Dan Gillmor News | Columnists | Personal Technology | Markets | Venture Capital Published: Monday August 9, 2004

Taxpayers let leaders off the hook on budgets

By Dan Gillmor Mercury News Technology Columnist

In politics, nothing succeeds like irresponsibility. It works wonders in the short term.

Irresponsibility permeates the fiscal policies that now dominate in Washington and Sacramento. Last week, the Bush administration confirmed that the federal budget deficit would be the largest on record, and a few days earlier California's governor and Legislature enacted yet another smoke-and-mirrors budget.

So America and its largest state continue our borrow-and-spend ways. We're only postponing the hard choices for others to make, but that's standard procedure.

The federal situation is by far the more alarming. It begs for actual leadership.

President Bush is leading, but the wrong way, and has reinforced how far we've come from the days when Republicans were the sensible ones. Peter G. Peterson, who served as Commerce secretary under Republican Richard Nixon, assails the administration in his bestselling new book, ``Running on Empty.''

Peterson, now an investment banker, calls the current administration and Congress architects of ``the biggest, most reckless deterioration of America's finances in history.'' He's right, but he's shouting into a hurricane.

It's not only the Republicans to blame, incidentally. Peterson also has tough words for the current spineless crop of congressional Democrats, many of whom have voted for the pad-the-rich Bush tax cuts and for spending bills that would have broken the budget even in good times.

But there was a time, quite recently, when the American economy grew in large part as a result of financial markets' confidence in federal fiscal probity -- a time that started with a tax increase and ended with record surpluses. Of course, the latter part of the 1990s also became a financial bubble that contributed to the large surpluses; politicians and regulators from both parties allowed the corporate sleaze to take root.

When it comes to fiscal sanity, John Kerry gets it, sort of. ``Over the last three years, record surpluses have turned into record deficits, with more deficits stretching into our children's future,'' says his campaign Web site.

It goes on to claim that a Kerry administration would ``cut the deficit in half and cut taxes for middle-class Americans and small businesses while funding better, more affordable health care for all Americans, improving our schools, and securing our country.''

In a parallel universe, maybe, but in this one the numbers don't begin to add up.

At least Kerry would roll back Bush's tax cuts for the highest income group. That's a start on the problem, but not nearly enough when you consider the expanded programs he's promising.

Back in California, Gov. Arnold Schwarzenegger and the Legislature have mocked their budgetary promises. This is no surprise, given the horrible choices they face, but they were elected to lead, not dissolve into more of the same old backbiting and budgetary flimflam.

Yet here we go again. The new budget does pretty much what the last one does -- pushing the day of reckoning into the future -- with a few cosmetic changes.

California's state government will spend about $105 billion without raising taxes. To accomplish this, the state will cut programs slightly, make extravagant assumptions about revenue and borrow heavily.

Meanwhile, State Treasurer Phil Angelides issued what he aptly called a ``credit-card statement'' showing the debt that someday must be paid in full. Unlike federal taxpayers, Californians can't get their legislators to print money.

The governor's secretive ``government reform'' process has come up with recommendations that would allegedly save $32 billion over five years. Some of the ideas are plainly good ones and will help streamline some governmental functions.

But as Mercury News reporters Ann E. Marimow and Mark Gladstone noted late last week, most of that alleged $32 billion -- alleged because big assumptions are built into it -- wouldn't do anything to bring the state's general fund into balance.

Looking for someone to blame, ultimately, for the federal and state fiscal woes? Start with the mirror. We don't seem to care enough about this to force honesty in budgeting, not to mention serious attention to deficit spending.

We're loading big trouble onto our kids. They'll pay for our selfishness, via higher taxes, lowered living standards and/or inflation. They won't be happy when they realize what we've done.

But wait, there's more ...

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12:33:12 AM    

From the War Room In Today's Salon....

 

The big picture: Hindering the "war on terror"

All the new details of potential al-Qaida attack scenarios -- tourist helicopters turned against New York City, scuba divers and speed boats in New York Harbor, limos gutted and pimped out with explosives, targeting of specific congressional leaders -- are disturbing to know, although no one should have been under any illusion that Osama bin Laden, still at large, and the al-Qaida network in general, had forgotten us. And the administration's new spokeswoman on the terror threat, homeland security adviser Frances Fragos Townsend, is claiming victory. "I certainly think that by our actions now that we have disrupted it. The question is, have we disrupted all of it or a part of it? And we're working through an investigation to uncover that," she said on Sunday.

But the immediacy of the threat is still in question. Joe Biden said this morning he thinks the Bush administration may have overstated the immediacy of the threat. "If there was a smoking gun that said we know for certain that was going to occur, I didn't see it." British officials, for the record, were also unconvinced, and British Home Secretary David Blunkett publicly rebuked the Bush administration for the terror alert hype last week: "Is it really the job of a senior cabinet minister in charge of counter-terrorism? To feed the media? To increase concern? Of course not. This is arrant nonsense," Blunkett wrote in The Observer.

But what's more disturbing, perhaps even more than the new details of al-Qaida's twisted plotting, is the Bush administration's outing of an undercover al-Qaida agent in its rush to justify raising the terror alert. This move, whether politically motivated or rooted in incompetence has terrorism and security experts shocked and dismayed for the harm inflicted on intelligence operations against al-Qaida. CNN reports today that the administration "may have shut down an important source of information that has already led to a series of al-Qaida arrests" when officials revealed Muhammad Naeem Noor Khan's identity to journalists last week (Khan is the computer expert who "flipped" last month and was operating as a double-agent for the Pakistani government). Do we have so many plugged-in al-Qaida double agents that we can afford to lose one and with him all of his connections and leads? Of course not.

Juan Cole looks at the consequences: British intelligence agents scrambled last week to arrest 13 members of a London al-Qaida cell before they fled after learning – from the Bush administration! – that Khan had been arrested. "The British do not, however, appear to have finished gathering enough evidence to prosecute the 13 in the courts successfully," Cole writes. And even worse: 5 got away. "If this is true," Cole says. "It is likely that the 5 went underground on hearing that Khan was in custody. That is, the loose lips of the Bush administration enabled them to flee arrest. Of the 13 taken into custody on Aug. 3, two were released for lack of evidence and two others were 'no longer being questioned on suspicion of terrorism offences.'"

"Two of the men let go on Sunday are being charged or questioned with regard to irregularities in their identity papers or lapsed visas. By Tuesday, British police must charge the remaining 9, release them, or ask the magistrate for yet more time for questioning. Terror suspects may be held in the UK for up to two weeks without being charged, in accordance with the Terrorism Act. One of the 9, Abu Eisa al-Hindi, is a high al-Qaeda official also wanted by the US. Because Muhammad Naeem Noor Khan's identity was prematurely released, however, the British may not have enough evidence to extradite him."

As you might expect, British and Pakistani officials are outraged at the administration for outing the al-Qaida mole. And Tim Ripley, a security expert who writes for Jane's Defence publications, says you just have to wonder what in the world they were thinking: "The whole thing smacks of either incompetence or worse … It goes against all the rules of counter-espionage, counter-terror-ism, running agents and so forth. It's not exactly cloak and dagger undercover work if it's on the front pages every time there's a development, is it?"

-- Geraldine Sealey

[09:35 PDT, Aug. 9, 2004]

12:14:25 AM