News Release Archive - 1999

“Banking Reform”?

The Clinton administration, the Republican congressional leadership and the financial services industry all seem to agree on the Gramm-Leach Act. If it becomes law, the legislation would abolish restrictions on banks, securities firms and insurance companies instituted in the aftermath of the Great Depression. Critics charge that — like the Telecommunications Act of 1996 — it will not provide the promised benefits to consumers, but will result in massive mergers and inadequate regulation. Among those available for interviews are:

Consumer advocate Ralph Nader called the proposed legislation “anti-competitive, anti-consumer and anti-community. It creates new risks for the nation’s financial system and enormous contingent liabilities for the taxpayers. The bill will mean fewer choices, higher prices and greater risks. Personal privacy will be virtually eliminated under provisions which allow financial affiliates to hijack the intimate details of individuals’ lives and freely share this information in wide-ranging cross marketing schemes.” Among the danger points highlighted by Nader was “a failure to establish a federal regulatory system that can withstand the stress of trillion-dollar conglomerates — a return to the congressional risk-taking that contributed to the $500 billion bailout of the savings and loan industry in the 1980s.” Nader also criticized “overly broad and unnecessary preemptions of state laws which are designed to protect rights of consumers in the financial marketplace.”
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A researcher specializing in Congress with the Center for Responsive Politics, Bailey said: “Banks, insurance, and securities firms for years have lobbied Congress to update laws which prohibit the industries from becoming financial ‘supermarkets,’ though lawmakers previously have given little heed to such proposals. Lawmakers enjoyed the amount of campaign cash, at least $150 million since 1996, spurred by the perennial issue. This year, lawmakers faced more pressure than ever from the industry to pass ‘reforms.’ Banks, insurance and securities — three of the wealthiest and most powerful lobbies on Capitol Hill — have made more than $30 million in soft money, PAC and individual contributions during 1999. Among the leading proponents was Citigroup. Without the new legislation, the company — which has contributed nearly $863,000 in donations to federal parties and candidates this year — would have been forced to sell some of the insurance operations it acquired from last year’s merger with the Travelers Group. In 1999, the leading recipient of banking, securities and insurance contributions — by a wide margin — was Sen. John McCain.”

For more information, contact at the Institute for Public Accuracy: Sam Husseini, (202) 347-0020 or David Zupan, (541) 484-9167

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Behind the Budget Battles: Probing Basic Assumptions

WASHINGTON — While the White House and Congress struggle over the federal budget, some policy analysts are questioning key assumptions in the debate. Sociologist Abby Scher and economist Jared Bernstein are available for interviews to discuss underlying issues:

“Since the late 1970s, Congress has directed more of the federal budget away from social investment,” Scher says. “The 1997 budget caps and current negotiations are only accelerating that trend. Corporations, meanwhile, will continue to receive their welfare payments in this budget.” Scher is co-editor of Dollars and Sense magazine.
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“In an ideal world, the debate over the federal budget would be an opportunity to rationally discuss national priorities,” said Bernstein, a labor economist at the Economic Policy Institute. “Even in less partisan times, it would be naive to hope for such an ideal scenario. But the contemporary budget debate occurring in Washington seems to me to be particularly distorted.”

Bernstein, a former deputy chief economist at the U.S. Department of Labor, said Friday: “Both sides are trying to adhere to budget caps agreed upon in earlier years, when the Congress and the administration wanted to display their fiscal rectitude. But they don’t really want to lower spending, which is why they’re using every trick in the book (and some inventive new tricks) to appear to do so. The most egregious example is labeling spending for the 2000 Census (an obligation called for in the Constitution) as an ’emergency.’ When the debate hits this level of absurdity, we are as far from the aforementioned ideal as we can get.”

Bernstein added: “In my view, and polls suggest that many Americans agree, Congress and the administration should redefine ‘responsible budgeting.’ This doesn’t mean adhering to budget caps that have no economic rationale; it means spending the resources necessary to meet the challenges still facing us. Despite the booming economy, there are still 34.5 million poor persons in America, 13.5 million of whom are children, and 13.9 million of whom have incomes less than half the poverty line, meaning they live in dire conditions. We are still underinvested in public infrastructure, devoting an historically small share of our resources to both physical (roads, schools, airports) and human (education, training, and basic scientific research) capital investment. That these needs exist over a period of full employment, when GDP and private investment are growing apace, tells us that the private sector cannot be counted on to solve the problem. Instead of hiding behind false promises, the federal government should address these issues through the budget process.”

For more information, contact at the Institute for Public Accuracy: David Zupan, (541) 484-9167; Norman Solomon, (415) 663-9674

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Money on Wall Street, Money in Politics

Wall Street is continuing a downward slide this fall, and some economists believe that policymakers in Washington are remaining unrealistically upbeat. Meanwhile, Elizabeth Dole’s withdrawal from the GOP presidential race has sparked more debate on campaign finance issues.

The following policy analysts are available for interviews.

Wall Street: Realism Needed

“The stock market has been hugely overvalued since 1996,” said Baker, an economist and senior research fellow at the Preamble Center in Washington, D.C. “At its peak earlier this year it may have been overvalued by more than 50 percent. To make this determination it is only necessary to use simple arithmetic and the profit projections from the Congressional Budget Office or other government agencies.” Baker added: “The Clinton administration and the Federal Reserve Board have been incredibly irresponsible in allowing this bubble to develop. In the short term the bubble makes the economy appear very healthy, which has political benefits. But it also virtually guarantees trouble in the long term. At some point the bubble inevitably bursts, as it did in Japan, which will almost certainly lead to a recession. (Also, as a result of the inflated stock prices, hundreds of billions of dollars, which might otherwise have supported productive investment, are instead financing the luxury consumption of Internet billionaires.) In addition, a whole generation stands prepared to lose much of their retirement savings as a result of being deceived about the safety of the stock market.”

Politics: Campaign Finance Deform

Executive director of Common Cause in New Hampshire and assistant professor of political science at New England College, Snow commented on Thursday: “Elizabeth Dole had the eyes of the country on her and the opportunity to say, ‘money is corrupting American politics.’ She didn’t seize the opportunity. Said Dole: ‘In the real America, it’s more important to raise issues than campaign funds.’ But when asked about the need for campaign finance reform, she balked: full disclosure (who doesn’t support that?), raising individual limits from the current $1,000 to $5,000, and a ‘downphasing’ but no ban on soft money. That kind of answer is exactly why so many Americans are tuning out politics — the failure to walk the talk. Meanwhile, Doris ‘Granny D’ Haddock, an 89-year-old New Hampshire resident, continues to walk her talk across America for real reform. Perhaps now that Elizabeth Dole has some time on her hands, she should join Granny D on the trail of that ‘real America’ of which she spoke so eloquently.”

For more information, contact at the Institute for Public Accuracy: David Zupan, (541) 484-9167.

Responses Available From Supporters of WTO Protests Wecomed by Clinton

Speaking at a news conference this afternoon, President Clinton said that he is not concerned about the massive protests planned for the World Trade Organization global summit when it convenes in Seattle in late November.

The following policy analysts who support those protests are available for comment:

“It’s great that he’s welcoming protesters outside the ministerial meeting, but it would be more meaningful for him to actually push for civil society to have a place inside, at the negotiating table,” said Sarah Anderson, an economic analyst and fellow at the Institute for Policy Studies in Washington, D.C. She added: “People are coming from around the world to protest because they’ve been locked out of this process.”

“We’ve joined with thousands of people around the planet to call for a reassessment of the WTO, not expansion, in Seattle — and until President Clinton respects this call, he’s not listening to the people who are raising these vital concerns,” said Juliette Beck, statewide coordinator of the California Free Trade Campaign. “He can say all he wants about caring for the environment and labor, but until he agrees to a reassessment of the WTO, he’s giving a green light to the corporate free-trade agenda that has gotten us into the social and environmental problems that we are all living with.”

Danaher is co-founder of Global Exchange, a San Francisco-based organization that is among hundreds of groups involved in planning for protests at the World Trade Organization summit in Seattle during the week after Thanksgiving. “President Clinton said this afternoon that he doesn’t think it’s a bad thing that so many of us will be going to Seattle to protest the WTO ministerial meeting,” Danaher said. “What he doesn’t seem to realize is that the public is catching on to what the WTO is really about. It is an undemocratic institution that exercises more control over the rules of the global economy than any other institution — and yet it operates in secret, with no representation of the interests of working people, small business and the environment.”

“Against the meager gains from trade, we must consider the impact of trade on the distribution of income,” said Mark Weisbrot, an economist who is research director of the Preamble Center based in Washington, D.C. “As trade has expanded over the last quarter century, the median real wage in the United States has actually fallen. There is no longer any doubt among economists that these two trends — increasing trade and falling real wages — are related.”

For more information, contact at the Institute for Public Accuracy: David Zupan, (541) 484-9167

Coup in Pakistan and Nuclear Test Ban

The executive director of the grassroots American organization Peace Action, Clark said Wednesday: “The military coup in Pakistan dramatically underscores the need for the nuclear test ban treaty. Will we be more secure or less secure with countries like Pakistan developing nuclear weapons? Because that is exactly what is going to happen if the U.S. rejects this treaty, and this treaty is only the beginning for the Republicans. George W. Bush, among others, has already said he favors abandoning the Anti-Ballistic Missile Treaty, which would without question cause Russia to increase its reliance on nuclear weapons. Is this what American needs — an unbridled global nuclear arms race with unstable dictatorships and crumbling superpowers?”

A specialist in nuclear disarmament, Cabasso is executive director of the Western States Legal Foundation and a member of the Coordinating Committee of the U.S. Campaign to Abolish Nuclear Weapons. She said on Wednesday: “The Comprehensive Test Ban Treaty was supposed to be a disarmament treaty. It was supposed to cut off the modernization and development of nuclear weapons and lead to their deterioration and eventual elimination. That’s why people everywhere have worked tirelessly since the `Ban the Bomb’ days in the 1950s to end nuclear testing. That’s why most of the world’s countries have made the CTBT their top disarmament priority in international negotiating fora. And that’s why the vast majority of Americans support the CTBT today. Yet the current Senate debate has made clear that the Clinton administration’s intent is to `ban the bang, not the bomb’ and that the U.S. plans to maintain and modernize its nuclear arsenal indefinitely, with or without explosive underground testing, through the $4.5 billion a year `Stockpile Stewardship’ program…. We can’t expect countries like India and Pakistan to `do as we say, not as we do.'”
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During the 1950s, Truman grew up in Southern Utah, where he watched mushroom clouds rise from the Nevada Test Site about 110 miles to the west. Today, as director of the Downwinders organization, he is one of the nation’s foremost authorities on nuclear bomb testing. “Yesterday’s sudden military coup in Pakistan can only make a dangerous situation worse and dramatically raises the risks of a nuclear confrontation between the world’s newest nuclear power and its arch enemy India,” Truman said Wednesday. “One clear option open to the new military government to solidify support will be to quickly engage in additional nuclear testing as a show of power over rival India. Should that occur, India will likely conduct yet another round of nuclear testing to one-up Pakistan…. The failure of the U.S. to take the lead in securing a truly Comprehensive Test Ban and other measures starting on the path to nuclear disarmament clearly shares a major part of the blame for the recent nuclear arms race between India and Pakistan.”
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For more information, contact at the Institute for Public Accuracy: David Zupan, (541) 484-9167

Comprehensive Test Ban Treaty: Hope or Sham?

Former deputy director of the Defense Atomic Support Agency in the Pentagon, an architect for decades of the U.S. nuclear program and now an independent consultant on nuclear issues and critic of U.S. nuclear policy, Taylor said: “I’m strongly in favor of the treaty, but not the Clinton administration interpretation of what it allows. The administration views the treaty as a way to stop other countries from doing what we did: develop a nuclear arsenal by depending on full-scale nuclear tests. The administration is trying to get around the comprehensive nature of the treaty by claiming that its continuing nuclear weapons development through the National Ignition Facility using smaller explosions is permitted. They are making a sham out of a noble idea, what should be the first step in abolishing nuclear weapons.”

Founder and director of Downwinders, Truman said: “With India’s detonation of five nuclear weapons last year, the strategy of the nuclear ‘haves’ to use the CTBT to forever ingrain in granite their superiority and their ability to dominate world policy through nuclear intimidation was effectively challenged. Unless the nuclear ‘haves’ choose to make the CTBT the first step toward total disarmament, the treaty as written shall never enter into force, no matter what the U.S. Senate does. The real lethal opposition to the treaty is coming from the nuclear ‘have-nots’ and is a debate over disarmament or maintaining the status quo.”
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Executive Director of Tri-Valley CAREs (Communities Against Radioactive Environment) based in Livermore, California, Kelley said: “Numerous national polls show that there is overwhelming public support for ending nuclear testing, over 80 percent. Ratifying the CTBT and stopping so-called ‘Stockpile Stewardship’ (modernizing nuclear weapons) are two key parts of truly ending all nuclear testing. Other nations have complained that the ‘Stockpile Stewardship’ program allows the U.S. to continue designing nuclear weapons and that it impairs global acceptance of the test ban.”
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Former editor of the Bulletin of the Atomic Scientists, Day said: “This treaty is causing a squabble among hawks. Both factions of hawks say that we need to have nuclear weapons in perpetuity and continue to have a ‘deterrent.’ What they disagree on is whether the test ban diminishes the reliability of our stockpile, and that’s a minor detail in the face of a consensus on an insane policy that we need to have a nuclear ‘deterrent’ at all. The test ban treaty makes it virtually impossible for small Third World countries to get nuclear weapons, solidifying the current status of nuclear ‘haves’ and ‘have-nots.'”
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For more information, contact at the Institute for Public Accuracy:Sam Husseini, (202) 347-0020; David Zupan, (541) 484-9167

MCI-Sprint Merger

Director of the Consumer Project on Technology, Love said: “The merger is an attempt to avoid competition. Sprint plays an important role in servicing resellers in the long distance market, smaller companies that buy bandwidth from the big three. For twenty years, you’ve had these three major players. Prices have gone down because there has been competition in the long distance market. This merger is good for the shareholders of the long distance industry, but bad for consumers because it will reduce competition.”
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Research economist with the Communication Workers of America, Goldman said: “When the FCC approved the MCI and WorldCom merger last year, Chairman William Kennard stated that the industry was ‘just a merger away from undue concentration.’ This would be that merger. MCI WorldCom proposes to buy up one of its two main competitors in long distance and grab control of 37 percent of the market (based on long distance revenue), just behind AT&T with 43 percent. There would be no other significant competitor in long distance, with all others having no more than 2 percent market share. Such concentration far surpasses the Justice Department’s permitted market concentration levels, and it fails any common sense test for what would be considered healthy competition.”
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Professor at the Institute of Communications Research at the University of Illinois and author of Rich Media, Poor Democracy: Communication Politics in Dubious Times, McChesney said: “This merger is the result of the bankruptcy of U.S. telecommunications policy that claims its allegiance to competition, but through deregulation has opened the floodgates to the greatest wave of corporate concentration in a century. We have a telecommunications system set up to serve Wall Street and corporate America first and foremost — and then the balance of the population in descending order, depending upon their income.”

Co-administrator of the Program on Corporations, Law and Democracy, Zepernick said: “The deeper question is, how did corporations achieve the power and wealth and authority to get that big, and so dominate our culture and our government? Corporations have usurped our sovereign authority to govern ourselves; it is an assault on democracy. Corporations should be subordinate to us, and clearly they’re not.”
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For more information, contact at the Institute for Public Accuracy: Sam Husseini, (202) 347-0020 or David Zupan, (541) 484-9167

Health Care: More Uninsured

The national coordinator of Physicians for a National Health Program, which today released an analysis of Census data figures, Young said: “The number of uninsured climbed by 833,000 to 44.3 million in 1998, according to data released by the Census Bureau. Though the Census Bureau claimed that children’s health coverage had not deteriorated, an analysis by PNHP reveals that the number of uninsured children rose by 330,300 in 1998, following rises of 188,000 in 1997 and 755,000 in 1996. Overall, the data show a clear and significant trend of deteriorating coverage among children. Since 1992, when President Clinton was elected, the number of uninsured children has increased by 2.7 million.”
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Associate professor of medicine at Harvard Medical School, Woolhandler wrote in last Thursday’s USA Today: “Bradley promises straight talk, fresh ideas and the courage to take on vested interests. But his health plan recycles ideas floated by Al Gore and, before him, Richard Nixon and Jimmy Carter. [His plan] would deliver billions to insurance companies and HMOs. But it won’t deliver the universal health care that Americans deserve… The number of uninsured has increased by 6 million since President Clinton took office. Millions more have such poor coverage that a serious illness would bankrupt them. HMO patients are hurried out of hospitals and worried that care will be denied when they’re sickest and need it most. Seniors can’t afford drugs, and hundreds of thousands have been dumped by profit-hungry HMOs. As health costs rise, reaching over a trillion dollars this year, $250 billion goes to health-care bureaucracy and profits.”
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The author of Profit Fever: The Drive to Corporatize Health Care and How to Stop It, Andrews said: “The good thing about Bradley on health coverage is that he raised the issue. The bad thing is that he’s just shoveling money to private insurers instead of covering everyone in a single public plan.”

California director of Neighbor to Neighbor, Nichols is a former Washington, D.C., health policy analyst. She said: “Bradley has jump-started a national debate about health care and none too soon. Today’s numbers show that we have a growing crisis of the uninsured. We need to talk about how to cover everyone and about the fairest, most affordable options — not just focusing on what’s acceptable to the health insurance industry, as the Clinton plan tried to do. The Bradley proposal could have been written by the health insurance industry; that’s its biggest strength and its biggest weakness.”

For more information, contact at the Institute for Public Accuracy: Sam Husseini, (202) 347-0020 or David Zupan, (541) 484-9167

Budget Battle?

“The public debate over the budget has almost completely missed the real issues,” said Baker, an economist at the Preamble Center. “The debate has been portrayed as a dispute over whether to spend the surplus on social programs or whether to pay it out in tax cuts. In reality, the projected surplus is based on the assumption that social programs will be cut in real terms over the next decade. The issue between the President and Congress is actually about how much these programs will be cut. Of course the even bigger deception is that we are making a budget for the next ten years. Whatever is done this year is going to be re-examined in every subsequent session of Congress.”
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Legislative director of Friends of the Earth and co-author of the Green Scissors report, Cuff said: “As the Congress and the administration continue to fight over the budget, unfortunately the Congress has chosen to fund millions and millions of dollars worth of anti-environmental pork. Considering the tight budget we’re operating under, this harmful waste of tax dollars is shameful. For example, Congress is refusing to force oil companies to pay fair market value for oil drilled on public lands. Because the oil companies are undervaluing their royalty payment, the taxpayers are losing at least $66 million every year.”

A professor of economics at Wheaton College in Massachusetts, Miller said: “Much of the projected budget surplus comes from real cuts in discretionary spending on the domestic economy. Programs targeted at the poor, such as Head Start, will not be adjusted for inflation. The rest of the projected budget surplus comes from the buildup in the Social Security Trust Fund. The Clinton administration would use those monies to pay down the national debt. Other than perhaps warding off further Republican tax cuts, that move will do little to secure Social Security or our economic future.”

Senior analyst at the Center for Defense Information, Hellman said: “Our military budget just dwarfs everyone else’s. If you look at the top ten spenders, we outspend the next nine combined. Just over half the discretionary budget is for the military. Military spending in real terms is at the peacetime Cold War average and began going up this year. It will increase by $130 billion over the next six years. As you attempt to reduce overall federal spending while providing real increases for the military, it’s inevitable that other programs are going to get squeezed. Assuming Congress and the administration abide by the spending limits, the vise grips on non-military spending are going to get tighter in each successive year.”
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For more information, contact at the Institute for Public Accuracy: Sam Husseini, (202) 347-0020 or David Zupan, (541) 484-9167

Russian Scandal

As congressional hearings on the Russian financial scandal continue, the following analysts are available for interviews:

Author of Collision and Collusion: The Strange Case of Western Aid to Eastern Europe and associate professor at the Graduate School of Public and International Affairs at the University of Pittsburgh, Wedel said: “As more becomes known about Western participation in the laundering of Russian money, the Washington establishment will likely try to hide behind stories of faraway organized crime and distance itself from any culpability. But U.S. policy toward Russia has contributed to that country’s sorry condition. Among those under investigation for allegedly laundering billions of dollars to the Bank of New York are the Russian ‘reformers’ to which the West pinned its hopes for a new relationship with Moscow and entrusted hundreds of billions of dollars in aid.”

Economics professor at the University of Massachusetts at Amherst and co-author of Revolution From Above: The Demise of the Soviet System, Kotz said: “The pervasive corruption and criminality in Russia, highlighted by the money-laundering scandal, are the result of misguided policies — especially rapid privatization — that American officials, Democratic and Republican, have urged on Russia since 1991. Our government has given unconditional support to Russian political leaders who not only permit but protect the brazen thefts that are now front-page news. It should not be surprising that an old-line bank like the Bank of New York got embroiled in this scandal. It is well known that tens of billions of dollars have been illicitly leaving Russia every year since the beginning of this decade, a flow that could not happen without the involvement, however innocent, of respectable Western financial institutions.”

Research director of the Preamble Center, Weisbrot said: “It has been one debacle after another since the IMF introduced its ‘shock therapy’ program in 1992. Like a battered spouse who sees no alternative but to return to her abuser, Russia comes back to the IMF for more credits. But the hundreds of billions that have fled the country in the 1990s have canceled out this ‘aid,’ as well as the meager foreign direct investment, many times over. At the same time Russia has accumulated more than $150 billion in foreign debt, with the burden of debt service now reaching a crushing 29 percent of export earnings. The economy has shrunk by more than half. Russian men can now expect to die in their fifties. The chief economist of the World Bank, Joseph Stiglitz, has noted that the number of Russians living in poverty climbed from 2 million to 60 million in just a few years.”
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For more information, contact at the Institute for Public Accuracy: Sam Husseini, (202) 347-0020