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Impeach Bush

Budget Error Rates--Who To Trust

GOP Seeks to Change Score on Tax Cuts

General Tommy Franks Gives Wife Classified Data

Bush budget forecasts optimistic

Back to the '80s

Saudis Aided Subpoenaed Woman's Trip Out of U.S.

Arab American Held on Secret Evidence Released

AIDS Panel Director Leaves, Deputy Secretary At HHS Resigns

Proving Mitch Daniels Lies

Budget Error Rates--Who To Trust
CBO.gov
Table A-1.
Comparison of CBO, Administration, and Blue Chip Forecasts of Two-Year Average Growth Rates for Nominal Output (By calendar year, in percent)

The table that follows clearly shows that the Reagan estimates were widely optimistic, Carter came in far below expectations (ie: better forecast), Clinton estimates are almost exactly right. Minus error rates or error rates that are low are good. Plus error rates or high numbers are bad. Bush Sr. overestimated growth every year. Who do you trust? In the past 22 years, the numbers tell us to NEVER trust republican presidents.


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Table A-1.
Comparison of CBO, Administration, and Blue Chip Forecasts of Two-Year Average Growth Rates for Nominal Output (By calendar year, in percent)
CBO
Administration
Blue Chip
Actual Forecast Error Forecast Error Forecast Error

GNP
1976-1977 11.6 13.1     1.5 12.3     0.7 a   a
1977-1978 12.2 10.8 -1.4 11.2 -1.1 a a
1978-1979 12.5 10.9 -1.6 11.2 -1.3 a a
1979-1980 10.4 11.0 0.6 10.4 0 a a
1980-1981 10.3 9.7 -0.6 9.5 -0.8 a a
1981-1982 7.7 12.1 4.4 11.9 4.2 a a
1982-1983 6.1 9.7 3.6 9.8 3.7 9.5 3.4
1983-1984 9.6 8.2 -1.4 8.0 -1.6 9.0 -0.7
1984-1985 8.8 9.9 1.0 9.6 0.8 9.6 0.8
1985-1986 6.2 7.6 1.4 8.2 2.0 7.4 1.3
1986-1987 5.8 7.1 1.3 7.7 1.9 6.7 1.0
1987-1988 6.8 6.5 -0.4 6.9 0 6.4 -0.4
1988-1989 7.7 6.3 -1.4 6.8 -0.9 6.1 -1.6
1989-1990 6.7 6.8 0.1 7.1 0.4 6.6 -0.1
1990-1991 4.3 6.1 1.8 7.1 2.8 6.0 1.7
1991-1992 4.2 5.7 1.5 5.6 1.4 5.2 1.1
 
GDPb
1992-1993 5.3 5.7 0.4 5.4 0.1 5.5 0.3
1993-1994 5.5 5.3 -0.1 5.3 -0.1 6.0 0.6
1994-1995 5.3 5.6 0.3 5.7 0.4 5.6 0.4
1995-1996 5.0 5.2 0.2 5.6 0.6 5.7 0.7
1996-1997 5.6 4.7 -0.9 5.1 -0.6 4.5 -1.1
1997-1998 5.4 4.6 -0.8 4.7 -0.7 4.6 -0.8
 
Statistics for 1976-1997
Mean error * * 0.4 * 0.5 * *
Mean absolute error * * 1.2 * 1.2 * *
Root mean square error * * 1.6 * 1.6 * *
 
Statistics for 1982-1997
Mean error * * 0.4 * 0.6 * 0.4
Mean absolute error * * 1.0 * 1.1 * 1.0
Root mean square error * * 1.4 * 1.5 * 1.2

SOURCES: Congressional Budget Office; Office of Management and Budget; Aspen Publishers, Inc., Blue Chip Economic Indicators; Department of Commerce, Bureau of Economic Analysis.
NOTES: Actual values are the two-year growth rates for gross national product (GNP) and gross domestic product (GDP) last reported by the Bureau of Economic Analysis, not the first reported values. Forecast values are for the average annual growth of nominal GNP or GDP over the two-year period. The forecasts were issued in the first half of the initial year of the period or in December of the preceding year. Errors (which are in percentage points) are forecast values minus actual values; thus, a positive error is an overestimate.
* = not applicable.
a. Two-year forecasts for the Blue Chip consensus were not available until 1982.
b. With the 1992 benchmark revision, GDP replaced GNP as the central measure of national output.


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GOP Seeks to Change Score on Tax Cuts
Washington Post
By Jim VandeHei and Jonathan Weisman
Washington Post Staff Writers
Thursday, February 6, 2003; Page A35

In a strategy with potential consequences for future federal budgeting and tax policies, Republicans inside and outside Congress are trying to promote a controversial method of calculating "cheaper" tax cuts.

While it sounds like a buzzer-beating slam dunk by Michael Jordan, dynamic scoring, if it catches on, could boost the GOP's tax-cutting agenda. But it could backfire, too.

To understand how dynamic scoring works, consider President Bush's plan to eliminate the tax on dividends, which would "cost" $364 billion over 10 years. The government's number crunchers came up with that figure by simply calculating that the United States loses one dollar in revenue for every dollar it gives back to Americans in the form of a tax cut. In a static world, that's true. Politically, that big number makes it easier for Democrats to ridicule Republicans for pursuing a big tax cut in tight budget times.

But Republicans have long argued that consumers turn around and pump that money right back into the economy, paying new taxes on, say, the clothes they buy and creating new jobs for the people who make them. Therefore, Republicans say, the "dynamic" economic benefits should be factored into calculations of the cost of any tax package.

The Heritage Foundation, a conservative think tank with close ties to President Bush and congressional Republicans, did just that.

Heritage last week calculated that the dividend tax cut would cost $125 billion, about one-third of the current projected price tag. It factored in such things as the jobs that would be created and the new business investment that would follow when dividends were no longer taxed.

"In the real world, tax policy exerts a significant effect upon economic growth. This growth, in turn, affects tax revenues," according to the report Heritage issued.

Until recently, the dynamic scoring theory was little more than a wonky crusade for conservative tax geeks. But Republicans are systematically trying to push the idea into their tax rhetoric and institutionalize the model in the congressional budget-making process.

It started early last month, when House Ways and Means Committee Chairman Bill Thomas (R-Calif.) pushed through a new House rule that requires the Joint Committee on Taxation (JCT) to provide dynamic scoring estimates with each new tax-cutting package. The JCT, one of the few House-Senate panels, provides lawmakers with estimates on the cost of tax policies. While the committee will continue to use the "static" model, Republicans now have an official, somewhat bipartisan, dynamic score to present to voters.

House Budget Committee Chairman Jim Nussle (R-Iowa) also nominated Douglas Holtz-Eakin, a member of Bush's Council of Economic Advisers and an advocate of dynamic scoring, to run the Congressional Budget Office. Sen. Kent Conrad (D-N.D.) has raised concerns about Holtz-Eakin's support for dynamic scoring, even though it is the JCT that provides the cost estimates for tax cuts. Former CBO director Dan L. Crippen, who retired at the end of last year, was frequently criticized by Republicans for his outspoken opposition to the concept.

House Majority Leader Tom DeLay (R-Tex.) last week lectured reporters against calling Bush's overall tax cut a $674 billion package.

"The number 674 is meaningless," DeLay said, because it fails to account for the "dynamic" effect of tax cuts.

Economists who support the use of dynamic scoring warn DeLay and other congressional advocates that they might be disappointed with the results. According to the most respected dynamic models, short-term gains from growth stimulated by tax cuts are quickly offset by the costs of lower national savings, higher interest rates and Federal Reserve Board actions.

"This is one of those things where Republicans have to be careful what they wish for," said one Bush administration economist.

Macroeconomic Advisers, an economic forecasting firm in St. Louis, released a dynamic score of Bush's $674 billion tax cut last month that illustrates the point. The firm found that by the end of 2004, the Bush plan would boost the size of the economy by 1.6 percent, but soon those positive effects would turn negative.

By 2017, the plan would actually have shrunk the economy by 0.3 percent while raising long-term interest rates by about 0.75 percent. Also by that year, the deficit would be $300 billion more than the traditional "static" score of the tax cut would predict, the report said.

Why is Macroeconomic Advisers' conclusion important? Because the firm is advising the Joint Committee on Taxation on how to implement its own new dynamic scoring model.

Other models have reached more positive conclusions. The White House Council of Economic Advisers believes the cost of the overall Bush plan over 10 years would be around $452 billion, or a third smaller than the static scoring figure of $674 billion.

PriceWaterhouseCoopers LLP, in a study for the Business Roundtable that was released last Thursday, came up with a similar dynamic score: $458 billion, including $162 billion for the dividend cut. Compare that dividend price tag with the Heritage cost of $125 billion, and you see another problem with dynamic scoring: Whose score is right?

Many conservative economists recognize these issues, but they say the more information Congress has to consider, the better.

Bruce Bartlett, an economist for the National Center for Policy Analysis said dynamic scoring would at least make clear that not all tax cuts have the same impact on the economy. Sending checks to taxpayers simply does not have the same effect as eliminating taxation on dividends, he said, even if on a static model, they can look identically costly.

The JCT, the Congressional Budget Office and the Office of Management and Budget will continue to use the static approach for years to come, Republicans say. But DeLay and others hope to use the Republican control of Congress to push the country and the budget offices toward dynamic scoring.

While Democrats acknowledge that tax cuts might not "cost" what the government says they do, most believe it is wrongheaded to undervalue the costs of tax cutting and rely on uncertain estimates of the economic benefits of specific proposals.

Holtz-Eakin pointed to that issue in testimony he prepared for R. Glenn Hubbard, the chairman of the Council of Economic Advisers, last year. Dynamic scoring is "conceptually correct" but would be difficult to implement, he wrote.

For that reason, Holtz-Eakin wrote, there was "no need to embed dynamic scoring in the existing budget process."

© 2003 The Washington Post Company

Commentary:


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General Tommy Franks Gives Wife Classified Data
CNN
Wednesday, February 5, 2003
Posted: 5:48 AM EST (1048GMT)

WASHINGTON (CNN) -- U.S. Army General Tommy Franks is being investigated by the Pentagon amid claims of possible abuses of office involving his wife.

Sources have told CNN that Franks, the man who would lead U.S. forces in the event of a military strike on Iraq, faces several allegations -- including one that he allowed his wife, Cathy, to be present during discussions of highly classified material.

The sources also said questions have been raised about whether Franks properly repaid the U.S. government for his wife's travel on military aircraft.

Franks, the head of U.S. Central Command, has been under investigation for weeks by the Pentagon inspector general's office.

"I am aware of the investigation and am cooperating with it," Franks said in a brief written statement. "It would not be appropriate to comment on the investigation until it is complete."

U.S. Defense Secretary Donald Rumsfeld -- who would decide what, if any, disciplinary action Franks would face if any wrongdoing is found -- has taken the unusual step of expressing support for the general before the investigation was completed.

"Tom Franks is doing a superb job for this country, and we are lucky to have him [in his command]," Rumsfeld told reporters Tuesday at the Pentagon.

"He has my complete confidence and the complete confidence of the president of the United States."

A similar statement from the defense secretary released on Monday has raised questions about whether Rumsfeld might influence the inspector general's conclusions.

Rumsfeld said he was not commenting on specifics of the case when he praised Franks in the statement, but he said an inspector general's probe "is not uncommon."

"Investigations such as this are not unusual and properly are required whenever the Office of the Inspector General is made aware of an allegation," Rumsfeld said in Monday's statement.

"Without commenting on the merits of the investigation, which is not yet before me, I want to emphasize that General Franks has my full trust, respect and confidence."

Rumsfeld reiterated his position Tuesday.

"The expressions of confidence that I have indicated are exactly how I feel, and I believe in the statement it is quite clearly separate from the issues of the investigation," he said.

-- CNN Pentagon correspondent Barbara Starr contributed to this report.

© 2003 Cable News Network LP, LLLP.

Commentary:
Franks should step down and safe himself, his country and the military the disgrace of being charged with breaking civilian and military laws. It doesn't surprise me Rumsfeld supports him. There are no laws where these men come from.


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Bush budget forecasts optimistic
Money.CNN
February 4, 2003: 6:03 PM EST
By Mark Gongloff, CNN/Money Staff Writer

If the White House is wrong on the economy and rates, deficits could be bigger than forecast.

NEW YORK (CNN/Money) - The White House budget proposal released this week makes some assumptions about the economy and interest rates that could be overly optimistic -- especially if the economy stays stuck in the mud much longer.

The White House Office of Management and Budget said it based its budget outlook for 2003-2008 on the assumption the U.S. economy would grow 2.9 percent in 2003 and average 3.3 percent growth between 2003 and 2008.

While few economists seemed inclined to quibble with the 2003-08 estimate -- which practically matches the 3.2 percent rate assumed by the Congressional Budget Office and by the private economists polled by Aspen Publishers in its closely watched Blue Chip Consensus Forecast -- some said the outlook for 2003 is fraught with uncertainty.

"A lot of things have to go right even to get 2.3 percent growth for the year," said Lehman Brothers chief economist Ethan Harris, citing his own firm's forecasts. "I would be very surprised if we got numbers as strong" as the White House expects in 2003.

While one year's economic growth might not seem like a big deal, the White House said that, because of the way it crafts its budget estimates, one year's performance could have budget repercussions until 2008 and beyond.

For example, if GDP grows just 1.9 percent in 2003 instead of the expected 2.9 percent and the unemployment rate averages 6.2 percent in 2003 instead of the 5.7 percent the White House expects, the budget deficit would be $172.5 billion higher between 2003-08 than the $1.39 trillion the White House expects.

Most economists doubt the economy will be that weak or unemployment that high in 2003, however.

Like Federal Reserve policy-makers, who recently left their target for short-term interest rates alone and said the risks to the economy were balanced between weakness and inflation, the White House and most analysts think the economy's recent slowdown is due mostly to many companies, consumers and investors holding their collective breath, waiting for the uncertainty about Iraq to clear up.

"Most private- and public-sector forecasters, including the [Bush] administration, expect these restraints on growth to be overcome by the favorable fundamental forces that will propel this expansion for years to come," the White House said in its proposal.

But according to some economists, that's just wishful thinking.

"Economists and policy-makers at the moment seem to always be erring on the side of optimism in terms of their outlook for growth and the equity markets," said Rory Robertson, interest rate strategist with Macquarie Equities (USA). Robertson said he expected GDP growth in 2003 of between 2 and 3 percent, but that number "could easily be a lot worse if things go badly."

Even if a U.S.-led war in Iraq is the quick, easy success most analysts are forecasting, it's possible the lingering effects of the investment bubble of the late 1990s will keep businesses from spending and hiring throughout much of this year.

In fact, mainstream economists -- who tend to be optimistic -- figure the unemployment rate will barely budge in 2003, dipping to 5.9 percent, on average, from 6 percent at the end of last year. The White House is forecasting a drop to 5.7 percent.

With factories using less than 75 percent of their production capacity, businesses might have little stomach for costly factory improvements. Continued stagnation in business investment and hiring might actually make unemployment even worse, putting pressure on consumer confidence, and more importantly consumer spending, which fuels about two-thirds of gross domestic product, the broadest measure of the nation's economy.

The effect of interest rates, inflation

On the other hand, if these concerns are overly gloomy and the economy performs as well as the White House expects, its estimates of short- and long-term interest rates might be too weak, meaning the government could end up paying more interest on its debts than it expects, making its budget picture even worse.

The administration's forecast assumes the yield on 90-day Treasury's will average 3.6 percent from 2003-08 and the yield on 10-year Treasury's at 5.2 percent during that time, above current rates but slightly lower than those by congressional and private economists.

"If the economy recovers quickly, the 10-year rate could be 5.2 percent even earlier than what they're projecting, and it could be 6 percent in the coming years," said Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University's Robinson College of Business.

What's more, if government spending increases faster than the White House estimates -- a real possibility, since the budget office makes no assumptions about the cost of going to war or rebuilding or occupying Iraq -- then the Treasury may have to borrow more. More bond sales would drive bond prices lower, forcing yields higher. Bond prices and yields move in opposite directions.

If interest rates are 1 percent higher than expected through 2008, the White House estimates, the budget deficit during that time will be $155 billion higher than its own forecasts.

On the other hand, with higher economic growth and government spending, inflation might also be higher than the average consumer price index gains of 2.2 percent a year the White House estimates for 2003-08 -- a figure lower than the 2.4 percent estimated by Congress and private economists.

"Given all the other spending we're having to do for homeland defense and the military, my suspicion is that inflation is going to be higher than what the White House thinks and probably what [economists in the] Blue Chip [survey] and Congress think as well," said Northern Trust economist Paul Kasriel. "Historically, when we've seen a pickup in government spending concentrated in military spending, you tend to get somewhat higher inflation."

Higher inflation, coupled with higher interest rates, would actually help the budget, according to the White House, since it means people will have more dollars, meaning the government can take in more in tax receipts.

If inflation and interest rates are both 1 percent higher through 2008 than White House estimates, the budget deficit will actually be $110.7 billion lower than expected during that time.

In any event, overly optimistic budget forecasts are nothing new for the U.S. government.

"If you're doing budget planning in business, you budget for the downside risks, not for the most optimistic scenario," said Harris of Lehman Brothers. "But the federal government doesn't have to worry too much -- it's the only business that has a blank check."

© 2003 Cable News Network LP, LLLP. An AOL Time Warner Company ALL RIGHTS RESERVED.

Commentary:
Bush is in a world of hurt. If the economy doesn't grow, deficits will rise higher than he projected. If the economy does grow, interest rates will rise and force the deficits higher. We're screwed. We just don't know it yet.


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Back to the '80's.
Money.CNN
February 5, 2003: 5:31 PM EST
By Mark Gongloff, CNN/Money Staff Writer

Big budget deficits are back. Whether they sink or support the U.S. economy remains to be seen.

NEW YORK (CNN/Money) - Skinny ties, feathered hair and legwarmers may not be coming back -- hopefully -- but at least one hallmark of the 1980s is here again: big budget deficits that could endanger the government's fiscal future, even if they help the economy in the short run.

The White House released a budget proposal Monday that projects deficits from 2003 to 2008 totaling some $1.4 trillion, including shortfalls in 2003 and 2004 that would be the biggest relative to gross domestic product (GDP) since the 1980s and early 1990s.

Though Democrats are crying loud and long about what they call the president's fiscal irresponsibility, President Bush and many economists say deficit spending is tolerable -- desirable, even -- when the economy is as anemic as it has been since early 2001.

"When the economy is running below potential, I don't mind deficits at all," said Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University's Robinson College of Business.

Bush argues his tax cuts, the majority of which will benefit businesses and upper-income families, will spur investment, thus boosting gross domestic product. Faster economic growth, this theory goes, will make Americans wealthier, driving up tax revenue and improving the budget picture.

"It's generally the case that if you push through tax cuts, over time, it will stimulate activity; and as growth accelerates, you'll start to get revenue increases back," said James Padinha, economic strategist at Arnhold & S. Bleichroeder.

Will it work this time?

This theory has been called many names: trickle-down, supply side and even "voodoo economics" (by Bush's father), and it's been called even worse -- names that are unprintable -- by Democrats.

Whether this actually works is hotly debated by conservatives -- who say the supply side approach of the Reagan years set the stage for the boom of the late 1980s -- and liberals, who say it does nothing for the economy and wrecks the budget in the process.

In a note published Wednesday on the Morgan Stanley Web site, chief economist Stephen Roach cited a 1998 study by the Congressional Budget Office (CBO) that showed the impact of various tax hikes and tax cuts on government revenue in the 1980s and 1990s.

One of the most famous of these programs, the Economic Recovery Tax Act of 1981, proposed by President Reagan, bears some resemblance to Bush's economic stimulus plan.

Both plans were presented as muscular horses to pull the economy out of the muck. Both involved cutting all sorts of taxes for all sorts of individuals and corporations, while also encouraging different forms of individual saving.

After the 1981 tax cuts took effect, the CBO cut its estimate of tax revenue for 1982-87 by $294 billion. But tax receipts were actually $205 billion lower during those years than the CBO's already reduced estimates -- numbers that might have been even worse if some of the 1981 tax cuts weren't reversed by Congress in 1982, the CBO said.

Part of that additional shortfall was due to the effects of the 1981-82 recession, but the 1982-87 revenue drop is the kind of thing that makes some economists say the "trickle-down" theory is a load of bunk.

"Like it or not, the experience of the 1980s demonstrates that supply-side tax cuts are not self-financing," Morgan Stanley chief economist Stephen Roach wrote in a research note. "In my opinion, similar results can be expected from the multi-year tax cuts now on the table in Washington."

Some economists also think the kind of tax cuts Bush proposes will do little to help the economy in the short term anyway, since wealthier Americans are less likely to spend the extra money they'll get, and businesses will want to wait for economic improvement before they have an incentive to invest.

"If you want to really help the economy right away, the fastest way to do that is to have the government spend the money itself," said Sung Won Sohn, chief economist at Wells Fargo & Co. "The next step would be to give tax cuts to low- and middle-income people, who are more likely to spend the money."

On the other hand, if the president's tax cuts, including elimination of the dividend tax, spur higher stock prices, that will be a boon to the shaky confidence of businesses and consumers -- especially seniors, who rely heavily on dividend income -- which could encourage more spending in the short run.

Will Frankenstein's monster wreck the budget?

The Democrats have offered their own stimulus plan, with smaller tax cuts, different spending projects and grants to cash-strapped state and local governments, whose budget problems could be a serious drag on the economy, offsetting much of the stimulus the federal government offers.

All this has yet to be fully debated, and after much grandstanding in Congress, the resulting stimulus package will probably include elements of both parties' plans. So a multibillion-dollar Frankenstein's monster of tax cuts and spending plans could stumble out of Congress this summer -- right about the time most economists think the economy could be picking up steam post-Iraq.

In other words, the budget might have been sacrificed to fix an economy that was already being fixed -- remember the Federal Reserve has cut interest rates to the lowest in 40 years in a bid to spur growth -- though a small number of economists think the economy could be in bad shape for a while.

"The tax cuts are being proposed as permanent cuts," noted Ken Goldstein, an economist with the Conference Board, a private research firm that publishes a monthly survey of consumer confidence. "This proposal is a permanent change, even if the economy should go back to the growth we had" before the recession.

Meanwhile, the White House's budget projections don't include the possible cost of war in Iraq or a prolonged occupation of Iraq, if such a thing is necessary, or any additional spending on the space program arising from the shuttle disaster.

If Bush and the supply siders are right -- if increased economic activity boosts government revenue and fixes the budget -- then there shouldn't be any problem.

But if they're wrong, the budget deficit could be ballooning at right about the time millions of Baby Boomers are getting ready to retire and start drawing Social Security benefits.

"Down the road, there are significant consequences in terms of what could be developing with the federal budget," Goldstein said.

© 2003 Cable News Network LP, LLLP. An AOL Time Warner Company ALL RIGHTS RESERVED.

Commentary:
Are you still wondering why Bush is doing Iraq? In fact, Bush is using Powell in a dog-and pony show at the UN this week to distract us from his failed policies and budget. If you were Bush, and presiding over the worst budget deficits in US history, what would you do? Fix them or go to war to keep our minds off of the problem? We know what Bush is doing, but what would a decent person do?

In the 1990's conservatives said 'character matters." You know what, they were right? The only problem is they don't have any.


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Saudis Aided Subpoenaed Woman's Trip Out of U.S.
Washington Post
By Susan Schmidt
Washington Post Staff Writer
Wednesday, February 5, 2003; Page A01

The Saudi embassy quietly provided the wife of a terror suspect a passport and transit out of the United States in November, after she was subpoenaed to testify before a federal grand jury in New York investigating her husband's possible links to the al Qaeda terrorist network, diplomatic and law enforcement sources said.

Federal law enforcement officials were outraged by the Saudi action, saying the move impeded their investigation. State Department officials, who had objected to the woman's departure without clearance from the FBI, expressed surprise at the move as well.

An attorney for the Saudi embassy who notified the State Department the day after the woman left said yesterday that the embassy "did not believe there was any legal impediment to her departure" because the grand jury had recessed.

Maha Hafeez Marri and her five young children flew to Saudi Arabia on Nov. 10, three days after law enforcement sources said federal prosecutors had their last contact with a lawyer representing her. The FBI had confiscated passports for Marri and her children soon after her husband was arrested in Peoria, Ill., in late 2001.

Ali S. Marri, a native of Saudi Arabia and a citizen of Qatar, is charged with lying to the FBI about phone calls he allegedly made in the months after the Sept. 11, 2001, terror attacks to a number in United Arab Emirates that belonged to a suspected al Qaeda operative. The operative, Mustafa Ahmed Hawsawi, allegedly received calls from several of the Sept. 11 terrorists and managed a bank account they used.

A law enforcement official said prosecutors and FBI agents were stunned to learn that Maha Marri had left the country. The official and others said Marri had received a subpoena from a grand jury seeking her testimony, though he declined to say when it was issued.

"She was still under subpoena, but no date had been set" for her testimony, he said, adding that lawyers for the woman hired by the Saudi embassy were negotiating to set up an FBI interview in lieu of a grand jury appearance.

"It was a big shock to our guys. All of a sudden, she's gone. That's what upset the troops," he said.

A spokesman for the Saudis said Maha Marri was issued a passport and sent back to Saudi Arabia after she appealed to the embassy. The Saudis brought the woman and her children from Illinois to the Washington area after her husband's arrest, and she waited for 11 months for the FBI to get around to interviewing her, he said.

"You get a grand jury subpoena, you can't sit here for a year doing nothing," said Nail A. Jubeir, the Saudi spokesman.

The embassy, he said, sent a diplomatic note to the State Department on Aug. 30 requesting assistance, but heard nothing. On Nov. 11, the day after the woman and her children left, he said, "a diplomatic note was sent to the State Department saying she has departed and if anyone has any questions she will be available."

A State Department official confirmed the receipt of a diplomatic note Aug. 30, but said that it did not accurately characterize the situation and that officials refused to give the Saudis the clearance they were seeking to issue Marri a new passport.

The note, according to a State Department official, "said there were no outstanding legal issues affecting her." Officials made some inquiries with the Justice Department and the U.S. attorney's office in New York, he said. It "became clear the issue was far more complicated than what was portrayed in the diplomatic note, that this was still a sensitive law enforcement issue, that there were complicated legal issues involved, not only with the suspect Al Marri but also with the wife," he said.

The Saudi embassy was told, he said, "that we here at the State Department are unable to provide the finding of 'no objection' they were seeking for passports . . . and if they wanted to pursue this further, they would need to take it up directly with law enforcement authorities, including the FBI."

Malea Kiblan, an attorney for the Saudi embassy who represented Maha Marri, also said she believes the grand jury subpoena was no longer valid -- a view not shared by law enforcement authorities. "There was no outstanding valid subpoena -- the grand jury was recessed," she said. "We kept her available for one year as a courtesy to the U.S. attorney's office."

Kiblan also contended that "the FBI took [Maha Marri's] passport illegally. It was not part of the warrant in the search of her apartment."

Maha Marri was under considerable hardship when she left the United States. Her children had been out of school for many months, and she was ill, Kiblan said.

"All of the relevant parties were informed before the fact and after the fact that the interview had to take place because her situation was deteriorating legally and otherwise," Kiblan said.

Ali Marri and his family arrived in Peoria from Qatar on Sept. 10, 2001, and he sought to enroll in a graduate computer program at Bradley University, where he had received an undergraduate degree a decade earlier.

Tips to the FBI led to a search of Marri's apartment. There, agents found audio files of Osama bin Ladin, photographs of the Sept. 11 attacks and a computer folder labeled "chem" that contained bookmarked Web sites with fact sheets on hazardous chemicals "immediately dangerous to life or health," according to court documents. Marri also had information on the purchase of such chemicals, bookmarked Web sites on weapons and satellite equipment, and an almanac in which U.S. dams, waterways and railroads were bookmarked, according to the documents.

Ali Marri was taken into custody as a material witness in December 2001 and was subsequently charged with credit card fraud. Last month, he was indicted on charges of making false statements to the FBI concerning a previous stay in the United States and calls to Hawsawi, who allegedly managed the hijackers' UAE bank account. Hawsawi is also an unindicted co-conspirator in the case against Zacarias Moussaoui, who is accused of conspiring in the Sept. 11 attacks.

Marri is being held without bail in New York and has entered not guilty pleas to both charges.

The Saudi government has insisted it is cooperating fully with the United States in its war on terrorism, but law enforcement officials have described that assistance as erratic at best. The U.S. government contends, for example, that Saudis must do more to crack down on charities that funnel money to terrorist groups, including al Qaeda.

In December, the Saudis were embarrassed by disclosures that Prince Bandar bin Sultan, Saudi ambassador to the United States, and his wife had provided charitable funds to Saudis in this country who aided and befriended two of the Sept. 11 terrorists.

Jubeir, the Saudi spokesman, bristled at suggestions yesterday that the Saudis had failed to assist law enforcement in the Marri case. "The idea that someone would say we are not cooperating is simply not true. There is full cooperation," he said.

© 2003 The Washington Post Company

Commentary:
There are two ways of looking at this story. First, the Bush nuts are spending so much time in front of TV camera's that they forget to do their jobs or second, they let her go on purpose because she's a Saudi and the Bush family has been doing business with the Saudi's for years. No matter, Bush looks like an inept president, his justice department looks worse and his war on terror looks like a joke.

I'm thinking anyone who waits in the US for ONE year can't be all bad. So, it's safe to say it's a story about how inept Bush and Co. are. Camera where?---where's the camera?


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Arab American Held on Secret Evidence Release
Washington Post
By Dale Russakoff
Washington Post Staff Writer
Wednesday, February 5, 2003; Page A02

PATERSON, N.J., Feb 4 -- An Arab American man jailed for months in a rare secret-evidence case was freed today after local prosecutors dismissed 26 of 27 charges against him but declined to explain why they had considered him dangerous.

Mohamed Atriss, 46, who spent six months in the Passaic County Jail, pleaded guilty to one felony count of selling false identification documents, admitting through his attorney to selling the cards to hundreds of illegal immigrants. He also said he had sold them to two of the hijackers in the Sept. 11, 2001, attacks but said he had no idea who they were.

"Never in my life did I have anything to do with any terrorist or group of terrorists," Atriss declared in Passaic County Superior Court. His hands cuffed in front of him, a shaken Atriss struggled several times during the hearing to wipe tears from his eyes.

Atriss's case drew national attention, first because of the apparently coincidental connection to terrorists and later because a judge allowed prosecutors to present secret evidence without Atriss or his attorney present. The case marked the only use of secret evidence in a criminal court since the attacks, according to civil liberties advocates.

Prosecutors presented the evidence in a bail hearing, and Judge Marilyn C. Clark said she drew on it when she doubled Atriss's bond to $500,000 -- an amount consistent with a charge of capital murder -- even though most of the charges against him were misdemeanors. Prosecutors and Clark declined to discuss the nature of the evidence and continued to do so today.

Senior Assistant Prosecutor Steven Brizek indicated, however, that prosecutors' view of Atriss had changed. "Abraham Lincoln said, 'As our situation is new, we must think anew and act anew,' " he said. "We had an obligation to ask questions, try to get answers and try to get information we need to proceed."

Federal officials were strongly critical of the Passaic County authorities, saying they had investigated Atriss exhaustively because of the hijacker IDs and had concluded he had no connection to terrorists. Atriss's attorney said today that Atriss was interviewed within a week of the Sept. 11 attacks, when the FBI discovered through credit card records that Abdulaziz Alomari, who was on the first plane to strike the World Trade Center, had bought an ID card at Atriss's business, All Services Plus.

Atriss told authorities that he also had sold a fake ID to Khalid Almihdhar, a hijacker on the plane that crashed into the Pentagon.

But county authorities continued to suggest that Atriss had terrorist connections. At one hearing, a prosecutor cited "ongoing investigations with regard to this defendant's connections to known terrorists." Another prosecutor wrote in a brief that "if nothing else, the safety of the millions of people in this state, let alone throughout this country" justified the use of secret evidence.

Clark ruled in November that the state constitution allowed the extraordinary secrecy. But Atriss appealed, and last month a state appellate judge, Howard Kestin, remanded the case to Clark, saying local prosecutors and sheriff's deputies are not authorized to assess national security risks.

To invoke national security, Kestin said, Clark would have to rely on the expertise of federal authorities. Given the position of federal prosecutors that Atriss had no terrorist connections, this appeared to remove the local prosecutors' justification for the secret evidence.

U.S. Attorney Christopher J. Christie declined to comment on his office's role in the outcome of Atriss's case. "With today's proceeding, this is now a local case, and we have no comment," a spokesman said.

Atriss declined to talk to reporters after the hearing. He was released on $50,000 bond and is scheduled to be sentenced to a year's probation at a hearing next month, according to the plea agreement. Miles Feinstein, his attorney, said Atriss felt no bitterness toward the judge or prosecutors. "He commends them for their devotion to protecting the public," Feinstein said.

Timothy H. Edgar, legislative counsel for the American Civil Liberties Union, called the Atriss case "part of a worrying, growing trend" in the use of secret evidence. He said he was not surprised by Atriss's respectful response.

"People whose rights are directly threatened often feel they don't have the freedom to stand up to authority," he said.

© 2003 The Washington Post Company

The Constitution says an accused AMERICAN has a right to see the evidence against him and a GRAND JURY must indict him. The judge violated the Fifth and Sixth amendments of the Constitution and should be impeached and removed from office.

Let's come up with some secret evidence and throw the judge and prosecutor in jail for six months. Maybe they'll learn their lesson.


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AIDS Panel Director Leaves, Deputy Secretary At HHS Resigns
Washington Post
.By Ceci Connolly
Washington Post Staff Writer
Wednesday, February 5, 2003; Page A10

Patricia Ware, the executive director of the Presidential Advisory Council on HIV and AIDS, left her post days after an activist selected for the panel on her recommendation withdrew amid revelations that he had made anti-gay comments.

Bush administration officials said Ware was being promoted to a more influential role in the Department of Health and Human Services. But several sources involved in the deliberations over Ware's departure from the panel asserted that she was moved to avoid further embarrassment over the selection of Jerry Thacker, who has described AIDS as the "gay plague" and homosexuality as a "death style," rather than a lifestyle.

Thacker withdrew his nomination on Jan. 23 after newspaper reports came out on comments he had made in speeches and had placed on his Web site.

A veteran of the first Bush administration with ties to the religious right, Ware was a leading proponent of abstinence-only sex education and was former director of the conservative Americans for a Sound AIDS/HIV Policy.

According to several sources on the council and inside the administration, Ware's support of Thacker was the "straw that broke the camel's back" in her stormy tenure as the top staff member for the 35-person advisory panel.

"She was a champion of Thacker and [the administration] wanted to get that behind them," said one council member close to the White House. "Getting rid of her was the way to go."

Claude Allen, deputy secretary at HHS and a longtime friend of Ware's, announced her departure on Friday at the conclusion of the council's two-day meeting.

"She is being promoted to work within the office of the assistant secretary of health. She will be broadening and expanding her portfolio," he said in an interview yesterday. "She will now be working across the board in many areas of health. We need our best people working on health issues."

Ware, who was named executive director of the council in December 2001, did not return telephone calls or e-mail messages yesterday. Allen said White House staffer Josephine Robinson will temporarily take over the council job.

"This is just rearranging deck chairs on the Titanic," said David Smith, spokesman for the Human Rights Commission, the nation's largest gay and lesbian advocacy group. He said moving Ware to a new post does not alleviate the group's concerns that her aggressive promotion of abstinence until marriage "is not scientifically sound and ignores gay people because they aren't allowed to marry."

For several months, AIDS activists and some council members grumbled that Ware overreached in the job, frequently imposing her personal ideological views in setting the council's agenda.

"Ultimately it was a decision that was good for Pat and good for the council," said panel member Brent Minor. "In some ways, Pat was drawing more attention than the work of the council."

Much of the controversy revolved around comments Ware made regarding the role of gay, white men both in spreading the AIDS virus and in controlling many of the most influential AIDS organizations.

"As an out gay man, I found Pat Ware to be on the verge of homophobic," said Stuart Burden, an executive at the Levi Strauss Foundation who completed his term on the council last summer. "It appeared at times that she wanted to blame the gay community for AIDS."

Other activists who requested anonymity said that Ware seemed to be attempting to broaden the AIDS prevention coalition by adding minorities and religious activists. But even Ware's sympathizers acknowledged that those efforts often backfired.

"The theory of getting someone who can speak to the evangelical community is a good idea," said one of her allies on the council. "In this instance, she just picked the wrong person."

© 2003 The Washington Post Company

Commentary:
I have a suggestion that borders on bizarre. Let's pass a law stopping women like this from breeding. That way we can stop another generation of intolerant christian conservatives from forcing their views on others. Maybe these "marriage first" nuts should think about allowing gays to marry before the push their nonsense. Making matter worse, the "marriage first" nut thinks they have a constitutional power to deny gays the right to marry. The congress and the courts don't have such powers, but that doesn't stop them. So much for the rule of law.


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Proving Mitch Daniels Lies
WhiteHouse.gov/OMB
Excerpts From Press Briefing
February 3, 2003

Q Thank you. Your turn to the five-year versus 10-year scenario, it was on the basis of just such a 10-year projection two years ago that you made the case that the country could afford a very large tax cut. You're now saying 10-year projections are wildly inaccurate. Are you not vulnerable to the charge of trying to have it both ways?

DIRECTOR DANIELS: I think we hear the charge, but I don't feel particularly vulnerable to it. At the time we indicated we had a lot of skepticism about 10-year numbers. At the time, we reserved, in the President's first budget, $842 billion -- about 15 percent of the hoped for, and we now know, illusory surplus over those 10 years -- at least for all we know it's illusory, it could come back -- and we said at the time that there is enormous uncertainty that we can look out this far. But we took the system, we took the estimates we inherited and worked with them.

In our second year, we indicated even more skepticism, and said we thought probably the 10-year experiment had been proven a failure and we ought to move away from it. We said it again in our midsession review, and we're acting on that today.

Let me just say this about surpluses and deficits. This forecasting is, we've all now learned, a very, very tricky business, because of the change in events. Who knew we would have an event like 9/11 that's already cost us $100 billion-plus. Very interesting to look back. No one saw the last surplus coming -- not five years, not three years, not one year ahead of time. In fact, in February of the year it arrived, both OMB and the CBO were still forecasting a deficit. It came because of economic conditions, and that's what will bring it back one day. And we may not see it coming any further ahead than our predecessors did.

FACT: Joint Session of Congress-2001 Bush: "Many of you have talked about the need to pay down our national debt. I listened, and I agree. We owe it to our children and grandchildren to act now, and I hope you will join me to pay down $2 trillion in debt during the next 10 years. At the end of those 10 years, we will have paid down all the debt that is available to retire. That is more debt, repaid more quickly than has ever been repaid by any nation at any time in history."

Q Nearly 20 years ago, I believe it was 20 years ago, we had the big tax cuts of -- which led to very high deficits and it was only a short time later that the Reagan administration had to endure tax hikes and take back some of those tax cuts.

Are you confident enough about your outlook that you could rule out that ever happening again? Because in other respects --

DIRECTOR DANIELS: "Ever"? You mean, like, in the next 200 to 300 years? (Laughter.) Let's get the history right first.

After the tax cuts of the '80s, like the tax cuts of the '60s, and like most other tax cuts, revenues in the next few years went up a lot. Revenues went up a lot. Now, there was a lot of other history going on in the '80s, and that involved the rebuilding of defenses, it involved a Congress which wanted to keep on spending on a number of other fronts. And also it involved, until those tax cuts took hold, a weak economy. And that's what gave you the deficits.

Carter
Receipts
Reagan
Receipts
Clinton
Receipts
Bush
Receipts
1977
355,559
1981
599.272
1993
1,154,401
2001
1,991,194
1978
399,561
1982
617,766
1994
1,258,527
2002
1,853,173
1979
463,302
1983
600,562
1995
1,357,830
2003
1,836,218
1980
517,112
1984
666,484
1996
1,453,062
2004
1,922,025
   
1985
734,088
1997
1,579,292
   
   
1986
769,215
1998
1,721,798
   
   
1987
854,353
1999
1,827,454
   
   
1988
909,303
2000
2,025,218
   
Increase
Per Term
161,553
 
155,015
 
435,408
 
-69,169
517,112 - 355,559
909,303 - 599,272 / 2
2,025,218 - 1,154,401 / 2
1,922,025 - 1,991,194

Source: Historical Tables, US Budget 2004, pg 29-30.
Bush 2003 and 2004 are estimates from same page
(millions of dollars}

FACT: No cigar. Revenue on average rose higher under Carter and Clinton than under Reagan. Revenues did NOT go up a lot after the tax cut. It's time for this myth (lie) to die. Tax cuts KILL REVENUE.

In 1983 the economy was growing 3.4% but we had a deficit of $-207.8 billion. In 1984 GDP grew by 7.3% and we still had a deficit of $-185.4. At no time during the Reagan years did the deficit fall below what it was when Mr. Reagan became president. In fact, deficits were almost twice as high when he left office than when he was elected. By any standard Reaganomics was a failure. The slow economy did NOT give us deficits--we know this because growth didn't reduce the deficits.

Q Give us maybe some general idea, at least, if these deficits that you're projecting over the next few years have no effect on interest rates, maybe a negligible effect, or some substantial effect, as many Democrats on the Hill would say.

DIRECTOR DANIELS: Well, the idea that there is some connection between deficits and interest rates is an article of faith for some people, but I say "faith" because there's just no evidence, zero. And at least at the levels that we are now experiencing, historically very moderate -- and as we see it, declining deficits -- one would not expect an impact. You can expect an impact from greater economic growth, which we all hope will occur and which this budget attempts to make more likely.

But as a direct effect of these deficits, no. We've gone from surplus to deficit, and interest rates have gone down. So I do not see that correlation.

FACT: Interest rates are the price of money and the Federal Reserve controls it. The Fed can and does destroy the economy at will when it raises rates artificially. It did just that with the rate increases beginning in 1999. The recession that began in 2001 was a direct result of the Fed raising rates. Is there a correlation between interest and deficits and debt? Sure there is. Look at the prime rate of the 1960's, then compare it to the 1980's or 1990's. Daniels views are based on an amateurs view, that is year to year, instead of decade to decade.

The prime rate has increased with each decade. In the 1930's and 40's the rate was around 1.5%, in the 50's around around 2-3%, in the 60's 4-6%, in the 70's 8-12%, in the 1980's 8-12% and in the 1990's from 6-9%. Rates are new zero today because the Fed fears deflation which leads to Depression. Since Daniels is too ignorant to know this basic fact he should be replaced as soon as possible.

Q Back on history and on the same general subject, the previous administration, nonetheless, did address deficits and interest rates by agreeing to, as the first President Bush had done, increase taxes in 1993. That had a significant effect on the budget outlook, again helped a lot by 1997 and Congress's agreement to -- how to balance the budget. You seem to have basically decided that those ideas were wrong, that those acts of trying to attack a deficit didn't seem to make sense or didn't have the consequences that you think increasing taxes or balancing budgets do have.

DIRECTOR DANIELS: The starting point always has to be what will be good for the economy. It's an economy that produces balanced budgets, not the other way around. It's not at all clear that tax increases in the early '90s had much to do with deficit reduction. Deficits stayed very high until we got, first of all, a Republican Congress that began to control spending; secondly, a stock market which took off -- not in '93, not in '94, but only in '95 -- then a huge surge of revenue that came from that market and from economic growth two or three years after that.

So I don't buy that there was causation the last time. And certainly, the President doesn't believe that a weak economy that's growing at rates that are too low today would be benefited by tax increases; quite the contrary, about the last thing we need if we want to see more people back to work.

FACT: The republican congress came to power in 1995, with its first budget for fiscal year 1996. In 1996, Dole proposed a $600 billion tax cut, later the republican congress proposed a $900 billion tax cut. If either of these tax cuts had passed we'd have had NO surpluses in the 1990's. From 1993 to 1995 deficits had fallen $91 billion, which was the largest deficit reduction in US history. Daniels is either a liar or an idiot.

Second, there was no surge in growth in 1995. GDP grew at a less than average rate of 2.7% in 1995. Receipts soared every year under Clinton so to pick one year, 1995 is as bogus as it gets. Deficits fell under Clinton when the economy grew fast (4.4% in 1997) and fell when growth was slow (2.7% in 1993 and 1996). All the sat I use (except prime rates from 1930's to 1970's) are from my other website Reagan Versus Clinton. The numbers are source on that site.

Not since the fall of communism has a political and economic system been so throughly discredited. Conservatism is for idiots and fools.


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