -- it's discrimination," Stewart adds. "That's why President Obama didn't just campaign on ending 'Don't Ask, Don't Tell'; he made it a priority. And it's why it's now a matter of how and when -- not if -- we will repeal this law.

"But as the Republicans prepare to block a vote on this historic legislation, we must do all we can to help deliver on the President's promise," Stewart says.

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House Bill Puts Main Street Ahead Of Wall Street -- But Now What Will The Senate Do?

Aiming to put the needs of Main Street ahead of Wall Street, the House Friday approved legislation to clamp down on corporations that avoid paying taxes and provide incentives to create American jobs.

It's now up to the Senate to decide whether to maintain a provision of the bill that would close a loophole that gives preferential treatment for wealthy investment fund managers who pay the same taxes as other Americans who make much less.

The House passed the the American Jobs and Closing Tax Loopholes Act by a vote of 215 - 204,
which would curtail tax avoidance by multinational corporations and lessen the incentive to move jobs overseas. The act also would tax the income of investment fund managers as income and not at the 15 percent capital gains rate, which is the current practice.

It also would aid small business lending, and help spur job creation through infrastructure projects and other provisions, according to a summary of the bill provided by the House Ways and Means Committee.

“This is a jobs bill,” says Ways and Means Committee Chairman Sander Levin (D-Mich.). “It will create more jobs and help sustain the recent job creation and recovery we have seen in recent months. This bill spurs job creation through tax cuts and loan relief to small businesses, as well as bond provisions to fund infrastructure improvements in our cities and towns. This bill provides more than $26 billion in tax relief for families and incentives for businesses and infrastructure improvements to create jobs. We pay for these investments in families and businesses by closing loopholes that encourage companies to ship jobs overseas.”

Major labor unions and consumer-interest groups hailed the new legislation for putting the interests of average Americans ahead of the desires of big corporations and banks.

"These tax reforms couldn’t come at a more important or more appropriate time. This bill ends the practice of subsidizing Wall Street gamblers who get a tax break for getting up in the morning and doing their jobs. It changes a system that rewards corporations that move jobs and profits offshore," says Nicole Tichon, tax reform analyst for U.S. Public Interest Research Group (U.S. PIRG). "These are simple, common sense ways to simultaneously make the tax system more fair and help restore fiscal responsibility."

Jim Hoffa, general president of the 1.4 million-member Teamsters union, praised a number of the bill's provisions, including measures that would protect pensions, limits to companies' ability to avoid paying taxes, and extension of unemployment benefits.

"For most working families, this country is still in a recession," Hoffa says. "Extending unemployment benefits not only help workers who've lost their jobs, but they help the economy as a whole because recipients spend them quickly in their local community."

Lawmakers left Washington for the regular congressional Memorial Day recess. The Senate, though, is expected to consider the bill when it reconvenes in June. Supporters of the legislation say they will want to see how senators treat the so-called "carried interest" provision contained in the House bill.


The Carried Interest 'Injustice'


The House bill closes the "carried interest" loophole that enables wealthy traders on Wall Street making tens of millions of dollars annually to pay the same tax rate as an American making just $34,000 a year or less, Tichon says.

Tichon sent Senate Finance Committee Chairman Max Baucus (D-Mont.), and ranking Republican Charles Grassley of Iowa a letter earlier this month, urging them to keep the loophole closed in the final legislation.

"To put the injustice in perspective, a single person qualifying for a 15 percent rate makes $8,375 - $34,000 per year. But top fund managers, who also pay a 15 percent rate, bring home at least $75 million per year in [a] 'down year' and as much at $570 million in a good year," the letter says. "Two types of workers, with an income spread of multiple millions, are taxed the same.

"While millions of Americans lost their jobs, their savings, their retirement, their health care and their homes, why is Washington in the business of subsidizing some of the very people who bet on the market collapse? It's unfathomable that by simply mislabeling their income these mega-millionaires are taxed at a rate less than teachers, police officers and small business owners, for example," she adds.

Those who don't want to see the loophole closed have characterized its closing as a "tax increase," when "in fact it is just treating these employees and employers like the rest of us," Tichon notes.

"Similarly situated workers are taxed at a rate of 35 percent and have payroll taxes added on as well," she says.

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For Obama's War, Reid Says: 'Stay The Course'

Majority Leader Harry Reid went to the Senate floor to fume at the commander-in-chief.

Reid complained of the long deployments troops had to endure, and of the high costs to the American taxpayer, for a war that continued to drag on, seemingly without end.

“The President still doesn’t understand that America’s limited resources cannot support his limitless war," the Nevada Democrat lamented.

Reid gave that speech on April 10, 2008, and it wasn't for the first time that he castigated the man who occupied the Oval Office over the way the president was conducting the war. The war that Reid was railing against was in Iraq, and the commander-in-chief the senator berated as clueless was George W. Bush.

But two years later, Reid has changed his tune, warning that when it comes to war today, “now is not the time to change course.”

The former war critic Thursday found himself in the position of directly opposing legislation from a fellow Democrat, Sen. Russ Feingold of Wisconsin, for the sake of continuing another lengthy armed conflict drawing U.S. blood and treasure.

The difference is that today the war Reid seeks to keep going is, instead, in Afghanistan, and the commander-in-chief Reid went to bat for was Barack Obama.

It is was with no apparent sense of irony that Reid led the Senate to defeat Feingold's proposal that would have called on Obama to provide a timetable to end U.S. operations in Afghanistan, which have been ongoing since 2002.

Feingold tried unsuccessfully to attach his measure as an amendment to the war spending bill that was before the Senate this week, the same week that saw the solemn occasion of the 1,000th U.S. fatality in the Afghanistan conflict. The Senate defeated the Feingold amendment on a lopsided vote in which just 18 senators supported the requirement of a timetable.

“While I am disappointed it did not pass, I am encouraged by the support my Afghanistan timetable amendment received, particularly by most of the Senate Democratic leadership,” Feingold says, referring to the votes of Assistant Majority Leader Dick Durbin (D-Ill.) and Democratic Caucus Chair Chuck Schumer (D-N.Y.), in favor of his proposal. “This amendment would have given the American people the information they deserve on when our massive, open-ended military operation in Afghanistan will end. Now, however, this supplemental will add some $30 billion more to the nearly $300 billion we’ve already spent in Afghanistan, with no end in sight. This cannot go on and is yet another reason why a flexible timetable for drawing down our troops in Afghanistan is necessary and appropriate.

“This amendment is the first attempt in the Senate to get an idea of when this nine-year war in Afghanistan will end,” Feingold adds. “Only 13 senators supported my original attempt to require a timetable for Iraq, and today, a timetable is exactly what is in place in Iraq. I am confident that, over time, more and more members will listen to their constituents and support my efforts to require a flexible timeline for ending the Afghan war.”

Defending his decision to torpedo the Feingold amendment, Reid argued that Obama had "articulated a sound strategy" to continue the war, deploying 30,000 additional American troops to the conflict while also having announced a goal to withdraw U.S. forces in July 2011.

“I have always believed that our commitment in Afghanistan should not be open-ended, which is why I continue to support the President’s plan,” Reid says. “We have begun to reverse the Taliban’s momentum in Afghanistan and weakened al Qaeda’s operations, safe havens and leadership in the region. Our troops will continue to defeat those terrorist networks and others like it and we will continue to press the Afghan government to end corruption and take responsibility for governing the country. But, as the President’s plan makes clear, these troops have a clear task in place: to reverse the Taliban’s momentum and to begin returning home next July.

“In light of the President’s strategy and the recent progress, now is not the time to change course,” he adds.

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Senate Dems: BP's 'Act Of Treachery' Puts Billions Of Dollars At Risk In Gulf Coast Economy

The true costs of hundreds of thousands of barrels of oil flooding the Gulf of Mexico aren't known, but it's clear that BP's disaster jeopardizes billions of dollars in the Gulf Coast economy, Democratic senators say.

Putting at risk the livelihoods of Americans who work in the tourism and commercial fishing industries along the oil-soaked coast demands that BP be offered "no legal wiggle-room," and must pay for the full scope of the catastrophe, the lawmakers say.

Four Democratic senators held a press conference Thursday to discuss the economic effects of the BP oil spill, which began last month with an explosion on an offshore drilling platform leased by the energy titan. The Senate Democratic Policy Committee also Thursday released a new report detailing the destructive economic impact of the spill, now officially the largest in U.S. history.

“Right now, our top priorities are capping the well and protecting and cleaning up the Gulf and Gulf coast,” says Sen. Bill Nelson (D-Fla.). “The cost of all this is going to be astronomical. This is why we must hold BP accountable.”

The senators called on Republicans to stop blocking legislation that would ensure that BP -– not the American taxpayer -– pays for the damages of the disaster, no matter what the cost.

Nelson and other senators have introduced legislation designed to raise the cap that BP would be subject to in paying damages for the ongoing spill. Their bill would raise that cap from the current $75 million, to $10 billion. Republicans, however, have been filibustering the measure.

“People understand the ridiculousness of the claims some have made that it is ‘un-American’ to hold a multi-billion dollar foreign corporation accountable for the disaster it caused,” says Senator Bob Menendez (D-N.J.), another sponsor of the Big Oil Bailout Prevention Act.

Menendez was referring to recent comments by Kentucky GOP Senate candidate Rand Paul, who called President Obama's criticisms of BP "un-American."

“This is a chance to show if we stand with big oil companies or with small businesses, fisheries, and coastal communities,” Menendez adds. “There should be no legal wiggle-room for oil companies that devastate coastal businesses and communities now or in the future.”

The Democrats' new report finds that the oil spill pegs the Gulf Coast's affected tourism industry at $20 billion, and another $60 billion in Nelson's home state of Florida. The report says that hotel occupancy rates will crater 70 percent over the long Memorial Day holiday weekend along the Florida panhandle.

In Alabama, where 41,000 workers were supported by the state's beaches in 2008, the hotel cancellation rate has reached 50 percent on Dauphin Island where the first tar balls came ashore, the report says.

Commercial fishing also is positioned to take a big hit, the Democrats say, with 46,000 square miles currently closed to fishing due to the spill. Some 20 percent of U.S. seafood comes from the Gulf Coast, where the value of the seafood harvest due to have begun May 15 is $21 billion.

“BP has committed an act of treachery in the Gulf that will go down as one of the most deplorable catastrophes in American history,” says Sen. Frank Lautenberg (D-N.J.), and a longtime foe of offshore drilling. “It’s clear that a $75 million liability cap won’t come close to covering the economic damages caused by this disaster in the Gulf. Whether it is fishermen, hotel workers or shop owners, our nation depends on an unspoiled coastline. Taxpayers shouldn’t be the ones paying to take care of the people and communities hurt by BP’s pollution.”

It was less than five years ago that the Gulf Coast's economy took a hit, particularly around New Orleans, due to the severity of Hurricane Katrina.

Sen. Jeanne Shaheen (D-N.H.) called it "unacceptable" that BP made more than $16 billion in profits last year, but currently are currently only responsible for $75 million of the expected billions in economic damage.

“BP and the contractors it hired are to blame for this disaster. They should be on the hook for the economic damages caused by this mess – not taxpayers,” she says.

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Speaker Has Obama's Back: Pelosi Blames Bushies Still 'Deep In Bureaucracy' For BP Oil Spill

House Speaker Nancy Pelosi is forcefully defending President Obama for his handling of the aftermath of the Gulf Coast oil spill, pinning the blame for the disaster on Bush administration appointees still within government.

Pelosi voiced her support for Obama after the president gave a lengthy White House news conference Thursday pertaining to the ongoing spill, in which upwards of 100,000 barrels of crude are leaking daily into the waters off the Louisiana coast.

At the news conference, Obama announced new restrictions on deepwater drilling, which Pelosi describes as "tough and appropriate," as well as suspension of oil exploration efforts off the northern coast of Alaska, and the cancellation of lease sales in the Gulf of Mexico and off the coast of Virginia.

Media reports portrayed Obama as on the defensive during the session with reporters, which took place more than a month after an explosion on an offshore drilling rig leased by BP caused the massive spill, which is now the worst in U.S. history.

“After eight years of the Bush Administration’s cozy relationship with Big Oil, President Obama is working to rid regulatory agencies of Bush appointees burrowed deep into the bureacracy," Pelosi says. "The performance of these appointees indicates they are incompetent or placing the interests of the oil industry over the interests of their nation."

Pelosi cites a new report from the Interior Department's independent inspector general as "a reminder of this [Bush] legacy and the need to clean house."

That inspector general investigation found that workers within the Interior agency which regulates offshore oil and gas drilling had been taking football tickets, trips and other gifts from the very companies they were to be regulating. The report covered the wrongdoing of employees of the Minerals Management Service (MMS) from between 2000 and 2008, before Obama came into office. Interior Secretary Ken Salazar earlier unveiled plans to break up MMS into three separate agencies to avoid conflicts of interest. Also Thursday, the Obama administration said the head of MMS would be leaving her post.

Pelosi also backed Obama's continued push to enact new legislation to address energy policy and regulate the emissions blamed for global climate change. Sens. John Kerry (D-Mass.) and Joe Lieberman (I-Conn.) recently introduced their American Power Act to contain greenhouse gases, and reduce U.S. dependence on fossil fuels.

“The president rightly pointed out the need to pass comprehensive energy and climate legislation through Congress," the speaker says. "The American Clean Energy and Security Act, passed by the House last June, will create clean energy jobs here in America, protect consumers, reduce our dependence on dirty and foreign fuels, and help ensure our national security. We have much common ground with the Senate bill and look forward to its progress.”

Pelosi also vowed to maintain tough oversight from Capitol Hill, in which House and Senate committees have been hauling top administration officials, BP executives, and others, to Congress to answer for the disaster.

“House committees have held and scheduled more than two dozen oversight and investigative hearings on this disastrous oil spill," the California Democrat says. "We will increase the fee that oil companies pay into the oil spill trust fund to ensure the industry pays, not the taxpayer. And as we get more information from committee oversight and the various investigations, we will take up legislation to address the problems that led to this tragedy."

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Cleanup Boats Sent to Shore After More Workers Get Sick

by Ryan Knutson, ProPublica

All 125 commercial vessels working to clean up the oil spill in the Gulf of Mexico have been ordered back to shore temporarily after four workers on three separate vessels became ill, according to a Deepwater Horizon Response press release.

It's unclear whether the crew members were working with chemical oil dispersants, which have been criticized for their toxicity. Our calls to officials in the region have not yet been returned.

The sick workers said they had headaches and chest pain, and were nauseated and dizzy. One was taken by helicopter to a hospital in Marrero, La., another was taken by boat and two were taken in an ambulance, according to the press release.

The current symptoms mirror those of other fishermen who were hired by BP to help clean up the spill, as we pointed out earlier this week. The dispersants BP is using to break up the oil have many health risks of their own. Earlier this month, the EPA told BP to stop using the chemicals and to switch to something else, but BP says there is no better alternative.

Write to Ryan Knutson at Ryan.Knutson@propublica.org.

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Dean Group Mounts BP Boycott Over Spill

A group of progressives associated with the former head of the Democratic Party is urging supporters to boycott BP until the energy giant cleans up the continuing massive oil spill in the Gulf of Mexico.

The call for the boycott Thursday by Democracy for America (DFA) comes a month into a spill that still hasn't stopped, and is leaking as many as 100,000 barrels of crude daily into the waters off of the Louisiana coast, and as President Obama signaled further action as a result of the disaster.

BP, the fourth-largest corporation on the planet, is in the midst of its latest attempt to stop the flow some 5,000 feet beneath of the surface of the Gulf in a maneuver known as "top kill."

"It's been over a month and the oil catastrophe caused by British Petroleum in the Gulf isn't even close to being contained, much less cleaned up. To make it worse, even as we await the results of the latest attempt to stop the flow of oil gushing from the well, BP continues to not allow anyone other than themselves the ability and access to fully investigate the extent of the problems," DFA Chair Jim Dean says in an email announcing the boycott.

"Why won't BP share the full information needed to assist in the emergency response and complete understanding of the severity of the disaster? Because, as it stands right now, they have a lot of incentive to never let us know the full truth," adds Dean, whose brother is Howard Dean, a former Vermont governor and ex-chairman of the Democratic National Committee. "It's likely the smaller the official estimates of how much has spilled, the lower BP's liability could be when it comes time to pay for cleaning it up."

Jim Dean asks supporters to buy "gas from anyone but BP until the disaster is cleaned-up."

"Clearly, BP's bottom line is more important to them than stopping and cleaning up the damage they've caused," Dean says. "Enough is enough. It's time to speak to BP in a language they will understand."

DFA was founded based on Howard Dean's campaign operation for his failed 2004 candidacy for the Democratic nomination for president. DFA had been largely devoted to advancing progressive positions in the healthcare reform battle, and more recently, has been advocating for an end to the "Don't Ask, Don't Tell" policy which bans gays from serving openly in the armed forces.

In his email, Jim Dean says BP is "extremely sensitive to public pressure right now," and that a large-scale boycott will create the economic leverage to push the energy giant to act more aggressively to end the spill and clean up the mess.

"By taking matters into our own hands, we're not waiting around hoping for BP to do the right thing or for Washington to take action. We're doing something right now -- as individuals -- that has an immediate impact on BP's bottom line," Dean says. "And the longer they take to get the job done, the bigger the impact of our campaign."

Also on Thursday, Obama held a White House press conference on the month-old oil spill, in which he announced a six-month ban on new deepwater oil wells. The president also vowed to hold BP "fully accountable" for the spill.

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Healthcare Reform Is Finished, But Senators Aren't Done Trying To Lower Drug Costs

They may not have won during the long and tumultuous healthcare reform debate, but there are those in Congress who want to help you pay less for your prescription drug costs -- and they haven't given up.

Lawmakers failed to include key provisions to lower the skyrocketing costs of prescription medications in the final healthcare bill President Obama signed into law back in March, but they are still trying to enact their reforms in new ways.

Sen. Russ Feingold (D-Wisc.) this week introduced his Fair Pricing for Prescription Drug Act to authorize the safe importation of prescription drugs from other industrialized countries and require price negotiation for Medicare Part D purchases.

The pharmaceutical industry raised prices on brand-name prescription drugs by about 9 percent last year, at a time when prices for most consumer products are falling, notes another key drug-cost reform advocate, Sen. Bernie Sanders (I-Vt.).

The increase in prices puts the yearly cost at around $2,000 for a brand-name prescription drug that is taken daily, Sanders says.

Feingold’s legislation would allow the United States to import FDA-approved drugs from Canada, Europe, New Zealand, Australia and Japan, which often cost just a fraction of what the same medications sell for in the United States.

Feingold says his bill could save the federal government $19.4 billion over 10 years, and save consumers at least $50 billion. The legislation builds on reimportation legislation previously introduced by Sen. Byron Dorgan (D-ND).

Dorgan and others on Capitol Hill fought to have drug reimportation authorization included in the big healthcare bill enacted this year, but saw the provisions stripped out during negotiations to corral votes for reform. The pharmaceutical industry has long opposed drug reimportation.

The industry association that represents drugmakers spent more than $26 million in lobbying to advance its overall agenda last year and influence Washington, according to data from the Center for Responsive Politics.

“For too long, the prescription drug market has favored big pharmaceutical companies, leaving Medicare beneficiaries and other consumers to foot the bill for outrageously high prescription drug prices,” Feingold says. “The importation of prescription drugs would help Americans pay for to the safe FDA-approved medications they need. This legislation would lower the cost of prescription drugs for consumers, and help save taxpayer dollars at the same time –- it’s a win-win.”

The Fair Pricing for Prescription Drug Act would also authorize Secretary of Health and Human Services Kathleen Sebelius to negotiate prescription drug prices on behalf of Medicare Part D beneficiaries, which has been prohibited since the program was created in 2003.

The Department of Veterans Affairs (VA) negotiates prescription drug prices and generates significant savings through the negotiations. Feingold says his legislation would ensure Medicare Part D beneficiaries and taxpayers are also getting the best deal possible deal from drug price negotiations. Feingold adds that his legislation is similar to that previously introduced by Sen. Bill Nelson (D-Fla.) and Rep. Peter Welch (D-Vt.).

“With more than $50 billion in tax dollars going toward funding Medicare Part D, it is completely irresponsible to continue this ban,” Feingold says. “There is absolutely no reason Medicare beneficiaries and taxpayers are not getting the best possible deal on their prescription drug prices.”


Going North of The Border


Meanwhile, Dorgan is taking a different approach to continuing his fight to lower the drug costs that Americans face.

Dorgan announced a proposal in April for a new prescription drug importation plan with Montana Gov. Brian Schweitzer (D). They are requesting that Sebelius approve a pilot project allowing North Dakota and Montana residents to import lower-priced prescription drugs from Canada, which would allow citizens in those border states to purchase of medication from Canadian pharmacies. Dorgan and Schweitzer say their plan could lower prescription drug costs for consumers by as much as 35 to 50 percent.

Residents of Montana and North Dakota filled more than 18 million prescriptions in 2008, spending more than $1 billion, Dorgan says on his Senate website. Allowing residents of the two states to access lower-priced medication from Canada could save as much as $400 million per year, he adds.

Dorgan and Schweitzer point to authority in existing law that would allow Sebelius to develop a such a pilot program to lead the way for safe drug importation for the entire nation.

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War Spending Bill Also Includes Bucks For Jobs, Oil Spill Cleanup, And More

The House Appropriations Committee is expected to vote Thursday on a supplemental spending bill designed to continue funding combat operations in Afghanistan which also includes billions to save teaching jobs nationwide, start addressing cleanup due to the BP oil spill, and other domestic initiatives.

The legislation would provide more than $37.5 billion to support U.S. troops, conduct the war in Afghanistan, continue to draw down troops in Iraq, and provide non-military assistance and build up State Department operations in Iraq, Afghanistan, and Pakistan, according a summary of the bill provided by the committee.

It also would fund a variety of domestic programs, too, including $24.7 billion to retain teachers, police officers and firefighters in their jobs nationwide. That includes $23 billion for an Education Jobs Fund to provide additional emergency support to local school districts to prevent impending layoffs, the appropriations committee says. Without the proposed funding, it is estimated that as many as 300,000 elementary and secondary teachers will be laid off in the coming year due to the ongoing poor economy.

“Providing all our children with a world-class education is critical to a sustainable economic recovery. Sadly, budget cuts across the country have threatened the jobs of hundreds of thousands of our teachers, guidance counselors, principals, cafeteria workers, librarians and more,” says Rep. George Miller (D-Calif.), who earlier this year authored separate legislation to direct federal aid to help local teaching jobs. “These job losses are devastating for students and our communities. We can’t allow a child’s education to become a casualty of what is happening in our economy.”

Miller says he appreciates Rep. David Obey (D-Wisc.), the chairman of the House Appropriations Committee, including the funds for teaching jobs in the war supplemental.

“I want to commend Chairman Obey for his vision and unwavering commitment to America’s students, teachers and families. Chairman Obey knows that with serious investments in education jobs, we can stave off a crisis in our nation’s schools by keeping teachers in the classrooms helping our children learn,” Miller adds.

The war funding bill also would direct $224 million toward the Gulf Coast oil spill. As much as 100,000 barrels of crude are leaking daily into the waters off Louisiana due to an explosion last month on an offshore drilling platform leased by BP.

The funding to deal with the massive oil spill includes: $83 million for unemployment assistance related to the oil spill and an oil spill relief employment program; allowance for the Coast Guard to receive advances from the Oil Spill Liability Trust fund; $7 million for oil spill response activities by the National Oceanographic and Atmospheric Administration, including scientific investigations and sampling; $14 million to respond to economic impacts on fishermen; $10 million for Justice Department legal activities associated with the spill; $5 million for economic recovery planning; and $31 million for the Department of the Interior to conduct additional inspections and enforcement and to strengthen oversight and regulation and for the Environmental Protection Agency to conduct a long-term risk study.

House appropriators emphasize that all costs directly related to the Gulf Coast oil spill must be reimbursed by the responsible parties, which includes BP. Lawmakers on Capitol Hill have been working legislatively to ensure those responsible, including BP, pay for the spill, which is expected to be larger even than the 1989 ExxonValdez spill.

The bill would fund a number of other federal programs, including health programs for veterans, college assistance for students, and more.

As with past war spending bills, the legislation becoming before the House panel Thursday would prohibit funds to be spent to establish a permanent base in Afghanistan or Iraq. Also, it would prohibit funds to support any training program if Secretary of Defense Robert Gates has received credible information that the unit to be trained has committed a gross violation of human rights, unless all necessary corrective steps have been taken, the appropriations committee says.

The bill also would prohibit funds for activities that would violate laws or regulations to implement the U.N. Convention Against Torture or Other Cruel, Inhuman or Degrading Treatment or Punishment, the panel adds.

If approved by the House Appropriations Committee, it would go to the full House for a vote.

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Conservatives Contradicted: Most Polls Support Gays Serving Openly In Military

Seeking to undermine a breakthrough deal that could enable Congress to overturn the "Don't Ask, Don't Tell" policy, a prominent social conservative organization is touting a poll that says a majority of Americans believe military brass, not lawmakers, should make the decision on whether gays should serve openly in the military.

But the supposed weight of the poll as an attempt to prevent an end to "Don't Ask, Don't Tell," (DADT) doesn't hold up on two counts, however.

The poll at issue, paid for by FRC Action, the legislative action arm of Family Research Council, is belied by many other opinion surveys that find broad American support for the ability for gays to serve in uniform without hiding their sexuality. Further, the impact of the FRC Action poll is moot, given the fact that the nation's highest uniformed officer also has given his blessing to end the 17-year-old "Don't Ask, Don't Tell" policy.

Enacted in 1993, "Don't Ask, Don't Tell" allowed gays into the military only if they kept hidden their sexual orientation. Before that, gays were not allowed in uniform under any circumstances. "Don't Ask, Don't Tell" became a compromise at the time between President Bill Clinton, who favored entirely lifting the ban and allow gays to serve freely, and conservatives in Congress who wanted a permanent ban on all gays.

In his 2008 campaign, President Obama vowed to repeal "Don't Ask, Don't Tell," saying gays should be allowed to serve freely. Once in office however, Obama moved slowly to make good on his promise. However, in his State of the Union address in January, the president announced that he wanted to keep his pledge this year.

Key members of Congress, who have been pushing legislation to lift "Don't Ask, Don't Tell," brought the policy closer to an end on Monday when they announced a new deal with the Obama administration to advance their bill. That paves the way for "Don't Ask, Don't Tell" to be history within a matter of weeks.

That has sent opponents of gay military service, notably social conservatives such as those at the Family Research Council, scrambling to somehow derail gays serving openly.

To that end, FRC Action makes the argument that "Don't Ask, Don't Tell" should not be ended because of public opinion, by saying that 59 percent of voters want military leaders, not Congress, to make the decision.

"This administration and liberals in Congress are attempting to use the military to advance a radical agenda as payoff to their homosexual base of political support. Congress and the White House should be listening to our military commanders and exhausting every resource to understand the concerns of our troops -- who will not only be forced to live under this new rule, but who can evaluate the issue through the lens of practicality," says Tony Perkins, president of FRC Action.


Wide Public Support For Repeal


Despite the FRC Action opinion survey, most polls find wide public acceptance for an end to "Don't Ask, Don't Tell." Indeed, a new CNN/Opinion Research Corporation Poll released just in recent days finds 78 percent supporting the ability for gays to serve openly.

"What would be the political costs for the President and Congress of eliminating Don't Ask, Don't Tell? In terms of public approval, not much," says Gregory Herek, a professor of psychology at the University of California at Davis, where he teaches graduate and undergraduate courses on prejudice, sexual orientation, and survey research methodology. "In fact, repealing the policy seems likely to score points with voters. Poll data indicate that opposition to DADT has been steadily increasing in the years since it was first enacted, and that Americans now solidly support getting rid of it."

In a blog post last year, Herek notes that a poll at the time found even a majority of conservatives favored an end to "Don't Ask, Don't Tell."

"This is a policy area in which the public is ahead of Congress and the President," Herek says. "There will certainly be an outcry from some far Right groups when President Obama suspends DADT and Congress overturns it permanently. In contrast to 1993, however, there appears to be a solid base of public support for a new policy that allows lesbian and gay Americans to serve their country without having to lie about who they are."

In a second blow to FRC Action's argument, military commanders have voiced support for an end to the gay ban. Notably, Adm. Mike Mullen, as the chairman of the Joints Chiefs of Staff the highest-ranking uniformed official in the nation, says that he supports repeal of "Don't Ask Don't Tell."

Mullen is quoted as saying, "I cannot escape being troubled by the fact that we have in place a policy which forces young men and women to lie about who they are in order to defend their fellow citizens."

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BP's Spill Liability Not Capped If Company Guilty Of Wrongdoing, Senate Energy Panel Told

BP could be subject to unlimited damages and liability for the massive, month-old oil spill unfolding in the Gulf of Mexico if the disaster was caused by the company's wrongdoing, a top Justice Department official says.

That means the energy giant could be liable for billions of dollars for the damage being caused as upwards of 100,000 barrels of crude leaks daily into the waters off the Louisiana coast, even if Republicans are successful in blocking legislation designed to raise the current $75 million maximum liability BP faces under current law.

The catastrophe was caused by an April explosion on an offshore oil drilling platform called Deepwater Horizon, leased by BP.

BP will be responsible for the full cost of removal and cleanup for the spill no matter what, Associate Attorney General Thomas Perrelli told members of the Senate Energy and Natural Resources Committee. There is no cap on such a responsible party’s liability for removal costs under the Oil Pollution Act of 1990, Perrelli says. The act defines removal costs as the costs of removing spilled oil from water and shorelines or taking other actions as may be necessary to minimize or mitigate damage to the public health or welfare, including wildlife and public and private property, he adds.

The responsible party, which in this case has been identified as BP and the platform's owner, Transocean, must pay in full for the removal costs incurred by the federal government, state governments, and others, Perrelli says.

He testified in the latest of what has becoming an ongoing series of hearings on Capitol Hill seeking answers and accountability for a disaster expected now easily to eclipse the notorious 1989 ExxonValdez incident.

In addition, responsible parties are liable to pay damages resulting from a spill. It is those damages which currently are capped at $75 million. Several Democratic senators have introduced legislation that would raise that cap to $10 billion, but Republicans are blocking that bill.


'Gross Negligence'


Regardless, the cap may be irrelevant, Perrelli says.

"The liability cap does not apply if the discharge was caused by the gross negligence or willful misconduct of the responsible party or of any of its agents, employees, or contractors," he says. "Similarly, no liability cap applies if the spill resulted from the responsible party’s – or its agent’s, employee’s, or contractor’s – violation of an applicable Federal safety, construction, or operating regulation. Under such circumstances, a responsible party would be strictly liable for all damages covered by the statute."

The Justice Department has dispatched a team of attorneys to the spill site to begin probing the cause of the BP spill. Further, a group of Democratic senators recently wrote to Attorney General Eric Holder seeking a full civil and criminal investigation, based on what the lawmakers say appear to be fraudulent statements made by BP.

Perrelli also told the Senate energy panel that the Obama administration supports "a significant increase in liability for offshore oil and gas developers whose actions pollute our oceans and coastlines."

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Wall St. Reform Bill Offers Help For 5 Million Homeowners Facing Foreclosure

The Wall Street reform bill approved last week by the Senate would offer a remedy for 5.5 million homeowners facing foreclosure, according to a Democrat who originated the proposal in the House.

The plan, endorsed by the Obama administration, reduces mortgage payments for the unemployed and is patterned after legislation already passed in the House, according to Rep. Chaka Fattah (D-Pa.), who authored the foreclosure-prevention measure in the House.

The provision will ensure those adversely impacted by the recession will remain in their homes, Fattah says.

The plan, which provides $3 billion out of the the federal TARP fund created in 2008 used to bail out banks, is based on a Keystone State program introduced by Fattah when he was a Pennsylvania state legislator. The Pennsylvania Homeowner's Emergency Mortgage Assistance Program (HEMAP) has a proven track record and has provided $236 million to tens of thousands of unemployed workers to stave off the foreclosure process, according to a statement from Fattah's office.

Under the Senate-passed bill, homeowners will be able to borrow up to $50,000 to assist them with their mortgage payments that have a reasonable prospect of resuming mortgage payments within 24 months, Fattah says.

Fattah says he introduced his mortgage-assistance plan in the House knowing that as the unemployment rate continued to rise, millions of families nationwide would be in jeopardy of losing their homes.

"Americans need help, 8 percent of all mortgage holders are currently at risk of losing their homes and that is unacceptable," Fattah says. "I'm encouraged that my colleagues supported my legislation in both the House and the Senate to ensure that families won't be faced with the double blow of being unemployed and homeless."

Fattah's program could fill a void, given the host of problems that have plagued the way the Obama administration's own mortgage-modification program has been performing since it was launched last year. The administration's program, based out of the Treasury Department, has aided just a tiny fraction of the U.S. homeowners who need its help. Indeed, some 155,000 homeowners actually have been dropped from the Obama program, leaving them worse off.

John Cochran, CEO and executive director of the U.S. Conference of Mayors, which is a national association of metropolitan leaders, praised Fattah for his leadership on foreclosure avoidance.

"The additional funds will certainly be welcomed by the nation's mayors who work daily to prevent mortgage foreclosures that are still ravaging too many families and neighborhoods in our nation," Cochran says.

Fattah's provision was approved in the House last year as part of the House version of financial reform legislation. With the Senate approving an overall Wall Street regulation bill, lawmakers now must hammer out differences between the two versions of reform unrelated to the Fattah language to create one, final reform bill to approve and send to President Obama to sign into law.

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GOP Wants Open Conference, But Pelosi Spokesman Says What's Clear Is United Republican Opposition To Financial Reform

Given the Republicans' nearly-united opposition thus far to enacting strong financial reform legislation, their 11th-hour protest smacks of a political stunt, according to a top aide to House Speaker Nancy Pelosi.

The Senate approved its version of financial reform last Thursday, but lawmakers on Capitol Hill now have to reconcile it with a somewhat different version of financial reform passed in the House late last year to create a final bill that could be sent to President Obama to sign into law.

If ultimately approved, these new financial regulations would be the most sweeping overhaul of the rules that govern banking and Wall Street since the Great Depression, and Obama is eager to sign such legislation into law. Obama and other supporters of the bill hope to curtail risky behavior by banks and offer consumers greater protections under the law.

Among other provisions, financial reform would create a new Consumer Financial Protection Agency, which would be a federal agency devoted to protecting Americans from unfair and abusive financial products and services. Wall Street executives have been strenuously opposed to the new regulations, and have worked to defeat them at every turn.

Rep. John Boehner of Ohio, the House GOP leader, last week wrote to Pelosi to demand an open, bipartisan House-Senate conference to craft a final financial regulation bill.

“This subject is too important and affects too much of our economy to be written in its final stages by a select few Democrats and lobbyists behind closed doors. I believe the American public is demanding –- and deserves -– the opportunity to understand what is in –- and not in -– the laws we enact,” Boehner writes in the letter. “In short, we need to ensure that the process going forward does not turn our mutual interest in regulating Wall Street into a bill with unintended consequences, root causes left unaddressed, or the federal government’s unwanted hand reaching into Main Street.”

Boehner says that he wants the House-Senate negotiations over the language for a final bill to be broadcast live on television and the Internet.

“I support bringing sunshine to the legislative process. As [House Financial Services Committee] Chairman [Barney] Frank said, we should have members of the House and Senate, Majority and Minority sitting in a public forum with C-SPAN coverage. And consistent with the new House initiative of live streaming video of House floor proceedings, we believe the conference debate should include live webcasting so even more Americans can engage in the debate over this crucial legislation’s final form. I stand ready to help with the selection of conferees and to do our part in this process,” the letter concludes.

But Boehner's interest in being part of an open reform process runs counter to the House GOP record, in which every Republican member voted against reform when the House approved it in December on a vote of 223-202, says Pelosi spokesman Nadeam Elshami.

Although Boehner says that he worries of lobbyist influence in the legislative process, it has been Republicans who have worked with lobbyists to try to kill financial reform, Elshami says. The Senate GOP was called out by Democrats for meeting with Wall Street lobbyists just weeks ago in an attempt to derail the legislation.

“The Congressional Republicans’ record to date in support of Wall Street over Main Street is clear,” Elshami says. “After meeting with industry lobbyists to kill the bill, every single House Republican voted against the legislation.

“Democratic leaders have long been committed to an open conference that will result in strong Wall Street reform, and we hope that Republicans, who have opposed reform from the start, will work with us to protect America’s middle class and stand up to Big Bank and corporate special interests,” he adds.

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Capitol Idea: Right Likes To Mix Oil With Their Tea

By Scott Nance

The massive oil spill in the Gulf of Mexico threatens to damage the environment, the livelihoods of local commercial fishermen and others, as well as affect the region's residents for months, if not years, into the future. But the response from the Right to the disaster so far also threatens for the long-term any credibility that the so-called tea party movement claims in representing such bedrock conservative principles of limited government, controlled federal spending, or strong national security.

If they truly cared about these core notions of what conservatism at least used to be about, the tea party activists would have been already been plenty angry about the relationship between big oil companies like BP and the federal government. And the disaster now unfolding off the coast of Louisiana only would have increased their outrage.

That the tea partyers seem so unconcerned — and in the case of Kentucky Senate candidate Rand Paul, outright hostile, who went as far as calling President Obama "un-American" for holding BP's feet to the fire — indicates either a profound ignorance of the situation, or more likely, just further unmasks the truth that conservatives today are motivated by unfettered corporatism, not the supposedly high-minded ideals to which they pay lip service.

Were a supposedly limited role for the federal government and spending restraint truly motivations for conservatives, they would be trying to pass legislation to make sure BP pays to clean up its own mess. Instead, it's the conservatives who are blocking such a bill in the Senate, leaving the American taxpayers to pick up the check.

Make no mistake, BP ain't hurting. As the fourth-largest corporation on the planet, BP reported $5.5 billion in profit — not revenue, but take-home profit — in the last three months.

It doesn't need a bailout, but by obstructing legislation to hold the company accountable for paying for its cleanup, the conservatives are offering BP just that.

In so doing, conservatives are talking out of both sides of their mouths. On the one hand, they wail about deficits and debts, but when push comes to shove, it is the right who needlessly adds to the nation's red ink.

BP's bosses aren't even the only Big Oil executives to be reaching into our wallets to take our money. All five of the largest oil companies are reporting huge profits, but they each are taking $20 billion in taxpayer-funded subsidies over the next five years.

Are conservatives outraged over this federal corporate welfare, which even George W. Bush has described as an unnecessary for oil production? Nope, quite the opposite: they are complicit in it. When President Obama proposed eliminating these wasteful tax giveaways — which truly represent an unwarranted federal hand in the private sector — it was a top conservative who howled.

Sen. John Cornyn is the Texas conservative who heads up his party's campaign to elect more Republican senators. He pounds Democrats on the one hand for deficit spending, but the moment someone tried to pull his oil buddies' hands out of your back pockets, Cornyn screamed bloody murder.

Where were the tea party folks during all this? Nowhere that I could see. Apparently, it's easier for the tea-party crowd to talk the limited government talk than it is to walk the walk.

Meanwhile, many conservatives and tea partyers are also busy betraying American national security. By shilling for Big Oil, they are helping to prop up a number of regimes and groups known to be unfriendly toward the United States. Specifically, it's known that each $1 increase in the price of oil provides an additional $1.5 billion to Iran annually. In this way, conservatives who side with Big Oil are giving direct aid and comfort to Iranian strongman Mahmoud Ahmadinejad.

Fortunately, conservatives can turn this around and start helping, not hurting, their fellow Americans. One way that they can do this is by supporting the Senate's new American Power Act. The American Power Act aims to contain greenhouse gas emissions, while simultaneously reducing U.S. dependence on foreign oil.

Even if you're one who thinks global climate change is bunk, you should still support the American Power Act. Many serious conservatives for years have recognized that the things they need to do to ensure strong U.S. energy security and national security are the exact same things others want to do to mitigate climate change. This includes such things as government mandates on automakers to manufacture increasingly fuel-efficient vehicles. That means everyone needs to be doing all of the same things in energy policy, even while they may disagree on why they are doing them.

The choice conservative activists face today is as big as the Gulf oil spill itself. They can either live up to what their ideals demand of them, or they can just keep spouting the same empty, angry platitudes in the defense of corporate greed.

The publisher of On The Hill, Scott Nance has covered government and Washington for more than a decade. Capitol Idea is his regular column from Washington. The article was first published as "Right Likes To Mix Oil With Their Tea," on Blogcritics.org.

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Conservation Groups Laud Push for Aggressive La. Wetlands Restoration Efforts After Spill

Five local and national conservation groups praised Sen. Mary Landrieu's (D-La.) proposal to include aggressive measures in legislation that would accelerate restoration of Louisiana's coastal wetlands, a vital natural hurricane barrier that is becoming increasingly drenched in oil from the Deepwater Horizon disaster.

"The historic and massive degradation and loss of Louisiana's protective coastal wetlands will magnify both the ecological and economic damage from the spill," says a joint statement by Coalition to Restore Coastal Louisiana, Environmental Defense Fund, Lake Pontchartrain Basin Foundation, National Audubon Society and National Wildlife Federation. "Sen. Landrieu rightly recognizes that it is a moral, environmental, and economic imperative to restore these protective wetlands as quickly as possible. Legislation that hastens restoration efforts will help the entire coastal system recover from this massive pollution disaster and make it more resilient to future threats."

Coastal Louisiana faces an environmental catastrophe, as upwards of 100,000 barrels of crude a day spill into the Gulf of Mexico as a result of an explosion last month on an offshore drilling rig leased by BP known as Deepwater Horizon.

The Gulf of Mexico Energy Security Act of 2006 dedicates a portion of offshore oil and gas revenues to coastal protection and restoration in the four Gulf Coast energy-producing states. Under the Restoring Ecosystem Sustainability and Protection on the Delta (RESPOND) Act that Landrieu unveiled Thursday, funds from new leases off Louisiana's coast would be shared immediately, as opposed to waiting until 2017, according to an announcement from Landrieu's office.

"Oil and gas revenue sharing sooner rather than later is the right thing in Louisiana -- where there is a tremendous amount of oil and gas activity -- as long as the revenues go to ecosystem restoration and aren't diverted for other purposes," the conservation groups add in their joint statement. "The point is to make sure the region isn't vulnerable to future oil disasters as they are today."

The state of Louisiana passed a constitutional amendment in 2006 that dedicates revenues shared from oil and gas leases to ecosystem restoration, flood protection, and a capped amount for impacted infrastructure.

Landrieu also announced a series of amendments would significantly bolster the $118 million Obama administration's own aid package request. The full Senate is expected to consider the emergency spending measure next week.

The Landrieu amendments include:

Enhanced Claims Assistance & Support - Authorizing $20 million for the Economic Development Administration to help Gulf Coast residents and businesses file claims with BP, the Oil Spill Liability Trust Fund, private insurance or other programs. Without technical assistance, many coastal residents and business owners may lack the resources to effectively secure recompense for damages.

Marketing Assistance - Authorizing $15 million to support tourism and seafood marketing to mitigate the damage being done to the Louisiana "brand".

Disaster Loan Relief - Providing interest relief up to $15,000 to the more than 12,000 Gulf Coast businesses still struggling to repay Small Business Administration (SBA) Disaster Loans obtained following Hurricanes Katrina, Rita, Gustav and Ike. SBA would be required to prioritize applications for businesses with 50 employees or less, and businesses impacted by the Gulf oil spill.

New Loan Deferrals - Authorizing SBA to defer payment on any new disaster loans granted as a result of this oil spill, interest free, for one year. These deferrals would act as an advance until claims with BP can be filed and paid.

Expedite CIAP Grants - Expediting the delivery of Coastal Impact Assistance Program (CIAP) funds that are already appropriated for Louisiana, but are being held up by bureaucratic red tape at the Minerals Management Service. These funds are dedicated to projects to restore coastal wetlands, restore marine and coastal ecosystems, mitigating damages to fish and wildlife and other coastal conservation and mitigation efforts. The four-year program, created by Sen. Landrieu in 2005 Energy Policy Act, was designed to disburse all funds to states by 2010. However, less than 20 percent of the $1 billion in funds have been distributed to states.

Accelerate Coastal Projects - Advancing $19 million in construction funding for authorized Louisiana Coastal Area projects in the President's Fiscal Year 2011 budget request. These projects were authorized in the Water Resource Development Act of 2007. Projects such as river diversions, barrier island restoration and Mississippi River Gulf Outlet ecosystem restoration create a first line of defense to storm surge and oil spills, keep saltwater at bay and protect interior wetlands from tidal influences, rebuild fragmented wetlands, and restore the river's natural land-building functions.

Beneficial Use of Dredge Material - Ensuring the beneficial use of dredge material from authorized Army Corps of Engineers dredging projects in the area funded by the emergency supplemental appropriations bill. This language would provide the Corps with the authority and funding for the beneficial use of dredge material to shore up barrier islands, vulnerable wetlands, and shorelines through the Gulf Coast area affected by the oil spill.

"Long-term sustainability of the Mississippi navigation and flood control systems, the energy industry and Gulf fisheries is not feasible without coastal wetlands restoration," the conservation groups say. "Accelerating coastal wetlands restoration will also create thousands of new jobs in a region that is facing major economic challenges."

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EPA Officials Weigh Sanctions Against BP’s U.S. Operations

by Abrahm Lustgarten, ProPublica

Officials at the Environmental Protection Agency are considering whether to bar BP from receiving government contracts, a move that would ultimately cost the company billions in revenue and could end its drilling in federally controlled oil fields.

Over the past 10 years, BP has paid tens of millions of dollars in fines and been implicated in four separate instances of criminal misconduct that could have prompted this far more serious action. Until now, the company's executives and their lawyers have fended off such a penalty by promising that BP would change its ways.

That strategy may no longer work.

Days ago, in an unannounced move, the EPA suspended negotiations with the petroleum giant over whether it would be barred from federal contracts because of the environmental crimes it committed before the spill in the Gulf of Mexico. Officials said they are putting the talks on hold until they learn more about the British company's responsibility for the plume of oil that is spreading across the Gulf.

The EPA said in a statement that, according to its regulations, it can consider banning BP from future contracts after weighing "the frequency and pattern of the incidents, corporate attitude both before and after the incidents, changes in policies, procedures, and practices."

Several former senior EPA debarment attorneys and people close to the BP investigation told ProPublica that means the agency will re-evaluate BP and examine whether the latest incident in the Gulf is evidence of an institutional problem inside BP, a precursor to the action called debarment.

Federal law allows agencies to suspend or bar from government contracts companies that engage in fraudulent, reckless or criminal conduct. The sanctions can be applied to a single facility or an entire corporation. Government agencies have the power to forbid a company to collect any benefit from the federal government in the forms of contracts, land leases, drilling rights, or loans.

The most serious, sweeping kind of suspension is called "discretionary debarment" and it is applied to an entire company. If this were imposed on BP, it would cancel not only the company's contracts to sell fuel to the military but prohibit BP from leasing or renewing drilling leases on federal land. In the worst cast, it could also lead to the cancellation of BP's existing federal leases, worth billions of dollars.

Present and former officials said the crucial question in deciding whether to impose such a sanction is assessing the offending company's culture and approach: Do its executives display an attitude of non-compliance? The law is not intended to punish actions by rogue employees and is focused on making contractor relationships work to the benefit of the government. In its negotiations with EPA officials before the Gulf spill, BP had been insisting that it had made far-reaching changes in its approach to safety and maintenance, and that environmental officials could trust its promises that it would commit no further violations of the law.

EPA officials declined to speculate on the likelihood that BP will ultimately be suspended or barred from government contracts. Such a step will be weighed against the effect on BP's thousands of employees and on the government's costs of replacing it as a contractor.

Even a temporary expulsion from the U.S. could be devastating for BP's business. BP is the largest oil and gas producer in the Gulf of Mexico and operates some 22,000 oil and gas wells across United States, many of them on federal lands or waters. According to the company, those wells produce 39 percent of the company's global revenue from oil and gas production each year -- $16 billion.

Discretionary debarment is a step that government investigators have long sought to avoid, and which many experts had considered highly unlikely because BP is a major supplier of fuel to the U.S. military. The company could petition U.S. courts for an exception, arguing that ending that contract is a national security risk. That segment of BP's business alone was worth roughly $4.6 billion over the last decade, according to the government contracts website USAspending.

Because debarment is supposed to protect American interests, the government also must weigh such an action's effect on the economy against punishing BP for its transgressions. The government would, for instance, be wary of interrupting oil and gas production that could affect energy prices, or taking action that could threaten the jobs of thousands of BP employees.

A BP spokesman said the company would not comment on pending legal matters.

The EPA did not make its debarment officials available for comment or explain its intentions, but in an e-mailed response to questions submitted by ProPublica the agency confirmed that its Suspension and Debarment Office has "temporarily suspended" any further discussion with BP regarding its unresolved debarment cases in Alaska and Texas until an investigation into the unfolding Gulf disaster can be included.

The fact that the government is looking at BP's pattern of incidents gets at one of the key factors in deciding a discretionary debarment, said Robert Meunier, the EPA's debarment official under President Bush and an author of the EPA's debarment regulations. It means officials will try to determine whether BP has had a string of isolated or perhaps unlucky mistakes, or whether it has consistently displayed contempt for the regulatory process and carelessness in its operations.

In the past decade environmental accidents at BP facilities have killed at least 26 workers, led to the largest oil spill on Alaska's North Slope and now sullied some of the country's best coastal habitat, along with fishing and tourism economies along the Gulf.

Meunier said that when a business with a record of problems like BP's has to justify its actions and corporate management decisions to the EPA "it's going to get very dicey for the company."

"How many times can a debarring official grant a resolution to an agreement if it looks like no matter how many times they agree to fix something it keeps manifesting itself as a problem?" he said.

Documents obtained by ProPublica show that the EPA's debarment negotiations with BP were strained even before the April 20 explosion on the Deepwater Horizon rig. The fact that Doug Suttles, the BP executive responsible for offshore drilling in the Gulf, used to head BP Alaska and was the point person for negotiations with debarment officials there, only complicates matters. Now, the ongoing accident in the Gulf may push those relations to a break.

Discretionary debarment for BP has been considered at several points over the years, said Jeanne Pascal, a former EPA debarment attorney who headed the agency's BP negotiations for six years until she retired last year.

"In 10 years we've got four convictions," Pascal said, referring to BP's three environmental crimes and a 2009 deferred prosecution for manipulating the gas market, which counts as a conviction under debarment law. "At some point if a contractor's behavior is so egregious and so bad, debarment would have to be an option."

In the three instances where BP has had a felony or misdemeanor conviction under the Clean Air or Clean Water Acts, the facilities where the accidents happened automatically faced a statutory debarment, a lesser form of debarment that affects only the specific facility where the accident happened.

One of those cases has been settled. In October 2000, after a felony conviction for illegally dumping hazardous waste down a well hole to cut costs, BP's Alaska subsidiary, BP Exploration Alaska, agreed to a five-year probation period and settlement. That agreement expired at the end of 2005.

The other two debarment actions are still open, and those are the cases that EPA officials and the company have been negotiating for several years.

In the first incident, on March 23, 2005, an explosion at BP's Texas City refinery killed 15 workers. An investigation found the company had restarted a fuel tower without warning systems in place, and BP was eventually fined more than $62 million and convicted of a felony violation of the Clean Air Act. BP Products North America, the responsible subsidiary, was listed as debarred and the Texas City refinery was deemed ineligible for any federally funded contracts. But the company as a whole proceeded unhindered.

A year later, in March 2006, a hole in a pipeline in Prudhoe Bay led to the largest ever oil spill on Alaska's North Slope – 200,000 gallons -- and the temporary disruption of oil supplies to the continental U.S. An investigation found that BP had ignored warnings about corrosion in its pipelines and had cut back on precautionary measures to save money. The company's Alaska subsidiary was convicted of a misdemeanor violation of the Clean Water Act and, again, debarred and listed as ineligible for government income at its Prudhoe Bay pipeline facilities. That debarment is still in effect.

That accident alone -- which led to congressional investigations and revelations that BP executives harassed employees who warned of safety problems and ignored corrosion problems for years -- was thought by some inside the EPA to be grounds for the more serious discretionary debarment.

"EPA routinely discretionarily debars companies that have Clean Air Act or Clean Water Act convictions," said Pascal, the former EPA debarment attorney who ran the BP case. "The reason this case is different is because of the Defense Department's extreme need for BP."

Instead of a discretionary debarment, the EPA worked to negotiate a compromise that would bring BP into compliance but keep its services available. The goal was to reach an agreement that would guarantee that BP improve its safety operations, inspections, and treatment of employees not only at the Prudhoe Bay pipeline facility, but at its other facilities across the country.

According to e-mails obtained by ProPublica and several people close to the government's investigation, the company rejected some of the basic settlement conditions proposed by the EPA -- including who would police the progress -- and took a confrontational approach with debarment officials.

One person close to the negotiations said he was confounded by what he characterized as the company's stubborn approach to the debarment discussions. Given the history of BP's problems, he said, any settlement would have been a second chance, a gift. Still, the e-mails show, BP resisted.

As more evidence is gathered about what went wrong in the Gulf, BP may soon wish it hadn't.

It's doubtful that the EPA will make any decisions about BP's future in the United States until the Gulf investigation is completed, a process that could last a year. But as more information emerges about the causes of the accident there -- about faulty blowout preventers and hasty orders to skip key steps and tests that could have prevented a blowout -- the more the emerging story begins to echo the narrative of BP's other disasters. That, Meunier said, could leave the EPA with little choice as it considers how "a corporate attitude of non-compliance" should affect the prospect of the company's debarment going forward.

ProPublica reporters Mosi Secret and Ryan Knutson and director of research Lisa Schwartz contributed to this report.

Write to Abrahm Lustgarten at Abrahm.Lustgarten@propublica.org.

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Financial Reform Supporters Vow Senate Vote Is 'Not The End' To Wall Street Regulation

The Senate has approved a bill that would impose sweeping new regulations on the financial industry. But some reform advocates argue that the legislation doesn't go far enough -- and promise to come back to enact further new reforms.

Senators Thursday passed a legislative package of financial reforms that they've had under consideration for three weeks by a vote of 59-39, with four Republicans joining Democrats in giving their bill their approval.

The vote brings President Obama to the brink of his second major legislative victory in a year, after enacting a new healthcare law in March. Obama has long sought new financial regulations to prevent another meltdown such that which occurred in 2008 and resulted in massive taxpayer-funded bailouts of industry. Lawmakers must now reconcile the Senate version with a somewhat-different bill that the House approved last year in a conference committee and then approve a single, final bill that can be sent to Obama's desk for the president to sign into law.

“As a result of the greed, recklessness and illegal behavior of Wall Street, this country was plunged into a horrendous recession. While this bill does not go as far as I would like, it is a strong beginning in the effort to re-regulate huge financial institutions and to bring transparency to their often nefarious activities,” says Sen. Bernie Sanders, a left-leaning Vermont independent who has been pushing for strong consumer protections throughout the process of financial reform.

Ed Mierzwinski, consumer program director of the U.S. Public Interest Research Group, a Washington-based organization that has advocated for strong new financial protections for consumers, also chose to see the positive in the new bill.

"This bill to rein in Wall Street is a bill that Main Street will like. While the bill isn’t perfect, it includes strong measures to rein in Wall Street’s casino bets, regulate the shadow derivatives markets, protect consumers and prevent future economic meltdowns," Mierzwinski writes on his blog. "We urge Congressional leaders to use the conference process to select the strongest provisions of the House and Senate bills while rejecting the efforts of lurking Wall Street lobbyists to weaken or delay passage of a strong final law."

In particular, Mierzwinski cheered the defeat of a Republican amendment to the bill that would have exempted car dealers from oversight of a new Consumer Financial Protection Bureau, and instead "leaving in place broad authority for the consumer watchdog over non-bank lenders.

"This is an important improvement over the House passed bill," he says. "Passage of the Restoring American Financial Stability Act includes a strong, independent Consumer Financial Protection Agency, preserves some authority for state attorneys general to enforce the laws, opens up the shadow markets where derivatives are traded, and ends, once and for all, ‘too big to fail.’”


More Left To Be Done


Not all reform supporters are as upbeat, however.

"The Senate bill would have been a modest but respectable reform package in 2007, before the financial crash, and it does contain several strong, positive elements -- in particular the creation of a Consumer Financial Protection Bureau, restrictions on 'swipe fees' at the cash register, useful regulation of credit rating agencies, and an audit of the Federal Reserve," says Robert Weissman, president of Public Citizen, a Washington watchdog organization. "But after all the damage inflicted by Wall Street, the bill should be much stronger. Even though it plunged the nation into the worst recession since the Great Depression, Wall Street has enough power on Capitol Hill to thwart reforms that would prevent it from doing the same all over again."

In particular, Weissman complains that the reform bill would not break up the megabanks that were "too big to fail," and doesn't do enough to clamp down on the "casino economy," in which Wall Street risks too much on speculative trading.

While Weissman applauds the "strong derivatives regulation" in the Senate bill, he argues that it has "one major, accidental loophole -- no enforcement."

"If this is fixed, then the derivatives reforms in the bill will significantly reform the sector that was perhaps most responsible for the financial crisis. Without the fix, the bill falls far short," he says.

But regardless of whether they are pleased or disappointed with the Senate bill as it stands, financial reform advocates vow to come back for more.

"Just as there were multiple rounds of reform in the 1930s, so we should look now to further reform efforts, fueled by more revelations about conflicts of interest, self-dealing, deception and fraud," Weissman says.

Sanders of Vermont says he is disappointed that the Senate could not garner the necessary votes to lower interest rates on credit cards or to begin the process of breaking up the largest financial institutions, "which are the cause of so many of our problems.

"I intend to continue that effort until we succeed," the senator adds.

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