Feinstein accuses CIA of spying on Senate oversight panel

The 6 million pages of information on the computers were provided by the CIA in the first place. In 2010, committee staffers discovered that some documents had vanished from the computers. The CIA promised not to remove any more documents. But months later staffers again found that documents were missing.

Feinstein said she has “grave concerns” that the CIA’s search violated separation of powers principles guaranteed in the Constitution.

“It may have undermined the constitutional framework essential to effective congressional oversight of intelligence activities or any other government function,” she said.

She said the CIA has refused to answer her questions on the matter.

“I have asked for an apology and a recognition that this CIA search of computers used by its oversight committee was inappropriate,” she said. “I have received neither.”

CIA Director John Brennan denied that his agency had hacked the computer network, saying that he asked for a computer audit to determine if Senate staffers had improperly gained access to classified information.

The Justice Department is investigating possible wrongdoing on both sides.

President Obama has declined to take sides in the feud, saying that it’s not “an appropriate role for me and the White House to wade into at this point.”

The administration chose not to turn over 9,000 pages of documents to the Senate Intelligence Committee, McClatchy first reported.

White House spokesman Jay Carney did not confirm nor deny the figure but conceded that the White House had not turned over everything requested by the Senate panel.

He noted that the information in question applied only to the previous administration, but said it was crucial to protect the internal conversations between executive-branch officials.

Senators on both sides of the aisle rallied around Feinstein, with Sen. John McCain, R-Ariz., saying a special investigation should be started and Sen. Lindsey Graham, R-S.C., saying “heads should roll” if Feinstein’s claims are true.

— Sean Lengell, Congressional Correspondent, and Brian Hughes, White House Correspondent

 

SENATE STRIKES DEAL ON UNEMPLOYMENT INSURANCE EXTENSION

The Senate surprisingly announced a deal to restore unemployment insurance benefits to more than 2 million long-term unemployed Americans.

Since Congress failed to reauthorize long-term unemployment package by a Dec. 28 deadline, about 2 million Americans jobless longer than 26 weeks have lost their benefits.

“There are a lot of good people looking for work and I am pleased we’re finally able to reach a strong, bipartisan consensus to get them some help,” said Jack Reed, D-R.I., who with Dean Heller, R-Nev., and eight other senators reached the deal to restore the benefits for five months, retroactive to Dec. 28. “Restoring this much-needed economic lifeline will help job seekers, boost our economy and provide a little certainty to families, businesses and the markets that Congress is capable of coming together to do the right thing.”

The cost of extending the program is about $25 billion for one year. But the proposal is fully funded by a combination of offsets that include extending “pension-smoothing” provisions in the 2012 highway bill, which are set to expire this year, and extending customs user fees through 2024.

Senators will not vote on the measure, which still has to be written, until after they return from their recess March 24.

The House also must approved the package.

— Sean Lengell, Congressional Correspondent

 

PUTIN RATED A FAR STRONGER LEADER THAN OBAMA

Maybe it is the photos of him posing shirtless on horseback, or his military push into Ukraine, but Americans in a new poll believe Russian President Vladimir Putin is a much stronger leader than President Obama.

A YouGov/Economist survey of 1,000 adults interviewed March 8-10 found that 78 percent view Putin as somewhat to very strong leader. Just 45 percent see Obama the same way. More Americans, 55 percent, view Obama as a weak leader.

The poll comes as the president is struggling with a response to Putin’s push into Ukraine and expectations that Crimea will break off and join Russia.

The public, however, does not seem to be agonizing over the Ukraine crisis. The poll found that 50 percent do not believe that the “U.S. should get involved in Russia’s dispute with Ukraine.” Twenty-five percent do, and 24 percent are not sure.

And only 24 percent approve of Obama’s handling of the situation.

— Paul Bedard, Washington Secrets Columnist

 

HOLDER PUSHES REDUCED DRUG SENTENCES

Attorney General Eric Holder endorsed shorter prison sentences for most drug offenders, saying the U.S. is wasting money on overcrowded jails and that the stiffest penalties should be reserved for violent crimes.

“This over-reliance on incarceration is not just financially unsustainable, it comes with human and moral costs that are impossible to calculate,” Holder said in remarks to the U.S. Sentencing Commission.

“Certain types of cases result in too many Americans going to prison for far too long, and at times for no truly good public safety reason,” he added.

The Justice Department estimates that the plan would trim the federal prison population by 6,550 inmates over the next five years and reduce their sentences by an average of 11 months. The new rules would affect roughly 70 percent of all drug cases brought by federal prosecutors.

The commission is expected to approve the framework in April.

— Brian Hughes, White House Correspondent

 

ENERGY REGULATORS URGED TO QUICKLY FINISH ELECTRIC GRID SAFETY RULES

A powerful Senate Democrat urged swift action from federal electric grid regulators to protect critical assets in light of a news report that has rattled regulators, lawmakers and the utility industry.

Sen. Dianne Feinstein said concerns have been raised by a Wall Street Journal article detailing a Federal Energy Regulatory Commission analysis that concluded knocking out nine key substations and a transformer could spark a nationwide blackout lasting 18 months.

The California Democrat said protecting those substations should be the first priority of forthcoming FERC guidelines for physical security.

“I’m one that believes that FERC did the right thing saying that there needs to be standards and we need to move forward quickly on all the big, critical substations,” Feinstein, who leads the Senate Intelligence Committee, told reporters in the Capitol.

FERC began drawing up baseline standards in response to requests from Feinstein, Senate Majority Leader Harry Reid, D-Nev., and others following an April 2013 attack by armed gunmen at a San Jose, Calif.-area substation.

The Edison Electric Institute, which represents the nation’s investor-owned utilities, says it welcomes that effort.

— Zack Colman, Energy & Environment Writer

 

OBAMA SIGNS ORDER TO REVISE OVERTIME PAY RULES

President Obama rolled out his latest initiative to boost workers’ pay, saying he wanted to “restore the common-sense principle behind overtime.”

Obama signed an executive order directing the Labor Department to develop new rules to expand the number of Americans who can receive overtime pay. The president was joined at a White House event by workers he said would benefit from the strengthened rules.

The move is the latest executive action Obama has taken this year to push his economic agenda in the face of opposition from the GOP-controlled House. He has signed orders raising the minimum wage for new federal contract workers and created new public-private partnerships on manufacturing and education.

The president is asking Labor Secretary Thomas Perez to expand the number of workers who qualify for overtime by revising an exemption that allows employers to avoid paying overtime to employees deemed to have managerial positions and who are paid more than $455 a week.

Obama said that exemption had been unfairly extended to cover many workers.

“It doesn’t make sense that in some cases, this rule makes it possible for salaried workers to be paid less than the minimum wage,” he said.

He added that revising the rules also would benefit the companies that pay their workers good wages.

“It’s not fair when business owners who treat their workers fairly can be undercut by competitors,” he said.

The move is likely to be opposed by many business groups and conservative lawmakers who warn that raising salary costs could weaken job growth and hurt small businesses.

But Obama said that the administration was “going to do this the right way and consult with both workers and businesses.”

— Meghashyam Mali, Assistant Managing Editor

 

BOEHNER INVITES POPE FRANCIS TO ADDRESS CONGRESS

House Speaker John Boehner extended an open invitation to Pope Francis to address a joint meeting of Congress, saying the head of the worldwide Roman Catholic Church “has inspired millions of Americans.”

The Ohio Republican said the pope’s “pastoral manner and servant leadership” is “challenging all people to lead lives of mercy, forgiveness, solidarity and humble service.”

“His social teachings, rooted in ‘the joy of the gospel,’ have prompted careful reflection and vigorous dialogue among people of all ideologies and religious views in the United States and throughout a rapidly changing world, particularly among those who champion human dignity, freedom and social justice,” Boehner said.

“These principles are among the fundamentals of the American Idea.”

Boehner’s invitation came a year to the day after the former Cardinal Jorge Mario Bergoglio of Argentina became Pope Francis.

The pope reportedly is interested in visiting the U.S. in September 2015.

If Pope Francis accepts the speaker’s offer, he likely would be the first pope to address Congress, Boehner’s office said.

Senate Minority Leader Mitch McConnell, R-Ky., praised Boehner for the invitation, saying he would “welcome the chance to hear his message of optimism and hope here in the U.S. Capitol.”

— Sean Lengell, Congressional Correspondent

 

SENATORS REACH ACCORD ON WINDING DOWN FANNIE AND FREDDIE

The chairman of the Senate Banking Committee and his Republican counterpart announced that they had reached an agreement to dissolve bailed-out, government-sponsored mortgage enterprises Fannie Mae and Freddie Mac and reform federal housing finance policy.

Sens. Tim Johnson, D-S.D., and Mike Crapo, R-Idaho, said they would soon release legislative text that would closely mirror an existing bill sponsored by a bipartisan group of senators on the committee, led by Sens. Mark Warner, D-Va., and Bob Corker, R-Tenn.

Both bills would wind down and eliminate the mortgage behemoths, which were taken into federal conservatorship after failing in 2008 and have remained in the government’s control. In recent months, the two companies have returned to profitability, so far yielding the government more in dividends than the $187.5 billion it cost to bail them out.

Both Senate measures would establish a Federal Mortgage Insurance Corp., modeled on the Federal Deposit Insurance Corp. that provides depositors’ insurance for banks. The FMIC would provide insurance on approved mortgage-backed securities that would only kick in once the private owners of those securities had suffered some losses. It would be intended to ensure a liquid market for mortgage securities while avoiding taxpayer losses on guaranteed loans.

Fannie and Freddie do not issue loans but buy mortgages from lenders and package them into securities to sell to investors, with the implied guarantee of the federal government. In recent years, following the collapse of the housing bubble, Fannie- and Freddie-backed mortgages have accounted for as much as two-thirds of all new home loans.

The White House has signaled support for the basic outline of the bipartisan Senate bill. President Obama said last year that the Corker-Warner principles were “consistent” with his own.

But House Republicans are not on the same page. The House Financial Services Committee last year approved a bill to wind down Fannie and Freddie and remove the government’s involvement in backstopping mortgage-backed securities. Instead, that legislation involved a privately run utility that would have standardized mortgage products without involving a guarantee.

That bill, which is opposed by homebuilders’ groups, has not advanced in the House, nor does it have support in the Senate.

— Joseph Lawler, Economics Writer

 

MORE THAN 500 ECONOMISTS SLAM MINIMUM WAGE HIKE AS A JOBS KILLER

Five hundred economists, including three Nobel laureates, urged Congress to junk President Obama’s proposal to boost the minimum wage to $10.10, saying it would cut jobs and raise prices.

Instead, they urged in a letter to Congress that Washington pass a comprehensive package to deal with poverty.

“One of the serious consequences of raising the minimum wage is that business owners saddled with a higher cost of labor will need to cut costs, or pass the increase to their consumers in order to make ends meet. Many of the businesses that pay their workers minimum wage operate on extremely tight profit margins, with any increase in the cost of labor threatening this delicate balance,” they warned.

Among the signers were economists from major universities; Nobel laureates Vernon Smith, Edward Prescott and Eugene Fama; and George Shultz, who was secretary of State, Treasury secretary, and a former top budget chief.

The letter was timed to coincide with a Senate hearing on legislation to boost the minimum wage, which the Congressional Budget Office warned could lead to thousands of job cuts.

While they did not lay out an anti-poverty agenda in the letter provided in advance to Secrets, they did argue that the minimum wage wouldn’t relieve poverty.

“The minimum wage is also a poorly targeted anti-poverty measure. Extra earnings generated by such an increase in the minimum wage would not substantially help the poor. As CBO noted, ‘many low-wage workers are not members of low-income families.’ In fact, CBO estimates that less than 20 percent of the workers who would see a wage increase to $10.10 actually live in households that earn less than the federal poverty line,” they wrote.

— Paul Bedard, Washington Secrets Columnist

 

OBAMACARE ENROLLMENT OFF 4 OUT OF 5 MONTHS

Enrollment in insurance plans through President Obama’s health care law is trailing expectations, with signups behind the original Department of Health and Human Services projections in four of five months since the exchanges launched Oct. 1.

Though the trend was broken in January, when reported signups exceeded projections by 86,171 individuals, but HHS reported that the pace of signups slowed in February when they were 329,047, or 26 percent, below projections for the month.

Cumulatively, HHS reported that 4.2 million Americans have signed up for a plan, compared with the 5.7 million originally projected. Original projections saw 7 million enrollments by March 31, the end of the open enrollment period.

HHS Secretary Kathleen Sebelius said the administration does not know how many of those enrollees have actually paid their health insurance bills.

“People are buying a product in the private market,” Sebelius told the House Ways and Means Committee, which was holding a hearing on the agency’s budget. “As soon as we have accurate information, we will give it to you. But we do not currently have information about how many people have paid.”

The administration is using what it calls “nontraditional” methods to drum up enrollment, including inviting former ‘N Sync pop star Lance Bass to the White House and an interview of Obama by comedian Zach Galifianakis on the “Between Two Ferns” mock online talk show.

— Philip Klein, Senior Writer, and Susan Ferrechio, Chief Congressional Correspondent

 

STUDY: TAXING SODA CAUSES DRINKERS TO GAIN WEIGHT

A new report funded by the Robert Wood Johnson Foundation casts “serious doubt” on efforts by legislators to curb obesity through tax increases on sweet sodas and energy drinks, finding in some cases that people simply shift to other sweets — and gain weight.

The report published in Health Economics and provided to Secrets could be a major blow to liberal state and local leaders who say that high soft-drink taxes will instantly cut obesity, especially in children.

The report looked at the impact of soda taxes on obesity on the national level and in two states where taxes have been imposed, Ohio and Arkansas.

On the national level, an increase in taxes on sugary drinks actually resulted in adults adding 27.7 calories to their daily intake with soda substitutes. “An important conclusion,” said the report, “is that this evidence demonstrates that large increases in soft-drink taxes are unlikely to reduce total caloric intake.”

In the studies of state data, the report found a decrease in obesity in Arkansas, but the data was limited, so the experts from the Universities of Wisconsin, Iowa and Washington focused on Ohio where more and better information was available. The result: “We cannot detect a significant weight effect because of a large soft drink tax increase,” said the report titled “Non-linear Effects of Soda Taxes on Consumption and Weight Outcomes.”

— Paul Bedard, Washington Secrets Columnist

 

SENATE VOTES TO DIVERT CONVENTION SUBSIDIES TO PEDIATRIC RESEARCH

Politicians will no longer party on the taxpayer dime after the Senate voted to divert taxpayer subsidies from the Democratic and Republican national conventions to fund new pediatric research at the National Institutes of Health.

The Gabriella Miller Kids First Research Act ends funding for the conventions from the Presidential Election Campaign Fund and redirects $126 million over 10 years to a new fund at NIH.

The bill passed by unanimous voice vote and now goes to President Obama for his signature. It passed the House 295-103 in December.

Conventions cost taxpayers more than $36 million in 2012, according to the bill’s sponsor, Mississippi Republican Rep. Gregg Harper.

Costs include everything from catering and flowers to makeup consultants and gift bags, according to Sen. Tom Coburn’s 2011 Wastebook, which details unnecessary government spending.

The convention subsidy was the first of 100 examples of wasteful federal Coburn highlighted in that edition.

The bill was named after Gabriella Miller, a 10-year-old Virginia girl who died of brain cancer in October 2013. Gabriella advocated for cancer research before she died.

“Sending this bill to the president is a fitting tribute to Gabriella’s legacy,” Harper said. “I urge the president to sign the bill without hesitation.”

— Michal Conger, Staff Writer

 

NEW YORK GETS CAUGHT DOUBLE-BILLING MEDICAID

New York made away with $320 million from the federal government by over-billing Medicaid, a new watchdog report found.

According to the inspector general for the Health and Human Services Department, state-operated residences billed the federal government at twice the rate charged by privately operated residences offering the same “habilitation services” in 2010.

Those services offered by the state’s Office for People with Developmental Disabilities help impaired individuals learn skills so they can live in society, according to the IG report.

By double-billing the government, New York received $320 million from Medicaid — or 57 percent more than the actual costs.

The average Medicaid payment was $18,759, while the average at the privately operated residences was $8,302.

— Kelly Cohen, Staff Writer