Study Faults U.S. Regulators in Aftermath of Power Crisis More than a year after California endured power shortages and soaring energy prices, the nation's energy regulators are still not up to the task of protecting consumers and ensuring that electricity is sold at reasonable rates, a Congressional study to be made public on Tuesday has concluded. The study by the General Accounting Office, an investigative arm of Congress, says the Federal Energy Regulatory Commission is hobbled by antiquated procedures, legislation and perhaps a mind-set more suited to the old days when energy producers were regulated monopolies. "FERC has not yet adequately revised its regulatory and oversight approach to respond to the transition to competitive energy markets," the report states. While the energy agency recognizes that it must "fundamentally change how it does business," it has been unable to transform itself, partly because of leadership changes and high staff turnover created by higher salaries in private business, the report said. Moreover, the study found, the agency "lacks adequate enforcement `bite' to deter anticompetitive behavior or other violations of market rules" because it is simply unable to impose meaningful civil penalties. Without stronger enforcement power, the report says, the agency will not be able to deter anticompetitive behavior or outright violations of market rules. http://www.nytimes.com/2002/06/18/business/18FERC.html

G.O.P. Is Moving to Slow Action on Tax Loophole Republican leaders in Congress are using procedural tactics like walking out of committee hearings to keep Congress from voting on measures to close the so-called Bermuda loophole in the federal tax code, measures that would almost certainly pass overwhelmingly if given the chance. The loophole allows big companies to pretend legally that they are based offshore (Bermuda has been the country of choice) and then filter profits through a third country (most often Barbados), avoiding American income taxes. The administration and the Republican leaders have said the loophole should be closed but have emphasized that flawed tax laws are forcing companies to make the Bermuda move. Representative Lloyd Doggett, Democrat of Texas, will try to change the law again today with a measure that would forbid companies to use the loophole unless their shares actually trade on an exchange in the tax haven country or most of their stock is owned by people living there. The proposal would close the loophole for companies like Tyco International, nominally a conglomerate based in Bermuda but which manages its operations from Exeter, N.H. There would be no effect on legitimate multinational corporations, like DaimlerChrysler, that have not used a haven to avoid American taxes. "It seems eminently fair to require that people in your own country be the ones to benefit from the tax treaty," Mr. Doggett said. "We did not negotiate these treaties so that American companies could stop paying taxes on profits earned in the United States, but to benefit commerce between our country and the tax treaty countries." "We cannot let these fair-weather friends choose when to wrap themselves in the flag and when, renouncing the flag, they will wrap themselves in a tax treaty," Mr. Doggett said. "Enjoying the rights means sharing the responsibility." The determination of Republicans to not allow a vote on closing the Bermuda loophole has been seen in both the Senate and House in recent weeks. Republicans left a Senate Finance Committee meeting last Thursday, ending the meeting for lack of a quorum, shortly before a vote on a bill by Max Baucus, Democrat of Montana, and Charles E. Grassley, Republican of Iowa, the two senior members of the committee, to close the loophole for new companies. Aides to both senators said that they were confident that the bill would pass by a wide margin if brought up for a vote on the Senate floor. The committee is to take up the bill again tomorrow. Three weeks ago, Republican leaders in the House cut off a vote on making permanent partial relief from the so-called marriage penalty to avoid allowing Democrats to bring up an amendment closing the Bermuda deals. The marriage penalty occurs when a working married couple pays more in taxes than if they lived together without being married. The Bermuda deals, according to the Treasury, reveal deep flaws in the system for taxing multinational companies. The administration has warned that a quick remedy, like the moratoriums proposed in the House or the denial of tax benefits in the bill by Mr. Baucus and Mr. Grassley, might make American multinational corporations vulnerable to takeovers by foreign companies or could damage their global competitiveness. Still, were a bill creating a moratorium on the Bermuda deals to come up for a vote in the House while a study was under way, it would easily win 300 votes, far more than needed for passage, said Representatives Jim McCrery, a Republican from Louisiana, who is on the House Ways and Means Committee. Mr. McCrery said that he favored a comprehensive review of the tax regime for international companies. http://www.nytimes.com/2002/06/18/business/18TAX.html

White House Gets 24 Hours to Turn Over Enron Papers White House officials were given 24 more hours today to turn over information about their contacts with Enron, as the administration and Democrats on the Senate Governmental Affairs Committee debated how thousands of pages of documents covered by subpoenas would be handled by investigators on the panel. Even so, both Democratic and Republican staff members from the panel began reviewing the documents this afternoon in the Eisenhower executive office building. In another development today, Texas utility regulators recommended fining Enron $7.1 million because they say that the company manipulated the state's wholesale power market last August. The White House counsel, Alberto R. Gonzales, said officials had already gathered 1,745 pages of documents detailing the White House's Enron-related contacts that were subpoenaed two weeks ago by the governmental affairs panel, which is led by Senator Joseph I. Lieberman, Democrat of Connecticut. Other documents are still being gathered by the White House, Mr. Gonzales said. The White House, which faced a deadline of noon today to hand over the materials to the committee, received a one-day extension after the committee's ranking Republican, Senator Fred Thompson of Tennessee, asked Mr. Lieberman for the delay. But the White House agreed that committee staff members could begin reviewing the materials immediately. The committee voted along party lines on May 22 to issue two subpoenas to the White House, seeking all information about communications between Enron and the White House since 1992 that in any way dealt with eight federal agencies, including the Federal Energy Regulatory Commission and the Securities and Exchange Commission. In addition, the subpoenas seek information about contacts between White House officials and officials at the eight agencies regarding Enron. They also seek contacts between Enron and the White House over the formulation of the national energy policy. http://www.nytimes.com/2002/06/04/business/04ENRO.html

Halliburton and Inquiry by the S.E.C. Whether the S.E.C. inquiry will reach Mr. Cheney, who as chief executive had final responsibility for Halliburton's books, is unclear. In a memo in 2000 to his colleagues at Arthur Andersen, which was Halliburton's auditor, the partner who managed the Halliburton account boasted of his close relationship with Mr. Cheney. The partner, Terry Hatchett, said the relationship was so close that Mr. Hatchett had remained lead partner on the Halliburton account even after he moved from Dallas to Tokyo to oversee Andersen's Asian operations. In addition, while he was an executive at Halliburton, Mr. Cheney appeared in a marketing video extolling Andersen's services. Current and former executives at Halliburton have described Mr. Cheney as a hands-off executive who left daily management to David Lesar, a former Andersen partner who at the time was Mr. Cheney's second-in-command. Mr. Foshee said last week that he could not imagine that Mr. Cheney had specifically approved the 1998 change, though he said he was certain that it was approved by Mr. Lesar, who became chief executive in 2000. http://www.nytimes.com/2002/05/30/business/30HALL.html?todaysheadlines

The True Purpose of Welfare Reform How have Americans been doing under the 1996 law? Federal welfare money is given to states as a block grant, so each state is different. Nonetheless, the broad story of families who left welfare has two major variants. One story is of the women who found jobs � the great majority of welfare payments go to single mothers � and the other is about those who are worse off. The latter are a remarkably large group; on any given day, something like 40 percent of former welfare recipients, or well over a million women, have no job, an indication of the 1996 law's failure as policy. The women who found work are the basis for the claim that the 1996 law is a huge success, but even there, one has to ask whether their families have escaped from poverty and what will happen to them if the current recession lasts. The 1996 law got some women to look for work who might otherwise not have done so, and it got the numbers down by pushing people off the welfare rolls or not letting them on. But the big post-1996 fact was the increase in the number of jobs � many areas had unemployment rates below 3 percent. Employment of never-married mothers shot up, although that did not necessarily mean they escaped from poverty. (Today they make an average of just under $8 an hour working about 35 hours a week, which would add up to around $14,000 annually.) The earned-income tax credit helped a lot, adding about $4,000 to the income of a minimum-wage worker with two children. But averages are deceiving. If your job was, for example, a 20-hour position as a school crossing guard for $107 a week, or if you kept cycling in and out of jobs, you and your children were still threatened with homelessness and hunger. The main lesson of the 1996 law is that having a job and earning a livable income are two different things. The Bush administration and its Congressional allies chose to ignore this fact and instead are going the get-tough route. Perhaps hoping to create a wedge issue by making the Democrats appear soft on the work issue, they looked at the fewer than two million parents still on welfare (down from nearly five million in the early 90's) and said, in effect: "These loafers are still on the rolls. We have to get after them." They proposed even tougher work requirements that had nothing to do with actually helping people find a job. Sad to say, they were abetted by a few Senate Democrats, led by Senators Evan Bayh and Thomas Carper, who have made a similar proposal the centerpiece of their own bill. Who are the two million adults still on the rolls? Many are there temporarily while they look for work and need no push to do anything. The remainder are the hard cases � the ones who have less education, less work experience and more personal problems. Rigid requirements are the exact opposite of the individualized approach they need. The House bill would effectively require states to spend large amounts of precious welfare funds on make-work jobs programs. (Such programs were not adopted by a single state on a statewide basis, as was possible under the 1996 law � probably because workfare is expensive and does not prepare people to find real jobs.) The pittance added for child care by the House is laughable � $2 billion over five years. If the Bush work proposals become law, states will be able to comply only by dismantling child care and other supports now in place. http://www.nytimes.com/2002/05/29/opinion/29EDEL.html?todaysheadlines

Florida Counties Seek to Avoid Suit Over Election But the Florida action has Democrats and civil rights groups accusing the Bush administration of dodging the most egregious charges of discrimination in the 2000 presidential race. Those critics also say that Duval County is conspicuously absent. Duval County, in and around Jacksonville, had among the highest numbers of complaints after the election, including charges county elections officials purged voters wrongly accused of being felons. Civil rights groups are also asking why the Justice Department did not address politically charged complaints from predominantly black districts in Florida, like those from thousands of voters that they were unjustly turned away from their precincts for not having multiple forms of identification. Several groups also denounced the Justice Department's failure to file suits against Florida state agencies. The department's actions do not address, for example, charges that the office of the secretary of state, Katherine Harris, wrongfully purged thousands of blacks from voter rolls. Figures from a report by the United States Commission on Civil Rights, examining possible improprieties in the election, estimated that at least 8,000 voters were incorrectly cited as having criminal records, resulting in their being barred from voting. The purging, civil rights advocates claimed, disproportionately affected black voters. Critics said they agreed with the Justice Department that language assistance to voters who have difficulties speaking English is a high priority in election reform. A lawsuit by a coalition of liberal civil rights groups, including the People for the American Way Foundation, the N.A.A.C.P. and the American Civil Liberties Union, also accused multiple counties in Florida of failing to provide bilingual voter information and translation services at the polls. But these critics said that the language issue is the easiest for the Bush administration to use to make political gains among immigrants. "They are actively courting Hispanics, and they are also trying to make inroads in the Haitian community," said Bob Poe, chairman of the Florida Democratic Party. "But the failure to address the disenfranchisement of African-Americans makes their whole case a sham." The Justice Department refused to comment, either on its cases or the charges from its critics, saying it would be "inappropriate to discuss matters further while the department is in presuit negotiations." http://www.nytimes.com/2002/05/25/politics/25CIVI.html?todaysheadlines

Rights Panel Plans Fight The United States Commission on Civil Rights announced today that it planned to ask the Supreme Court to overturn a court decision seating a Bush administration appointee on the panel. In a letter to the Justice Department, the commission's chairwoman, Mary Frances Berry, said that the commission would not try to block seating the appointee, Peter N. Kirsanow, while its application to the Supreme Court was pending and that Mr. Kirsanow would be recognized as a commissioner at the meeting scheduled for Friday. http://www.nytimes.com/2002/05/14/politics/14RIGH.html?todaysheadlines

Many on Medicaid Lack Drugs, Study Says The study was based on a survey of 39,000 adults, including nearly 1,800 on Medicaid. By most measures, it said, Medicaid recipients and people with private insurance have similar access to medical care. But, it said, prescription drugs appear to be an exception; some Medicaid recipients have almost as much difficulty as the uninsured in obtaining medications. Twenty-six percent of Medicaid beneficiaries ages 18 to 64 reported that they could not afford to get all their prescriptions filled in the last year, the report said. That was just slightly less than the 29 percent of uninsured people who reported similar difficulty. By contrast, 8 percent of people with employer-sponsored health coverage and 8 percent of elderly people with Medicare said costs prevented them from obtaining medicines. (Medicare generally does not cover prescription drugs outside the hospital, but about two-thirds of Medicare beneficiaries have drug coverage from other sources.) Len M. Nichols, vice president of the Center for Studying Health System Change, said, "The findings are surprising because Medicaid is expected to ensure access to affordable care for the poorest and sickest Americans." http://www.nytimes.com/2002/04/09/health/09DRUG.html?todaysheadlines&pagewanted=all

Many on Medicaid Lack Drugs, Study Says States have become so aggressive in trying to control Medicaid spending on prescription drugs that many Medicaid recipients do not get all the drugs prescribed for them, researchers said today. Although Medicaid covers prescription medicines in every state, one-fourth of patients enrolled in the program reported that they could not afford to fill some of their prescriptions in the last year, the researchers said. In an environment of rapidly rising drug prices, they said, states' cost-control efforts were the leading factor. http://www.nytimes.com/2002/04/09/health/09DRUG.html?todaysheadlines&pagewanted=all

Affluent Avoid Scrutiny on Taxes Even as I.R.S. Warns of Cheating The government looks for tax cheating by wage earners far more carefully than it looks for cheating by people whose money comes from their own businesses, investments, partnerships and trusts. This is true despite many warnings by federal tax officials that cheating is becoming far more common among affluent Americans. Even as Congress finances a crackdown on tax cheating by the working poor, it is appropriating little money to detect abuses by people, usually among the wealthiest Americans, who do not rely entirely on wages for their income. Executives at the Internal Revenue Service have mentioned this discrepancy in several reports to Congress. They have not focused attention on how little they can do about it. But an examination by The New York Times of I.R.S. statistics including audit rates and staff deployment figures, as well as interviews with current and former I.R.S. officials, shows that the agency can identify at best only a tiny percentage of the cheats and pursue even fewer of them. That the I.R.S. audits the working poor more frequently than wealthy people is well known. What has not been discussed is that the agency does not track nonwage income as closely as wage income � and in some cases does not verify it at all, even as the I.R.S. says that cheating on nonwage income is rising. http://www.nytimes.com/2002/04/07/business/07TAX.html?todaysheadlines&pagewanted=all

Energy Industry's Recommendations to Bush Became National Policy In one example cited by the natural resources council, the American Petroleum Institute, a trade group that represents the country's largest oil companies, submitted a proposed draft executive order on energy policy to the Energy Department on March 20, 2001. Two months later, Mr. Bush signed an executive order that the council's lawyers said was nearly identical in structure and language to the trade group's proposal. The executive order concerned government regulations that affect energy supply and distribution. "Big energy companies all but held the pencil for the White House task force as government officials wrote a plan calling for billions of dollars in corporate subsidies, and the wholesale elimination of key health and environmental safeguards," John H. Adams, the president of the council, said at a news conference today. http://www.nytimes.com/2002/03/28/politics/28ENER.html?todaysheadlines&pagewanted=all

Lockbox or Not, Social Security's Ills Grow Democrats are casting this year's budget fight in Congress as a test of which party can do more to wean the government off of using excess Social Security revenue to pay for general programs. As one way of making their point, Democrats are preparing to assail the administration for having to request an increase in the legal limit on the national debt, a step they say proves that the tax cut last year was fiscally irresponsible. In the wake of the Enron (news/quote) collapse � and looking for an issue to carry into the Congressional elections this fall � Democrats are trying to focus attention again on the push by Mr. Bush and many conservatives to let workers invest a portion of their Social Security taxes in the stock market. http://www.nytimes.com/2002/03/24/business/yourmoney/24VIEW.html?todaysheadlines&pagewanted=all

Doctors Shunning Patients With Medicare Medicare cut payments to doctors by 5.4 percent this year. The government estimates that under current law, the fees paid for each medical service will be reduced in each of the next three years, for a total decrease of 17 percent from 2002 to 2005. http://www.nytimes.com/2002/03/17/health/policy/17HEAL.html

Oil Industry Hesitates Over Moving Into Arctic Refuge Publicly, the biggest multinational petroleum companies, like Exxon Mobil (news/quote), Royal Dutch/Shell, BP and ChevronTexaco, back the Bush administration's assertion that developing the oil in the Arctic refuge is critical to the American economy. But privately, many large companies say the prospect, solely on business terms, is not terribly attractive. "Big oil companies go where there are substantial fields and where they can produce oil economically," said Ronald W. Chappell, a spokesman for BP Alaska, which officially supports opening the area to drilling. Using the acronym for the refuge, he continued, "Does ANWR have that? Who knows?" http://www.nytimes.com/2002/03/10/business/10ALAS.html?todaysheadlines&pagewanted=all

Top G.O.P. Donors in Energy Industry Met Cheney Panel Critics of the Bush administration's energy policy have long suspected that many of the corporations that were invited to advise the White House were large energy concerns that had contributed heavily to President Bush's campaign and the Republican Party in 2000. The White House has refused to release the names of the companies and individuals consulted during the formulation of the administration's energy policy last spring. It has been sued for the information. But interviews and task force correspondence demonstrate an apparent correlation between large campaign contributions and access to Mr. Cheney's task force. Of the top 25 energy industry donors to the Republican Party before the November 2000 election, 18 corporations sent executives or representatives to meet with Mr. Cheney, the task force chairman, or members of the task force and its staff. The companies include the Enron Corporation (news/quote), the Southern Company, the Exelon Corporation (news/quote), BP, the TXU Corporation (news/quote), FirstEnergy (news/quote) and Anadarko Petroleum (news/quote). http://www.nytimes.com/2002/03/01/business/01ENER.html?todaysheadlines&pagewanted=all

Stuffing the Pillowcase With Soft Money With companies like AT&T, SBC Communications and Philip Morris leading the way, corporations provided the bulk of the $11,450,673 raised by 24 soft-money political committees run by Congressional leaders, including Speaker J. Dennis Hastert of Illinois and Senator Tom Daschle of South Dakota, the majority leader, in the 12 months that ended June 30, according to Public Citizen, a group founded by Ralph Nader. http://www.nytimes.com/2002/02/26/politics/26DONA.html?todaysheadlines&pagewanted=all

This Modern World by Tom Tomorrow Fuzzy math Alert reader John Hart sends this link. Apparently the Pentagon--that model of fiscal responsibility which has, of late, taken to tossing hundred dollar bills out of planes over the skies of southern Afghanistan, and to whom taxpayers will be giving an additional $48 billion this year--has misplaced 2.3 trillion dollars, which amounts to $8,000 for every man, woman and child in this country. Twenty years ago, Department of Defense Analyst Franklin C. Spinney made headlines exposing what he calls the "accounting games." He's still there, and although he does not speak for the Pentagon, he believes the problem has gotten worse. http://thismodernworld.com/

Web Site Helped Change Farm Policy It is www.ewg.org, operated by the Environmental Working Group, a small nonprofit organization with the simple idea that the taxpayers who underwrite $20 billion a year in farm subsidies have the right to know who gets the money. Conceived by Ken Cook, 50, director of the group, the Web site has become unusual in the crowded world of special-interest politics, where it is hard to get noticed in Washington, much less heard. It not only caught the attention of lawmakers, it also helped transform the farm bill into a question about equity and whether the country's wealthiest farmers should be paid to grow commodity crops while many smaller family farms receive nothing and are going out of business. In farm circles, where neighbors now know who is receiving the biggest checks from the government, the Web site has name recognition roughly equal to that of Heinz ketchup. Web Site Helped Change Farm Policy

America and Anti-Americans It would be easy for America, in the present climate of hostility, to fail to respond to constructive criticism, or worse: to start acting like the overwhelming superpower it is, making decisions and throwing its weight around without regard for the concerns of what it perceives as an already hostile world. The treatment of the Camp X-Ray detainees is a worrying sign. Secretary of State Colin Powell's reported desire to determine whether, under the Geneva Convention, these persons should be considered prisoners of war was a statesmanlike response to global pressure � but Mr. Powell has apparently failed to persuade President Bush and Donald Rumsfeld. http://www.nytimes.com/2002/02/04/opinion/04RUSH.html

When Government Doesn't Tell Last year, to the dismay of historians, Mr. Bush signed an executive order restricting public access to the papers of former presidents. Attorney General John Ashcroft also established more restrictive rules governing what agencies release under the Freedom of Information Act. The government is even refusing to give Congress the results of a survey taken after the 2000 census to calculate how many people were either missed or double-counted by the census takers � data that has nothing to do with national security, law enforcement, confidential communications or any other normal grounds for keeping data from Congress. The Commerce Department says it is not confident the figures are accurate. http://www.nytimes.com/2002/02/03/weekinreview/03ROSE.html