$4 Gas: Get Used To It

by Jacob Goldstein

Get in line.

In China, there's one car or truck for every 14 people. In the U.S., the ratio is nearly one to one.

But China's catching up. The country is now the world's biggest car market, and the the number of civilian vehicles in the country grew by an astonishing 19 percent last year.

As a result of this kind of growth, demand for oil is shooting up in China and other developing countries. And it's likely to keep rising in the years years to come.

But the world's big oil-producing regions may be unable or unwilling to increase production fast enough to keep up.

The combination of long-term increases in demand and sluggish growth in supply means we should get used to higher prices for oil — and, by extension, higher gas prices.

It's true that the most recent spike in oil prices was precipitated by unrest in the Middle East and North Africa. So if things settle down in the region, the price of oil and gasoline will likely fall in the short term.

In fact, just today, oil prices fell sharply.

But those longer-term trends aren't going away.

 

Saudi Arabia, the world's largest oil supplier, has historically increased production when demand rose. But, lately, it hasn't been doing that. The country is now producing less oil per day than it was in 2005.

Saudi Arabia hasn't publicly explained the change , according James Hamilton, an economist and oil expert.

It's possible that the country has decided its economic interest is best served by producing less oil. It's also possible that the country just isn't able to increase output.

"Their main field, the world's largest producing field, has been in production since 1951," Hamilton told me. "Sooner or later, that's going into decline. A lot of people think it's now."

Other big fields, including those in Mexican waters and the North Sea, are also in decline, he said.

Hamilton said that two common complaints about higher oil prices — that they're caused by publicly traded oil companies, and that they're caused by speculators — don't hold up in the long term.

Publicly traded oil companies account for a minority of global oil production; most oil is supplied by state-owned oil firms. Those countries try to regulate oil production via OPEC, but they often fail to stick to predetermined targets. In other words, the cartel often doesn't function very well.

And speculators can't affect the price of oil in the long term. If they bid up the price higher than the market can bear, oil stockpiles will increase, which in turn will put downward pressure on prices.

"There's an underlying reality on the ground, which is the people consuming the oil and the people producing the oil," Hamilton said.

Even as growth slows from Saudi Arabia and other big producers, other regions around the world may pick up the slack. Iraq, Central Asia, and parts of Africa, Canada and the U.S. all may increase output, according to Hamilton.

That could drive down prices for a while. But, in the medium term, there's a good chance that supply just won't be able to keep up with demand.

"The demand is pretty darn sure," Hamilton said. "Even if we get through a few years here, we're going to be right back in the same boat soon."

For a look at what that might mean, Hamilton cited the years leading up to the financial crisis.

Between 2005 and 2007, he said, China's oil consumption increased by 1 million barrels a day. But global oil production didn't increase at all. So other countries wound up consuming less oil.

A key lesson from those years, Hamilton says: "It takes an awfully high price of oil to persuade us to reduce consumption."

http://www.npr.org/blogs/money/2011/05/05/135995528/-4-gas-get-used-to-it?sc=fb&cc=fp

Kids, Seniors, Disabled, Others Would Feel Sting of Ryan’s Medicaid Cuts

by January Angeles
May 5, 2011 at 1:58 pm

Converting Medicaid to a block grant and cutting its federal funding nearly in half over the next two decades, as House Budget Committee Chairman Paul Ryan’s budget would do (see graph), would carry serious consequences for some of the most vulnerable Americans, as I explain in a recent report.  Here are just a few examples of how different groups could be affected:

• Seniors: An overwhelming majority of Medicare beneficiaries who live in nursing homes rely on Medicaid for their nursing home coverage.  Because the Ryan plan would require such deep cuts in federal Medicaid funding, it would inevitably result in less coverage for nursing home residents and shift more of the cost of nursing home care to elderly beneficiaries and their families.  A sharp reduction in the quality of nursing home care would be virtually inevitable, due to the large reduction that would occur in the resources made available to pay for such care.


• People with disabilities: These individuals constitute 15 percent of Medicaid beneficiaries but account for 42 percent of all Medicaid expenditures, mostly because of their extensive health and long-term care needs.  Capping federal Medicaid funding would place significant financial pressure on states to scale back eligibility and coverage for this high-cost population, many of whom would be unable to obtain coverage elsewhere because of their medical conditions.



• Children: Currently, state Medicaid programs must provide children with health care services and treatments they need for their healthy development through the Early Periodic Screening, Diagnostic and Treatment (EPSDT) aspect of Medicaid, which provides regular preventive care for children and all follow-up diagnostic and treatment services that children are found to need.  A block grant would likely permit states to drop EPSDT coverage, meaning that children, particularly those with special health care needs, would not be able to access some care that medical professionals find they need (because Medicaid would no longer cover certain health services and treatments for children, and their parents wouldn’t be able to afford to pay for that care on their own).

• Working parents and pregnant women: Many state Medicaid programs already have extremely restrictive eligibility criteria for parents.  In the typical state, working parents are ineligible for Medicaid if their income exceeds 64 percent of the poverty line (or $14,304 a year for a family of four), and unemployed parents are ineligible if their income exceeds 37 percent of the poverty line ($8,270 a year for a family of four).  Under a block grant, states could cut these already low eligibility levels even further, cap enrollment, and/or require low-income parents to pay more for health services.  States could do the same for low-income pregnant women who rely on Medicaid for their prenatal care, resulting in them forgoing services that are critical to ensuring a healthy pregnancy.

Unfortunately, that’s not all.  The Ryan budget, which the House passed on April 15, would also repeal the health reform law’s Medicaid expansion.  Health reform will result in some 17 million more people gaining coverage through Medicaid by 2021, according to the Congressional Budget Office.  If it’s repealed, millions of low-income parents and childless adults would remain uninsured.

http://www.offthechartsblog.org/kids-seniors-disabled-others-would-feel-sting-of-ryan%E2%80%99s-medicaid-cuts/

Five Biggest Recipients Of Corporate Tax Breaks Spent $8 Million In 2010 Elections (UPDATED)

Amanda Terkel
First Posted: 05/ 3/11 03:30 PM ET
Updated: 05/ 4/11 11:09 AM ET

This story has been updated.

WASHINGTON -- The top five recipients of large federal corporate tax breaks in 2009 are also among the biggest spenders in the U.S. political system -- they shelled out a combined $7.86 million in campaign contributions during the 2010 elections (in political action committee and individual employee contributions), according to analysis from the New York City Public Advocate's office. Bill de Blasio, the public advocate, is now calling on these companies to verify that no taxpayer dollars will be used in future election spending, warning such a move could "carry financial risk to the [companies'] bottom line."

De Blasio, a Democrat, has aggressively gone after campaign finance accountability and successfully used his bully pulpit to convince several Wall Street firms not to spend any corporate dollars on political advertising.

According to the analysis by de Blasio's office, ExxonMobil, Bank of America, General Electric (GE), Chevron and Boeing had combined profits of $77.16 billion in 2010 but paid $0 in current federal income taxes in 2009. [ExxonMobil's spokesman contacted The Huffington Post and disputed this figure. See below.] It should be noted, however, a Chevron spokesman said the company paid current taxes of $1.5 billion and deferred taxes of $162 million for 2010.

At the same time, these companies gave a combined $7.86 million in political contributions during the 2010 election cycle -- a 7 percent jump over their 2008 political spending.

Charts via the Office the Public Advocate:

According to the Center for Responsive Politics, all five of these companies ranked among the top 100 biggest political spenders between 1989 and 2010, with Chevron and ExxonMobil giving more heavily to Republicans, and the other three corporations generally balancing donations between the two parties.

In 2010 alone, Boeing ranked 28th in political giving ("on the fence" in political leanings), GE ranked 30th ("leans Democratic"), Bank of America ranked 37th ("leans Republican") and ExxonMobil ranked 93rd ("strongly Republican"). Chevron was not in the top 100 overall donors for the year.

"[Corporate] tax breaks were put in place to promote growth and create jobs, not bankroll the political causes of corporate executives," said de Blasio in a statement. "The unencumbered and anonymous spending in elections let loose by the Citizens United ruling has opened the door for a gross misuse of taxpayer dollars. No company that can afford to spend millions of dollars to influence our elections should be pleading poverty come tax time."

The Supreme Court's landmark ruling in Citizens United cleared the way for a federal court's decision in Speechnow.org v. FEC, which opened the floodgates for unlimited election spending by certain independent political groups, as long as they do not coordinate their activities with political candidates or party committees. These groups can raise unlimited funds from individuals, corporations and unions. Thanks to the ruling, the five companies could have contributed even more than the $7.86 million than was disclosed in 2010.

De Blasio sent letters to the heads of each of the corporations, expressing concern over the use of their federal tax credits. He urged each company to "ensure full disclosure of its political spending to demonstrate that these funds and other corporate treasury dollars are not being used for political spending and electioneering." He also asked all of them except GE to adopt policies that prohibit their trade association dues from being used for political contributions and electioneering.

His office is also launching a campaign to ask the public to email ExxonMobil and urge the company to "adopt the proposed shareholder resolution on disclosure of political spending," which will be considered at the company's May 25 shareholders meeting.

In response to de Blasio's statement, ExxonMobil spokesman Alan Jeffers told The Huffington Post in an email that the company complies with all tax laws and disclosure requirements. He also addressed some criticism of ExxonMobil's federal taxes.

"Recent media reports have highlighted efforts by lawmakers to end economy-wide tax deductions for U.S. oil companies that were established to support manufacturing jobs in the United States and prevent U.S. companies from paying double taxation on income earned outside the country," Jeffers wrote. "ExxonMobil is one of the largest taxpayers in the United States," he added. "During the first quarter of this year, on earnings of $2.6 billion in the United States, we incurred U.S. tax expenses of $3.1 billion."

Boeing held its shareholders meeting on Monday and according to a spokesman, 67 percent of shareholders voted with the management against publishing amounts contributed to trade associations. The company already publishes its other political contributions online.

"Like most of its competitors, Boeing does not publish amounts contributed to trade associations or otherwise mandate disclosure of funds spent for non-political purposes that are later used by the third parties to support political activity," reads the Board of Directors' statement in opposition. It cites problems with potentially revealing corporate strategy to competitors through this information and problems in compelling third parties to reveal whether they used Boeing-contributed funds for political purposes.

GE spokesman Andrew Williams sent a statement that, like Exxon's, did not address the issue of political contributions and also took exception to media reports on the company's tax liability.

"We will file our 2010 tax returns by September," he wrote to The Huffington Post. "We expect to have a small federal income tax liability. In 2010, GE paid significant federal income taxes for prior years. We also paid about $1 billion in 2010 in other state, local and federal taxes in the U.S." Williams said the company's federal tax rate was low in 2010 because the company "lost billions of dollars in GE Capital, our financial arm, as a result of the global financial crisis. Similarly, in 2009 GE Capital's losses were so large that the total company lost money on its U.S. operations." He added that GE expects its tax rate will be higher in 2011 as GE Capital recovers.

In March, however, GE told shareholders that the company expected to get back a $3.2 billion tax benefit from the federal government.

Last year, Bank of America agreed to begin publishing a summary of its political donations online.

"We comply with all state and federal campaign regulations," said Bank of America spokesman Jerry Dubrowski. "Our policy is not to make corporate contributions to candidates for public office."

In a statement, Chevron wrote, "Chevron is committed to adhering to the highest standards of ethics and transparency in engaging in any political contributions. We have strict policies and internal approval processes so that decision making and reporting on political contributions comply with the letter and spirit of all applicable laws. A list of corporate contributions made during 2010 is available on Chevron.com." It also defended its taxes, stating, "Between 1998 and 2008, the oil and gas industry paid $1 trillion in total income taxes. ... In 2010, Chevron, as an example, paid $12.9 billion in taxes on pretax income of $32.1 billion, or an effective tax rate of 40 percent."

Large corporations that won't be paying any federal income taxes have faced fierce bipartisan criticism in recent weeks.

Former Wisconsin senator Russ Feingold, who now runs the Progressives United political action committee, launched a campaign pressuring GE CEO Jeffrey Immelt on the issue. And in April, there were massive protests in Washington state over the Democratic-controlled legislature proposing cuts to public programs over closing corporate tax loopholes.

For the past month, Sen. Bernie Sanders (I-Vt.) has been publicly shaming what he calls the "worst corporate income tax avoiders" in an effort to share the burden of deficit reduction more equally, rather than letting it fall more on programs that assist low-income and middle-class individuals. The top five federal corporate tax break recipients have been particular targets of Sanders' campaign.

UPDATE: 10:41 p.m. -- ExxonMobil spokesman Alan Jeffers disputes the $156 million 2009 federal tax benefits figure, arguing the company paid $500 million in US income taxes in 2009. De Blasio's office based its number on ExxonMobil's publicly available SEC filing documents (form 10-K filed in 2010). Politifact has a longer analysis of ExxonMobil's taxes here.

This article has also been updated to include a statement from Chevron.

The chart originally provided by de Blasio's office incorrectly identified 2009 federal income taxes as being from 2010. Federal 2009 taxes are the most recent taxes paid by all corporations listed. The 2010 profits are the most recent profits reported. De Blasio's original chart can be viewed here.

The story was also changed to include Chevron's 2010 tax filings.

http://www.huffingtonpost.com/2011/05/03/recipients-corporate-tax-breaks-elections_n_856630.html?view=print

Gov. Walker signs bill blocking communities from passing sick leave ordinances

Governor says the new bill removes another barrier to creating jobs

11:11 AM CDT, May 5, 2011

MADISON (AP)

Gov. Scott Walker has signed a bill that prohibits local governments from passing ordinances guaranteeing workers' paid sick and family leave.

The Republican measure came after a state appeals court upheld a Milwaukee ordinance requiring employers to give workers paid sick leave. Milwaukee voters overwhelmingly approved the ordinance by referendum two years ago but it's been tied up in the courts ever since.

The bill declares that statewide employee leave provisions trump local ordinances and prohibits cities, villages, towns and counties from adopting their own.

Walker, a Republican, says in a statement the bill removes another barrier to creating jobs. Milwaukee Mayor Tom Barrett, a Democrat who ran against Walker for governor, opposes the bill, saying it could drive jobs out of the city.

http://www.fox6now.com/news/politics/witi-20110505-sick-leave-bill,0,2257310,print.story

GOP Chooses Big Oil at the Expense of Granny

By Jim Hightower, AlterNet
Posted on May 4, 2011, Printed on May 5, 2011
http://www.alternet.org/story/150833/gop_chooses_big_oil_at_the_expense_of_granny

Now, let's check today's sports scores: 4, 10.7 and 21-and-a-half.

Those tallies are from the oil league, and the winner, of course, is the league's powerhouse, ExxonMobil.

Four, as you might have guessed, is the $4 that Exxon is siphoning out of your wallet these days for 1 gallon of its petrol.

Next comes 10.7. That's the $10.7 billion in profits that this oil giant has soaked up in just the first three months of this year -- a new record, not achieved by any managerial genius, increased productivity or improvement in customer service, but solely by the jack-up in gasoline prices.

Finally, 21-and-a-half. This is the big score made by Rex Tillerson, Exxon's CEO. The chief pulled down $21.5 million in personal compensation last year, making him the highest paid executive in the oil league and one of the most richly paid CEOs in the entire country.

Wait ... this late-breaking score is just in: 0. That's from the special tax game that ExxonMobil consistently wins in Washington. Last year, ExMo powered through loopholes created by its slick lobbying team to pay an income tax of zero on the $19 billion it had racked up in profits the year before. But, wait again, here's a surprising update on that score: Exxon's taxes were actually less than zero! How's that possible? Because Big Oil's lobbyists have so skewed the tax system that Exxon was able to extract a $156 million rebate from us taxpayers last year.

So Exxon is soaking us at the gas pump and sacking our public treasury to gain record profits for itself, while bestowing a royal fortune on its CEO. It wins, we lose.

With a record like that, you wouldn't think the oil league would need more handouts from government -- but then, you're not a Republican congressperson.

The GOP recently pushed its appropriations priorities through the House, touting the bill as a revolutionary, politically responsible, tax-saving piece of legislative art.

Well, art is in the eye of the beholder. The Repubs "saved" money by essentially killing Medicare and drastically slashing Medicaid, Head Start, EPA, food stamps, and dozens of other popular and effective programs that Americans overwhelmingly support. Having taken their blunt budget ax to these programs that support our nation's notion of the common good, GOP leaders then scampered to save one of the least popular and least effective federal programs on the books: the annual taxpayer subsidy for Big Oil.

As gasoline prices were rising toward $4 a gallon and higher, House Republicans voted unanimously to let the oil giants continue siphoning $4 billion a year out of our public treasury. All 241 of the Republican/tea party House members -- with not even one dissenter in the bunch -- declared that in this time of a supposed budget "crisis," the neediest among us are not the elderly and the poor, but the little waifs of Big Oil.

As Casey Stengel once asked of the bumbling New York Mets team he was managing, "Can't anyone here play this game?"

Meanwhile, ExxonMobil just announced a 69 percent leap in profits this year, while Chevron, ConocoPhillips and others are enjoying similar jumps in theirs. Guess what percentage of those enormous profits the corporations are likely to pay in taxes?

Zilch. Last year, ExxonMobil, Chevron and ConocoPhilips each banked multibillion-dollar profits, yet far from paying even a dime in taxes, all three worked the loopholes to get multimillion-dollar refunds from us.

Republican lawmakers had a clear choice in dealing with the deficit. So why did they choose to cut off your granny's health care, while helping these corporate billionaires make off like bandits? I guess it's a matter of who you really love.

Jim Hightower is a national radio commentator, writer, public speaker, and author of the new book, "Swim Against the Current: Even a Dead Fish Can Go With the Flow." (Wiley, March 2008) He publishes the monthly "Hightower Lowdown," co-edited by Phillip Frazer.

http://www.alternet.org/news/150833/gop_chooses_big_oil_at_the_expense_of_granny?utm_source=feedblitz&utm_medium=FeedBlitzRss&utm_campaign=alternet

GRAPH: Income Inequality In U.S. Worse Than Ivory Coast, Pakistan, Ethiopia

By Zaid Jilani
May 4th, 2011 at 12:55 pm

As ThinkProgress has repeatedly noted, crucial services and public investments for Main Street America are being gutted as taxes on the richest Americans are the lowest they’ve been in a generation. Yet many Americans may not know exactly how unfair this is, as the country has grown increasingly unequal at the same time. Using data from the CIA Factbook based on the Gini coefficient — a measure of income inequality within a society — ThinkProgress has assembled the following graph, which demonstrates that the United States is now about as economically unequal as Uganda and more unequal than countries like Pakistan or the Ivory Coast:

Income inequality in the United States is actually higher than at any other time in modern history since the Great Depression. There is also a tremendous amount of inequality even in life expectancy, with the American Human Development Index reporting in 2010 that there is now a 6 year gap in average life expectancy between Mississippi, in the Deep South, and Connecticut, in prosperous New England.” As ThinkProgress previously reported, one of the major factors in this hike in income inequality has been the decline of unionization in America.

http://thinkprogress.org/2011/05/04/us-unequal-uganda-pakistan/

With Liberty and Justice for…Corporations?

Posted on May 5, 2011 by Rania Khalek

On April 27, 2011, the Supreme Court of the United States once again ruled in favor of big business.  In the highly anticipated case of AT&T Mobility v. Concepcion, the Roberts led conservative block of the Supreme Court ruled 5-4 that federal law trumps state law in allowing companies to use arbitration clauses to prohibit consumers from joining class actions against the companies.

The case involved a California couple, Vincent and Liza Concepcion, who were charged $30.22 sales tax on the full retail price of a cellphone that was advertised as “free.”  They filed a lawsuit against AT&T for deceptive practices on behalf of a class of consumers who had also overpaid.  But the couple, along with their fellow plaintiffs, had signed a contract with AT&T that contained a “mandatory arbitration clause” which required them to settle any disputes through arbitration (a private legal proceeding) and barred them from seeking class-action treatment with other consumers, whether through arbitration or in a lawsuit brought in a traditional court.

Initially, both a federal district court and the Ninth Circuit Court sided with the Concepcions, saying it was unfair under a 2005 California Supreme Court ruling, for contracts to ban class-action litigation.  However, this was overturned by the recent Supreme Court decision, which says federal law, specifically the Federal Arbitration Act of 1925, trumps state law.

Aside from the fact that the conservative Justices who purport to be staunch defenders of “states rights” abandoned their principles for corporate interests, this ruling has chilling implications for future corporate accountability.  Corporations are now free to legally bar victims of their abuse from collectively suing in a court of law if the abused have signed a contract that includes a mandatory arbitration clause, regardless of state laws to the contrary.  This could literally render companies immune from class actions and overall accountability.

At first glance, it seems reasonable to conclude that individuals should simply steer clear of these types of contracts in order to avoid waiving their rights.  But most people are unaware that mandatory arbitration clauses are commonly used in product and service contracts, and sometimes in employment contracts–usually found buried in the fine print of billing inserts, employment handbooks, health insurance plans, and dealership agreements.

In a statement after the ruling, Deepak Gupta, a lawyer with the public interest group Public Citizen who argued the case on behalf of the Concepcions, called the decision a “crushing blow to American consumers and employees, ruling that companies can ban class actions in the fine print of contracts. Now, whenever you sign a contract to get a cell phone, open a bank account or take a job, you may be giving up your right to hold companies accountable for fraud, discrimination or other illegal practices. Class actions are an essential tool for justice in our society. Brown v. Board of Education was a class action. The fate of class actions should not be decided through the fine print of take-it-or-leave-it contracts.”

Pro-Business groups, most notably the US Chamber of Commerce’s Institute for Legal Reform, argue that arbitration is an efficient, effective, and less expensive means of resolving disputes for consumers as well as businesses.  Of course, what they mean is that it’s efficient, effective and less expensive for corporations, since companies are far less likely to use arbitration clauses in contracts with each other than they are in contracts with consumers.   And if arbitration is truly superior to the courts, it should be up to consumers and employees to voluntarily choose their preferred method of redress should a dispute arise.

In reality, arbitration is a closed, private process often with little or no written record.  When California changed its law to require that arbitration results be publicly recorded, Public Citizen reviewed 34,000 California cases, and the results were stunning.  The study found that consumers had lost more than 94 percent of cases in an arbitrations plagued by conflicts of interest, with arbitrators benefiting financially from ruling in favor of businesses.  Overall, they found that forced arbitration creates a systemic bias in favor of businesses while offering few, if any, meaningful deterrents against negligence or even foul play.

Needless to say, these contracts are intended to undermine consumer protection, civil rights, and other laws that level the playing field between big business and individuals. And because arbitration clauses are presented on a take-it-or-leave-it basis, individuals are left with no choice but to waive their rights.  Given these circumstances, it’s no suprise that AT&T had the backing of the Chamber of Commerce, Comcast, Dell, and DirectTV.  A clear pattern of the Supreme Court’s conservative majority ruling in favor of corporations while stripping away the power of individuals has emerged, and AT&T Mobility is icing on the Chamber’s eight layer cake.

In an article that appeared in Mother Jones late last year, Stephanie Mencimer quoted Paul Bland, a lawyer with the public interest law firm Public Justice, who argued that “In Concepcion, AT&T and the Chamber of Commerce are asking the Supreme Court to do the same thing for consumer protection that Citizens United did for election law…the Chamber wants the Court to overturn a number of precedents and eliminate the most important safeguards that have limited corporate abuse in the past.”

Mencimer points out that the Chamber has been systematically fighting to limit consumers access to the courts for years, particularly through class actions.  She goes on to say, “In 2005, it finally succeeded in winning legislation that made it much harder to bring such cases in state courts, after investing more than $20 million in lobbying Congress. But it didn’t stop there. It has defended the right of big companies to use contracts to wipe out whatever legal rights for consumers remained.”

At the behest of their corporate overlords, the Supremes have stripped away consumers last remaining recourse against corporate wrongdoing: class actions.  Corporations are actively rigging our civil justice system to shield themselves from accountability for fraud, discrimination, and other illegal practices, and so far they have been successful.

If you believe the effects of these contracts are isolated to small dollar rip-offs, then think again.  There are a plethora of horror stories about individuals that have been victimized by forced arbitration.  Take the case of Jamie Leigh Jones.  She was 19 when she signed a job contract with Halliburton and went to work in Iraq, where she was drugged and gang raped by her co-workers.  After actively participating in the cover-up, Halliburton used the mandatory arbitration clause in her contract against her filing suit, eventually leading to legislation ordering the federal government not to work with contractors who force employes to sign arbitration agreements involving cases of sexual assault or Title VII violations.

In an article for the Boston globe, Beth Healy highlights the heart-wrenching plight of Philip Grossman, who committed suicide after his family lost much of their savings from its encounter with a Bank of America broker.  The family tried to sue Bank of America but was denied access to the court because of an arbitration clause in Mr. Grossman’s brokerage account documents.  As Healy observed, “The Grossmans’ case shows how entrenched arbitration has become in the financial industry, demonstrating that even in an extreme case alleging wrongful death, aggrieved clients have no recourse other than a system that critics say favors investment firms.”

Keep in mind these cases took place before the current ruling.  In the aftermath of AT&T Mobility, class action waiver provisions in arbitration agreements will almost always be found enforceable.  Except that now, these types of abuses are likely to be system-wide, since companies have no reason to fear potential class actions, and therefore little incentive to act ethically from the get-go.

Corporate attorneys recognize the significance of this ruling and are advising their clients to include class action bans in their arbitration clause.  This explains why companies, thrilled at the opportunity to avoid liability, are rushing to review and revise existing arbitration clauses in standard contracts to include class action bans.

The good news is efforts are underway to reverse this disgraceful Supreme Court ruling.  Senators Al Franken (D-MN) and Richard Blumenthal (D-CT), along with Rep. Hank Johnson (D-GA), have announced their plan to reintroduce the Arbitration Fairness Act. The bill, which was first introduced in 2007, would ban forced arbitration clauses in employment, consumer, and civil rights cases, and immediately faced heavy opposition from business interests, including the Chamber of Commerce.

Another ray of hope is Elizabeth Warren, head of the Consumer Financial Protection Bureau (CFPB).  According to Reuters, the Dodd-Frank law gives Warren’s consumer agency the power to regulate arbitration in consumer financial-services contracts, and the agency could conclude that class-action bans are harmful to consumers.  Given Warren’s vocal support of consumer safeguards, businesses are already nervously anticipating what her new agency may have in store.

In the meantime, I suggest you visit Fair Arbitration Now for ways to join fight against forced arbitration and end the abuse once and for all.

http://raniakhalek.com/2011/05/05/with-liberty-and-justice-for-corporations/

Senior Republicans: We could drop that whole Medicare abolishment thing

Joan McCarter for Daily Kos
Thu May 05, 2011 at 07:05 AM PDT

Rep. Paul Ryan's happy talk about how constituents are "overwhelmingly supportive" of his budget plan once it's explained to them apparently didn't convince all those members of Congress who got an earful from their constituents about his Medicare proposal. It can be dropped now, according to the Washington Post and "senior Republicans."

Senior Republicans conceded Wednesday that a deal is unlikely on a contentious plan to overhaul Medicare and offered to open budget talks with the White House by focusing on areas where both parties can agree, such as cutting farm subsidies.

On the eve of debt-reduction talks led by Vice President Biden, House Majority Leader Eric Cantor (Va.) said Republicans remain convinced that reining in federal retirement programs is the key to stabilizing the nation’s finances over the long term. But he said Republicans recognize they may need to look elsewhere to achieve consensus after President Obama "excoriated us" for a proposal to privatize Medicare.

That search should start, Cantor said, with a list of GOP proposals that would save $715 billion over the next decade by ending payments to wealthy farmers, limiting lawsuits against doctors, and expanding government auctions of broadcast spectrum to telecommunications companies, among other items.

In addition to hearing directly from constituents, they can read polls, too. And stories like this one in the Wall Street Journal.

Changes to Medicare and Medicaid remain wildly unpopular and more than two-thirds of registered voters want to repeal Bush-era tax cuts for households that make more than $250,000 a year, according to the latest Quinnipiac University poll.

More than twice as many voters oppose efforts to change Medicare than those who favor limiting benefits under the popular health-care program for seniors. And a distinct majority opposes new limits on Medicaid, the federal-state health program for the poor.

Of course, almost every single House Republican voted for that Republican budget, and for the abolishment of Medicare and decimation of Medicaid. That vote can't be undone, no matter how fast they run from it now. None of which is to say they won't argue for shredding as much of the rest of the safety net as possible. Or against raising taxes on corporations and the wealthy.

http://www.dailykos.com/story/2011/05/05/973206/-Senior-Republicans:-We-could-drop-that-whole-Medicare-abolishment-thing

GOP Increases Deficit for Wars, Bank Bailouts and the Wealthy, But Cuts Medicare, Social Security and the Safety Net

ROBERT CREAMER FOR BUZZFLASH AT TRUTHOUT
Submitted by buzzadmin on Wed, 05/04/2011 - 4:41pm.

GOP Plans to Demand Mandatory Cuts in Social Security, Medicare as Price for Debt Ceiling

It is increasingly clear that the Republicans will demand mandatory cuts in Social Security and Medicare as a price for increasing the debt ceiling later this spring.

Of course they won't say they are demanding mandatory cuts in Social Security and Medicare.

Over the Easter recess they've had a taste of just how strongly people feel about Medicare. Before they left the Capitol last month House Republicans voted - almost unanimously -- for the Republican budget that ends Medicare and replaces it with a privatized system of partial support for private insurance premiums. They ran into a town hall buzz-saw of opposition in every corner of the country.

The House Republican budget plan authored by Congressman Paul Ryan isn't going anywhere in the Senate.

If the "gang of six" Senators come up with a deficit reduction plan that is acceptable to its three Democrats and three Republicans, that may attract brief interest among the elite media. But such a budget deal would have to involve substantial increases in revenue - presumably from raising taxes on the wealthy - and that has exactly zero chance of being approved by the Republican House.

But the Republicans won't let the 70-plus percent opposition to cuts in Medicare and Social Security dissuade them. They've come up with a new plan that sugarcoats their attempts to eviscerate Social Security and Medicare. It's called a "mandatory global spending cap" and it's nothing more than the House Republican budget in disguise.

The Republicans like this plan because, when you ask everyday voters if they support a "mandatory global spending cap" they think it sounds pretty good. What better way to force the government to "live within its means"?

But support turns into solid opposition the moment people understand that the "mandatory global spending cap" would require mandatory cuts in Medicare and Social Security. In fact, this proposal isn't a way to make the government "live within its means" - it's really a way to cut Medicare and Social Security in order to give more tax breaks to millionaires. It's a way to reduce the "means" that normal people live on, and hand them over to the Donald Trumps and Paris Hiltons of the world.

Turns out that if you set a spending cap at a fixed level somewhere close to the average percentage of Gross Domestic Product that has gone to Federal outlays over the last couple of decades, it will inevitably force cuts in Medicare and Social Security. That's because the percentage of the population that is older and receiving Medicare and Social Security is going up. This will automatically increase the percentage of GDP going to Medicare and Social Security benefit - which, of course, Americans have paid for their entire working lives. In fact, the "mandatory global spending cap" is a trick intended to sucker ordinary people into supporting a proposal to cut their own Social Security and Medicare benefits.

But, you say, we may just have to renege on our commitments to pay Social Security and Medicare benefit because "we're broke" and the Federal deficit is soaring out of sight.

First, of course, we're not "broke." Big corporations and the wealthiest Americans are making more money - and a higher percentage of America's total income - than ever. The fact is that if millionaires and billionaires paid taxes at the same rate they did during the Reagan Administration - and the income they earn clipping coupons on investments were taxed at the same rates as people who work for a living - that would go a long way to eliminating the deficit.

And the experts tell us that Social Security would be solvent for 75 years if you required higher-income people to pay as much in Social Security taxes as their secretaries and janitors by eliminating the cap on income for which Americans pay Social Security taxes.

But if Moderate Democrats in the Senate need to support some deficit reducing measure at the same time they vote to raise the debt ceiling, there is actually also an elegant way to require that the Government eliminate its deficits that does not require mandatory cuts in Social Security and Medicare.

Instead of a "mandatory spending cap" you could pass a "mandatory deficit cap." This would require Congress to agree on a gradually-lower year-by-year dollar target for the deficit over the next ten years. Congress could achieve this target through any means - from raising taxes on the rich, to cutting spending, to eliminating tax expenditures like subsidies to oil companies. If it failed to do so that would trigger automatic reductions in spending - and tax expenditures. Social Security and Medicare would be excluded, since the benefits paid by these programs have been earned and paid for during people's working lives. The same would be true for the small percentage of Federal expenditures going to low-income programs that provide the critical social safety net.

That kind of "deficit trigger" is similar to -- though not exactly like -- the one proposed by President Obama in his budget speech. It would provide the discipline to force Congress to cut deficits over the next decade, without requiring cuts in Social Security and Medicare. It would also allow moderate Democrats in the Senate to support action that is responsive to voter concern about the deficit that doesn't run a foul of their rock-solid support for Social Security and Medicare.

Of course the problem with this proposal from the Republican point of view is that it actually addresses the deficit - and forces Congress to choose between tax breaks for the rich on the one hand, and Social Security and Medicare on the other. Since three-fourths of the voters choose cutting tax breaks for the rich, the Wall Street/CEO faction of the Republican Party (the dominate faction of the GOP) is not so wild about this approach. In fact, of course they don't really care about the "deficit." All they really care about are more and more tax breaks for themselves. They were perfectly happy, for instance, to massively increase the deficit last fall in order to continue the Bush tax breaks for the wealthy.

On the other hand, the Wall Street/CEO faction of the Republican Party is not about to allow the Tea Party gang to default on the Federal Debt and precipitate another financial market meltdown.

That's why, if Democrats frame the choice as a "global spending cap that will mandate cuts in Medicare and Social Security" versus a "deficit trigger" that will protect Social Security, Medicare and the social safety net - but also get the Federal Deficit under control - Democrats win.

But it's up to Democrats to affirmatively frame the debate in the upcoming budget battle. And it's critical that moderate Senate Democrats do not allow themselves to be stampeded into knee jerk positions that look good at first blush, but on closer inspection have horrific implications for their constituents on the one hand, and turn out to be politically unpopular on the other.

Robert Creamer is a long-time political organizer and strategist, and author of the book: Stand Up Straight: How Progressives Can Win, available on Amazon.com. Follow him on Twitter @rbcreamer.

http://blog.buzzflash.com/node/12664

Bernie Sanders (I): 'A Death Sentence'

John Ashcroft to advise Blackwater on ethics

By JENNIFER EPSTEIN
5/4/11 12:26 PM EDT

John Ashcroft has been hired to work as an independent ethics advisor for Xe Services, the military contractor that used to be Blackwater Worldwide, the company announced Wednesday.

Ashcroft, who became a controversial figure while serving as George W. Bush’s attorney general from 2001 to 2005, will head the company’s subcommittee on governance, which “will focus on the company’s efforts to maximize governance, compliance and accountability, continuing to build and promote the highest degrees of ethics and professionalism within the private security industry.”

Employees of the company — then known as Blackwater — were found to have killed civilians and committed other crimes while working for the U.S. government during the Iraq war.

After changing its name in the face of the bad publicity, Xe was acquired in December by a group of investors organized as USTC Holdings, LLC. When the group made the acquisition, it promised to tighten internal oversight in light of a string of scandals, including a 2007 shooting in Baghdad that killed 17 Iraqi civilians. A judge threw out the case after determining that prosecutors mishandled evidence, but the U.S. Court of Appeals ruled last month that the judge had misinterpreted the law.

In a company statement, the chairman of the Xe’s board, Red McCombs, said Ashcroft’s “experience, unparalleled reputation for integrity and personal commitment to ethics, transparency, and excellence” made him a good pick for the job, bringing big-name legal clout to the company.

“I’m delighted to be involved in USTC’s next phase of ownership and growth, particularly in helping to oversee its commitment to professionalism, compliance and accountability within the security industry,” Ashcroft said in a statement. “This is a company with a strong history of service to its country, and a reputation of best-in-class offerings to its public and private customers. I look forward to helping USTC enhance its governance and oversight capabilities as the company moves forward.”

Ashcroft served two terms as Missouri governor and one term in the Senate before losing a re-election race and being nominated as attorney general.

http://www.politico.com/news/stories/0511/54283.html

United States Ranks At The Bottom In Total Taxation

May 4, 2011
By Ray Medeiros

The statistics in this article creates a problem for Republicans who consistently blame taxes going up as a reason for job loss and credit taxes going down as a reason for job creation. It turns out that out of all 34 OECD countries, the United States ranks 32nd out of 34 in the world, only 2 countries have lower taxes than the United States, and they are Mexico and Chile. The highest taxed country in Denmark at 48.2% but has an unemployment rate of 4.3% in 2009

The United States citizens’ total tax bill equals 24% of GDP in 2009. The 2009 statistics is still relevant today, because the US tax code has not really changed overall. In fact the GDP of the United States has actually grown since 2009, thus today’s percentage of taxation to GDP ratio is even smaller.

Measuring taxation in parallel to GDP is a good analogy because the Republican and conservative argument that every dollar that is taxed is dollar taken out of circulation in the economy, thus halts job growth. This of course is a false premise to begin with, but we will use their own logic in this article.

The argument that the conservatives use is raising taxes, halts economic growth, but the statistics do not add up if we look at places like Germany, their unemployment according to the CIA world fact book was 7.4% and their taxes per GDP was a whopping 37%, 13% higher than the United States.

Unemployment in the United States in 2009 was 9.3%, yet our taxes to GDP was 24%.

Let’s now look at some other countries that are within percentage points of the United States’ taxation. In 2009 Chile’s taxes were 18.2% of GDP and their unemployment was 9.6%.

In Canada, the taxes were 31% of GDP and their unemployment in 2009 was 8.3%.

You get the point, taxation has little effect on unemployment or employment. The Republicans are using American’s ignorance of economics to further their agenda.

Rather than creating a environment that makes it economically difficult to justify leaving this country, through equalizing American labor with third world labor, they have told the American people, taxes are the problem.

We know better now. As more and more people are beginning to wake up to their scheme, it is getting harder for Republicans to justify lowering taxes. What the Republicans and Democrats need to do is re-write our trade agreements to protect our labor force. That is the real reason for our unemployment.

One last statistic, Mexico’s unemployment was 5.5% in 2009, with a tax to GDP percentage of 17%.

Factories moved down there from Canada and the United States, pay them peanuts and sell the goods to Americans, it’s a good deal for the corporate bottom line but a terrible deal for America’s labor force.

http://www.politicususa.com/en/united-states-total-taxation

Small Business Owners Demand Repeal Of Bush Tax Cuts For The Rich

First Posted: 05/ 4/11 01:09 PM ET Updated: 05/ 4/11 05:15 PM ET

WASHINGTON -- Michael Teahan, like his father, mother, and uncles before him, is a small business owner. The 52-year-old has spent most of his adult life running his own businesses: a restaurant, a coffee bar and various companies involved in the espresso machine business.

"I was the only person in my family to go to college, because that’s not what we did -- we all opened up businesses," Teahan says. "For some people, that’s a big hurdle ... for us, it was like having lunch."

Teahan currently operates Espresso Resource, a company that imports espresso machine parts from Europe to sell to U.S. restaurants and coffee shops. And he’s doing very well for himself: The two-man operation clears about $1 million a year in total sales, Teahan says -- enough to secure himself annual income in excess of $250,000.

That makes Teahan one of the few small business owners to actually benefit from the Bush administration's tax cuts for the wealthy. He says the cuts save him about $12,000 a year, compared to what he paid before they were enacted. But as debates over the federal budget deficit have intensified, Teahan has found the political discussion increasingly divorced from the reality of his experience as a small business owner.

Tax cuts for the wealthy, according to Teahan, will do nothing to bolster his firm. They won’t affect his hiring decisions, they won’t encourage him to buy new equipment or help him move into a bigger warehouse. He says all of those decisions -- the nuts and bolts of actually running a small company -- depend on the his customers' economic conditions, not his personal tax rate.

"What we do in business, how we spend our money, how we allocate our resources -- that has very little to do with tax policy," Teahan says. "I map my business based on my customers, and what my customers want to buy, and what they can afford to buy."

It’s a common complaint from small business owners. While congressional Republicans and entrenched corporate lobbying groups like the U.S. Chamber of Commerce -- which is holding a Wednesday meeting on small business priorities -- and the National Federation of Independent Business (NFIB) have been pushing hard to preserve the Bush tax cuts for the wealthy by touting the interests of small firms, much of the small business community is demanding that those very tax cuts be repealed. The tax breaks for the wealthy will add $700 billion to the debt over the next 10 years, according to the White House's Office of Management and Budget. And many small firms say that money would be better spent on direct aid to the middle class.

"We are fed by our consumers, not by our tax breaks," says Rick Poore, owner of Designwear, Inc., a screen-printing business based in Lincoln, Neb. "If you drive more people to my business, I will hire more people. It's as simple as that. If you give me a tax break, I'll just take the wife to the Bahamas."

Poore emphasizes, however, that -- like the vast majority of small business owners -- he isn't among the elite class of taxpayers making $250,000 a year or more. He and his wife take in a combined $80,000 a year from their business. Teahan is an outlier, because most small businesses don’t make nearly enough to benefit from the Bush tax cuts for the wealthy.

"Most small business owners make less than $250,000 and so the tax cuts don’t benefit most of us, and they’re really taking important valuable resources away from the federal budget," says ReShonda Young, corporate vice president and operations manager for Alpha Express, a Waterloo, Iowa-based company that specializes in transportation services and snow removal.

Young also serves on the executive board of Main Street Alliance, a coalition of small firms. Main Street Alliance notes that 98 percent of small businesses will not be affected by the Bush tax cuts in any way.

"The reality is that most businesses don’t pay the top marginal tax rate,” notes John Irons, an economist with the left-leaning Economic Policy Institute. "Most small businesses won’t be affected at all by a reversal of Bush tax cuts for the rich.”

For his part, Poore, the screen-printer, sees some dark humor in the entire notion of wealthy small business owners. He says that any accountant "that allows $250,000 in profit to get through to my bottom line would be fired."

Teahan emphasizes that even the few firms that do qualify for the Bush tax cuts don't boost their hiring in response to the Bush tax cuts. For decades, small companies have been able to secure tax breaks on the expenses that actually affect their bottom line -- labor, rent, equipment and other necessary costs. The Bush tax cuts for the wealthy, by contrast, only affect how much of a firm's total profit owners keep for themselves.

"The economic premise, that people won’t hire because they might have to pay more taxes if they make more money, is beyond laughable,” says Lew Prince, owner of the Vintage Vinyl record store in St. Louis, Mo. "You hire when you think there’s a way you can make more money with that hire. The percentage the government takes out of it has almost nothing to do with it.”

So what really affects small businesses? High health care costs, which will likely be ameliorated by President Barack Obama’s health care reform, and limited access to credit in the wake of the financial crisis. Just as important to Teahan, Poore, Prince and other small business owners are federal economic policies that directly benefit their middle class customers. If extending tax breaks to millionaires means denying aid to the middle class, their firms will suffer.

"My customers work for a living,” Teahan says. "They’re working on espresso machines and selling coffee. They’re not these uber-rich Wall Street bankers. [My customers] need the money. If they’ve got money, then I'm doing great."

The upper-end Bush tax cuts are not corporate taxes -- they’re taxes on wealthy individuals. Many small firms are not corporations, and owners report their profits as the individual income of their owners. Some firms, like Teahan’s, choose to incorporate, though they never officially report a profit because all excess earnings are paid out to the owners.

The U.S. Chamber and the NFIB say that, because these business profits are reported as individual income, allowing tax hikes for wealthy individuals will hurt small business. The U.S. Chamber declined to comment for this story but NFIB spokesman Kevan Chapman says his organization has repeatedly polled its members and found that they favor the Bush tax cuts.

"We have over 300,000 members who would disagree with the notion that we don’t represent small business. The last time we balloted this measure was in November, and 89 percent said the federal government should extend those tax breaks," Chapman said.

There were 26.9 million small businesses in the United States in 2008, according to the Small Business Administration, though that figure includes millions of people who work on contract for employers but have no business, in the traditional sense, of their own. There were 6 million small firms with at least one employee.

Another small business groups beg to differ with the NFIB. The American Sustainable Business Council, which represents 70,000 small firms and social groups, maintains that "there is a strong business case for letting the tax relief for the wealthiest expire,” noting that doing so would "reduce the federal budget deficit and lessen the crisis with state and local budgets around the country.”

Frank Knapp, president and CEO of the South Carolina Small Business Chamber of Commerce has written on the Bush tax cuts issue for The Huffington Post. He emphasizes that many of the people who report business income on their personal income tax returns are bond traders, partners in corporate law firms, lobbyists and hedge fund managers -- not the kind of activity that most people think of as "small business.”

These alternative small business groups say that the debate over the Bush tax cuts has been heavily skewed by talking points from the NFIB and the Chamber. The Chamber has a long track-record of backing the economic priorities of corporate elites, while the NFIB has increasingly become a partisan wing of the Republican Party, as HuffPost detailed in January.

While the NFIB continues to support the indefinite extension of the Bush tax cuts for the rich, it opted last year not to fight for a bill that would expand lending to small firms.

"Any small businessman who is in the NFIB is paying his enemies to stab him in the back,” says Prince, the record store owner.

Alpha Express VP Young agrees. "It's the corporate interests and the wealthy stealing our name to further their agenda," she argues.

While the upper-end Bush tax cuts would increase the federal debt by $700 billion over the next 10 years, the broader class of Bush tax cuts, which affect many middle-class taxpayers, would cost $3.1 trillion over the next decade, according to the Congressional Budget Office.

"We should have learned from the last decade that slashing taxes for the richest Americans is a great way to grow the national debt –- not jobs," says Holly Sklar, the executive director of Business for Shared Prosperity, a non-partisan small-business group funded predominantly by the Ford Foundation. "Few small businesses benefit from the top rate tax cuts, but many lose from a shrinking middle class and deepening budget cuts in everything from the Small Business Administration and education to vital infrastructure repair and modernization. The tax cuts are like termites, eating away at our economy and our nation’s future.”

http://www.huffingtonpost.com/2011/05/04/small-business-owners-bush-tax-cuts-rich-repeal_n_857204.html?view=print

WI's Supreme Court Election 'Recount' is a Mess

By Brad Friedman on 5/3/2011 7:50pm

Wisconsin is no Minnesota.

Where Minnesota's post-election hand count of the 2008 U.S. Senate election between then Sen. Norm Coleman and now Sen. Al Franken was, as we wrote at the UK's Guardian at the time, "one of the longest and most transparent election hand-counts in the history of the US," Wisconsin has made it extremely difficult (putting it nicely) to know what the hell is actually going on in their statewide "recount" of the April 5th, 2011 state Supreme Court election between Justice David Prosser and Asst. Attorney General JoAnne Kloppenburg.

Where Minnesota's chief election official, Sec. of State Mark Ritchie, oversaw a process to ensure that updated and accurate numbers were easily tracked and transparently shared with the media on a daily basis, Wisconsin's chief election authority, their Government Accountability Board (G.A.B.), has posted (and even sometimes removed) confusing, misleading, and unclear updates, often with inaccurate information, on various schedules, and frequently with little or no explanation for wholesale changes and deletion of data.

Where Minnesota counted every vote by hand with full public scrutiny, including photographs and video cameras, Wisconsin is tabulating ballots, often by the same oft-failed, easily-manipulated computer systems that counted them in the first place, behind barriers that preclude broad public oversight, under an agreement between both campaigns which disallows the use of video cameras by observers.

The count, which began last Wednesday, often feels as if it's happening in virtual darkness, at least to those of us trying to observe from afar, but the same sentiment has been shared with us by many we've spoken to who are there on the ground. There is an alarming lack of transparency to help the citizenry oversee the process in order to ensure accountability and an accurate count. To make matters worse, if that's possible, chain of custody issues for the ballots appear questionable in a number of reported cases, after ballots have been kept in the same darkness by election officials --- sometimes securely, sometimes not --- for the three weeks following the election and prior to the "recount".

One person we've spoken to who has also been trying desperately, as we have, to closely follow along with the progress, described the situation over the weekend by saying: "Let's call it 'fascinatingly unacceptable'. There are other 'f' words I could use, but we'll leave it at that."

Another Election Integrity veteran was forced to reach for a "bright side" by saying: "It may be worse than Minnesota, but, hey, at least it's no Florida!"

We've not written here about WI's Supreme Court "recount" since it began last Wednesday, largely because we've had such a difficult time making heads or tails of the progress, the accuracy, the integrity of the ballots or the counting, or even of the various reports of bizarre anomalies which continue to occur, often with little explanation for their resolution...

'Necessary and appropriate light'

Two Wednesdays ago Kloppenburg announced her intention to request this count after the unverified results of the state canvass placed her some 7,300 votes behind the incumbent Republican Prosser. The 0.488% margin out of some 1.5 million ballots cast allowed for the state-sponsored count to take place at Kloppenburg's option. The unofficial and unverified canvass results followed on the startling and still-unexplained revelation of some 14,000 votes which were not initially included in the Election Night tallies by Prosser's former colleague, Republican Waukesha County Clerk Kathy Nickolaus. Those ballots changed the unofficial results from a 204 vote lead for Kloppenburg, to a 7,316 vote lead for Prosser.

When Kloppenburg made her announcement that she was exercising her right to a statewide recount, she declared, appropriately enough: "A recount may change the outcome of this election or it may confirm it, but when it is done, a recount will have shed necessary and appropriate light on an election that right now, seems to so many people to be suspect."

Unfortunately, the process to date risks those hopes being dashed, unless changes are made broadly and quickly in the state's current "recount" process. If not, there is a great possibility that little if any "light" will ultimately be "shed" on the April 5th election results and they are likely to remain "suspect", sadly, for a long time to come.

Just 31 of Wisconsin's 72 counties are counting some or most of their paper ballots by hand. The others counties are running them back through the same machines that counted them --- either accurately or inaccurately --- in the first place, offering little assurance that the results are correctly tabulated.

Where ballots have been counted by hand over the last week or so, a number of anomalies have occurred and/or irregularities been discovered.

Let's review a few of the most noteworthy incidents, in no particular order...

97 uncounted, unsecured ballots in the city of Verona

As reported by the Capitol Times last Friday...

On Thursday afternoon official "tabulators" [which is what they call the people who are counting] were busily counting ballots from the city of Verona when the votes came up more than 90 short of what the electronic readout from the voting machines said they should. That sent Verona officials on a hunt, and a rubber-banded stack of 97 ballots turned up in the office of Verona City Clerk Judy Masarik.

"There's a table in the clerk's office, and there was a binder and some other papers on top of the ballots," said City Administrator Bill Burns, who found the stack.
...
On election night, all the ballots were supposed to be secured in sealed bags, which were then supposed to be signed by local elections officials. The seals were supposed to remain intact.

Burns found the bundle unbagged. They were bagged and he drove them to Madison. The bag had no signatures or initials.
...
"I just have to ask," [newly appointed Dane County Clerk Karen] Peters asked Masarik: "Just why were these not sealed in a bag on election night?"

But no one could say how it happened.

Despite the mystery of the ballots' provenance and the broken chain of custody for them, the Cap Times reports [emphasis added], "Through precinct stamps and initials on the ballots, the proceeding pretty much established that the ballots were genuine."

"Pretty much." Close enough for government work, then?

The paper continues [emphasis added]: "But the chain of custody was compromised. Not only did Masarik admit that her office was sometimes left unlocked while she was at lunch, a cleaning person had access to the office after hours."

So, no big deal? Apparently not in Wisconsin, for some reason --- even after we learn the results on those 97 votes: "the ballots in question favor Prosser by 30 votes: unexpected because he took a 2-1 beating in the city overall."

In fact, according to Dane County's canvass results [XLS], in the City of Verona (and be careful, because there is also a Town of Verona, as is the case with many WI cities, towns and villages), Kloppenberg supposedly defeated Prosser soundly 2380 to 1204. And yet, 97 votes show up after three unsecured weeks on someone's desk and Prosser gains 30 votes over Kloppenburg when they are counted. Okay.

Undocumented and torn ballot bags in the Town of Delafield

This is one of the strangest anomalies to date, and it's made all the more disturbing by the fact that it occurred not only in Kathy Nickolaus' Waukesha County, but in the Town of Delafield, where Justice Prosser says he spent the day after the election "trying to figure out what the hell is happening." But more on that in a moment.

Last Thursday, according to a volunteer observer in the Waukesha County counting room, the serial number on the protective plastic seal on one bag of ballots was not recorded at all on the "Inspector's Statement", raising serious chain of custody issues for the entire bag of ballots [emphasis in original]...

At around 2:15pm, we were ready to open the bags for Delafield. There were three bags total. Bags 1 & 2 were fine. The numbers all matched up. When we got to bag 3, we found out that the bag # was NOT RECORDED ON THE INSPECTOR'S statement...! The Republican canvass person said we could assume that the clerk forgot to write the # down on the inspector's statement and we could proceed. Of course, this is a break in the chain of custody!...

So Bill (volunteer lawyer) objected. I got my phone out and went to call the campaign. The sheriff wouldn't let me out the back door (even though I went out that door to use the restroom earlier) but made me go around everyone to the front door (front door is for reps, back door is for public). I had to get past the guy sitting out front wanting to know if I was leaving for the day, what my name was...

I called the campaign and they said to tell Bill to tell the judge that we are considering making an objection and want to have legal counsel. They said DO NOT open the bag. I raced back into the room and found Bill. He said the bag had already been opened...

He said he objected and asked the judge to open the other bags first, and not # 3, but the judge said NO. Bill said it's in the minutes and we have a record of it. BUT...they started counting the ballots in bag 3 first. By this time the ...media started pouring in.
...
I don't know how many votes we're talking here, but this is very suspicious. Why couldn't the judge wait? Why did they open # 3 first?

Equally troubling, another ballot bag from Delafield was later found to have been torn, reportedly, with the serial number scratched out and replaced with another.

We asked G.A.B. spokesperson Reid Magney for an explanation of these anomalies from last Thursday, but he didn't yet have one.

"I haven't been briefed on that situation and so I can't comment on it at this point," he told The BRAD BLOG this afternoon.

"Generally we don't have information about these things until we get minutes from the county. We don't get the minutes until the entire county has completed their count," he explained.

Aside from the obvious significance of (hundreds of? thousands of?) ballots in Waukesha County having fallen from what is supposed to be a secure chain of custody, the fact that these anomalies occurred out of Delafield is sure to raise even more eyebrows, given Prosser's admission that he spent the day there following the April 5 election.

It was on that very same day, April 6th, that Nickolaus says she discovered the unreported 14,000 votes from the town of Brookfield, though she failed to report that fact to either the G.A.B. or even her own Waukesha Canvass Board which was busy reconciling polling books and ballot totals that same day and the day after. It wasn't until Nickolaus' stunning 5:30pm press conference on April 7th that the canvassers and the G.A.B. learned of the problem (though Rightwing bloggers had been reporting the discovery which would change the course of the election, with very detailed and specific reports in the hours prior to Nickolaus' presser.)

When Kloppenburg filed for her "recount" on April 20th, she also requested that a special investigator be assigned by the G.A.B. to look into Nickolaus' many election reporting inconsistencies. In the complaint requesting the special probe [PDF], as we reported in detail on April 22, the following allegations were included:

17. On Wednesday, April 6, 2011, Justice Prosser was observed entering the Governor's Office late in the evening and attending a private, on-on-one [sic] meeting with Governor Scott Walker.

18. Governor Scott Walker made public statements on Wednesday, April 6, 2011, commenting that there might be "ballots somewhere, somehow found out of the blue that weren't counted before."

After Kloppenburg's complaint was made public, Prosser vehemently denied the charges, according to Milwaukee's Journal Sentinel. He "angrily" told the paper "The idea that I would go to the governor's office is just patently untrue. There is not a shred of evidence. That is pure malice."

But just one week later, Prosser's story had begun to change. In an interview with Tony Galli of Madison's ABC affiliate WKOW27 Prosser conceded, "It is conceivable that during that week, I stopped down to the governor's office."

"I certainly never went beyond the reception person," Prosser told WKOW27 in his apparent flip-flop, "I never met with the governor personally in his office." (Emphasis in original audio.)

More to the point of this article, while going on record with his changing story and carefully qualified remarks, Prosser added that he'd "spent almost all day in Delafield [the day after the election], where we're trying to figure out what the hell is happening here, are we going to have to have a recount?"

So he spent that day In Delafield? Interesting.

This is a sitting Supreme Court Justice who has already admitted to felony crimes as the Republican majority leader and speaker of the state Assembly as Ernest Canning meticulously documented in our recent exposé, and someone whose story on meeting with his old colleague, Republican Governor Scott Walker, the day after an election which had become a referendum on Walker's union-busting agenda, has changed from indignant denial to "maybe I did", in the period of one week.

So is there anything more behind his presence in Delafield and the two ballot bags which we now learn appear to have somehow fallen out of the chain of custody? Good questions for a special investigator, it seems to us.

Here's the package from WKOW27 News including Prosser's admission, changing his story, as captured on audio tape...

Whatever happened in Delafield, and whatever happened with those two ballot bags, the matter was of enough concern to the Kloppenburg campaign that they sent an attorney to monitor the count in Waukesha County the next day, according to TMJ 4, Milwaukee's NBC affiliate:

On Friday, day three of the statewide recount of the Supreme Court race, the Kloppenburg recall effort called in their attorney, Michael Maistelman, to monitor the recount in Waukesha County.

Earlier Friday a clerk discovered that one of the bags full of ballots from the Town of Delafield was not properly sealed. The Kloppenburg campaign said that means there was the possibility that people could have had access to the bag of ballots. On Thursday, a different bag containing hundreds of ballots wasn't recorded on the poll inspector's log. That bag was also from the Town of Delafield.

Despite that, poll officials promise the numbers all added up to those obtained on election night. Still, the Kloppenburg campaign sent Maistelman to oversee the recount.

"I was obtained to come down here to ensure the integrity of the process on behalf of the Kloppenburg campaign. "It's my understanding that there's been some issues with bags, ballot bags, identification numbers not adding up, so they just wanted to ensure that all the proper procedures were followed," Maistelman said.

The BRAD BLOG has learned, via a number of Kloppenburg volunteers, that while Maistelman was there on Friday, he was not there in some of the days which have followed since.

And again, the G.A.B. told us they have no comment at all on this matter, and likely would not until they receive and review minutes from the counting room after the counting has completed in Waukesha, where all ballots are being counted by hand, due to the serious concerns about County Clerk Kathy Nickolaus. She has (wisely) recused herself from this hand count.

Unfortunately, these anomalies are becoming less and less anomalous. As a blogger observing Waukesha County's progress via webstream reported over the weekend reported:

Three bags of ballots from a precinct in Oconomowoc (oh-CON-eh-meh-walk) have been identified as having no serial number on their bag labels.
...
Waukesha County officials discovered that all three ballot bags from a precinct consisting of wards 4, 5, 6, 14 and 22 in Oconomowoc had nothing written on the bag labels.
...
The municipal clerk from that area (not the County Clerk) was asked if she had an explanation. She said she had none.
...
This makes 8 bags of ballots so far in Waukesha County with serious "chain of custody" breaches.

See his report at dKos for more details.

Nearly impossible to follow "recount" updates

There have been various reports by the media, and very occasionally by the G.A.B., of problems and discrepancies elsewhere, as the recount is just over a third of the way done, at best. Some, such as this report on Monday, posted at the G.A.B. website, include more than 100 votes (in this case, for Kloppenburg) that were not included in the original post-election canvass results from Waupaca County.

In that incident report, County Clerk Mary Robbins details problems in two different towns discovered during their "recount". In the town of Larrabee "the original tally sheet from the April 5, 2011 election showed a 0 vote count," according to her email to the G.A.B. The "mistake" was not discovered during the canvass, and was explained by the town clerk Arlene Kratzke who admitted "she just forgot to transfer the numbers onto the sheet. ... The call in sheet, also, only shows 70 for Kloppenburg, the tape shows 167, the actual hand count shows 168 for Kloppenburg."

In the Town of Royalton, Kloppenburg's original count was 80, but the hand count tallied 95 votes for Kloppenburg. According to Robbins, Royalton's Town "Clerk had no explanation other than the election officials forgot to count a stack of ballots cast for Kloppenburg when they reported."

Anomalies, errors or out-and-out failures like the above are being discovered across the state, and have affected both candidates, though usually not in numbers as large as those in one fell swoop.

Problems like this are not particularly unusual in large counts like this. Shit happens, as they say. All a part of the problems that occur when ballots are not counted transparently, at the polling place, on Election Night in front of the public, all parties and video cameras, with results posted decentrally at each precinct before ballots move anywhere. We've come to call that sort of truly transparent process, "Democracy's Gold Standard" and recently posted a video "Special Comment" in regard to that standard being greatly missed in the WI Supreme Court election and so many others like it.

Of more import than the various small errors, is that it has become very difficult --- some would say damned near impossible --- to track the entire mess, thanks to the horrible job the G.A.B. has been doing in the first week of counting, to keep the public up to date with "recount" results as they happen.

On this score, the G.A.B.'s reporting has been a mess.

The failures started from the very first day, when numbers were released by the G.A.B. in a spreadsheet that didn't add up at all in some 25 different rows (each one representing a "counting unit", usually made up of several different wards in one municipality in Wisconsin.)

For example, in this April 27 spreadsheet [XLS], row 74, representing the Town of Sumner (Wards 1 & 2) in Barron County, shows 653 votes cast as counted during the "recount", but just 145 votes were reported from that "counting unit" in the original post-election canvas.

Unless 508 votes showed up out of nowhere in those two wards, it's likely there was a mistake in record keeping by the G.A.B. somewhere. There were similar anomalies seen in another 15 or 20 rows that day.

The next day, the G.A.B. explained cryptically on their website:

The updated spreadsheet that was posted late Wednesday was removed from this page early Thursday when we discovered some data entry errors. Some errors occurred in transferring information from clerk e-mails to the spreadsheet, and some were due to typos by clerks. We have been working today to ensure that the data we post is as accurate as possible. Please keep in mind that these are unofficial numbers.

For several days thereafter, results spreadsheets were posted with, instead of 3603 rows (one for each "reporting unit" in the state, plus one header line), just 53 rows, or perhaps a hundred or two hundred.

Of course, this made it nearly impossible for those trying to oversee the "recount" to track the updated numbers and changes in vote totals, since one could not easily compare numbers on one spreadsheet against another. The same rows represented completely different "reporting units" in each sheet.

As we said when we began here, Wisconsin is no Minnesota. During the Minnesota U.S. Senate count, tracking changes each day was a breeze, with clear results postings each and every night. That has decidedly not been the case in Wisconsin.

In their terse Monday night "Recount Summary for May 2", the G.A.B. announced:

A note about the spreadsheet: Going forward, it will contain all the reporting units, whether or not any results have been reported. Some past spreadsheets had reporting units removed if we had received data but were still in the process of reviewing it. Now, if data is in but not reported, it will say the reporting unit is under review.

G.A.B. spokesman Magney offered The BRAD BLOG a bit more detail today. "When we get in results that show more than a 10 vote change in any ward, we do a review internally, contact the clerk, to make sure that's not a typo. Initially, we weren't including it at all if it was under review, but we later decided it was better to include it with a notation."

Thankfully, as of Monday night, their May 2nd, 6:07pm report [XLS], once again had all rows ("counting units") fully restored to it. Finally.

(NOTE: Unfortunately, we failed to SAVE the above mentioned file locally and, as is their maddening custom, the G.A.B. has now removed that file from their system, replacing it with a newer one with a different name, rather than keeping them all available for download, so various versions of the update files could be compared. The G.A.B.'s spokesperson says we may request any particular file, however, and they can send it via email --- a seemingly necessarily burdensome process, as we have now suggested to him. He says it's their way of keeping things free from clutter and easier to follow along with the latest files as posted to the main G.A.B. "recount" information page. Magney notes anybody is free to save any posted files to their own systems locally, if they chose. Of course, as we told him, they need to view it to know about it in the first place, in order to do so!)

The problem seen on row 74 (the Town of Sumner) in the earlier spreadsheet, where 508 extra votes were reported, as noted above, is now cleared up in the latest versions of the spreadsheet, in that the canvass result totals are the same as the "recount" vote totals for that row. No change between canvassed and "recounted" numbers is reported from that "counting unit". The reason for the initially misreported "recount" totals? Unknown. Though the "recount" numbers initially reported for the Town of Sumner (Wards 1 & 2) on row 74, now show up in the same exact totals on row 70, the Town of Rice Lake (Wards 1 - 4) where they were likely supposed to have been shown on Day 1.

Making matters worse, many counties are failing to report the number of "Total Ballots Cast", crucial to overseeing the process, to the G.A.B., as requested in their April 26 directive [PDF] to Wisconsin County Clerks on the day before counting was to begin. Here's what the G.A.B. told counties to include when reporting numbers to them at the end of each day's counting:

Nightly Email: The Recount Plan requires a nightly email from each county identifying the wards completed, the total ballots cast, and the ballots for each candidate and scattering votes, as completed on that day. Please use "Daily Update" in the subject line of the email and use the following format for each completed reporting unit so that we can compile the information in an efficient manner:

Date
County
Name of Reporting Unit i.e. Town of Madison, Wards 1-7
Total Ballots Cast
Votes for Prosser
Votes for Kloppenburg
Scattering Votes

Note the instruction to include "Total Ballots Cast" with each update. That number is crucial for investigators and overseers to help determine any anomalous undervote totals, often a red flag that there may be a problem in the results somewhere along the way.

Unfortunately, in parts or all of 14 counties (Ashland, Bayfield, Burnett, Chippewa, Crawford, Green, Marquette, Menomonee, Monroe, Sauk, Sawyer, Taylor, Vilas and Winnebago) the "recount" totals are given, but the "Total Ballots Cast" column remains blank as of the latest spreadsheets.

The G.A.B.'s Magney tells us that they are "working to get that information, but it's not always provided to us."

He says, "this is information that the counties are going to be reporting in the official canvas of the recount. What we're providing now is information so people can follow along and see the process. Clerks are sending along the information each night, but there is no form or template. The numbers you are seeing are unofficial."

"At this point," he continued, "we're contacting the clerks and asking them to provide that information [Totals Ballots Cast]. I think those that haven't likely have the higher priority of actually counting the ballots. There's no statutory requirement for them to provide this information."

All the miscounted votes

Lastly, for now, the G.A.B. spreadsheets do not include another crucial set of numbers, though it's one we should be able to cull ourselves after the G.A.B.'s results reports finally settle into a single, reliable format. That is the number of miscounted votes.

As you'll see when following almost any of the reporting on this "recount", or usually any other, the only numbers reported are generally net gains or losses for each candidate.

Of far more interest to The BRAD BLOG --- and likely, election integrity advocates in general --- is the number of votes originally miscounted by the oft-failed, easily-manipulated electronic tabulating systems which are rarely checked for accuracy except in post-election contests such as this.

So if a hand-count discovers that Joe Candidate received 50 more votes in Ward 1 than originally reported by the machines on Election Night, but in Ward 2 Joe Candidate lost 49 votes, the county and the media would both end up reporting: "Hand count finds machines work almost perfectly! Only 1 vote lost by Joe Candidate!"

That, even though some 99 votes were actually miscounted for poor Joe in just two precincts. Had the hand count found that he'd lost a full 50 votes in Ward 2, the county and media would have reported that the "recount" found the original machines results were perfect!

And that's precisely what they do. Watch for it as you're reading reports on the "recount" progress in Wisconsin. We'll endeavor in the weeks ahead to pull together a report on the real number of miscounted votes to give you a better idea of how well the machines made by Diebold, ES&S and Sequoia actually worked, or didn't, in Wisconsin's April 5th election.

Unfortunately, in this contest, just 31 of the 72 counties will actually see some or all of their ballots counted by hand. So we'll only be able to get a limited sample. But it'll no doubt provide an interesting set of numbers to consider for the future as these very same systems are set for use in upcoming state Senate recall elections in Wisconsin, as well as set to tally millions of votes in next year's Presidential election cycle.

And, oh, for those interested, to date, according to the G.A.B.'s latest numbers as of 6pm CT today (Tuesday, May 3rd), Prosser has gained 245 votes net and Kloppenburg has gained 414 votes net. His unofficial, unverified 7,316 vote lead after the statewide canvass is now an unofficial, only-slightly-less-unverified lead of 7,147 votes.

- Jeannie Dean contributed research for this article.

http://www.bradblog.com/?p=8507