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FGHIJ Lessons from the spill
an independent newspaper EDITORIALS
T What Washington must do to respond
HERE IS MUCH that we still don’t know about what led to the Deepwater Horizon’s catastrophic oil well blowout, the effects of which continue to foul the Gulf of Mexico. Congressional, exec-
utive-branch and BP investigations continue, as does the blame-shifting among those involved. But evidence is mounting that this was an emi- nently preventable accident. BP, operating under the indifferent oversight of the Interior Depart- ment’s Minerals Management Service (MMS), could have done much more to minimize the risk of blowout, and it wasn’t adequately prepared for a major spill. Internal BP documents reveal that engineers had concerns about the integrity of the well’s met- al casing nearly a year ago. And in March, the month before the accident, BP told federal offi- cials that the rig was having problems with “well control” after a loss of drilling fluid and a sudden release of gas. Perhaps more important, a BP investigator ad- mitted to a congressional panel that the com-
A steady Freddie?
The search for new ideas on housing policy
die Mac, the two mortgage giants currently hem- orrhaging taxpayer cash. But new ideas are per- colating in the private sector, academia and think tanks. A recent example is the proposal by two mod-
B
erate Republican economists, Donald Marron and Philip Swagel, which notably departs from their party’s free-market orthodoxy while prom- ising to abolish the most toxic features of the old “government-sponsored enterprise” model. In particular, the plan would get Fannie and Fred- die out of the business of directly purchasing mortgage-backed securities, which was highly profitable to them in large part because their im- plicit government guarantee enabled them to fund a large portfolio at artificially low rates. Their existing $5 trillion pile of securities and guarantees would be wound down or sold off to the private sector. But Mr. Marron and Mr. Swagel would keep a
government role in Fannie and Freddie’s other business: securitizing conventional, moderately sized “conforming loans,” which is both neces- sary to mortgage liquidity and relatively less risky. And instead of a non-transparent, implicit government guarantee, the new securities would carry an explicit one, for which the securitizers would pay a fee. Accumulated fees, in turn, would cover losses, thus shielding taxpayers. To promote innovation and competition, this busi- ness would be open not only to Fannie and Fred- die but to any other well-capitalized financial in- stitution capable of taking it on. Crucially, there would be no mandates to sup-
Y NOW IT’S CLEAR that whatever Con- gress does about financial reform this year almost certainly will not include a permanent fix for Fannie Mae and Fred-
pany’s workers may have made a “fundamental mistake” by replacing drilling “mud,” a heavy mix- ture of water, clay, minerals and chemicals that counters the pressure of the oil and gas in the well, after a test indicated “a very large ab- normality,” probably because of gas leaking into the well. Then the blowout preventer, which had been leaking hydraulic fluid and contained a dead battery, failed, allowing seawater, drilling mud and volatile gas to shoot up to the rig. According to a Bloomberg News analysis of BP drilling permit applications, the company claimed to be ready to contain a worst-case sce- nario spill. But its plan was too optimistic. Be- cause of weather, logistics, oil dispersion and oth- er difficulties, for example, BP admits that it’s skimmed fewer gallons of crude from the ocean in six weeks than it estimated its contractors had the capacity to remove in a single day. All of this underscores the regulatory failure in this case. When MMS got word in March that BP was encountering well control problems, why didn’t it investigate more aggressively? How did
MMS find BP’s assurances about its capacity to contain a big spill credible? Actually, it seems that for years government regulators dismissed the possibility that a big blowout could occur, down- playing the likelihood of that scenario in three 2007 studies and issuing BP a waiver from more detailed environmental analysis last year. Such complacency, no doubt, bred only more of the same.
BP had little reason — financial or otherwise — to risk a catastrophic spill. And yet it did. Which is why the vigilance of regulators is critical — and why the task of fundamentally reforming Amer- ican offshore drilling regulation should only be- gin with the Obama administration’s breakup of MMS. Part of this process will mean changing rules. Another will involve establishing pro- cedures to ensure those rules are properly en- forced. Finally, policymakers should see that the government or other appropriate bodies have ad- equate equipment and credible plans to clean up big leaks. The president’s oil spill commission must examine all three as it continues its work.
TOM TOLES
SUNDAY, JUNE 6, 2010
LETTERS TO THE EDITOR
dletters@washpost.com
Time to update poverty standards Robert J. Samuelson’s May 31 op-ed, “Why Oba-
ma’s poverty gauge misleads,” was itself misleading in its characterization of the Obama administra- tion’s proposed supplemental poverty measure. First, Mr. Samuelson largely reduced poverty to “a mind-set that fosters self-defeating behavior” or a result of lousy luck, without examining a labor mar- ket that, even in good times, produces low-wage jobs without benefits. For instance, more than a quarter of jobs in 2006 paid less than a poverty-level wage. Second, Mr. Samuelson failed to note that the cur-
rent official poverty line, while still useful for some purposes, no longer has the meaning he suggested. The official measure is based on 1950s spending pat- terns and 1960s emergency food diets, and it has not been markedly improved since the 1970s. In fact, the proposed measure is far more consistent with public opinion that a far higher level of income is needed just to get by. Finally, the administration’s proposal is modeled on recommendations by a nonpartisan panel, not on some backroom political agenda, and it is similar to New York Mayor Michael Bloomberg’s alternative poverty measure in New York. It will not change eli- gibility for any public programs. While Mr. Samuelson suggested the administra- tion desires a higher poverty rate, this very possibil- ity has deterred many administrations from mod- ernizing our poverty measurement. The administra- tion is showing courage, not opportunism, in ending a half-century stalemate. MELISSA BOTEACH, Washington
The writer manages the Half in Ten Campaign, aimed at cutting the U.S. poverty rate by half in 10 years, for the Center for American Progress Action Fund, the Coalition on Human Needs and the Leadership Conference on Civil and Human Rights.
Robert J. Samuelson ignored one of the funda- mental problems with the “federal poverty line”: It’s national. The poverty line does not reflect the differ- ences in the cost of living in communities around the country. The Council for Community and Eco- nomic Research publishes the ACCRA Cost of Living Index for hundreds of cities. It estimates that the cost of living in New York is more than double the national average. The District and Los Angeles are about 1.4 times the national average. A more current but unofficial approach is the self-
sufficiency index, which estimates what households of various configurations would need to get by with- out governmental assistance. In 2008, a family of two parents and two school-age children living in San Francisco would have needed more than $54,000 per year to be independent; the federal pov- erty line was then $21,000. Until we are able to reflect regional differences in the cost of living, no index is going to adequately es- timate poverty or allocate resources effectively. BARRY SACKIN,Murrieta, Calif.
The writer is a consultant on school meal programs and policy.
Rights in foreign policy Regarding Jackson Diehl’s May 31 column, “Oba-
ma’s national security strategy is light on the human rights agenda”: Mr. Diehl lamented that the Obama national secu-
port affordable housing of the kind that Congress routinely imposed on Fannie and Freddie. Though appealing in theory, these “goals” proved irresponsible in practice. The companies met them by stuffing their portfolios with risky loans to marginal borrowers, who defaulted by the thousands when the downturn hit. That’s not to say government has to get out of promoting low-
Expect delays That whoosh you hear is the sound of Gov. McDonnell’s transportation plan evaporating. G
OV. ROBERT F. McDonnell’s exquisitely detailed plan to fix Virginia’s spiraling transportation problem was never much more than a campaign confection held
together by gossamer strands of wishful thinking, unrealistic projections, far-fetched assumptions and invented numbers. The problem itself, on the other hand, couldn’t be more real, or more press- ing.
Virginia needs $20 billion in new transporta- tion funding over the next decade. The state is running out of construction dollars and will even- tually be at risk of leaving millions of dollars in available federal matching funds on the table. When that happens, the alarm bells can no longer be ignored. As it is, a quick glance at Mr. McDonnell’s menu of proposed funding sources for transportation is a useful reminder that his plan — showcased to great effect during last fall’s gubernatorial cam- paign — is a non-starter. Begin with the $177 mil-
lion annually that Mr. McDonnell (R) said would materialize in the form of revenue and taxes from offshore oil and gas drilling. President Obama has canceled those drilling rights. Even before that, chances that oil and revenue would flow anytime soon, or that Congress would allow Virginia to skim off royalties, were slim. Similarly, the $236 million annually that Mr. McDonnell said he would conjure from state revenue growth and from budget surpluses (remember those?), is noth- ing more than a pleasant daydream. Current and forecast sums from those sources is $0.00. Then there are the funding sources that Mr. Mc- Donnell promised to tap for transportation even though doing so would mean raiding existing state support for public schools, public safety, higher education and social programs. One of those is the $105 million annually he would skim from sales taxes collected in Northern Virginia. That was de- feated in the Democratic-controlled state Senate this year. Another such proposal, which might use
revenue from the Port of Virginia in Hampton Roads, would, at best, benefit the port itself. In the same category is Mr. McDonnell’s plan to
sell off the state’s liquor stores, which he said would net a windfall of some $500 million (a made-up number, by the way). The trouble is that selling the liquor stores would also mean the state would lose the $100 million in annual profit they generate, which also goes to support schools, po- lice and other programs. Again: not very likely. Finally, the governor is seeking federal approval to collect tolls on Interstate 95 at the North Caro- lina border. Even if he gets it, the amounts collect- ed would be trivial. The bottom line? Mr. McDonnell promised new
transportation funding amounting to almost $1.5 billion a year. That amount suggest that he grasps the scale of the challenge. But at the rate things are going, we’d be surprised if the actual new funding —if there is any at all — makes a dent in the state’s most critical problem.
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A gulf-size crisis in the Chesapeake Bay The June 3 Metro article “Future of Chesa-
peake Bay back in focus” quoted William C. Baker, president of the Chesapeake Bay Founda- tion, as saying: “We have a gulf oil spill right here on the Chesapeake every day. Almost a mil- lion pounds of nitrogen flows into the bay every day.” As BP’s Deepwater Horizon well in the Gulf of
Mexico continues to leak, Americans are contin- ually shocked by the environmental impacts. The Gulf of Mexico spans 600,000 square miles — a massive body of water touching five states, Mexico and countless islands. People are in awe at the scale of this devastating oil spill, but as Mr. Baker pointed out, comparable amounts of pollutants enter the bay daily. While the impacts of these pollutants are less immediate and obvi-
ous, they are nevertheless hugely detrimental to the 64,000 square miles of the Chesapeake’s watershed. As one of the most iconic and scenic water-
ways in the United States, the Chesapeake Bay begs for our protection. Factory farm pollution is a leading source of nitrogen, phosphorous and sediment, much of it due to animal manure. In Maryland alone, the poultry industry dis- poses of more than 300,000 tons of excess ma- nure annually, which results in more than 4,000 tons of pollution. We must hold all polluters ac- countable for their waste in order to help clean and preserve the bay.
HILARY JACOBS, Baltimore
The writer works at Environment Maryland, an advocacy organization.
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income housing completely. But it is far better, as Mr. Marron and Mr. Swagel suggest, to address such policy goals directly, through agencies designed for that purpose, such as the Federal Housing Administration. Mission creep and public-private confusion de- stroyed the mortgage system. Clarity and consis- tency can restore it.
rity strategy does not “combat tyranny or oppres- sion, or promote democracy,” in contrast to the Bush administration’s “freedom agenda.” Putting aside the fact that the Bush administration never really promoted that agenda (especially with friends such as Saudi Arabia and China), the practicality of that agenda is clear. How much further do we call for hu- man rights in China and still engage it as a partner in combating risks such as Iran? Should we stop all trade with Saudi Arabia until it allows religious free- dom for all faiths? As for the Palestinian state, we saw what happened in their last election. Democ- racy cannot be pursued naively and be guaranteed successful. I agree that the lack of a clear statement on hu- man rights is impolitic, but I think it reflects the ad- ministration’s pragmatic view of national security priorities and does not mean it doesn’t care about human rights.
JAMES D. WALKER, Pleasantville, N.Y. Break the lobbying-fundraising tie
The May 31 front-page article “Lobbyists by day, top fundraisers by night” implied that lobbyists’ participation in fundraising is inevitable absent public financing of elections. It’s not. According to the National Conference of State
Legislatures, 12 states have limited participation by lobbyists in fundraising when legislatures are in ses- sion, and one, South Carolina, has banned virtually all lobbyist contributions at any time. And in an overlooked passage in this year’s State of the Union address, President Obama called on Congress “to put strict limits on the contributions that lobbyists give to candidates for federal office.” Heeding the president’s call would make a differ- ence in how business is done in Washington. Mem- bers of Congress spend a significant chunk of their time in Washington raising money. The special ac- cess that many lobbyists enjoy is largely the result of their fundraising activities. Breaking the link be- tween fundraising and lobbying would be an impor- tant step in reducing lobbyists’ influence. JEFF BLATTNER, Bethesda
First-date crash-dummies
With regard to journalistic surrogates for men in the online dating world [“Online dating assistants help the lonely and busy,” front page, June 1], it stands to reason that eventually the target women will respond in kind with stand-ins. At that time, for an additional fee, naturally, wouldn’t it make sense for the surrogates themselves to have the initial date? After all, they know their clients well enough, and this would be an additional timesaver. JAMESWEISSMAN, Charlottesville
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