Super committee's Failure Provides an Opportunity for Lobbyists
26 November 2011

     The failure of the Super committee to reach a solution to the debt problem will mean an extremely active December for lobbyists, especially those in the defense and healthcare sectors. The Super committee's failure to reach a bipartisan solution to the $1.2 trillion debt will trigger about $454 billion in sequestered reductions from defense programs, and a reduction of about $123 billion in Medicare payments to doctors and hospitals. Unemployment benefits and Bush’s payroll tax also may not be extended, as the terms to these benefits expire in December, along with numerous other expiring provisions that face an uncertain future.
     Lobbyists, who hoped to use the Super committee’s decision as an opportunity to influence lawmakers to enact their favorite pieces of legislation, will be doing all that they can to push their agendas onto members of Congress, in an effort to limit budget cuts in their sectors. With lawmakers and the Obama Administration set to begin budget deficit negotiations next month on what programs can survive into 2012, it will certainly be interesting to see what kind of bipartisan solution they can come up with, with their backs against the wall…again.

Adam S. Finkelstein

David Wemer

November 3, 2011

Times have been tough for Ukrainian President Viktor Yanukovych. In recent weeks, Ukraine has been in world headlines for all of the wrong reasons. The jailing of former Prime Minister Yulia Tymoshenko has drawn international condemnation not only from Western countries such as the United States and the European Union, but also from neighboring Russia. This criticism has hit Yanukovych as Ukraine is in the midst of signing vitally important trade agreements with the European Union while at the same time attempting to repair relations with Russia, troubled since the Orange Revolution of 2004. The conviction of former Prime Minister Tymoshenko, Yanukovych’s main political opponent, has caused a massive uproar from European politicians, who saw the proceedings as politically motivated and illegal, as well as from Russian officials who balked at the charge that the Russian-Ukrainian gas agreement Tymoshenko is under attack for was in some way illegitimate.

To compound this international crisis, a massive protest has gripped Kiev today in response to legislation proposed in the Ukrainian Parliament (Rada) which would cut social benefits for almost 10 million Ukrainian citizens including Soviet veterans of the Afghanistan War and former Chernobyl workers. The protest, self-named the “Vpered” or “Moving Forward” movement, has called for the Rada to dissolve itself and current Prime Minister Mykola Azarov to resign. President Yanukovych has responded to the unrest by ordering his ministers to either take tangible steps to improve the country’s economic situation or to immediately resign.              

Yanukovych has reason to be concerned. As foreign powers withdraw support for his government due to concerns over democratic freedoms and continued anger over the Tymoshenko affair, the economic recovery of Ukraine will only slow. Yanukovych has the disadvantage of being one of the most polarizing political figures in Ukraine: the leading opponent of the Orange Revolution. Yanukovych is the only President in Ukraine’s short history to win with less than 50% of the popular vote and with Tymoshenko’s conviction he has re-awakened the powerful opposition movement “Our Ukraine” which orchestrated the Orange Revolution only seven years ago. Ukrainians elected Yanukovych in the 2010 election mainly on the belief that he would repair the Ukrainian economy faster than Tymoshenko and “Our Ukraine” could. However, Ukrainian voters have not seen results from Yanukovych and have become disillusioned with the apparent hyper-partisanship and repression Yanukovych has introduced.

Perhaps the most important development of the on-going protests in Ukraine is the emergence of protests in the eastern city of Donetsk which have drawn as many as 1500 protestors. Donetsk has traditionally been a stronghold of the left-leaning and Communist parties of Ukraine and is the home of Yanukovych, who served as governor of Donetsk from 1997-2002. In the 2010 Presidential Election, the region of Donetsk voted over 80% for Yanukovych. Massive protests in his home turf certainly will cause Yanukovych to take pause. Ukrainians proved in 2004 that they are not afraid to fight for their nascent democracy and overturn unpopular governments. It appears that time is running out for Yanukovych, and Ukraine may be in store for another revolution.

Videos of protests can be found here: http://www.kyivpost.com/news/nation/detail/116217/

Industries Attempt to Influence Supercommittee
Adam S. Finkelstein
11/2/11

     With the deadline for the supercommittee to reach a deal on debt legislation right around the corner, lobbying on behalf of groups and businesses is heating up tremendously. It seems to be a lose-lose rally for the groups and business who are lobbying the supercommittee, as Rick Pollack, a lobbyist for the American Hospital Association points out; “There isn’t much of an upside here in terms of what we’re doing. … It’s not like they are looking at ways to improve anything, they are just looking at ways to chop.”
      With nearly 200 trade associations, companies and lobby shops working to influence supercommittee lobbyists, it appears that the health care industry is leading the charge on the lobbying front. Two major health care companies—insurance company WellPoint and drug manufacturer AstraZeneca have just recently disclosed, for the first time, that they have sought to influence the panel.
      Also with strong interests to influence the panel are representatives from the defense, transportation, energy, telecom and education sectors. Specifically, the airline industry potentially has a lot to lose from the supercommittee’s new legislation, as they are trying to ensure that two revenue raisers from President Obama’s jobs plan, which would cost the industry $36 billion over 10 years are not included. The airline industry has already lost about $50 billion over the past 10 years, and the threat of an additional $36 billion in taxes could bring about devastating effects for a lot of carriers.
      Nevertheless, the members of the supercommittee and their staffers are not releasing any of their progress, as Gerald Cassidy, a veteran lobbyist for Cassidy & Associates, has called it “the most closed-mouth committee that I have ever seen,” during his 42 years in Washington. What is known, however, are the strong implications that the legislation will have. “Failure to achieve this deficit reduction would lead to substantial risk of a downgrade, which would have serious consequences for jobs and our economy,” a senior GOP aide said.
      The deadline for a majority of the supercommittee members to agree to send recommendations to Congress is November 23rd. If the supercommittee fails to do so, a $1.5 trillion mix of discretionary and defense cuts will be automatically triggered, and will take effect on January 15, 2012.

With the repeal of the Bipartisan Campaign Reform Act their has been a shift in the where the electoral power lies during elections. For years the biggest players on the block were the 6 party committees but starting with the 2010 election cycle the SuperPacs have started to usurp the authority of the party committees. Under the new election laws the party committees which are only allowed to collect donations of $30,800 a year from individuals, the SuperPacs can accept unlimited individual donations. The Republican Party was the first to realize the potential of the SuperPacs and the Democrats have been playing catch up since the 2010 election cycle. One of the reasons for the success of the SuperPacs is there ability to take hardline stances and run commercials that a party committee could not get away with. This has endeared SuperPacs with wealthy die hard party members who prefer a less moderate lean to their political candidates. In public both the political committees and the SuperPacs have been friendly with one another and have stressed that they can work together, although an FEC law forbids the two groups from collaborating. The political committees remain unconvinced of the longevity of the SuperPac groups because they do not have the large staffs and relationships with major donors that the committees do. That being said there could be a correlation with the growth of SuperPacs and the growth of the Tea Party and other hard line conservative and liberal groups.

Adam S. Finkelstein
6 October 2011

           The downfall of Solyndra-a producer of solar panels, is multifaceted and complex. How a corporation that had $859 million in assets and $749 million in liabilities went bankrupt is a mystery that Congress and American taxpayers, who lent Solyndra over half a billion dollars, want answers for. Perhaps it was the fact that Chinese solar panels are cheaper, or that other solar panel companies such as Westington Solar are capable of supplying them more cheaply. Nevertheless, Solyndra lost the $527 million it borrowed from the U.S. government in approximately one year from the time it received the loan.
            The most disappointing aspect of the bankruptcy is the Obama administration’s role in the lending process. All evidence indicates that the Obama administration knew just how risky the investment was. The administration ignored Lawrence H. Summers’s and Timothy F. Geithner’s warning that the selection process for federal loan guarantees was not rigorous enough-maybe it should have been a red flag, coming from the director of the National Economic Council and the Treasury secretary. Furthermore, the Obama administration lent the over $500 million despite the Bush administration’s refusal to do so, having concerns of financial stability. Finally, it appeared that, even before the factory was built with taxpayer funds, the business would not work, due to the pricing of competitors such as China.
          Taxpayers also got the short end of the stick when in December, the U.S. Department of Energy learned that Solyndra was in violation of its loan terms. The Department of Energy nevertheless proceeded to modify Solyndra’s loan terms so that they can keep receiving taxpayer money. In fact, in a possibly illegal move, the Department of Energy modified the loan terms to give priority in repayment to private investors over the U.S. taxpayers. The Solyndra bankcruptcy does not reflect upon the Obama administration too well, as it seems this mess may have been avoidable, had proper loan procedures been followed.
           Solyndra does, however, still have assets it can sell in its state of the art factory, equipment, and solar panels. While the assets will most likely not add up to the $527 million it owes the government, some optimistic analysts believe that the government may be able to get back some of the money it lent. Also, according to Mark Muro, Policy Director at the Brookings Institution's Metropolitan Policy Program, it is conceivable that taxpayers will not lose any money at all. How much the assets are worth, and how much the government will get back, will be resolved in bankruptcy court within the next few months.

by: David Wemer

October 8, 2011

Former President and current Prime Minister Vladimir Putin is poised to control Russia until the year 2024. At the conclusion of his next two presidential terms (he is almost assured to win the election next year) he would have served as President or Prime Minister of Russia for almost a quarter century. Putin’s recent decision last week to run for the Presidency again with current President Dmitri Medvedev as Prime Minister comes as the Russian economy continues to reel from the current global economic crisis. Putin has promised to steer Russia towards fiscal responsibility while at the same time strengthening Russia’s industrial sector through foreign investment.

Putin’s main solution to the economic crisis however is the creation of a “Eurasian Union” and the plan has raised eyebrows across the region. Putin’s “Eurasian Union” would act as an eastern counterpart to the European Union consisting of common economic space and even a common currency. The geography of the union would mirror closely the makeup of the former USSR and would inevitably be dominated by Moscow. Many analysts doubt that such a union could feasibly exist given both anti-Russian sentiment in many former Soviet nations such as Moldova and Georgia and also the serious opposition such a union would bring from Western powers.

Indeed countries such as Ukraine and the Baltic States have seemed poised to join or work closely with the European Union. Just last week several former Soviet states met in Poland for the European Union’s “Eastern Summit” which sought closer EU-Eastern Europe relations. In Central Asia, the war in Afghanistan and the rise of Chinese power has caused most former Soviet republics there to shift their attention to Beijing and Washington over Moscow. Combined with festering anti-Russian sentiment from the Soviet period, this pro-western focus of most of the former Soviet republics should signal that Putin’s union would never get off the ground.

However, the West should not underestimate Russian influence and power, especially under a leader such as Vladimir Putin. In less than a week from announcing his proposal, Putin has already received tacit support from the nations of Belarus and Kazakhstan. If Chinese power continues to rise, it is possible that many Central Asian nations would seek support from Moscow against Chinese aggression or influence. Ethnic Russians still comprise sizeable minorities in western countries such as Belarus and Ukraine and given the recent EU criticism of both countries, EU influence in the region is beginning to weaken. Certainly recent economic developments in Europe have made full membership to the EU less desirable in Central Europe and if Putin is able to bring Russia out of the global recession in strong economic shape, a Eurasian economic space may seem beneficial. Putin’s scheme may seem to be a nostalgic view of Russia’s glory days, but Western leaders would be wise not to write off a man who has and will continue to rule one of the world’s most prestigious nations almost single-handedly. 

By: David Wemer

September 30, 2011

This week European Union leaders will meet with leaders from Armenia, Azerbaijan, Georgia, Moldova and Ukraine at the second Eastern Partnership summit in Warsaw. The summit, which serves as an opportunity for nascent former-Soviet nations to strengthen ties with the European Union, will be well attended this year by many leaders from the European Union hoping to better relations with their Eastern neighbors. But while more Western leaders will attend the summit this year, there is a notable absence among the former Soviet nations.

The small nation of Belarus has been a thorn in the side of Eastern European democratic politics for years. Under the control of President Alexander Lukashenko since 1994, Belarus is considered to be the last dictatorship in Europe and conditions are worsening. After an election in December 2010 showing a huge landslide victory for Lukashenko, protests over perceived vote-rigging by Lukashenko ended in brutal government repression and numerous arrests of political opponents. Following a brief reprieve, a sharp economic collapse this summer has increased protests of the government which in turn has increased repression.

The repression in Belarus has drawn widespread condemnation throughout Europe and calls for sanctions by the EU have increased as the Eastern Partnership summit draws near. On Wednesday, German Chancellor Angela Merkel met with members of the Belarusian opposition and promised that increased sanctions against Belarus would be a major topic of the summit. The conversation over sanctions has caused Belarusian Foreign Minister Sergei Martynov to announce that he will not be present at the summit sending instead the Belarusian ambassador to Poland. The ambassador, Victor Gaisenok, will not be able to attend the meetings however because his rank is not high enough to represent a country at the summit.

This development means that perhaps the most volatile and unstable country in Eastern Europe will be absent from the summit. Sanctions will surely be discussed and leveled against Belarus and Lukashenko this weekend. Politicians will make remarks about solidarity with opposition parties and the need to isolate Lukashenko. European leaders must be careful, however, for Belarus is much less like the Communist-bloc countries of the late 1980s than many officials would like to think. Although relations have soured considerably, Belarus remains connected to Russia both economically and culturally. Indeed Belarusians still struggle to distinguish themselves ethnically from Russians. Talk of incorporation with Russia has lingered for years and Belarus could serve as an easy target for resurgent Russian aggression. Furthermore, Belarus continues to be a major player in European politics from its shipping of weapons to the Gadhafi regime of Libya to the vital natural gas pipeline from Russia that flows through the country.

Certainly a more open and politically free is desirable for the European Union and the world as a whole. But Western and European leaders must be aware that the region of the Soviet Union continues to be economically, socially, and politically fragile. Countries such as Ukraine and Lithuania which border Belarus continue to struggle with issues such as political freedom and economic growth. Starting a messy fight in Belarus could have major repercussions for both the region and the continent as a whole. Much will be discussed this weekend in Warsaw and unfortunately for the world, the Belarusian people will not be part of it.

The Bipartisan Campaign Reform Act

The Bipartisan Campaign Reform Act, also known as McCain Feingold, was the change to campaign financing since the Federal Election Campaign Act of 1971. McCain Feingold looked to address the issue of soft money and issue advocacy advertisements. Soft money when used to reference campaign funds refers to the problem of candidates receiving money either over a set limit or from sources that wish to go unreported. Usually this happens through each party's national committee which can collect money through various means then funnel into a candidate's war chest. Issue advocacy refers to an offshoot problem of soft money which is that groups can buy ads for a candidate endorsing him/her or detracting from his/her opponent and end the commercial by saying paid for by the friends of the candidate. This did not constitute a campaign contribution prior to the BCRA even though it influenced the voters decision come election day. It would be nice to say that the BCRA fixed both the issues of soft money and issue advocacy but in reality it did not. It placed a ban on issue advocacy ads 60 days before a general election and 30 days before a primary or caucus which did help to shut down those ads directly before an election. The real problem however was that soft money could still be easily acquired it just required the party and candidate to jump through a few loop holes.

Dylan Johnson

By: David Wemer

September 22, 2011

Tensions are high in Kiev. At stake are not only free trade agreements and economic incentives but possibly the integration of Ukraine into the European Union and even the hope for true democracy in the lands of the former Soviet Union. The issue is the recent trial of former Ukrainian Prime Minister Yulia Tymoshenko for allegedly abusing her powers during her 2007-2010 term. At the center of the allegations is the charge that Tymoshenko illegaly pushed state-run energy company Naftogaz into a deal with Russian energy giant Gazprom. 

Western nations, especially the European Union, have denounced the allegations of Tymoshenko's corruption as politically motivated attempts to force her off the political scene. Tymoshenko and her supporters have alleged that the charges were orchestrated by the party of current President Viktor Yanukovych, who narrowly defeated Tymoshenko in the presidential election of 2010. If current Ukrainian law holds, a convicted Tymoshenko would not only face prison time but also be disqualified from running for public office.

Last week, the European Union and the United States re-affirmed their disapproval over the Tymoshenko trial. The European Union even went so far as to say that current talks with Ukraine over trade agreements were in danger of failing if Tymoshenko was jailed and not allowed to run in the 2012 parliamentary elections. President Yanukovych has maintained that Tymoshenko's trial is a result of an increased effort to root out government corruption but has also admitted that the law allegedly broken has not been updated since 1962. He also stated Friday that while he is willing to resolve the crisis he cannot do anything until the Ukrainian courts decide on the trial. Adding to the tension, the following day Ukrainian Prime Minister Mykola Azarov called the European Union's position on the trial "immoral". 

Regardless of the outcome an interesting page has been turned in Ukrainian-European relations. The European Union has now shown its willingness to use its influence to affect domestic policy of a country beyond its tradtional sphere of influence. Furthermore, the trial has provided another dramtic episode in the conflict between Russian and Western influence in Ukraine. Tymoshenko is considered in Ukraine as the face of pro-Western oppostion to Russian influence in the region and has supported closer integration with the West throughout her career. 

If Tymoshenko is imprisoned and left out of the 2012 elections in Ukraine. the European Union and the West will have lost a key ally in the region. However, if Ukraine does back down, questions will emerge about the true legitmacy of Ukrainian politics and government. Opponents will allege that corruption will have once again won and the political atmosphere may become more polorized than ever. The nation of Ukraine stands at a key moment in its short history, which may determine much more than one woman's fate.

Links: http://www.kyivpost.com/news/nation/detail/113402/

http://www.reuters.com/article/2011/09/17/ukraine-tymoshenko-premier-idUSL5E7KH0CJ20110917

http://in.reuters.com/article/2011/09/16/idINIndia-59390720110916

The Dow Jones dropped over 500 points today, the largest single day loss since the financial meltdown in 2008. This drop comes in the wake of a grim economic outlook by the Federal Reserve. Investor reacted to Bernake's beliefs that the European Debt Crisis may begin to harshly affect the United States Economy. Furthermore, the Fed embarked on a new, rather risky economic policy. The Reserve will begin selling its short term bonds in order purchase bonds with a longer maturity. This policy was implemented with hopes of reducing long term bond interest rates. Bernake, as well other Reserve officals, believe that in the long run this will incentivize lending and stimulate economic growth. Investors disagreed and this led to a sizeable drop in the market yesterday that carried over into today. Japan has attempted similiar policies in hopes of creating growth within its economy, but this has led to little expansion.  American investors are panicking amidst the fears of another recession, and one has to wonder whether Obama will step in or if Bernake's new policy, aptly named "the twist", will cause a stabilization and rebound within the market.