US “Not Viewed Very Well” on Corruption

At a Senate Foreign Relations committee hearing on corruption and kleptocracy, testimony was given to the effect that the United States’ anti-corruption activities around the world are undermined by its own image and acts.

The US’ “credibility is extremely weak on this issue,” said Sarah Chayes, the Senior Associate for the Democracy and Rule of Law Program at the Carnegie Endowment for International Peace. Responding to a question from the chairman of the committee, Bob Corker, R-TN, that asked how people outside of the US view the US on the issue of corruption, Ms. Chayes replied “I have to say we’re not viewed very well.”

Earlier Senator Bob Menendez, D-NJ, had highlighted the issue of what one witness called “western enablers.”

Bob Gershman, the president of the National Endowment fro Democracy, in his written testimony wrote “professional intermediaries in the established democracies are critical links for venal kleptocrats who seek to move ill-gotten gains from authoritarian systems into the democracies, where they can enjoy the rule of law.”

He also quoted from journalist Oliver Bullogh, who wrote “only with the help of Western enablers can a foreign kleptocrat transform the ownership of a questionable fortune, earned in an unstable country where jail is often one court decision away, into a respected philanthropist.”

The numbers being lost by corruption discussed during the hearing were large. Mr. Corker noted that the cost of corruption annually stands at $2.6 trillion.

by Marlon J. Ettinger

PROMESA Advances to the Executive

The Puerto Rico Oversight, Management, and Economic Stability Act(PROMESA) made it out of the Senate again today, jumping two hurdles with ease and landing on the President’s desk. The bill passes only two days before Puerto Rico is due to make a debt payment of $2 billion, an obligation it does not have the money to fulfill.

Supporters of the bill began the process by invoking cloture on it in the early afternoon. The cloture motion passed comfortably by 68-32.

After an hour long recess the final debates on the bill began with five hours provided divided between both sides. Harry Reid, D-NV, designated 40 minutes each to Bernie Sanders, I-VT, and Robert Menendez, D-NJ, of his party’s time. Reminding the speakers that they were not obligated to use all of their time, he said “the sooner we get to the votes, the better off we will be.”

“This is a terrible piece of legislation,” Mr. Sanders began, “setting horrific precedence, and it must not pass.”

“This legislation strips away the most important powers of the democratically elected officials of Puerto Rico,” Mr. Sanders continued.

“The US must not become a colonial master,” he asserted vehemently, “which is precisely what this legislation allows.”

Mr. Sanders warned of a mass migration of professionals away from the island, and called a 58% childhood poverty rate disgraceful.

“You cannot get blood from a stone,” he exhorted hedge funds who are seeking to profit from Puerto Rico’s debt.

Addressing the presiding officer Ted Cruz, who also ran for president this year, Mr. Sanders said that “Puerto Rico must be given the time it needs to grow its economy” and added that there should be austerity for hedge funds, not the people of Puerto Rico.

“I am very disappointed that this…piece of legislation is being pushed through the Senate” said Sanders.

He finished his speech by setting up a procedural challenge to the bill, claiming it violated the Budget Act.

Orrin Hatch, R-UH, jumped to challenge the charge, and set up a vote to waive the provisions of the Budget Act with regard to PROMESA.

Mr. Hatch then attacked what he called “unsatisfactory” financial disclosures by Puerto Rico. He asserted that Puerto Rico has $40 billion in unfunded pension promises, and accused the administration of collaborating with the government of Puerto Rico “in an obvious attempt to favor public pensions.”

Bob Menendez, D-NJ, called the rush to act on legislation unwise, saying that worries about litigation in the event of a Puerto Rican default are addressed in the bill by a retroactive stay on any action taken in court.

“We still have one last opportunity to do right by the people of Puerto Rico.”

Mr. Menendez launched another attempt, as he did on the floor of the Senate for four hours yesterday, to show how completely the financial oversight board that will govern much of the island’s spending decisions, in his words a “control board,” strips the island territory of its sovereignty.

“I believe we’re opening the flood gates,” he maintained, “to turning Puerto Rico into a laboratory for right wing ideology.”

He also called the legislation an assertion of neocolonial control.

A motion put forward by Mr. Menendez to table the PROMESA notion failed by a vote of 44-54.

The procedural challenge issued by Mr. Sanders was also defeated, and the Budget Act provisions were waived in regard to the legislation by an 85-13 vote.

Then finally, the Senate made its final push and passed the bill with 68 yeas and 30 Nays, completing its circuitous passage in and out of the Senate for what is probably the last time, provided the President does not veto it.

by Marlon J. Ettinger

Parliamentarian Earns Her Pay

A comical scene played out this evening in the waning hours of the Senate session that left members scratching their heads over the contents of a bill that was moved by Majority Leader Mitch McConnell, R-KY.

Senator Bernard Sanders, I-VT, kicked off the confusion by objecting when the Majority Leader moved the bill.

Seeking a point of parliamentary inquiry, Mr. Sanders asked whether or not it was true that there was an amendment in the bill titled “The Defund Planned Parenthood Act of 2015.”

Mr. Sanders was forceful in his demand for an answer, and the presiding officer was at a loss for words while the Senate staff found what, in fact, the bill said.

“Yes, no, maybe?” asked Mr. Sanders impatiently.

“The language in question is in the House legislation,” came the eventual answer from the chair.

Mr. Sanders then asked that such language be removed by unanimous consent.

Amid uncertainty about whether or not such an action could be taken, the senior Senator from Vermont, Patrick Leahy(D), asked a few times whether or not the legislation would defund Planned Parenthood. Crosstalk reigned casually before Mr. Leahy could get an answer. The presiding officer informed him that such a question was not for the parliamentarian to answer.

Mr. McConnell then took an opening to ask in genuine bewilderment who held the floor. When he was told that it was himself, Mr. McConnell sought to clarify that he was amending the legislation with the Roberts Amendment that would replace in full the Planned Parenthood act.

Barbara Boxer, D-CA, asked whether or not the Senate could strike the language by unanimous consent, and learned from the parliamentarian talking through the presiding officer that that was not the case and that they can only amend.

At this point Mr. McConnell, looking lost, asked if the clerk would read the title of the bill, drawing a wry smile from the presiding officer.

The chamber erupted in laughter when John J. Merlino, the legislative clerk, recited the name of the bill the Senate had been working on all day, the National Sea Grants College Program Amendments Act of 2015.

Charles Schumer, D-NY asked one last time to ensure that the legislative action that Mr. McConnell was about to take would exclude entirely the words “Planned Parenthood” from the bill.

The presiding officer reported that it would, then moved on without taking anymore questions.

by Marlon J. Ettinger

Subcommittee on Primary Health and Retirement Security Takes Testimony on Small Business Health Care Concerns

The Chairman of the HELP subcommittee on Primary Health and Retirement Security, Mike Enzi, R-WY, along with witnesses, asserted that cost is the number one reason why small businesses do not offer health care to their employees, in a roundtable discussion this afternoon.

Tom Glause, who is the Insurance Commissioner for the State of Wyoming, echoed the importance of cost, and added in his testimony that the second consideration small business employers have is choice.

Can the small employer provide the coverage that the employees need,” Mr. Glause wrote, “with networks that are sufficient, and out-of-pocket costs that are reasonable?”

Among the concerns that Mr. Glause listed in Wyoming health care, the rate of uncompensated care was held up as particularly worrying. It has seen a 3% annual increase, and he warns that a report by the Wyoming Hospital Association augurs “larger increases because of increasing unemployment, increasing numbers of individuals with high deductible plans, and increasing numbers of uninsured.”

Individuals with higher deductibles are more likely to seek uncompensated care, Mr. Glause explained, and costs from uncompensated care ultimately raise the price of deductibles.

High deductibles due to uncompensated care…[threatens the] existence of facilities,” he said.

Warren Hudak, the President Hudak and company, of a small Pennsylvania accountancy firm, testified on behalf of the National Federation of Independent Business. He called his firm a “typical small business,” and said that health care costs are consuming revenue.

I feel like we’ve been placed in an impossible position,” he told the subcommittee.

Thomas Harte emphasized throughout the day affordability of care. He was representing the National Association of Health Underwriters, and is also the president of an employee benefits company, Landmark Benefits, Inc. in New Hampshire. He talked about both his experience in running a company with 17 employees, and in providing benefits plans to small businesses.

Mr. Harte painted a grim picture of massive rates jumps by numbers like 23.32% and even a whopping 46.60% He warned that with outrageous deductibles shooting up to $5,000 individuals are increasingly forgoing necessary medical procedures.

Sarah Lueck, of the Center on Budget and Policy Priorities, gave more of a defense of the health care environment, and of what she sees as the worthy reforms of the Affordable Care Act. Despite what the other witnesses described as mounting pressures on employers, Ms. Lueck pointed out that contrary to predictions before the passage of the health reform the ACA has not caused employers to drop benefits.

Mr. Glause clarified that it is health care that determines the cost of health insurance, and highlighted skyrocketing prescription prices as deserving a great deal of the blame in rising deductibles and premiums.

Mr. Harte agreed with Mr. Glause, using the 49% rise in deductible price between 2009 and 2014 as an example. Mrs. Lueck testified to the fact that the ACA mandated that 80% of premiums be used for health care, with the additional 20% going to overhead and profits. Mr. Harte told the subcommittee that 30% of that 80% goes to prescription costs. He also said that while the ACA has insured many more people, it has had the consequence of raising costs for many others.

Mr. Hudak related an anecdote about a back surgery he had performed before the reforms. The procedure was designated as elective by his plan, but he said that because the condition was causing him so much pain he negotiated a better price with his doctor and was able to get the treatment. He said that the surgery had made him much more productive afterwards, and reiterated a call for greater flexibility in what employers can offer.

Tim Scott, R-SC, blamed an “[unparalleled] regulatory environment that exists today” for mounting levels of poverty. He claimed that the two primary reasons for this are the ACA and Dodd-Frank legislation. He wondered if the ACA may actually be increasing the cost of health care.

Reflecting on the $5,000 deductibles cited by Mr. Harte, Mr. Scott observed that “it is difficult for the average American to put $400 together.”

Mr. Scott also said that he “think[s] the employer mandate and penalties will actually create a perverse incentive to provide less coverage [to] employees.”

The small business community has always struggled with health care premiums,” Mr. Hudak answered. He echoed concern with high prescription prices, saying his wife’s prescription had rose from $100 to $600. Mr. Hudak championed health reimbursement arrangements(HRAs), which allow employees to purchase their own health plans. “I have long been a supporter of consumer-driven health insurance arrangements,” he wrote in his testimony, “and believe they are key to curbing unsustainable health care cost increases.”

Mr. Hudak later said that “the only way we can compete with the big guys with a lot of money is with flexibility,” and he believes that HRAs are just such a flexible plan. Mr. Hudak cannot offer them anymore because they were banned from being offered by employers in 2014.

Purchasing health insurance is overwhelmingly complicated,” said Mr. Harte, “…it’s likely the most complicated product you’ll ever purchase.”

Mr. Harte wrote of his desire to see passage of S. 1661, which removes agent and broker fees from the medical loss ratio. His firm provides those services, and he argued that they are essential for anyone purchasing a health insurance plan.

An exchange between Senator Bill Cassidy and Ms. Lueck led to a consensus between her and the Louisiana Republican that a look at what percentage of income people pay for health care is deserved. While Ms. Lueck commended the ACA for substantially lowering deductibles for lower income people, Mr. Cassidy challenged the law’s success in ensuring middle class people get health care.

A single woman making $75,000 a year would pay 15% of her income towards health care, Mr. Cassidy said, claiming that rates this high lead to forgoing care. The ACA was supposed to eliminate medical bankruptcy, he continued, but they have not declined while out of pocket exposures increase and premiums rise.

Ms. Lueck called employees taking more of the burden a longstanding trend that predates the 2010 law.

Transparency trends were touted as successes in lowering costs. Ms. Lueck noted the Summary of Benefits and Coverage form(SBC), which compares plans’ benefits and cost-sharing, as a success. She also praised the standards the ACA set, writing that they “help consumers compare coverage options, promoting competition based on price and quality among insurerswhich can help reduce premiums.”

Mr. Harte told Mr. Enzi of transparency’s importance in keeping down health care costs, noting that facilities differentials can reach as high as 600%.

There was a coalescence around a rejection of the employer mandate in providing health care by some of the witnesses. Mr. Harte called the time that administration takes “overwhelming,” and expressed a desire for the employer exclusion to stay in place. This exclusion excludes employer contribution to employee health care from the employer’s taxable income. He said that increasingly, higher fees and arcane regulation are causing employers to “just say, ‘why not just pay the $2,000 penalty?

by Marlon J. Ettinger

Senate Confirms Robert F. Rossiter, Jr. as District Judge for Nebraska

After being confirmed by unanimous consent last week by the Judiciary Committee, Robert F. Rossiter, Jr. was confirmed to his seat as a judge in the US District Court for the District of Nebraska.

In a perfunctory 90-0 vote, Mr. Rossiter became one of the three judges in his district. He replaces Joseph F. Bataillon, a Creighton University graduate like Mr. Rossiter who was appointed by President Bill Clinton.

Earlier in the day Deb Fischer, R-NE, spoke on the floor in support of the judge and listed some of his qualifications. Mr. Rossiter clerked for C. Arlan Beam, a prominent former chief Judge of the United States District Court for the District of Nebraska who went on to become the Senior Judge of the United States Court of Appeals for the Eighth Circuit.

Mr. Rossiter was chosen recently as president of the Nebraska Bar Association, though because of his nomination and now appointment to the district court he did not have a chance to serve in that position.

Mr. Rossiter comes from the law firm of Fraser Stryker, where he was a partner. Fraser Stryker is an Omaha based firm that specializes in business and technology law.

by Marlon J. Ettinger

Senate Poised for Fight over Zika Funding

The Senate will vote tomorrow on legislation that could provide $1.1 billion in emergency funding to combat the Zika virus. The coming months are peak mosquito season, and there are fears among health officials that if action is not taken there might be an explosion in incidence of the mosquito-borne disease.

A Centers for Disease Control Interim Response Plan released earlier this month warned that “local transmission of Zika virus in US territories and affiliated Pacific Island countries is ongoing.” It also noted that “neither vaccines nor proven clinical treatments are expected to be available to treat or prevent Zika virus infections before local transmission begins within [the Continental United States] or Hawaii.”

The Majority and Minority leaders both addressed the bill in their opening statements. Mitch McConnell, R-KY, said that combating the spread of the Zika virus should be a priority of both parties. He then accused Senate Democrats of playing partisan politics over funding.

Harry Reid, D-NV, accused the Republican package of being “full of poison pills.” He says that with cuts to Obamacare, Ebola funding, and provisions prohibiting funding in the bill from being directed to Planned Parenthood “it’s like we’re being dared to oppose this legislation.” Democrats are also upset that the bill falls short of the $1.9 billion the Obama administration requested.

The bill has already made it through the House, but even if it does pass the upper chamber the administration has warned it may veto it. This week is the last week for the Senate to address the issue before a long July 4th recess.

The Majority Whip, John Cornyn, R-TX, called the shifting of funds from other programs better than deficit spending.

“I hope we will act with dispatch,” he said, commending the Obama administration for reprogramming $589 million from the Ebola fund to face the Zika threat. He called for support of the bill, and echoed the Majority Leader’s accusation against Senate Democrats.

“They can either play politics at the expense of women and children across the nation, or they can support the bill.”

by Marlon J. Ettinger

Ahead of Warsaw NATO Summit, Testimony at Foreign Relations Committee Stresses Deterrence

Following the Senate Committee on Foreign Relations’ approval of resolutions condemning Russia’s “military aggression” and “violations of the Open Skies Treaty” the committee heard testimony this morning in a hearing examining the upcoming NATO Warsaw Summit.

The summit will be held from July 8th-9th in Poland, and a number of the topics likely to be on the agenda were brought up over the more than hour and a half long discussion. The chairman of the committee Bob Corker, R-TN, began the proceedings by echoing the committee’s condemnation of Russia with a rebuke towards President Vladimir Putin’s actions in Syria.

The Russian Federation has repeatedly bombed innocent civilians,” he said.

Mr. Corker introduced a theme that would be discussed in length during the witness testimony that followed, as well as in the questions of more than one Senator. He maintained that the alliance must shift towards “actively deterring aggressors.”

Benjamin L. Cardin, D-MD, who is the ranking member on the committee, called NATO a “critical tool for shaping our relationship with Russia.”

The two witnesses who gave testimony are former members of the Bush and Obama Defense Departments. Ian J. Brzezinski was the Deputy Assistant Secretary of Defense for Europe and NATO policy from 2001 to 2005, and Derek Chollet was Assistant Secretary of Defense for International Security Affairs between 2012 and 2015.

Mr. Chollet, who is now Counselor and Senior Adviser for Security and Defense Policy at the German Marshall Fund of the United States, a private Atlanticist think tank, described the present NATO situation as “perhaps the most perilous moment in the 25 years since the end of the Cold War.”

He commended the United States’ commitment to Europe by citing the European Reassurance Initiative, which passed the Senate last week as part of Fiscal Year 2017’s National Defense Authorization Act. Significantly, the language in the bill names the program the European Deterrence Initiative. The funding for the initiative is four times more than last year, reflecting the Administration’s budget request. It provides $3.4 Billion to “deter Russian aggression.”

Four battalions are expected to be approved at the summit to provide deterrence on Poland’s border. A battalion consists of 800-1000 troops.

Mr. Chollet also reported in positive terms that Israel is expected to open an office at NATO headquarters this week, and that Montenegro’s membership may be approved at the summit. He urged the Senate to work towards ensuring that authorization of that membership be approved by the United States before the end of the year.

Ian Brzezinski is now the Senior Fellow at the Brent Scowcroft Center on International Security for the Atlantic Council, another organization that promotes trans-Atlantic relations. His testimony was portentous, and when he spoke of planning efforts he recommends they seemed to indicate a belief on his part that conflict with Russia is imminent. He warned that Russia has three distinct advantages, those of proximity, of speed, and of massed firepower.

That speed was emphasized. Mr. Brzezinski said during questioning that he was “not worried about intentional attack against NATO,” but rather Putin’s actions “rais[ing] the likelihood of inadvertent conflict.”

He warned that in the event of an attack there may not be time for North Atlantic deliberation.

During the Cold War,” Mr. Brzezinski expanded in his written testimony, “NATO’s generals and admirals were entrusted with the authority to deploy forces and engage opponents in analogous scenarios. This trust needs to be returned to the Alliance’s military chain of command.”

The value of NATO was talked up by all involved throughout the hearing. Mr. Cardin set the tone by saying in his opening remarks that “we too often take these organizations for granted.” The second organization he was referring to was the European Union.

Britain held a referendum yesterday on its membership in the EU, and there was talk throughout the hearing on the ramifications of a possible exit by the country which is also a member of NATO. The Leave vote carried the day, an outcome that was not desired by the two witnesses. When asked by Cory Gardner, R-CO, what they believed the effect of a Leave vote would be for NATO Mr. Brzezinski said that an EU without the UK would be less Atlanticist.

To have that Atlanticist orientation diluted cannot be a net gain, it’s actually a net loss,” he said.

Mr. Chollet told Mr. Gardner that a British exit would mean less bandwidth for discussion of NATO in Europe, though he predicted that it might make Britain more eager to take on a larger role in the alliance.

Mr. Cardin laid out some of the facts explaining the exacerbating tensions between Russia and NATO. Saying that “Russia represents a real threat to NATO’s security,” he detailed Russia’s recent exercises along NATO borders with over 80,000 personnel, as well as wargames simulating a Russian attack hosted by Poland this year that boasted 31,000 troops, 14,000 of which were American.

Mr. Cardin touched on another issue that occupies much of the concern of NATO boosters when he mentioned that the German Foreign Minister Frank-Walter Steinmeier called those exercises “warmongering.” He expressed a worry about the level of unity in the alliance.

Mr. Brzezinski concurred.

While we do have some unity, I’m not sure we have sufficient unity.”

Mr. Corker, in emphatic terms, indicated his disgust with what he thinks is insufficient commitment to the treaty by some members.

I find it to be highly offensive,” he said of that fact that Germany spends only 1.18% of their GDP on NATO. The United States has pushed for member nations to comply with the provision that they put a minimum of 2% of their GDP towards defense spending for the alliance.

We are the provider of security services,” Corker continued, referencing the fact that US contributions account for roughly 75% of the NATO budget. “They are the consumer of the security services.”

Mr. Corker then put his feelings into more certain terms, calling Germany “laggards, they’re being laggards in regard to NATO.”

Chris Murphy, D-CT, asked Mr. Brzezinski whether he thought ISIL or Russia was a greater threat to NATO.

Russia,” Mr. Brzezinski responded, adding darkly “I’m talking about nuclear threats.”

Mr. Chollet and Mr. Brzezinski were in near total accord on every issue. When Mr. Gardner asked them if they agreed that Europe faces blind spots in intelligence gathering the two responded quickly. Mr. Brzezinski said more ISR(Intelligence, Surveillance, & Reconnaissance) is needed, and Mr. Chollet claimed that NATO has lost some of its “muscle memory” since the end of the Cold War.

Near the end of the hearing the two former Defense Department officials were more frank about the position that they believe NATO needs to take. Bob Menendez, D-NJ, asked “how do we go from defense to deterrence?”

Mr. Chollet replied that presence and posture are the two essential things, especially in Poland and the Baltic states. He noted that this presence should be exhibited in the form of warfighting forces.

Mr Brzezinski was clear in his belief that the United States must lead NATO, and exhibit “steely determination.”

During a press conference in Brussels on June 15th, Defense Secretary Ash Carter was pellucid too in his assessment of the possibility that NATO might have to fight when he described the shift NATO must make as beyond just deterrence.

We agreed that NATO would further strengthen its posture to deter,” he told reporters,”and if necessary defeat any aggressor across the full spectrum of conflict.”

by Marlon J. Ettinger