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Photos by: joanneleon. September, 2013.


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Shutdown Updates

-- Monday night --

Monday afternoon, word went out that a deal had been struck in the Senate.  A meeting at the White House scheduled for 3pm between Pres. Obama and all of the House and Senate leaders was postponed.

Really weird that this happened Sep. 30 and is only getting attention now.

Louise Slaughter: Republican Rules Change 'An Atrocity' That Allows Shutdown To Continue

House rules typically allow any member, Republican or Democrat, to call up a Senate-passed bill for a vote. But on Sept. 30 -- the eve of the government shutdown -- Republicans on the House Rules Committee changed the rule so only House Majority Leader Eric Cantor (R-Va.) could call up a Senate-passed clean funding bill -- a bill that has the votes to pass the House and would end the shutdown, if it were given a vote. The move to prevent lawmakers from bringing up the bill came as part of Republican leaders' strategy to try to extract concessions from Democrats in exchange for reopening the government.

A video clip from that hearing, which surfaced Monday, shows Slaughter, the ranking Democrat on the committee, trying to comprehend why Republicans would make such a significant change to House rules.

Ezra Klein with details about the deal.  Some minor changes to Obamacare and a Catfood Committee.  Bicameral Budget Committee.
The Senate’s deal to end the shutdown is a deal to fight over sequestration

The outline of the emerging Senate deal is this: The government is funded until Jan. 15. The debt ceiling is lifted until Feb. 7. There are a handful of small Affordable Care Act changes: Stronger income verification, which Republicans want, and a one-year delay on the reinsurance tax, which Democrats want.

Oh, and there's a bicameral budget committee that needs to report back by Dec. 13.

Felix Salmon.
The default has already begun

The harm done to the global financial system by a Treasury debt default would not be caused by cash losses to bond investors. If you needed that interest payment, you could always just sell your Treasury bill instead, for an amount extremely close to the total principal and interest due. Rather, the harm done would be a function of the way in which the Treasury market is the risk-free vaseline which greases the entire financial system. If Treasury payments can’t be trusted entirely, then not only do all risk instruments need to be repriced, but so does the most basic counterparty risk of all. The US government, in one form or another, is a counterparty to every single financial player in the world. Its payments have to be certain, or else the whole house of cards risks collapsing — starting with the multi-trillion-dollar interest-rate derivatives market, and moving rapidly from there.

And here’s the problem: we’re already well past the point at which that certainty has been called into question.
The vaseline, in other words, already has sand in it. The global faith in US institutions has already been undermined. The mechanism by which catastrophe would arise has already been set into motion. And as a result, economic growth in both the US and the rest of the world will be lower than it should be. Unemployment will be higher. Social unrest will be more destructive. These things aren’t as bad now as they would be if we actually got to a point of payment default. But even a payment default wouldn’t cause mass overnight failures: the catastrophe would be slower and nastier than that, less visible, less spectacular. We’re not talking the final scene of Fight Club, we’re talking more about another global credit crisis — where “credit” means “trust”, and “trust” means “trust in the US government as the one institution which cannot fail”.

While debt default is undoubtedly the worst of all possible worlds, then, the bonkers level of Washington dysfunction on display right now is nearly as bad. Every day that goes past is a day where trust and faith in the US government is evaporating — and once it has evaporated, it will never return. The Republicans in the House have already managed to inflict significant, lasting damage to the US and the global economy — even if they were to pass a completely clean bill tomorrow morning, which they won’t. The default has already started, and is already causing real harm. The only question is how much worse it’s going to get.

--- Tuesday morning ---

Today is all about getting the House GOP to accept the Senate deal.  Word is that the House will have changes.  It's amazing that the markets have been so relatively calm.  Either they are just desensitized to the Obama and Bush admins regular use of manufactured crises that get solved at the last minute, or the masters of the universe have inside information from the govt.

Yeah, they're back.  At least three members of the Catfood Commission, from the Dems side, have been sent out to do media appearances.  Durbin on Meet the Press, Bowles on CNBC and Alice Rivlin on NPR.  And now the two Catfood stars are part of an ad campaign starting today.

Hey, wait a minute.  Pete Peterson and his Catfood Commission and their ridiculous faux grassroots organization, Fix the Debt... they put together this ad campaign, and putting together an ad campaign is not trivial.  What's curious is that they waited until this week, just a couple days before the 10/17 deadline to run these ads.  How did they know that the shutdown would go on for this long?  Why didn't they run some of their ads soon after the shutdown began?  

Roll Call compares all of this to the TARP battle. I've made the same comparison during the past weeks. But TARP was also very different than this deal. As far as we know, TARP was not a manufactured crisis and it was based on a demand from the Treasury Secretary that was at the same time simple and profound and we all know the rest of it.

Echoes of TARP in Fiscal Fight, but Ties Have Soured

When the $700 billion TARP bailout came to the House floor, then-Speaker Nancy Pelosi urged her members to vote for it. So did then-Minority Leader John A. Boehner, then-Chief Deputy Minority Whip Eric Cantor and a young Rep. Paul D. Ryan.

Boehner told his flock on the floor the vote would separate the men from the boys and the girls from the women. He called it a mud sandwich on the floor, and worse in private. But it had to be done, he said.

The bill failed on the first try, and 15 minutes later the Dow Jones industrial average was down 777 points. The vast majority of Boehner’s conference had voted no.

It’s just the kind of humiliating event political leaders try to avoid repeating.

That moment, which helped spawn the tea party, may help explain why Boehner has dug in so fiercely this time around, rather than — as Democrats assume he must in the end — put legislation on the floor that can only pass with mostly Democratic votes.

In 2008, it was left to Reid and McConnell to resuscitate TARP with a few amendments before it finally passed several days later.

Leon Panetta goes off message and bloviates about the Clinton days.

Panetta rebukes Obama’s handling of shutdown

“We govern either by leadership or crisis. . . . If leadership is not there, then we govern by crisis,” Panetta said at the start of the session, sponsored by The Wall Street Journal. “Clearly, this town has been governing by crisis after crisis after crisis.”
Next came the “but” — without a name but with a clear message. “You have to engage in the process. This is a town where it’s not enough to feel you have the right answers. You’ve got to roll up your sleeves and you’ve got to really engage in the process . . . that’s what governing is all about.”
The solution, Panetta added, is not “some razzle-dazzle supercommittee or group of muckety-mucks from the outside world. That hasn’t worked. They are going to have to do it in the context of the conference of the budget.” Locked in a room, if need be, until differences are resolved, as happened with the 1990 budget summit at Andrews Air Force Base. “I spent three months at Andrews Air Force Base going through this crap,” Panetta recalled.

Don't call it a Super Committee or a Catfood Commission! Don't call it a Grand Bargain!

I have to redact myself on this one.

New Snowden files article in the WaPo by Barton Gellman and Ashkan Soltani.  As they have done before, they've provided a marked up digital copy of the relevant documents here: The NSA's overcollection problem.  This is a long 3-page article.  Finally, we're getting to some of the information about programs outside of the carefully ringfenced 215 and 702 programs which questions and answers are almost always limited to in Congressional hearings.  
NSA collects millions of e-mail address books globally

[1:10 mark]

The National Security Agency is harvesting hundreds of millions of contact lists from personal e-mail and instant messaging accounts around the world, many of them belonging to Americans, according to senior intelligence officials and top secret documents provided by former NSA contractor Edward Snowden.

The collection program, which has not been disclosed before, intercepts e-mail address books and “buddy lists” from instant messaging services as they move across global data links. Online services often transmit those contacts when a user logs on, composes a message, or synchronizes a computer or mobile device with information stored on remote servers.
During a single day last year, the NSA’s Special Source Operations branch collected 444,743 e-mail address books from Yahoo, 105,068 from Hotmail, 82,857 from Facebook, 33,697 from Gmail and 22,881 from unspecified other providers, according to an internal NSA PowerPoint presentation. Those figures, described as a typical daily intake in the document, correspond to a rate of more than 250 million per year.

Each day, the presentation said, the NSA collects contacts from an estimated 500,000 buddy lists on live-chat services as well as from the “in-box” displays of Web-based e-mail accounts.


The NSA has not been authorized by Congress or the special intelligence court that oversees foreign surveillance to collect contact lists in bulk, and senior intelligence officials said it would be illegal to do so from facilities in the United States. The agency avoids the restrictions in the Foreign Intelligence Surveillance Act by intercepting contact lists from access points “all over the world,” one official said, speaking on the condition of anonymity to discuss a classified program. “None of those are on U.S. territory.”


In this program, the NSA is obliged to make that case only to itself or others in the executive branch. With few exceptions, intelligence operations overseas fall solely within the president’s legal purview. The Foreign Intelligence Surveillance Act, enacted in 1978, imposes restrictions only on electronic surveillance that targets Americans or takes place on U.S. territory.


Sen. Dianne Feinstein (D-Calif.), chairman of the Senate Intelligence Committee, said in August that the committee has less information about, and conducts less oversight of, intelligence-gathering that relies solely on presidential authority [12333]. She said she planned to ask for more briefings on those programs.


Because the agency captures contact lists “on the fly” as they cross major Internet switches, rather than “at rest” on computer servers, the NSA has no need to notify the U.S. companies that host the information or to ask for help from them.

[Emphasis added]

Dissemination of this information? Who are they giving it to?  Anyway, that article is a must read, in full.  Yahoo was also prepared for the publication of that article by Gellman.  Before publishing, Gellman sent out this tweet to give Yahoo some help.  Since their email and contact lists and whatever, are unencrypted by default, the government gets its biggest harvest from Yahoo mail.  So before he published that detail, Gellman let Yahoo reassure their users that they'd be encrypting soon.  Yahoo much have had a look at the article ahead of time.  The article also says that Google switched to encrypted email delivery because they knew the govt was collecting.  In the article, all the tech companies interviewed say they didn't know anything about it.

These are the slides that WaPo has published.  At the link below, you'll find the slides in digital form with bookmarked sections that have sidebar explanations.

"Content Acquisition Optimization" -- Slides










Hamilton Nolan, from, writes about Dianne Feinstein's op-ed in the WSJ (which is behind a paywall).  Feinstein would have known, of course, about the WaPo article above and would have timed her op-ed to precede it by a half day or so.  And after reading that WaPo article, it's easy to see why she'd want to try to defend herself, the NSA, and her oversight committee.  She admits that she has known about the other programs that the NSA has, under executive order 12333, but she hasn't gotten around to asking questions or doing oversight on those.  But she's planning on it!

Dianne Feinstein Can't Come Up With One Good Defense of the NSA

She has, in her Wall Street Journal op-ed today, nothing but a mishmash of vagaries and downright illogical factoids. Let's take them one at a time.

1) The NSA program could have stopped 9/11. It's right there in the story's subhed: "If today's call-records program had been in place in before 9/11, the terrorist attacks likely would have been prevented." Odd, since Feinstein includes this paragraph right up front:

In the summer of 2001, the CIA's then-director, George Tenet, painted a dire picture for members of the Senate Intelligence Committee when he testified about the terrorist threat posed by al Qaeda. As Mr. Tenet later told the 9/11 Commission, "the system was blinking red" and by late July of that year, it could not "get any worse."
Huh. So... the CIA did issue dire warnings prior to 9/11, although the NSA's program was not in place at that time. This directly contradicts Feinstein's point about the necessity of the NSA's phone spying. Paging the editing department.

2) The NSA itself says the program works.


3) Al Qaeda is scary.

Snowden's statements after receiving the Sam Adams award.
Edward Snowden Speaks Out Against NSA "Dragnet Mass Surveillance"


October 26th, 2013 in Washington, D.C.
A Rally Against Mass Surveillance

Right now the NSA is spying on everyone's personal communications, and they’re operating without any meaningful oversight. Since the Snowden leaks started, more than 571,000 people from all walks of life have signed the petition telling the U.S. Congress that we want them to rein in the NSA.
On October 26th, the 12th anniversary of the signing of the US Patriot Act, we're taking the next step and holding the largest rally yet against NSA surveillance. We’ll be handing the half-million petitions to Congress to remind them that they work for us -- and we won’t tolerate mass surveillance any longer.

12pm Eastern, Saturday October 26th
Gather at Columbus Circle in front of Union Station, then march to the Capitol Reflecting Pool

Blog Posts and Tweets of Interest

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