Progress Report: Extending the Overextended

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Thu, 13 Jan 2005 08:50:01 -0800

Progress Report: Extending the Overextended

 

 

" American Progress Action Fund "

<progress

 

 

 

The Progress Report

 

by Christy Harvey, Judd Legum and Jonathan Baskin

with Nico Pitney and Mipe Okunseinde

 

January 13, 2005

EDUCATION Extending the Overextended

ECONOMY The Rumpelstiltskin Routine

UNDER THE RADAR Go Beyond The Headlines

 

EDUCATION

Extending the Overextended

 

Despite underfunding his landmark education initiative by $9.4 billion

in 2005, President Bush on Wednesday proposed a $1.5 billion federal

initiative to extend No Child Left Behind (NCLB) testing requirements

to America's high schools, calling for a " mandatory battery of reading

and math tests in the ninth, 10th and 11th grades. " With a ballooning

deficit and several " unfunded mandates " already dotting the

president's domestic agenda, Bush's proposal " may be squeezed fast. "

Congress, for example, " took Bush's $100 million request for his

'Striving Readers' program and cut it to $25 million this year. " The

announcement comes less than a week after conservative columnist

Armstrong Williams admitted he was paid $240,000 by the government to

tout NCLB – which he had formerly criticized. The episode was the

latest reminder of the Bush administration's crass politicization of

an education initiative which has lost its once bipartisan support.

 

STIFF RESISTANCE: Though NCLB once had broad support, Bush's new

announcement is likely to meet with " stiff resistance. " Even

progressives who sided with Bush when he passed the original law –

such as Rep. George Miller (D-CA) and Sen. Edward Kennedy (D-MA) –

have said they are unlikely to do so again " unless the president

agreed to erase…a multibillion-dollar school funding shortage. "

 

BAD STATE OF AFFAIRS: Bush's proposed expansion of NCLB is also likely

to meet with resistance in several states. A bipartisan group of

lawmakers in Iowa, Montana, Kansas, Idaho, Virginia and elsewhere has

spoken out against the law, as their states have been hampered in

attempts to comply with NCLB " by budget cuts and stringent

requirements. " In one resolution, the Virginia House of Delegates

voted 98 to 1 to for a resolution asking Congress to exempt the state

from the program, stating the act represented " the most sweeping

intrusions into state and local control of education in the history of

the United States. "

 

AN UNFUNDED MANDATE: Bush tried to convince critics his program to

increase testing in high schools would be fully funded. " We've got

money in the budget to help the states implement the tests, " he said.

" There should be no excuse saying, well, it's an unfunded mandate.

Forget it – it will be funded. " But in 2003, the bipartisan National

Governors Association voted unanimously to name No Child Left Behind

exactly that – an " unfunded mandate, " which means " the federal

government isn't supplying the money needed to make the law work. "

Bush's FY 2005 education budget falls $9.4 billion short of the amount

needed to fund the program, according to the National Education

Association.

 

TEXAS DEBACLE: President Bush once again justified extending NCLB on

Wednesday based on its success in Houston while he was governor of

Texas, now known to have been greatly exaggerated (on which more

below). While there has been some success in Texas with disadvantaged

student achievement, reports have surfaced indicating Houston's

" miracle " students are unprepared for higher education. The Houston

Chronicle reports that " nearly two-thirds of 2004's graduating high

school seniors now enrolled in Houston-area community colleges are

taking remedial classes because they weren't prepared for college. "

Those are students who would have been enrolled in primary school when

Bush's reforms were in place. The problem extends to four year

colleges as well. " A report released this spring by the Texas Higher

Education Coordinating Board found that half of the state's 2001 high

school graduates needed remedial help in college. "

 

FALSE MEASUREMENTS: Bush said the thing he liked about No Child Left

Behind was that it " measured results. " You can " say with certainty "

when a school has turned around, he said, " because you measure. " But

" measurements " can be deceiving. Indeed, President Bush's vaunted

" Texas Miracle " – used as a justification for launching NCLB

nationwide – " is facing new doubts as allegations surface about

possible cheating on test scores. " Last week, the Houston Independent

School District (HISD) " announced an investigation of 'suspicious'

results on 2004 statewide tests. " Already, investigators have

discovered the supposed reform of public schools in Houston was " based

on cooked books " – specifically the massive falsification of high

school dropout rates and a misrepresentation of the difficulty of

certain tests. Similar problems have been reported across the country.

 

A BETTER IDEA: Rather than extending an over-extended and possibly

ineffective program, President Bush should focus on " improving and

funding " the current NCLB and on building a stronger teaching force.

Read American Progress's education initiative, which lays out a

step-by-step strategy for assuring " that every public school student

in America is taught by highly qualified, well-trained and adequately

supported teachers. "

 

ECONOMY

The Rumpelstiltskin Routine

 

The United States imported $60.3 billion more than it exported in the

month of November, a record high trade deficit. The total trade

deficit for this year is expected to exceed $600 billion. America's

import bill is financed by borrowing from abroad, making the economy

heavily dependent on the whims of foreigners, especially the Chinese.

At any time, America's foreign creditors could decide they don't want

to finance any more U.S. debt or demand higher interest rates in

return, sending our economy into a tailspin. A diverse group of

economic analysts – from the conservative American Enterprise

Institute to the liberal Economic Policy Institute – expressed deep

concerns about the new figures. But to the Bush administration, it was

just more good news. Treasury Secretary John Snow said his impression

from the new numbers was that " the economy is growing, expanding,

creating jobs. " But many economists are growing wearing of the

administration's unjustifiable happy talk. Peter Schiff, chief global

strategist at Euro Pacific Capital, said in a message to clients,

" Snow continued with his Rumpelstiltskin routine of characterizing

disastrous economic news as if it was just the opposite. "

 

THE FOREIGN OIL PROBLEM: A big factor in the record trade deficit:

America is consuming more imported oil than ever. The Bush

administration refuses to make significant investments in renewable

energy, which could alleviate the problem. Instead it continues to

push Ken Lay's energy plan, which emphasizes drilling on public lands.

The strategy not only threatens public health and the environment, but

it won't put a dent into our dependence on foreign oil because,

relative to America's energy needs, there is very little untapped oil

available domestically.

 

THE FEDERAL DEFICIT PROBLEM: The largest chunk of the trade deficit in

November – $16.6 billion – is with China. Part of the reason is that

China artificially fixes the value of its currency, the yuan, to the

dollar. That means U.S. goods are more expensive than they should be

in China and Chinese goods are cheaper than they should be in America.

The solution would be to convince the Chinese to revalue the exchange

rate between the yuan and the dollar. The problem is that we are in a

terrible negotiating position because the Chinese are financing a big

chunk of the Bush administration's enormous federal deficit, which

totaled $412.3 billion in 2004. They are keeping our government

afloat. Because of the Bush administration's reckless fiscal policies,

we aren't in a position to pressure the Chinese government to do anything.

 

THE GROWTH PROBLEM: It's simple: higher trade deficits mean lower

economic growth. With so much money tied up in financing debt

accumulated from trade, there is less capital available for other

investments, dampening future growth. It's already having an impact.

That's why the November numbers prompted economists to move quickly

" to downgrade their expectations for growth in the final three months

of last year. "

 

THE JOBS PROBLEM: High trade deficits also mean fewer jobs. A new

study by the Economic Policy Institute reveals that, over the last 15

years, the trade deficit with China alone has cost America 1.5 million

jobs. Job losses are not just in " labor-intensive industries like

textiles and apparel " but also the " high-tech arena, " where America

was expected to maintain some competitive advantage.

 

THE DOLLAR PROBLEM: The trade deficit numbers were especially

troubling because the slumping dollar, on decline since 2002, should

make exports more attractive and imports more expensive. But JP Morgan

strategist Paul Meggyesi said the report was a " reality check " – the

trade deficit is one of the major factors pushing the dollar lower,

not the solution to the problem. Why should we be concerned about the

slumping dollar? Eventually, the dollar's rapid decline will make

people less willing to invest in America, raising interest rates,

slowing economic growth and making it harder to pay down the federal

debt. (For an in-depth look at the decline of the dollar, check out

this American Progress column.)

 

 

Under the Radar

 

ETHICS – SLEEPING WITH THE LOBBYIST: The Associated Press reports that

outgoing Homeland Security Secretary Tom Ridge twice spent the night

at the home of a wealthy lobbyist whose firm " was aggressively

expanding its homeland security business. " After the visits, the firm

hired two of Ridge's aides to lobby the department, including one

described as " the closest governmental and political adviser to

Secretary Tom Ridge for over 18 years,'' and some of the firm's

clients eventually landed lucrative, long-term contracts. Ridge and

the lobbyist, David Girard-diCarlo, are old associates and worked

together to raise over $400,000 for the 2000 Bush-Cheney campaign.

Homeland Security officials now defend Ridge, insisting the two " never

discussed business, " but Steven L. Schooner, co-director of the

Government Procurement Law Program at George Washington University,

says the administration's message is evident: " When Ridge makes clear

that he is not worried about appearances, we should not be surprised

when the public concludes that government cannot be trusted. "

 

INAUGURATION – FRIENDS IN LOW PLACES: For industries itching to

benefit from this administration's policies, President Bush has found

a perfect way for them to get their backs scratched – but they first

have to pay up. " At least 88 companies and trade associations, along

with 39 top executives " have donated nearly half of the money needed

for the Bush Inauguration Committee to reach its $40 million goal for

the lavish four-day celebration. Practically all of the substantial

donors have either already " benefited from Bush administration

policies " and/or stand to receive windfall profits from the

second-term policy proposals. While the committee has voluntarily

capped contribution maximums to $250,000, it has turned a blind eye

(but extended an open hand) to overachievers who circumvent this

limit, willfully allowing them to donate both through a parent company

and its subsidiaries. How have corporations managed to pour in all

this money without having their fun spoiled by those pesky campaign

finance reform laws? The laws do not apply to inaugurations.

 

TORTURE – WHATEVER WHITE HOUSE WANTS, WHITE HOUSE GETS: Hear the one

about the intelligence reform legislation that explicitly prohibited

intelligence officers from participating in torture? How about the one

that " would have required the C.I.A. as well as the Pentagon to report

to Congress about the methods they were using " ? Showing just how

serious it is about reserving the right to do whatever it wants to

whomever it wants, the White House pushed for the removal of such

restrictions from the final version of last month's intelligence

reform bill in spite of the measure already having passed a 96-to-2

vote by the Senate. Letters of opposition from Condoleezza Rice and

the Defense Department as well as closed-door negotiations with White

House officials all contributed to the removal of the supposedly

" unnecessary " restrictions. (Read more about just how " unnecessary "

oversight and restrictions would have been.) Former Justice Department

lawyer Martin Lederman stated his belief was " that the administration

had 'always wanted to leave a loophole where the C.I.A. could engage

in actions just up to the line of torture.' "

 

HOMELAND SECURITY – VIRTUAL FAILURE: The $581 million overhaul of the

FBI's computer system has hit a major snag: it might not work. Called

" Virtual Case File, " the software was intended to aid in coordinating

the agency's antiterrorism measures, but " the bureau is so convinced

that [it] will not work " that it has already started preparing to

reopen the bidding process for new contractors to design new software.

Since the Sept. 11 attacks, the FBI has been freely taking advantage

of the " blank check " handed to it by Congress. Hopefully this latest

bump in the road, which could be " a stunning reversal of progress, "

will inspire Congress to take notice of just how expensive, and

ill-planned, the FBI's revamp has been thus far. The 9/11 Commission

and members of Congress believe the FBI's decrepit computer system

" prevented agents from sharing information that could have headed off

the attacks. " Sen. Judd Gregg called the software failure " a stunning

reversal. "

 

PRESCRIPTION DRUGS – KILLER ADS: Pharmaceutical firm Pfizer last month

" reaffirmed its commitment " to keep its controversial prescription

painkiller Celebrex on the market, despite findings that the drug

sometimes more than tripled the risk of heart attacks, strokes and

death. The drug company has still failed to commit to telling the

truth about the drug's potential dangers. The Food and Drug

Administration yesterday warned that promotional materials for

Celebrex continue to omit critical risk information about the drug,

and called on Pfizer to " immediately cease the dissemination " of the

materials. The FDA's letter charges that Pfizer's print and television

ads " omit material facts, including the indication and risk

information " and " make misleading safety, unsubstantiated superiority,

and unsubstantiated effectiveness claims. "