In the USA...Obama warns congressional Republicans on ‘dangerous game’ with debt ceiling
By Agence France-Presse
Saturday, January 5, 2013 7:38 EST
US President Barack Obama on Saturday warned congressional Republicans against what he called a “dangerous game” with the country’s economy as lawmakers prepared for a new battle over the national debt ceiling.
“As I said earlier this week, one thing I will not compromise over is whether or not Congress should pay the tab for a bill they’ve already racked up,” the president said in his weekly radio and Internet address.
“If Congress refuses to give the United States the ability to pay its bills on time, the consequences for the entire global economy could be catastrophic,” he pointed out.
Obama recalled that the US economy “suffered” and congressional Republicans clashed over national debt in 2011, a row that resulted in a downgrade of the US credit rating.
“Our families and our businesses cannot afford that dangerous game again,” the president said.
The United States reached its legal borrowing limit of $16.4 trillion on Monday. Now Congress has about two months to raise the debt ceiling to allow more government borrowing or risk causing the government to default on its bills and financial obligations.
A bipartisan “fiscal cliff” deal passed by Congress later in the week did not address the debt ceiling issue.
Republicans, who accepted this deal without any significant spending cut, are now demanding concessions on expenditures in return for allowing the ceiling to rise.
House Speaker John Boehner has warned the Republicans will ask for “significant spending cuts” and reforms of expensive programs like Social Security and Medicare that provide pensions and health care services for the nation’s seniors.
Obama said he was for spending cuts without shortchanging things like education, job training, research and technology.
“But spending cuts must be balanced with more reforms to our tax code,” he said. “The wealthiest individuals and the biggest corporations shouldn’t be able to take advantage of loopholes and deductions that aren’t available to most Americans.”
January 05, 2013 07:00 AMThe Next Self-Made Crisis
By Mike Lux
There is a great deal of angst and worry among progressives about what is going to happen in two months, when the Republicans will once again try to hold the economy hostage so they can cut Social Security, Medicare, Medicaid, education, and everything else in the federal budget that helps low- and middle-income folks. It is of course a bad situation when you have one branch of the government eager to blow up the economy to do bad things that more than 80 percent of Americans oppose, but we need to spend a lot less time worrying and a lot more time organizing.
We can beat these guys, and beat them badly, if we have a focused and aggressive strategy.
There are four things progressives should do right now. The first relates to the President. I understand the disappointment we're feeling about his kicking the can down the road another two months, and the leverage lost on the revenue side. And I was very critical of the President’s willingness to swap cuts in Social Security benefits for a deal in this last go-around, and will fight him with every ounce of energy if he proposes any such thing again. But right now is the worst possible time to be raising doubts about this President’s willingness to hang tough in a negotiation as some of my friends in the progressive movement are doing.
The Republicans need to know that the President is deadly serious when he says he won’t negotiate on the debt ceiling, and that the entire progressive movement and Democratic party have his back on this. No negotiation whatsoever. Period and end of sentence.
In the 2011 situation and in the fiscal cliff drama, the President made clear from the first that he was ready, willing, and eager to negotiate, and negotiate he did. But Obama knows that we can’t keep running from one ridiculous self-made crisis to the next, so he has drawn a line in the sand, and progressives need to back him to the hilt. Let’s take him at his word, and expect that he will deliver: no negotiation over whether government will pay the bills it has already incurred. To send the economy into a massive panic, to put the good faith and credit of our country at risk, so that Republicans can cut Medicare, Medicaid, Social Security, and education is not acceptable to the American people, and the Republicans will quickly figure that out.
I've been very tough on the President at times over the last four years, and I’m sure I will have some choice words for him at some point down the line, but I admire the fact that he has essentially put his manhood on the line on this issue. If he backs down and starts negotiating, he will look terrible, be seen as very weak, and he knows it. He knows he can’t afford to blink, and progressives should back him 100%: no negotiation whatsoever on the debt ceiling.
Speaking of lines in the sand, the second thing progressives need to do is to mount an all-out, serious, no-holds-barred campaign around no more cuts to those things in the budget that help the bottom 98%. Social Security, Medicare, and Medicaid benefits should all be off the table. Education, student loans, Head Start, health care, the SNAP and WIC programs have to be as well. Low and middle income Americans have lost jobs, had their wages frozen or decline, had the cost of basic necessities like groceries and health care and gas prices skyrocket, had their homes drop badly in value, and have taken round after round of devastating cuts in government programs that directly help them. It is neither morally nor economically right that they would be the ones who get hurt by budget cuts. And cuts to these programs are generally quite unpopular, in some cases by percentages of more than 80% against. If politicians feel the need to cut government spending, there are plenty of bloated military contracts and subsidies to agribusiness and oil companies, but don’t you dare touch the things that help middle- and low-income folks.
This needs to be a serious campaign, like the campaign against Social Security privatization in 2005, or the campaign HCAN organized on health care reform. We need to build a firestorm that walls off these programs from more cuts, that makes that idea fundamentally unacceptable and politically explosive. And we need to tell the leaders of both parties: we will fight you with everything we’ve got if you don’t keep your hands off the things that matter the most to us.
Third, in every forum we have, we need to keep resolutely bringing this back to jobs. We should keep asking the questions: How, exactly, does threatening to stop paying our bills create jobs? How does cutting Social Security create jobs? Why are politicians obsessed with cuts for middle class programs instead of creating new jobs? What we need, as many of my friends in the blogosphere keep saying, are jobs, not cuts. In fact, as Bill Clinton proved beyond a shadow of a doubt, the best way to cut the deficit and create a surplus is to create lots of decent paying jobs. So every single time some right-wing blowhard is talking about cuts, ask them exactly how that cut creates a job, and remind people that 60 percent of the deficit right now is due to the lack of jobs in the economy.
Finally, we need to be very clear: we are not done extracting tax revenue from big corporations and the top two percent. There are hundreds of billions of dollars in big corporate loopholes we need to close; we should have a financial transactions tax on speculative Wall Street trading and a carbon tax to help do something about global warming; and yes, we can still raise more from individual rates and the inheritance tax.
After all, the Republicans keep going back and raising the same old bad ideas over and over again, we can certainly revisit the good ideas.
Progressives need to stop worrying about what deals might be cut, and start organizing to make it impossible to cut the bad deals we are afraid of. The President has laid out in the clearest possible way that he won’t negotiate with these economic hostage takers, and we should make clear we have his back. We have to make clear to every politician and every pundit: we need jobs, not cuts to the things the bottom 98 percent most rely on, and we need more tax revenue from big business and the top two percent.
Click to watch: http://www.youtube.com/watch?feature=player_embedded&v=DqINP_8MlYk
January 3, 2013Battles of the Budget
By PAUL KRUGMAN
The centrist fantasy of a Grand Bargain on the budget never had a chance. Even if some kind of bargain had supposedly been reached, key players would soon have reneged on the deal — probably the next time a Republican occupied the White House.
For the reality is that our two major political parties are engaged in a fierce struggle over the future shape of American society. Democrats want to preserve the legacy of the New Deal and the Great Society — Social Security, Medicare and Medicaid — and add to them what every other advanced country has: a more or less universal guarantee of essential health care. Republicans want to roll all of that back, making room for drastically lower taxes on the wealthy. Yes, it’s essentially a class war.
The fight over the fiscal cliff was just one battle in that war. It ended, arguably, in a tactical victory for Democrats. The question is whether it was a Pyrrhic victory that set the stage for a larger defeat.
Why do I say that it was a tactical victory? Mainly because of what didn’t happen: There were no benefit cuts.
This was by no means a foregone conclusion. In 2011, the Obama administration was reportedly willing to raise the age of Medicare eligibility, a terrible and cruel policy idea. This time around, it was willing to cut Social Security benefits by changing the formula for cost-of-living adjustments, a less terrible idea that would nonetheless have imposed a lot of hardship — and probably have been politically disastrous as well. In the end, however, it didn’t happen. And progressives, always worried that President Obama seems much too willing to compromise about fundamentals, breathed a sigh of relief.
There were also some actual positives from a progressive point of view. Expanded unemployment benefits were given another year to run, a huge benefit to many families and a significant boost to our economic prospects (because this is money that will be spent, and hence help preserve jobs). Other benefits to lower-income families were given another five years — although, unfortunately, the payroll tax break was allowed to expire, which will hurt both working families and job creation.
The biggest progressive gripe about the legislation is that Mr. Obama extracted less revenue from the affluent than expected — about $600 billion versus $800 billion over the next decade. In perspective, however, this isn’t that big a deal. Put it this way: A reasonable estimate is that gross domestic product over the next 10 years will be around $200 trillion. So if the revenue take had matched expectations, it would still have amounted to only 0.4 percent of G.D.P.; as it turned out, this was reduced to 0.3 percent. Either way, it wouldn’t make much difference in the fights over revenue versus spending still to come.
Oh, and not only did Republicans vote for a tax increase for the first time in decades, the overall result of the tax changes now taking effect — which include new taxes associated with Obamacare as well as the new legislation — will be a significant reduction in income inequality, with the top 1 percent and even more so the top 0.1 percent taking a much bigger hit than middle-income families.
So why are many progressives — myself included — feeling very apprehensive? Because we’re worried about the confrontations to come.
According to the normal rules of politics, Republicans should have very little bargaining power at this point. With Democrats holding the White House and the Senate, the G.O.P. can’t pass legislation; and since the biggest progressive policy priority of recent years, health reform, is already law, Republicans wouldn’t seem to have many bargaining chips.
But the G.O.P. retains the power to destroy, in particular by refusing to raise the debt limit — which could cause a financial crisis. And Republicans have made it clear that they plan to use their destructive power to extract major policy concessions.
Now, the president has said that he won’t negotiate on that basis, and rightly so. Threatening to hurt tens of millions of innocent victims unless you get your way — which is what the G.O.P. strategy boils down to — shouldn’t be treated as a legitimate political tactic.
But will Mr. Obama stick to his anti-blackmail position as the moment of truth approaches? He blinked during the 2011 debt limit confrontation. And the last few days of the fiscal cliff negotiations were also marked by a clear unwillingness on his part to let the deadline expire. Since the consequences of a missed deadline on the debt limit would potentially be much worse, this bodes ill for administration resolve in the clinch.
So, as I said, in a tactical sense the fiscal cliff ended in a modest victory for the White House. But that victory could all too easily turn into defeat in just a few weeks.
January 4, 2013Congress Passes a $9.7 Billion Storm Relief Measure
By RAYMOND HERNANDEZ
WASHINGTON — Under intense pressure from New York and New Jersey, Congress adopted legislation on Friday that would provide $9.7 billion to cover insurance claims filed by people whose homes were damaged or destroyed by Hurricane Sandy.
The measure is the first, and least controversial, portion of a much larger aid package sought by the affected states to help homeowners and local governments recover costs associated with the storm. The House has pledged to take up the balance of the aid package on Jan. 15.
The House passed the insurance measure 354 to 67; it then cleared the Senate by unanimous consent. President Obama is expected to sign the measure into law.
In the House, all of the votes against the aid came from Republicans, who have objected that no cuts in other programs had been identified to pay for the measure despite the nation’s long-term deficit problem. The 67 Republicans who voted against the measure included 17 freshman lawmakers, suggesting that the new class will provide support to the sizable group of anti-spending conservatives already in the House.
Speaker John A. Boehner, Republican of Ohio, brought the bill to the House floor after he drew criticism from Democrats and Republicans alike for adjourning the previous Congress earlier this week without taking up a $60.4 billion aid bill that the Senate had passed to finance recovery efforts in the hurricane-battered states. Among those most critical of Mr. Boehner were several leading Republicans, including Representative Peter T. King of Long Island, who is a senior member of Congress, and Gov. Chris Christie of New Jersey, who is a possible presidential contender in 2016.
The bill adopted on Friday would give the National Flood Insurance Program the authority to borrow $9.7 billion to fill claims stemming from damage caused by Hurricane Sandy and other disasters. The Federal Emergency Management Agency, which administers the flood insurance program, recently notified Congress that it would run out of money within the next week to cover claims filed by individuals.
“The administration is pleased that Congress has taken action to ensure that FEMA continues to have the funds to cover flood insurance claims, including over 100,000 claims from Hurricane Sandy the agency has already received,” Clark Stevens, a White House spokesman, said in a statement. “We continue to urge Congress to take up and pass the full supplemental request submitted last year to ensure affected communities have the support they need for longer term recovery.”
Congress’s action did not fully mollify lawmakers from New York, New Jersey, Connecticut and other states struck by the storm. Some officials continued to criticize the chamber’s leadership for failing to act more quickly on the larger aid package, saying it provided the necessary financing to help the region rebuild.
“I am optimistic and worried,” said Senator Charles E. Schumer, Democrat of New York. “Optimistic because there is pressure on the House to produce. Worried because I know how difficult it is to get things through the Congress.”
Mr. Christie and Gov. Andrew M. Cuomo of New York, a Democrat, issued a similarly cautious statement.
“Today’s action by the House was a necessary and critical first step towards delivering aid to the people of New Jersey and New York,” they said. “While we are pleased with this progress, today was just a down payment, and it is now time to go even further and pass the final and more complete, clean disaster aid bill.”
The overall measure would provide money to help homeowners and small-business owners rebuild; to repair bridges, tunnels and transportation systems; to reimburse local governments for overtime costs of police, fire and other emergency services; and to replenish shorelines. It also would finance an assortment of longer-term projects that would help the region prepare for future storms.
Some Republicans have been critical of the size of the proposed aid package, and have suggested that it includes unnecessary spending on items that are not directly related to the hurricane, like $150 million for fisheries in Alaska and $2 million for museum roofs in Washington. Representative Frank A. LoBiondo, Republican of New Jersey, said Friday that the measure going before the House later this month would “strip out the extraneous spending directed to states not affected by the storm.”
“Today’s vote is a key step in getting critical federal assistance to the residents, businesses and communities devastated by Hurricane Sandy,” Mr. LoBiondo said in a statement. “I hope my colleagues recognize politics has no place when dealing with a disaster and that the overwhelming bipartisan support demonstrated today is present as the remaining federal aid is considered.”
In the House debate leading up to the vote on Friday, several lawmakers said it had taken too long for Congress to provide federal aid to the region and urged the speaker to make good on his pledge to bring the $51 billion aid package to the floor later this month.
“We have been waiting for 11 weeks,” said Representative Carolyn B. Maloney, a Democrat from New York City. “It is long overdue.”
**********67 Republicans vote against partial funding for Hurricane Sandy relief
By Stephen C. Webster
Friday, January 4, 2013 12:47 EST
After days of anger directed at House Speaker John Boehner’s (R-OH), the House of Representatives on Friday passed a bill that puts a small down payment on Hurricane Sandy relief efforts — over the objections of 67 Republican lawmakers.
The $9.7 billion package passed Friday is intended to pay for flood insurance claims, but little else. Funding requests from New York, Connecticut and New Jersey alone add up to more than $83 billion.
The bill passed by a vote of 354 to 67, with the only opposition coming from members of the Republican Party. The Senate has already approved a much larger $60 billion relief package.
A second relief bill for an additional $51 billion is set for a vote later this month, but it is not clear if the speaker will be able to corral enough Republicans into supporting it.
An earlier vote on the full $60 billion relief package was cancelled this week amid talks on tax rates, triggering fury from east coast Republicans.
“It has now been 66 days since Hurricane Sandy hit and 27 days since President Obama put forth a responsible aid proposal that passed with a bipartisan vote in the Senate while the House has failed to even bring it to the floor,” New Jersey Gov. Chris Christie (R) said on Wednesday. “This failure to come to the aid of Americans following a severe and devastating natural disaster is unprecedented.”
**********Obama poised to nominate Chuck Hagel as defense secretary
By Ewen MacAskill, The Guardian
Friday, January 4, 2013 17:48 EST
Move likely to prompt strong opposition from Republicans who feel Hagel, a former GOP senator, is too liberal on foreign policy
Barack Obama is poised to nominate as defence secretary early next week a Vietnam combat veteran and former Republican senator, Chuck Hagel, in a move that would provoke strong opposition from Republicans and spark a tough nomination battle.
Hagel, though he was a Republican senator, takes a liberal position on many foreign policy issues and was one of the leading voices in his party against George W Bush’s Iraq policy.
He had been approached by the White House about replacing Leon Panetta as defence secretary and successfully vetted.
Obama, in an interview last Sunday, spoke highly of him but said he had not made up his mind. “I’ve served with Chuck Hagel. I know him. He is a patriot. He is somebody who has done extraordinary work both in the United States senate, somebody who served this country with valour in Vietnam,” Obama said.
Various sources in the administration and friends of Hagel said the president finally made his decision last week and an announcement will be made on Monday or Tuesday. NBC also said it had confirmed the news.
Others who had been considered included the former under-secretary for defence Michele Flournoy.
Obama announced before Christmas that senator John Kerry will replace Hillary Clinton as secretary of state. While Kerry will almost certainly sail through the nomination process, Hagel’s hearings are likely to be more awkward.
The main opposition to his appointment comes from Republicans, who see him as insufficiently supportive of Israel and intent on recalibrating the US position to take more account of Arab opinion.
As a former infantry sergeant, Hagel takes a dovish approach to conflict, being a strong advocate of talks with Iran rather than military strikes over its disputed nuclear programme, potentially the biggest foreign policy issue of Obama’s second term.
As defence secretary, Hagel would not be directly responsible for either diplomatic moves involving Israel-Palestine or Iran. But as defence secretary he would have a voice at the table. In the case of Iran, he would also have to provide the military muscle to back up diplomatic moves by Obama and Kerry.
One of his biggest challenges for the incoming defence secretary will be be to oversee a huge reduction in spending planned for the Pentagon. Even though US involvement in the war in Iraq is over and its role in Afghanistan winding down, the administration is seeking deep cuts, especially in big, expensive air and sea projects, one that would be heavy resisted by the defence industry and by members of Congress who fear job losses in their states and districts.
Republicans predict there will be few votes for Hagel from their side in the nomination process.
GOP senator Lindsey Graham, of South Carolina, told Fox last week that though all of them liked Hagel as a person, “I think a lot of Republicans and Democrats are very concerned about Chuck Hagel’s positions on Iran sanctions, his views towards Israel, Hamas and Hizbollah – and there is wide and deep concern about his policies”.
guardian.co.uk © Guardian News and Media 2013
January 4, 2013Job Creation Is Still Steady Despite Worry
By CATHERINE RAMPELL
Despite concerns about looming tax increases and government spending cuts, American employers added 155,000 jobs in December. Employees also enjoyed slightly faster wage growth and worked longer hours, which could bode well for future hiring.
The job growth, almost exactly equal to the average monthly growth in the last two years, was enough to keep the unemployment rate steady at 7.8 percent, the Labor Department reported on Friday. But it was not enough to reduce the backlog of 12.2 million jobless workers, underscoring the challenge facing Washington politicians as they continue to wrestle over how to address the budget deficit.
“Job creation might firm a little bit, but it’s still looking nothing like the typical recovery year we’ve had in deep recessions in the past,” said John Ryding, chief economist at RDQ Economics. “There’s nothing in the deal to do that,” he said, referring to Congress’s Jan. 1 compromise on taxes, “and nothing in this latest jobs report to suggest that. We’re a long way short of the 300,000 job growth that we need.”
If anything, the most visible debt-related options that policy makers are discussing could slow down economic and job growth, which, at its existing pace, would take seven years to reduce the unemployment rate to its prerecession level. The $110 billion in across-the-board federal spending cuts scheduled for March 1, for example, might provoke layoffs by local governments, military contractors and other companies that depend on federal funds.
A showdown over the debt ceiling expected in late February could also damage business confidence, as it did the last time Congress nearly allowed a default on the nation’s debts in August 2011.
“We may be seeing the calm before the storm right now,” said Ian Shepherdson, chief economist at Pantheon Macroeconomic Advisors, noting that a recent survey from the National Federation of Independent Business found that alarmingly few small companies planned to hire in the coming months. “Small businesses are wringing their hands in horror at what’s going on in Washington.”
A best case for the economy, many analysts say, would involve a swift and civil Congressional agreement that raised the debt ceiling immediately. It would also address the country’s long-term debt challenges, like Medicare costs, without sudden or draconian fiscal tightening this year.
Given the uncertainty over what Congress will do, estimates of the unemployment rate’s path this year vary wildly. The more optimistic forecasts for the end of 2013 predict that unemployment will fall to just above 7 percent, which would be considerably below its most recent peak of 10 percent in October 2009, but still higher than its prerecession level of 5 percent.
The job gains in December were driven by hiring in health care, food services, construction and manufacturing. The last two industries were probably helped by rebuilding after Hurricane Sandy.
Aside from the wild card of what happens in Washington, some encouraging trends in the economy — including the housing recovery, looser credit for small businesses, a rebound in China and pent-up demand for new automobiles — suggest that businesses have good reason to speed up hiring.
Congress’s last-minute deal to raise taxes this week will offset some of these sources of growth, since higher taxes trim how much money consumers have available each month.
President Obama’s proposals to spend more money on infrastructure projects and other measures intended to spur hiring are fiercely opposed by Republican deficit hawks. The fiscal compromise reached this week did include one modest form of stimulus, though: a one-year renewal of the federal government’s emergency unemployment benefits program. That program allows workers to continue receiving benefits for up to 73 weeks, depending on the unemployment rate in the state where they live, and stimulates economic activity because unemployment benefits are spent almost immediately.
The extension was a tremendous relief to the two million workers who would otherwise have lost their benefits this week.
“We woke up on Wednesday morning and saw the news and just said, ‘Thank God, thank God, thank God,’ and then went out and went food shopping because we knew we had money coming in,” said Gina Shadis, 56, of Newton, N.J.
Both she and her husband, Stephen, were laid off within the last 14 months from jobs they had held for more than a decade: she from a quality assurance manager position at an environmental testing lab, and he as foreman and senior master technician at an auto dealership. They are each receiving $548 a week in federal jobless benefits, or about a quarter of their pay at their most recent jobs.
“It has just been such a traumatic time,” Ms. Shadis said. “You wake up in the morning with shoulders tense and head aching because you didn’t sleep the night before from worrying.”
More than six million workers have exhausted their unemployment benefits since the recession began in December 2007, according to the National Employment Law Project, a labor advocacy group.
Millions of workers are sitting on the sidelines and so are not counted in the tally of unemployed. Some are merely waiting for the job market to improve, and others are trying to invest in new skills to appeal to employers who are already hiring.
“I have a few prospects who say they want me to work for them when I graduate,” said Jordan Douglas, a 24-year-old single mother in Pampa, Tex., who is enrolled in a special program that allows her to receive jobless benefits while attending school full time to become a registered nurse. She receives $792 in benefits every two weeks, a little less than half of what she earned in an administrative position at the nursing home that laid her off last year.
Ms. Douglas calculates that her federal jobless benefits will run out the very last week of nursing school.
“This had to have been a sign from God that I had to do this, since it all worked out so well,” she said.
January 4, 2013Massachusetts Plans Stricter Control of Compounding Pharmacies
By ABBY GOODNOUGH and DENISE GRADY
BOSTON — New laws to strengthen state control of compounding pharmacies were proposed on Friday by Gov. Deval Patrick, in hopes of preventing another public health disaster like the current outbreak of meningitis caused by a contaminated drug made in Massachusetts.
The laws will be among the strongest in the country, said Kevin Outterson, a law professor at Boston University and a member of the expert panel that advised the state on how to curb abuses by companies like the New England Compounding Center, the Framingham pharmacy that made the tainted drug responsible for the nationwide meningitis outbreak.
The legislation would establish strict licensing requirements for compounding sterile drugs; let the state assess fines against pharmacies that break its rules; protect whistle-blowers who work in compounding pharmacies; and reorganize the state pharmacy board to include more members who are independent of the industry and fewer who are part of it.
Alec Loftus, a spokesman for the state’s Office of Health and Human Services, said that Mr. Patrick expected the new legislation to be passed quickly.
Daniel Carpenter, a professor of government at Harvard, said the proposed laws seemed sound and comprehensive. But he warned that if other states did not take similar steps, compounding pharmacies engaging in shoddy practices would just move to places with the weakest laws and the least oversight.
“The remaining question is not what Massachusetts is doing or will do, but will there be a minimum level of regulation like this in the rest of the states?” Professor Carpenter said.
The meningitis outbreak, first detected in September, was caused by contaminated batches of a steroid, methylprednisolone acetate, made by the New England Compounding Center. The drug was injected into about 14,000 people’s spinal area to treat back and neck pain.
As of Dec. 28, 656 people in 19 states had become ill with meningitis or other infections, like severe internal abscesses in the area where the drug was injected. Some have had both meningitis and spinal infections. The case count is expected to keep rising. Thirty-nine have died.
The New England Compounding Center was shut down, and inspections found extensive contamination. Investigations uncovered a long history of questionable practices that had drawn warnings from the state and the Food and Drug Administration.
On Dec. 21, the company announced that it had filed for bankruptcy. Numerous lawsuits have been filed against it.
At the heart of the problem have been gaps in regulation that have allowed such companies to avoid both state and federal controls. The company called itself a pharmacy, and pharmacies are generally regulated by states, while large drug companies are regulated federally, by the Food and Drug Administration.
Compounding pharmacies mix their own drug preparations, like skin creams and cough syrups, supposedly for individual patients with special needs. But the New England Compounding Center began to act like a manufacturer, making and shipping large amounts of injectable drugs, for which sterility is essential. No state law required it to obtain a license for this type of large-scale compounding, to follow good manufacturing processes or to let the state know it was shipping all over the country.
Dr. Lauren Smith, interim commissioner of the Massachusetts Department of Public Health, said the company “was a manufacturer in pharmacy clothing.”
Governor Patrick said, “The tragic meningitis outbreak has shown us all that the board’s governing authority has not kept up with an industry that has evolved from corner drugstores to the types of large manufacturers that have been at the center of so much harm.”
Dr. Smith said she thought the most important part of the new legislation was the requirement of a license for sterile compounding. “Now we are going to have the ability to develop specialty licenses that will allow us to track and identify those pharmacies that are engaged in different practices that could potentially put higher numbers of individuals at risk, such as those who engage in sterile compounding,” she said.
Professor Carpenter said a particularly powerful part of the proposal is that it requires licensure for out-of-state pharmacies that ship medication to Massachusetts. The state, he said, is a huge market for injectable drugs.
“Basically, if you think about the large hospitals, the amount of medical care that goes on in the state, it’s in a sense using the purchasing power of the state of Massachusetts to induce changes elsewhere,” he said.
The state has also taken other steps recently to rein in compounding, apart from the new legislation. It began conducting surprise inspections, and has required compounding pharmacies to report how much medication they are shipping and where, so that it can keep tabs on those that begin acting like manufacturers. It also requires the pharmacies to report when they become subjects of regulatory actions by other states or the federal government.
Abby Goodnough reported from Boston, and Denise Grady from New York.
January 4, 2013F.D.A. Offers Broad New Rules to Fight Food Contamination
By STEPHANIE STROM
The Food and Drug Administration on Friday proposed two sweeping rules aimed at preventing the contamination of produce and processed foods, which has sickened tens of thousands of Americans annually in recent years.
The proposed rules represent a sea change in the way the agency polices food, a process that currently involves taking action after contamination has been identified. It is a long-awaited step toward codifying the food safety law that Congress passed two years ago.
Changes include requirements for better record keeping, contingency plans for handling outbreaks and measures that would prevent the spread of contaminants in the first place. While food producers would have latitude in determining how to execute the rules, farmers would have to ensure that water used in irrigation met certain standards and food processors would need to find ways to keep fresh food that may contain bacteria from coming into contact with food that has been cooked.
New safety measures might include requiring that farm workers wash their hands, installing portable toilets in fields and ensuring that foods are cooked at temperatures high enough to kill bacteria.
Whether consumers will ultimately bear some of the expense of the new rules was unclear, but the agency estimated that the proposals would cost food producers tens of thousands of dollars a year.
A big question to be resolved is whether Congress will approve the money necessary to support the oversight. President Obama requested $220 million in his 2013 budget, but Dr. Margaret Hamburg, commissioner of the F.D.A., said “resources remain an ongoing concern.”
Nonetheless, agency officials were optimistic that the new rules would protect consumers better.
“These new rules really set the basic framework for a modern, science-based approach to food safety and shift us from a strategy of reacting to problems to a strategy for preventing problems,” Michael R. Taylor, deputy commissioner for foods and veterinary medicine, said in an interview. The Food and Drug Administration is responsible for the safety of about 80 percent of the food that Americans consume. The rest falls to the Agriculture Department, which is responsible for meat, poultry and some eggs.
One in six Americans becomes ill from eating contaminated food each year, the government estimates; most of them recover without concern, but roughly 130,000 are hospitalized and 3,000 die. The agency estimated the new rules could prevent about 1.75 million illnesses each year.
Congress passed the Food Safety Modernization Act in 2010 after a wave of incidents involving tainted eggs, peanut butter and spinach sickened thousands of people and led major food makers to join consumer advocates in demanding stronger government oversight.
But it took the Obama administration two years to move the rules through the regulatory agency, prompting complaints that the White House was more concerned about protecting itself from Republican criticism than about public safety.
Mr. Taylor said that the delay was a function of the wide variety of foods and the complexity of the food system. “Anything that is important and complicated will always take longer than you would like,” he said.
The first rule would require manufacturers of processed foods sold in the United States to come up with ways to reduce the risk of contamination. Food companies would be required to have a plan for correcting problems and for keeping records that government inspectors could audit.
An example might be to require the roasting of raw peanuts at a temperature guaranteed to kill salmonella, which has been a problem in nut butters in recent years. Roasted nuts would then have to be kept separate from raw nuts to further reduce the risk of contamination, said Sandra B. Eskin, director of the safe food campaign at the Pew Charitable Trusts.
“This is very good news for consumers,” Ms. Eskin said. “We applaud the administration’s action, which demonstrates its strong commitment to making our food safer.”
The second rule would apply to the harvesting and production of fruits and vegetables in an effort to combat bacterial contamination like E. coli, which is transmitted through feces. It would address what advocates refer to as the “four Ws” — water, waste, workers and wildlife.
Farmers would establish separate standards for ensuring the purity of water that touches, say, lettuce leaves and the water used to irrigate soil, which reaches plants only through their roots.
A farm or plant where vegetables are packaged might, for example, add lavatories to ensure that workers do not urinate in fields and post signs similar to those in restaurants that remind employees to wash their hands.
The food industry cautiously applauded the proposals, with most companies and industry groups noting that they would be poring over them and making comments as necessary in the coming weeks.
“Consumers expect industry and government to work together to provide Americans and consumers around the world with the safest possible products,” the Grocery Manufacturers Association said in a statement. The group added that the food safety act and putting it into effect “can serve as a role model for what can be achieved when the private and public sectors work together to achieve a common goal.”
The association noted that the government would have to issue more than 50 regulations to fully carry out the new law.
The businesses that must comply with the proposals may face new costs, but how much remains to be seen. Dr. Hamburg said that the measures might save businesses money in the long run, and that in many cases, they already take such precautions voluntarily.
The agency estimated that it would cost large individual farms as much as $30,000 a year to comply with the new rules, and the food manufacturing industry as a whole as much as $475 million a year. It said it would finance the regulations in part from savings within its budget and from fees for things like reinspections, which Congress has already authorized.
In a conference call with reporters, Mr. Taylor, the deputy commissioner, said some foods would require more attention than others. Fruits and vegetables destined for canning operations, for instance, might be subject to less stringent guidelines because they are processed using heat that would kill bacteria, unlike produce intended for raw consumption. Vegetables that are much more likely to be consumed cooked, like potatoes and artichokes, would be exempt from the rules, Mr. Taylor said.
“We were directed by Congress to establish risk-based standards that are practical, and we think this approach targets what will be significant from a public health standpoint,” he said. “If we get evidence to the contrary, we will make adjustments.”
While such precautions may seem obvious and some food producers and makers may already be taking them, there has not been any legal requirement they even consider doing so.
“We’re not going to relinquish all risk of contamination, but these steps will make us think more about what we can do to reduce it,” Mr. Taylor said.
After a 120-day period for public comment, the agency will complete the rules.
Other rules are pending, including one that would cover importers’ responsibilities for the safety of food products grown or made overseas. About 15 percent of food eaten by Americans — and an even higher percentage of produce — is imported.
January 4, 2013Justices Take Case on Adoption of Indian Child
By ADAM LIPTAK
WASHINGTON — The Supreme Court on Friday agreed to consider cases concerning the adoption of American Indian children and whether federal judges may play a role in plea negotiations.
The adoption case involves a South Carolina couple who were ordered to turn over a 27-month-old girl they had cared for since birth to her biological father, an Indian, whom the girl had never met. The South Carolina Supreme Court, saying it was doing so “with a heavy heart,” ruled for the father, even as it acknowledged that the adoptive couple, Matt and Melanie Capobianco, were “ideal parents who have exhibited the ability to provide a loving family environment.”
Under South Carolina law, the majority said, the girl, Veronica, would have stayed with the Capobiancos. But federal law, under the Indian Child Welfare Act of 1978, calls for special procedures rooted in the sovereignty of Indian nations and a history of abusive child welfare practices involving Indian children.
Lawyers for the Capobiancos said the law did not apply because Veronica’s biological father, Dusten Brown, had relinquished his parental rights in a text message. Lawyers for Mr. Brown and his tribe, the Cherokee Nation, said that “extraordinary defects in the adoption process,” including efforts to conceal Veronica’s Indian heritage, were to blame for a case that had been “painful and personally difficult for all of the parties.”
The main question the justices have been asked to decide in the case, Adoptive Couple v. Baby Girl, No. 12-399, is whether the law applies when an unmarried mother who is not an Indian gives up her child for adoption. Some lower courts have said that the law kicks in only if the adoption breaks up an existing Indian family, others that it applies when an absent father is an Indian.
The court also agreed to hear United States v. Davila, No. 12-167, which concerns a guilty plea filed by Anthony Davila in a tax conspiracy case after pressure from a federal magistrate judge. There is no dispute that the judge violated a federal rule of criminal procedure, which says of plea negotiations that “the court must not participate in these discussions.”
The federal appeals court in Atlanta allowed Mr. Davila to withdraw his plea and face trial, saying there were good reasons for an “absolute ban on judicial participation.”
Other appeals courts have required defendants seeking to withdraw guilty pleas to show they were hurt by the judge’s participation, relying on another part of the rule.
The federal government urged the justices to resolve the conflict, saying that guilty pleas accounted for 97 percent of federal criminal convictions. Judges “cannot stay completely removed from all matters touching upon plea discussions,” the brief said, and so they will sometimes run afoul of the rule barring any participation.
January 4, 2013Scare Adds to Fears That Clinton’s Work Has Taken Toll
By MARK LANDLER
WASHINGTON — When Secretary of State Hillary Rodham Clinton fractured her right elbow after slipping in a State Department garage in June 2009, she returned to work in just a few days. Her arm in a sling, she juggled speeches and a trip to India and Thailand with physical therapy, rebuilding a joint held together with wire and pins.
It was vivid evidence of Mrs. Clinton’s indomitable stamina and work ethic — as a first lady, senator, presidential candidate and, for the past four years, the most widely traveled secretary of state in American history.
But after a fall at home in December that caused a concussion, and a subsequent diagnosis of a blood clot in her head, it has taken much longer for Mrs. Clinton to bounce back. She was released from a hospital in New York on Wednesday, accompanied by her daughter, Chelsea, and her husband, former President Bill Clinton. On Thursday, she told colleagues that she hoped to be in the office next week.
Her health scare, though, has reinforced the concerns of friends and colleagues that the years of punishing work and travel have taken a heavy toll. Even among her peers at the highest levels of government, Mrs. Clinton, 65, is renowned for her grueling schedule. Over the past four years, she was on the road for 401 days and spent the equivalent of 87 full days on a plane, according to the State Department’s Web site.
In one 48-hour marathon in 2009 that her aides still talk about, she traveled from talks with Palestinian leaders in Abu Dhabi to a midnight meeting with Prime Minister Benjamin Netanyahu in Jerusalem, then boarded a plane for Morocco, staying up all night to work on other issues, before going straight to a meeting of Arab leaders the next morning.
“So many people who know her have urged me to tell her not to work so hard,” said Melanne S. Verveer, who was Mrs. Clinton’s chief of staff when she was first lady and is now the State Department’s ambassador at large for women’s issues. “Well, that’s not easy to do when you’re Hillary Clinton. She doesn’t spare herself.”
It is not just a matter of duty, Ms. Verveer and others said. Mrs. Clinton genuinely relishes the work, pursuing a brand of personal diplomacy that, she argues, requires her to travel to more places than her predecessors.
While there is no medical evidence that Mrs. Clinton’s clot was caused by her herculean work habits, her cascade of recent health problems, beginning with a stomach virus, has prompted those who know her best to say that she desperately needs a long rest. Her first order of business after leaving the State Department in the coming weeks, they say, should be to take care of herself.
Some even wonder whether this setback will — or should — temper the feverish speculation that she will make another run for the White House in 2016.
“I am amazed at the number of women who come up to me and tell me she must run for president,” said Ellen Chesler, a New York author and a friend of Mrs. Clinton’s. “But perhaps this episode will alter things a bit.”
Given Mrs. Clinton’s enduring status as a role model, Ms. Chesler said women would be watching which path she decides to take, as they plan their own transitions out of the working world.
“Do remember that women of our generation are really the first to have worked through the life cycle in large numbers,” she added. “Many seem to be approaching retirement with dread.”
For now, aides say, Mrs. Clinton’s focus is on wrapping up her work at the State Department. She would like to take part in a town hall-style meeting, thank her staff and sit for some interviews. But first she has to get clearance from her doctors, who are watching her to make sure that the blood thinners they have prescribed for her clot are working.
Speaking to a meeting of a foreign policy advisory board from her home in Chappaqua, N.Y., on Thursday, Mrs. Clinton said she was crossing her fingers and encouraging her doctors to let her return next week. “I’m trying to be a compliant patient,” she said, according to a person who was in the room. “But that does require a certain level of patience, which I’ve had to cultivate over the last three and a half weeks.”
While convalescing, Mrs. Clinton has spoken with President Obama and has held a 30-minute call with Senator John Kerry, Democrat of Massachusetts, whom Mr. Obama nominated as her successor.
Mrs. Clinton also plans to testify, while still in office, about the deadly attack on the American diplomatic mission in Benghazi, Libya, making up for hearings in December that she missed because of her illness. Because the Senate will be in recess until Jan. 21, and it must then confirm Mr. Kerry, she is expected to stay on as secretary of state until the end of the month.
“She would have vastly preferred to testify that original date than go through the last 27 days,” said her senior adviser, Philippe Reines. “Only an imbecile would say otherwise,” he added, referring to charges by conservatives that Mrs. Clinton faked her illness to avoid the Congressional questioning.
But her illness has scuttled further travel, including hopes for a valedictory tour of Asia or the Middle East. Mrs. Clinton holds the record for the most countries visited by a secretary of state, 112, though her total of 956,733 air miles will fall short of the 1.06 million logged by her predecessor, Condoleezza Rice.
The travel demands caught Mrs. Clinton by surprise, especially in an era in which American officials can communicate via videoconference calls. But the technology, she has said, paradoxically puts a bigger premium on actually showing up. And Mr. Obama has traveled abroad sparingly, raising the pressure on her to do more.
On many trips, Mrs. Clinton flew overnight and, after landing, went straight into a 12- or 16-hour day, sometimes getting a quick shower at the American ambassador’s residence. On a visit to South Asia in 2009, she spent three consecutive nights on her plane, an Air Force Boeing 757, which is equipped with a small cabin and a bed.
Unlike Ms. Rice, who is seven years her junior, Mrs. Clinton is not an exercise enthusiast. And her diet over the past four years has been a mix of exotic fare in distant capitals and airplane food. While the military stewards often prepared a bowl of cereal and berries, Mrs. Clinton faced her share of breakfast burritos.
“On these trips, you’re in all these different time zones, your body clock is way off schedule, you’re not routinely getting exercise, and you’re not eating healthy food,” said Lissa Muscatine, a former speechwriter who traveled with Mrs. Clinton. “On top of that, she has to be operating at the height of mental acuity at all times.”
Given Mrs. Clinton’s temperament, friends say there is little likelihood that she will ever take it easy.
Ms. Muscatine recalled that when Mrs. Clinton was racing to finish her memoir, she often spent a full day in the Senate, worked at home until midnight, and then held meetings about the book at her dining room table that stretched past 3 a.m.
“While we always thought of her as invincible and indestructible,” Ms. Muscatine said, “we all just really hoped there would be a point where she could stop going at that breakneck pace.”