More Problems Emerge In Implementing Health Care Reform

Democrats are going to have a hard time trying to explain this one in any coherent manner. The Obama Administration approved waivers for major corporations, including McDonalds, so that they do not have to comply with new regulations set to take effect next year.

That avoids the contentious issue of major corporations dropping insurance coverage affecting hundreds of thousands of workers at McDonalds alone. But it also means that more than 1 million workers wont get health care benefits as promised under the health care reform program.

Thirty companies and organizations, including McDonald's (MCD) and Jack in the Box (JACK), won't be required to raise the minimum annual benefit included in low-cost health plans, which are often used to cover part-time or low-wage employees.

The Department of Health and Human Services, which provided a list of exemptions, said it granted waivers in late September so workers with such plans wouldn't lose coverage from employers who might choose instead to drop health insurance altogether.

Without waivers, companies would have had to provide a minimum of $750,000 in coverage next year, increasing to $1.25 million in 2012, $2 million in 2013 and unlimited in 2014.

"The big political issue here is the president promised no one would lose the coverage they've got," says Robert Laszewski, chief executive officer of consulting company Health Policy and Strategy Associates. "Here we are a month before the election, and these companies represent 1 million people who would lose the coverage they've got."

The United Agricultural Benefit Trust, the California-based cooperative that offers coverage to farm workers, was allowed to exempt 17,347 people. San Diego-based Jack in the Box's waiver is for 1,130 workers, while McDonald's asked to excuse 115,000.

How exactly did the Administration come to the conclusion to provide the waiver - and is a question that deserves scrutiny since it appears to be arbitrarily based.

Well, they had to balance the bad politics of going back on a campaign promise saying that people wouldn't lose coverage under the health care legislation and the bad politics of providing waivers to companies enabling those companies to avoid having to pay more for increased mandates on health care coverages.

The government took the latter approach, which was the easy way out, but which also creates more uncertainty in the marketplace. You wont get a comprehensive approach nationally since many of the decisions will be done at the state level.

Insurers have also sought waivers to maintain limited plans, which aren't nearly as comprehensive as the plans sought under the health care reform.

The insurers have a point - they should have a right to continue selling policies that people want, including low cost alternatives that are right for their lifestyles, rather than comprehensive coverages that they may never want or need. Those comprehensive policies are mandated because of a desire to bend a cost curve to get more healthy people who underutilize medical facilities to balance out those who are chronically ill or require expensive treatment options. Yet, the costs will rise for all as the costs for implementing new technologies rises and there is little effort to curb the costs.

This legislation was badly flawed, but this is just the tip of the iceberg since provisions will gradually take effect - some provisions wont become effective until 2014, while others have already taken effect.

Among those that have already taken effect and those taking effect on January 1, 2011, the one that will cause the greatest amount of confusion is the changed rules dealing with FSAs. That includes requiring doctor's prescriptions or statements of medical necessity to use health care FSA dollars to pay for over-the-counter medications. Currently, there is no such requirement. The new requirement translates into more paperwork, higher costs for patients who do not have the time or inclination to get those documents from doctors, and buries doctors' offices under still more paperwork that takes time away from seeing patients and maximizing quality of care. Far from reducing costs, this change will result in increased costs for doctors and patients alike with no tangible benefit. Moreover, it reduces the overall utility of the FSA, which is used by patients to reduce their health care costs for over-the-counter medications and other out of pocket medical expenses.

Other changes, including increasing the mandatory coverage for children and dependents up to age 26 will mean higher premiums that will inevitably be passed on to the customers.

New York Gubernatorial Campaign Update

Today's big news is a planned news conference this afternoon by Carl Paladino. No one knows what he's going to say in the three minute spot, but sources indicate that he isn't planning on dropping out of the race.

The only thing that seems sure is that Paladino isn't going to pull out of the race, they said. As of late Wednesday, the Paladino camp bought a block of time in Buffalo with the three network affiliates.

Upstaters won't be able to turn on a major channel without seeing Paladino. The broadcast will be rerun in Rochester, Albany and Syracuse and Channel 12 on Long Island, plus Westchester Fox cable later Thursday night. Sources said his people also were trying to buy time on Fox statewide.

The only thing for sure is that no one knows what Paladino will say (which isn't really any different from any other day - when all manner of assorted craziness emanates from the filter-free Paladino. You also have some supporters urging him to drop some kind of bombshell about Cuomo (though that is quite unlikely), while others are urging him to drop out (also just as unlikely).

Still, as of last night, Paladino was attempting to show bipartisan support for his "outsider" campaign, holding a rally Wednesday evening in which Democrats for Carl Paladino announced their support, although the feature of the event was when former Buffalo Bills star running back Thurman Thomas spoke (he's an enrolled Republican). Paladino's also expected to appear at NYU for a College Republican event on October 15.

Meanwhile, Andrew Cuomo picked up the endorsement of the Business Council and Onondaga County Executive Joanie Mahoney, who happens to be a a Republican.

Paladino might try to make hay of the fact that Andrew Cuomo considers Brooklyn Democrat Vito Lopez a friend, when Lopez is the focus of multiple criminal investigations.

The media continues focusing on how Paladino is spending campaign cash on entities he partially controls. They're taking a close look at his financial situation, but they aren't giving Cuomo a free pass either.

At the same time, David Koch, who is a major philanthropist for major New York City institutions, has donated to Andrew Cuomo. Koch, along with his brother, not only fund Tea Party candidates, but groups like the John Birch Society and various libertarian causes. The John Birch Society was founded by Koch's father.

Politics certainly makes for strange bedfellows.

Hevesi Expected To Plead Guilty In Pension Kickback Case

Former State Comptroller Alan Hevesi is in court this morning and is expected to enter a guilty plea on charges stemming from his "oversight" of the state's pension funds, which included kickbacks and favors for access to the state pension funds. This will be the Democrat's second guilty plea stemming from personal misconduct while Comptroller:

Mr. Hevesi has been a subject of a lengthy investigation focusing on allegations that his friends, family and associates sold access to the state’s $125 billion pension fund, one of the world’s largest, to reward allies, pay back political favors and reap millions of dollars for themselves.

Two marshals brought Mr. Hevesi into the courthouse with his hands cuffed in front of him beneath a draped trench coat. Once inside the lobby, he had his hands uncuffed before being taken to the fifth floor for his arraignment. He was to be arraigned at 9:30 a.m. in State Supreme Court in Manhattan, and was expected to enter his plea around 10:45 a.m.

Mr. Hevesi’s plea would make him the highest-ranking state official convicted in the case. In 2006, he pleaded guilty to a separate felony after admitting that he had used state workers to chauffeur his ailing wife, but he avoided jail time in that case after he agreed to resign.

He will plead guilty to a single count of receiving award for official misconduct in the second degree — an E felony — before Justice Lewis Bart Stone, those involved in the case said.

Attorney General Andrew Cuomo's office had been carrying out the long-running investigation.

Hevesi's plea today follows a separate guilty plea on misusing state workers for personal gain (which included caring for his ailing wife).

Gov. Christie Set To Can ARC Tunnel Project? UPDATE: Done Deal

New Jersey Governor Chris Christie is in a major bind. He is apparently on the cusp of killing a major infrastructure improvement that would benefit New Jersey commuters, the ARC Tunnel project, which would construct the first new rail tunnel connections into Manhattan in decades.

His main objection is the cost. The project is running at least $8.7 billion, and the project overruns are likely to be considerable and the state is on the hook for those overruns.

The state can't afford to pay for the overruns in the current budget structure.

Don't expect Christie to sign off on an increase in the gas tax to cover the project either, even though that could be seen as a prudent step. New Jersey hasn't raised the gas tax since the 1980s, and is third lowest in the nation. Of course, that is more than offset by the highest property taxes in the nation and one of the worst overall tax burdens in the nation. Moreover raising the gas tax a penny would raise only $50 million a year - a drop in the bucket compared with the billions needed to cover the construction and infrastructure and would also translate in to higher transportation, shipping, and cost of living for all New Jerseyeans.

New York isn't going to pick up the tab either, even though it would benefit from the additional rail links.

What I see is that Gov. Christie is playing politics to get the feds to pick up a greater share of the costs - particularly on cost overruns when the state is unable to cover the costs. It may come down to who blinks first - and I don't think that Christie will can the project because of the jobs at stake.

That doesn't meant that the project as currently arranged is without objection.

It isn't.

My main objection to the project is that the rail links do not create additional capacity at Penn Station, but instead funnel traffic South to Herald Square. It doesn't provide the kind of redundancy one would expect from doubling the number of tracks into Manhattan because the tracks would lead to a separate train terminus. The separate station at Herald Square was deemed a necessity by NJ Transit because of concern over stability of the two existing rail tunnels during the construction of the new tunnels.

The problem is that Amtrak is contemplating its own additional two tracks into Penn Station, which makes one wonder how exactly Amtrak would manage to get the additional tracks at some point in the future when NJ Transit is unwilling to do so.

The better option would be to build the tracks into Penn Station and make sure that Amtrak and the feds pick up the cost overruns - that would not only allow the project to continue (and several hundred million in contracts have already been let out), but would be a jobs program and serve to improve regional infrastructure where the youngest rail tunnels are 100 years old.

The new tracks and tunnel should lead into the Moniyhan station at the former Farley Post Office Building across from Madison Square Garden. Instead, NJ Transit is hoping to set up its own separate fiefdom that not only doesn't truly add redundancy, but would be subject to many of the same problems with the current setup.

With only two tracks, any delay or disabled train on one track would back up all trains entering the station because there would not be a way to work around the problem. Four tracks would provide the redundancy necessary to route around potential problems like disabled trains (which are an all too common occurrence).

UPDATE:
Christie has indeed pulled the plug on the project, because of projected cost overruns on an already bloated budget that was originally going to cost $5 billion but which was last projected at $8.7 billion. The expectation was that budget overruns would push that figure up to $10 billion, and New Jersey would have to cough up the funds, which the state simply doesn't have and which it cannot afford.

Moreover, the ARC project groundbreaking took place just as Corzine was in the midst of a reelection campaign, so he was hoping to benefit from the project politically, even though the state would have no way to pay for it.

It's good to see a politician trying to exercise fiscal discipline, something that has been sorely lacking in New Jersey and at NJ Transit.

NJ Transit has been a poor steward of limited resources, and has spent hundreds of millions of dollars more on the Secaucus Project than it otherwise should have. I mention the Secaucus Transfer only because one of the goals of the ARC tunnel was to make the Secaucus station obsolete because trains would be able to travel directly into Manhattan, eliminating the need for transfers between trains bound for Hoboken to those heading to NY Penn.

No, what needs to happen now is for the feds, Amtrak, NJ Transit, Port Authority and New Jersey to pool their resources to build the tunnel as originally envisioned to Penn Station and do so under the limited budget constraints. That means eliminating the separate terminal at Herald Square and eliminating the need for Amtrak to build its own multibillion dollar tunnel to Penn Station.

Major Wind Power Projects Move Ahead At Last

The widely touted Cape Wind project has finally been awarded the federal leases that are necessary before construction on the project can begin. The project, located off Cape Cod, was long opposed by none other than former US Senator Ted Kennedy, but with his passing, the project has advanced to the point of construction.

The 28-year lease for 25 square miles in federal waters will cost Cape Wind an annual fee of $88,278 before construction and a 2 to 7 percent operating fee during production based on revenue from selling the energy.

“This is the beginning of a new era for our Nation in offshore energy production,” Salazar said in a speech to the American Wind Energy Association in Atlantic City where he was signing the lease this morning. “Responsibly developing this clean, renewable, domestic resource will stimulate investment in cutting-edge technology, create good, solid jobs for American workers, and promote our nation’s competitiveness, security, and prosperity.”

The expected announcement brings Cape Wind, which has undergone nine years of permitting, that much closer to construction. The state Department of Public Utilities is currently reviewing a deeply controversial contract between the utility and the developer to sell 50 percent of it energy at more than double the cost of current fossil fuel prices. They are expected to make a decision, widely expected to be an approval, by Nov. 15.

It was not immediately clear how the lease payment was arrived at – or how it compares to offshore oil and gas leases.

“We’re ready to roll up our sleeves and get to work building America’s first offshore wind farm that will create hundreds of jobs, increase our energy independence and promote a healthier and more hopeful energy future,” said Cape Wind President Jim Gordon.

Cape Wind, about five miles from the closest Cape Cod shore, is expected to produce the equivalent of up to 75 percent of the electricity demand for the Cape and Islands. Salazar gave the project final federal approval in April.

This may help spur the approval of similar projects off New Jersey's coast.

Meanwhile, major companies are looking to get into the wind power business including
Northrup Grumman. The major aerospace and naval shipbuilder is getting into the wind power game after signing a deal with a Spanish company to build an offshore wind turbine. They have the experience necessary to build major structures offshore that are capable of withstanding the forces of nature typically encountered offshore, so this is a good fit and will help create jobs.

Opponents to land-based wind power facilities have plenty of fodder in thwarting construction of projects. Besides the typical NIMBY mentality, some are pointing to studies claiming that wind power projects can affect local weather patterns. Much more frequently, the opposition is based on the noise made by the blades cutting through the air. Some projects have restrictions on when they can operate, reducing their efficiencies and output.

The net result of land-based opposition will be an increased cost associated with construction offshore, and increased costs for running transmission lines to the offshore projects, but once these sites are built, they will provide a renewable source of electricity.

Embassy Bomber Trial In Jeopardy Over Judge's Ruling on Witness Testimony

The trial of Ahmed Khalfan Ghailani is now in limbo because the judge is refusing to allow a government witness who claims to have sold Ghailani weapons.

"The court has not reached this conclusion lightly," Kaplan wrote. "It is acutely aware of the perilous nature of the world in which we live. But the Constitution is the rock upon which our nation rests. We must follow it not when it is convenient, but when fear and danger beckon in a different direction."The government immediately asked for a delay of the trial, which had been expected to begin with opening statements on Wednesday, so that it has time to appeal the ruling, should it decide to do so.

The judge sent a pool of 66 jurors home until Tuesday, but not before warning them against hearing anything about the case from news reports or discussing it with anyone.

Ghailani is charged with conspiring in the 1998 bombings of two U.S. embassies in Africa. The attacks killed 224 people, including a dozen Americans.

The witness in question is Hussein Abebe, who testified three weeks ago in a hearing before the judge about his dealings with authorities. Judge Kaplan found that the government failed to prove that Abebe's testimony is sufficiently attenuated from Ghailani's coerced statements to permit its receipt in evidence.

Abebe was apparently discovered as a witness after statements Ghailani made while in CIA custody where it is alleged that he was subject to torture/enhanced interrogations.

Ghailani is a Tanzanian who was captured following the embassy bombings in Africa. It would appear that the decision is along the lines of a "fruit of the poisonous tree" doctrine (an offshoot of the exclusionary doctrine in evidence, which prohibits prosecutors from introducing evidence if it was illegally obtained. In this case, the judge is finding that the evidence from Abebe was obtained because of the ties with Ghailani's coerced statements while in CIA custody.

A way that prosecutors could overcome this is if they can somehow show that Abebe's testimony would have eventually been discovered by some independent means. Of course, that too runs into problems that might reveal classified national security secrets.

No Surprise Spitzer's CNN Show Garners Horrible Reviews; Ratings

It should come as no surprise that Eliot Spitzer's attempt at a television show was a failure out of the gate.

The show comes to the screen with a whole host of negatives even before one starts digging into the show. Spitzer, the former New York Governor who resigned over a prostitution scandal, is someone that few people want to hear from - particularly when it comes to issues on ethics and morals.

Yet, that's exactly what he was doing in his first show opposite Kathleen Parker.

The show aims to be something like a toned-down Crossfire, but it simply misfires.

The political discussion program, featuring the hosts Kathleen Parker, the conservative columnist, and Eliot Spitzer, the one-time governor of New York, fizzled badly in its initial outing Monday, attracting only 454,000 total viewers.

That not only left CNN far behind its main rivals — Bill O’Reilly on Fox had 3.1 million on Fox News and Keith Olbermann had 1.1 million on MSNBC – but it also trailed Nancy Grace on the HLN channel, who had 468,000 viewers.

Even worse for the new CNN program, it lost viewers from the show on just ahead of it, “John King USA,” which had 471,000 viewers. Perhaps more troubling for CNN, “Parker Spitzer” was down sharply from the show it replaced, “Rick’s List,” hosted by Rick Sanchez, who was recently ousted from CNN. And it even fell short of the show that had long occupied the 8 p.m. slot on CNN, with Campbell Brown.

CNN doesn't have many alternatives for the time slot, so they'll likely let Spitzer/Parker continue for now. After all, they just canned Rick Sanchez after his anti-Semitic outburst and Brown left the time slot because she wasn't competitive with Bill O'Reilly or MSNBC. Brown had at least been garnering 500,000 viewers. No one since has come close in that time slot for CNN.

Parker/Spitzer can't even hold their lead-in audience, and it isn't likely to get better.

The Rebuilding of Ground Zero, Part 116

Construction is proceeding all around Ground Zero as the Freedom Tower (1WTC) and 4WTC both rise gradually above the site. The museum and memorial spaces continue to be built out.

At the same time, the Winter Garden, which is located in the World Financial Center across West Street and was wrecked by falling debris on 9/11 is in for a makeover. The Winter Garden had connected to the World Trade Center with a pedestrian bridge before the 9/11 attacks, but the new WTC complex will connect with the World Financial Center via an underground passage that will link up with the Santiago Calatrava-designed transit hub and the upgraded Fulton Street station.

The Winter Garden is one of the grand public spaces in the City and the staircase is one of the reasons.

However, the underground connector means that the current grand staircase may disappear so that the frontage with West Street can be opened up. Brookfield Properties, which operates the Winter Garden, has proposed a new design for the building.

Brookfield also plans to create a two-level market and 714-seat food court in the retail space just south of the Winter Garden, with cafes and test kitchens by the city’s top restaurateurs.

David Cheikin, vice president of leasing for Brookfield, said he hopes to revive the Financial Center’s sleepy, underutilized retail by serving local residents in addition to office workers.

"We believe we can take [the WFC] from a five-day-a-week retail corridor to a seven-day [corridor]," Cheikin said Monday night.

Many Battery Park City residents strongly object to demolishing the Grand Staircase, which was rebuilt after 9/11 and has since become a place of community gathering. City Planning Commissioner Amanda Burden also wants to preserve the stairs.

However, Brookfield executives said that if the stairs stay in place, they would create a choke point by blocking the exit of the new pedestrian tunnel beneath West Street, scheduled to open by the end of 2012.

"We like those stairs, too," Lawrence Graham, a Brookfield vice president, told CB1 Monday. "We wish we could have found something different. Obviously, it would have been cheaper for us [to keep the stairs in place]."

Meanwhile, Fiterman Hall is rising adjacent to 7WTC between West Broadway and Greenwich Streets. Steel has reached 6 stories above street level.

It will start receiving the brick cladding on its exterior in coming weeks and the exterior work should be complete within a year.

At the same time, the Port Authority is looking to restart talks over the fate of the St. Nicholas Greek Orthodox Church, which was destroyed by the collapsing towers. The site is adjacent to the former Deutsche Bank building, which is thankfully in the final stages of demolition more than nine years after the attacks.

UPDATE:
A LMDC Committee is proposing a reallocation of funds to cover construction of a performing arts center, which may end up being built on the site of the former Deutsche Bank building. The Joyce Theater is the primary tenant for the performing arts center, but it is quite likely to be joined by at least one other group so as to make the most of the space.

A committee of the Lower Manhattan Development Corporation on Wednesday recommended that the corporation allocate up to $100 million for the performing arts center planned for ground zero. The money would come from a pool of some $200 million formerly designated for utility companies. At the corporation’s Wednesday board meeting, Kate D. Levin, the New York City cultural affairs commissioner, said the money was important “to fulfill this critical part of the master plan.”

The financing, which requires approval by the full board, would add to $50 million in federal money set aside for the project, which is controlled by the development corporation. Still unresolved is whether to build the performing arts center on the World Trade Center site, as called for in the master plan, or at 130 Liberty Street, site of the former Deutsche Bank building. The center’s primary tenant is to be the Joyce Theater, which presents dance.

Paladino Pops Silver Again; Yet Another Round of Lies and Smears

We get it. GOP/Tea Party candidate for governor Carl Paladino doesn't like Assembly Speaker Sheldon Silver. Silver, a Democrat who has outlasted all of his contemporaries in the dysfunctional Albany political environment, has been a frequent target on this blog for his actions, but he is not a criminal.

He hasn't done anything criminal, so when Paladino routinely smears him time and time again it further indicates that Paladino is removed from reality. This time, he called Silver a criminal. The last time, it was calling Silver Hitler (Silver is an Orthodox Jew).

The latest smear drew rebukes from Ed Koch, Silver, and Cuomo.

Moreover, let's say that Paladino actually wins the election in November over the Democrat Andrew Cuomo.

That means that Paladino has to work with Silver and the Senate Majority Leader. A budget deal would have to be worked out, and that means working with and through Silver.

If you've established a poisonous relationship with Silver, how do you expect that a sane and fiscally responsible budget will be enacted. You can't. It would be wishful thinking to suggest otherwise.

Meanwhile, Paladino's advisers are trying to spin Paladino's lack of a filter (he speaks whatever he thinks without regard to facts or logic), that this is exactly what Albany needs.

At the same time, some of Paladino's claims have come under fire for being outright lies or misrepresentations. That includes one where Paladino claims to have interceded on behalf of the chancellor of Syracuse University during a student takeover in 1970 to secure the chancellor's release. Paladino was a law student at the university at the time, but surviving participants say that Paladino had nothing to do with the incident. One of the student demonstrators (and now a law professor at my alma mater but who began teaching there after I left) disputes Paladino's account:

Paul Finkelman is contradicting published reports on the incident.

The reports say Paladino claims to have helped negotiate the exchange of the Syracuse Police chief for the university's chancellor.

“If it were 1970, I would want to know what Carl Paladino was smoking because this simply did not happen,” said Finkelman. “There was no known negotiation. There was no hostage-taking. The chancellor was not locked in his building. This is other nonsense.”

DC Bag Tax Falls Short On Revenues; Proponents Remain Optimistic

Washington DC had enacted a tax on plastic bags with the intent of curbing their use.

The tax has worked but the anticipated revenues never materialized.

Since January, District residents have been charged 5 cents for each disposable bag they pick up at the grocery store or local market. Four cents of the tax goes to the city, while the retailer is allowed to keep the rest to cover costs.

The latest data from the D.C. Office of Tax and Revenue reveals the city collected just over $1.3 million in revenue from the tax through September. A number that falls far short of the official $3.6 million estimate, made by the District's chief financial officer in 2009.

That's because the number of bags being used by consumers has fallen off the chart.

The use of bags by shoppers at grocery stores is down by 50%, according to an informal survey conducted by the office of Councilman Tommy Wells. He was one of the original bill's sponsors, and the driving force behind the tax. Some big name grocers like Giant, Safeway and Harris Teeter have reported that bag use by their customers has fallen by 60%.

Reducing pollution is a worthy goal. The problem is that the revenues were allocated toward clean-up efforts along the Anacostia River. If the District allocated $3 million for cleanup, but took in less than half that amount, the program wouldn't be able to do its job. While some cleanup is better than none, allocating tax revenues from taxes that are designed to eliminate certain behaviors are more likely result in shortfalls. It also means that revenues will need to come from elsewhere to fully fund the cleanup activities, raising taxes and fees elsewhere to cover the differences.

French Police Arrest 12 In Terror Sweep

At least 12 al Qaeda suspects arrested around Europe in a plot to attack targets in France.

Three of the men allegedly linked to man caught with bomb-making kit in Naples; arrests come as US, France, other European nations have stepped up terrorism alert vigilance.

French authorities arrested twelve men on Tuesday morning on suspicion of involvement with al-Qaida and terror plots, news agencies reported.AFP reported a police source as saying the men were detained in the southern French cities of Marseille and Bordeaux. According to an official, police seized "some weapons, including a Kalashnikov and a pump-action shotgun, as well as ammunition."

Also on Tuesday, French police arrested three men said to be linked to a man of Algerian origin taken into custody by Italian police in Naples on Saturday, who is due to be extradited to France. Police reportedly found the phone numbers for the three men in the mobile phone of the Algerian man.

The man, 28, had been under a European arrest warrant when he was caught, allegedly with a bomb-making kit.

Depending on how you read the numbers, we're looking at least at 13 (9 arrested in one sweep in France, 1 arrested in Italy, 3 arrested in France in connection with the Italy arrest).

Intel was gathered from another captured terrorist in Afghanistan, which led law enforcement and intel services to disrupt and arrest this group. CNN provides more information on the source of the intel:

Western intelligence officials say they learned about the potential attacks after Ahmed Sidiqi, a German citizen of Afghan descent, was arrested in Afghanistan in July and taken to the U.S. air base at Bagram for questioning. He has not been charged, and intelligence sources in Germany said he was cooperating with the investigation. According to German intelligence officials, Sidiqi and 10 others left Hamburg in 2009 for the tribal areas of Pakistan -- where most of the group joined a jihadist group fighting U.S. and coalition forces across the border in Afghanistan.

Sidiqi told American interrogators that at least one member of his travel group was to be a "foot soldier" in the plot, with other members of the group helping to plan the attacks, a European counterterrorism official told CNN.

Sidiqi's sister says that he had attended the Hamburg Germany mosque where 9/11 collaborators attended. Other relatives are in denial, claiming that Sidiqi would not get himself involved in terror ops, but his actions apparently betray that notion.

Times Square Bomber To Be Sentenced Today; UPDATE: Life In Prison

Faisal Shahzad will learn his punishment today when the court announces his sentence. Shahzad had already entered a guilty plea on 10 counts relating to his attempted bombing in Times Square. The bomb failed to detonate properly, which meant that New Yorkers and visitors to the area were spared a gruesome fate:

A dramatic videotape of the FBI-staged test blast in June has become a key piece of evidence against Shahzad, who faces a mandatory life prison term at his sentencing Tuesday in Manhattan federal court.

Technicians studied Shahzad's design before using it to build a working model they say demonstrated his deadly intent.

"Had the bombing played out as Shahzad had so carefully planned, the lives of numerous residents and visitors of the city would have been lost and countless others would have been forever traumatized," prosecutors wrote in court papers.

Shahzad's bomb fizzled before it could do any harm, doomed by faulty wiring and ingredients such as a low-grade fertilizer that couldn't explode.

The Pakistan-born Shahzad hasn't disputed the allegations while under interrogation and taking a guilty plea.

In fact, "he spoke with pride" about the scheme, in which he bragged that he wanted to kill at least 40 people, the government said in a sentencing memo. If he escaped arrest, he added, he hoped to set off another bomb two weeks later in a second, undisclosed location.

"While it is impossible to calculate precisely the impact of Shahzad's bomb had it detonated, the controlled detonation ... demonstrated that those effects would have been devastating to the surrounding area," prosecutors wrote.

Calling himself a Muslim solider, a defiant Shahzad pleaded guilty in June to 10 terrorism and weapons counts, some of which carry mandatory life sentences.

Shahzad had received terror training and financial assistance overseas. He claims that the Pakistan Taliban provided him with more than $15,000 and five days of explosives training late last year and early this year, months after he became a U.S. citizen. He had planned the attack using widely available web feeds and had planned the attack to coincide with when the area would be heavily trafficked with tourists.

The sentencing comes just a day after a UAV airstrike apparently killed a German terror cell that was in the Pakistani frontier province of Waziristan in the town of Mir Ali. Pakistan continues to be a hub of terrorism, and the latest European travel warnings are related as well. Al Qaeda has mutated its efforts to strike at targets around the world to try and carry out attacks. No high level al Qaeda or Taliban were killed in the latest strike, but the elimination of the German cell could have thwarted a major attack down the road. Western intel agencies are concerned that al Qaeda will attempt to carry out Mumbai-style attacks (using a cadre of terrorists to attack hotels and other soft targets to inflict maximum casualties).

UPDATE:
Shahzad has gotten life in prison. He was unrepentant to the last - he said: "Brace yourselves, the war with Muslims has just begun," just before the judge handed down the six life sentences.

Shahzad, like many other Islamic terrorists, ignores that the bulk of victims of their terror campaigns are fellow Muslims, but they chalk it up to acceptable losses in a larger campaign of jihad against the West as they promote their version of fundamentalist Islam.

After Delaying Inevitable Budget Woes, Municipality Woes Come Crashing Down

Cities and states around the country are again facing massive budget deficits. Cities are looking to cash-strapped states for bailouts. It's a recipe for fiscal disaster but it isn't one that couldn't have been predicted.

The stimulus package of 2009 - the ARRA of 2009 - including hundreds of billions of dollars in transfer payments to prop up cities and states. It was meant to keep them afloat, but instead of using the money to close budget deficits and curb spending to rectify awful fiscal positions, some cities and states increased spending precipitously.

That includes New York State, where the budget continued to bloat by billions that the state simply didn't have.

Now, many of the same cities and states are begging for a bailout because they can't close their budget deficits.

The increasingly common pleas for state assistance — after two relatively quiet decades — reflect the yawning local budget deficits that have appeared in the last two years.

As tax revenue has fallen, the cost of providing labor-intensive government services, like teaching and policing, has proved hard to reduce.

The programs, which vary by state, generally allow troubled communities to tap emergency credit lines while restructuring their finances with some form of state oversight.

Many places may indeed bridge shortfalls and make necessary changes in services.

But some public finance experts worry that the states, mired in their own financial problems, will not force communities to attack their problems head-on and solve them. If states let towns keep borrowing, without acknowledging the magnitude of the towns’ existing debts — like the pensions they owe retired public workers — they might never solve their problems and just keep drawing on the states. They could end up like miniature versions of Fannie Mae and Freddie Mac, stuck in conservatorships under government oversight with no clear way out.

Better off in bankruptcy court?
“It’s like throwing you a life preserver but never pulling you into the boat,” said Daniel Miller, a certified public accountant and the city controller in Harrisburg. He says he believes that the city might be better off in federal bankruptcy court.

Worse yet, the municipal requests for state assistance could spell problems for already beleaguered state finances. One head of a municipal bond trading desk at a major Wall Street firm said he worried more about problems bubbling up from the local level than he did about the possibility of a sudden state collapse.

If the downturn is prolonged and deep, and local governments fail to act aggressively, he said, dozens of small communities could be pushed into the arms of a state, weighing it down so much that it, too, would need a bailout. Something like that happened in Arkansas during the Great Depression, causing the only default by a state on general-obligation bonds in United States history.

Restructuring only works when the cities and states can make major changes to contractual relationships with various unions that represent teachers, law enforcement, fire and other municipal workers. The benefits bubble that has led to driving up pension obligations is untenable and something has to give.

Allowing municipalities to restructure by taking on still more debt isn't a workable solution either. Many cities are simply incapable of taking the steps necessary to cut the structural deficits and attacking the problems that cause out-of-control spending.

UAV Airstrike Kills German Militants In Pakistan As Unrest Continues

A United States UAV airstrike in the Waziristan town of Mir Ali appears to have taken out a bunch of German militants. The exact number of casualties is not yet known, but it is highly unusual for such a large concentration of foreign terrorists to congregate in the area.

Pakistani intelligence officials say five German militants are believed to have been killed in an American missile strike close to the Afghan border.

The officials say the missiles hit a house in the town of Mir Ali in North Waziristan region late Monday.

Two say the victims were believed to be German citizens in the region for terrorist training.

A third says they were believed to be foreigners, but gave no details.

A Reuters report said eight militants of German nationality were killed by missiles from a pilotless aircraft.

The officials spoke anonymously because their agency does not permit operatives to be named in the media.

This comes on the heels of NATO convoys to Afghanistan being repeatedly attacked in Pakistan, which has put the NATO efforts under considerable strain.

It's also on the heels of alerts in Europe over potential terror attacks. The US State Department issued warnings to those Americans visiting Europe to be vigilant (as if that isn't what people should be doing generally).

There were 21 UAV airstrikes this past September - the most for any month.

The CIA has been trying to eliminate leaders of the Haqqani network, an Afghan Taliban faction operating out of North Waziristan which is seen as one of the most effective forces fighting U.S. troops in Afghanistan.

North Waziristan is home to a variety of militant groups, some fighting the Pakistani government, others battling U.S.-led NATO troops in Afghanistan.

Some militants are foreigners who have taken up the cause of holy war against the West and see North Waziristan as a safe haven or training ground.

U.S. and British alerts about possible attacks in Europe highlight concern that growing numbers of militants are going from the West to remote war zones for training in answer to al Qaeda's online call for violence.

The immediate trigger for Sunday's travel alerts was intelligence about a plot against European targets reportedly originating with a group of individuals in mountainous northern Pakistan, some of them believed to be European citizens.

Few details of the conspiracy are known. But the plot appears to be of the kind that Western officials believe poses the most significant danger today -- the use of so-called self-radicalized militants with no previous record of extremism.

This area has been the focus of military action for quite some time. Mir Ali was the scene of a major Pakistani military action in 2007, where Pakistani troops killed nearly 200 people, most of whom were terrorists, though the Pakistani forces got bloodied in the process. Quite a few of the UAV airstrikes have been directed in the vicinity of Mir Ali.

US Supreme Court Denies Cert On 9/11 Victims' Burial Case

The US Supreme Court denied certiorari in refusing to hear an appeal from the a group of families of 9/11 victims who have sought to have the City of New York remove 1.6 million tons of debris that was carted to Fresh Kills landfill following the attacks in the course of clearing Ground Zero of the debris. This shouldn't come as much of a surprise.

Lower federal courts had dismissed the families' lawsuit against the city, saying it acted responsibly in moving 1.6 million tons of materials from the site in Lower Manhattan to a landfill on Staten Island and then sifting through the material for human remains.

No remains have been found for roughly 1,100 of the 2,752 people killed on Sept. 11, 2001 at the World Trade Center. The families have said the landfill is not a proper burial site for their loved ones. They also argue that 223,000 tons of the material was never sifted for remains.

Officials say the material that is the subject of the litigation resulted from a 10-month search in which law enforcement authorities and others manually and mechanically searched World Trade Center material for evidence, personal belongings and human remains.

The case is World Trade Center Families for Proper Burial, Inc. v. City of New York, New York, Dkt. No. 09-1467.

The families simply could not overcome the sheer size of the logistical endeavor that they claimed was necessary for relief. They wanted to remove 1.6 million tons of WTC debris from Fresh Kills and relocate it to another location. That would not have brought back the victims, nor would it have addressed the fact that the City was more than reasonable in picking Fresh Kills as a destination for the debris - and the City took reasonable precautions in searching materials delivered to Fresh Kills for remains.

Moreover, the City will be turning the area of Fresh Kills into a memorial/park for remembrances of what happened on 9/11 and to the victims of the attacks.

Mets Finally Dismiss Manager and GM After Season of Woe

The New York Mets finally have made it official. Manager Jerry Manuel was dismissed and General Manager Omar Minaya has been reassigned within the organization.

Apparently the Mets didn't feel that several sub-par seasons and questionable personnel choices were sufficient to give Minaya the boot.

Manuel got a well-deserved firing, but it came several months too late.

Minaya should have fired Manuel a week into the season when Manuel admitted that the Mets were unprepared to play the Washington Nationals and a former Met pitcher Livan Hernandez.

There was absolutely no excuse for being unprepared to play a week into the season. Minaya should take the blame for not firing Manuel, just as surely as he should be blamed for the string of personnel decisions that will continue to haunt the team for some time to come.

That includes a decision to give Johan Santana an extended contract. Santana has yet to play a complete season with the Mets - each of the past three years has ended with Santana on the disabled list for a long stretch of time.

Carlos Beltran is a shell of his former self and it is unlikely that he will ever regain his former glory in center field.


Jason Bay was a disaster, and it suggests that the Red Sox knew more than the Mets when it came to signing him.

The pitching staff has been a mess, but there are a few glimmers of hope. RA Dickey was a positive this year, but he's 35 years old and the chances that he can repeat his 2010 success is limited at best. John Maine and Ollie Perez were a mess.

Then, there was the implosion and criminal charges surrounding closer Francisco Rodriguez
.

About the only positive decision that can be attributed to Minaya was to give Jose Reyes a shorter contract than David Wright. Reyes has also been plagued by injuries and doesn't seem to show much in the way of maturity. There may be a few bright spots in the future for the likes of Ike Davis and Angel Pagan and the resurgence of David Wright who came off a bad year to post good numbers, but the pitching staff is abysmal.

The new managerial staff will have to cope with the mess left behind. Good luck to who ever it may be.

They're going to need it.

New Yorkers Awaken To Higher Clothing Taxes

This is the first weekend since the New York legislature eliminated the sales tax exemption on clothing sales of $110 or less. That means that if you buy clothing, you'll be hit with a 4.375% sales tax on those sales.

Counties impose their own sales tax, and they have generally not imposed the sales tax on clothing.

Why did the legislature raise the tax on clothing?

They had to close the budget gap, and figured that the temporary sales tax would raise sufficient revenues. The exemption will be reimposed next April, with clothing sales of up to $55.

The problem with all of this is that the sales tax on clothing was completely unnecessary. The state needed to raise the income because they increased spending even though the state can't afford the higher state budget. Had the state merely held the line on spending, the sales tax was completely unnecessary.

Moreover, you have some proponents of big government (including NYC Mayor Mike Bloomberg) claiming that the sales tax on clothes would have been unnecessary had the state instead imposed tax on carbonated beverages (the soda tax). Again, this argument falls flat because the tax would have been unnecessary had the state contained costs and kept spending in line with last year.

Unintended Consequences Strikes Again

This is just rich. A mortgage provider, ING Direct, gets into trouble for promoting ridiculously low adjustable rate mortgage, but the rates quoted were the result of federal rules.

The ING Direct loan is called a 5/1 Orange Mortgage, and as of early September, it came with a 3.25 percent interest rate for the first five years and a projected interest rate of 3.375 percent for the 25 years after that.

Yes, you read that right, under 3.5 percent for the next 30 years.

But that is not right, in any number of ways. First of all, by not using the words “adjustable rate mortgage” or similar terms to describe the loan, ING Direct violated a simple Federal Reserve disclosure rule that was revised in 2008.

And that “projected” interest rate suggesting that today’s record low rates will continue for a generation? It is utter nonsense. But ING Direct seems to have had no choice but to use the numbers that it did, because of another relatively new Federal Reserve rule.
b
It all sort of makes you wonder: have we accomplished anything over the last several years?

No. We haven't learned anything because the politicians who demand these changes don't understand the markets involved or how one change can have unpredictable and unintended consequences.

No one knows what the rates will be in a five years - when the initial teaser rate ends. Yet, the ads make it seem like a no-brainer to obtain a mortgage that has tremendous risk - affordable introductory loan rates, but which can increase tremendously at the end of the period.

It's a problem that contributed to the real estate market crash when subprime mortgages - many of which were adjustable rate mortgages - defaulted.

So how does the new regulation create problems?:

Regulation Z requires companies to make a projection and insists that they use current figures to do so. Why use today’s numbers? Well, nobody knows what the rates will be in five or seven years when the interest rate resets on loans like those offered by ING Direct. This rule was changed after some lenders offered teaser rates — say, 1 percent for only a month or so. The Fed’s idea was to give borrowers a sense of the rate they might face.

No one knows what the rate will be, but it isn't likely going to be as low as they are now. A far more accurate ad would be a statement to the effect that the rate is variable and could potentially be far higher than today's current rate for the introductory period.

Instead, we get a lender complying with the regulation peddling a rate that will be quite a bit different - and potentially quite a bit higher.

Ecuador In Chaos: Possible Coup Following Controversial Police Benefits Changes

Ecuador is in chaos after the Ecuadorian President and Congress adopted new benefits rules for police officers. Funky stuff going down in Ecuador. Ecuadorian President Correa issued a state of emergency and claimed that there was a coup attempt. This all started because police are pissed that the President tried to reduce their benefits and rioted. Some threw tear gas, and the President was overcome by the fumes and taken to a hospital. The country was then thrown in to chaos as the police demonstrated:

President Rafael Correa was taken to a hospital after being overcome by tear gas thrown by rebellious officers, local media reported. 

Correa later declared a state of emergency and said he was considering dissolving a deadlocked Congress. “It’s a coup attempt," he said in an interview with Radio Publica de Ecuador.

The rebellious officers fired tear gas and burned tires after taking over barracks in the capital Quito, Guayaquil and other cities. They also set up roadblocks that cut off highway access to the capital.

Schools shut down in Quito and many businesses closed due to the absence of police protection.
...
The striking police were angered by a law passed by Congress on Wednesday that would end the practice of giving members of Ecuador's military and police medals and bonuses with each promotion. It would also extend from five to seven years the usual period required for before a subsequent promotion.

Police barricaded the airport and roads and chaos has ensued throughout the country. Soldiers had to storm the hospital where President Correa was being treated for exposure to tear gas following yesterday's police riots. Two police officers were killed in the fighting.

Ecuador was under a state of siege Friday, with the military in charge of public order, after soldiers rescued President Rafael Correa from a hospital where he'd been surrounded by police who also roughed him up and tear-gassed him.

Correa and his ministers called Thursday's revolt — in which insurgents also paralyzed the nation with airport shutdowns and highway blockades — an attempt to overthrow him and not just a simple insurrection over a new law that would cut benefits for public servants.

Two policemen were killed when Ecuador's army stormed the hospital, the Red Cross said.

The President has addressed the Ecuadorian people by excoriating the actions of the police:



He's vowing to go after those responsible for the rioting. The Guardian details the circumstances of Correa's hospitalization and rescue:

The rescue was the climax to a dramatic day in which a police revolt over austerity measures spiralled out of control, leaving airports and motorways blocked, borders sealed, the president assaulted and businesses looted.

The Ecuadorean police chief, Freddy Martinez, resigned this afternoon after failing to stop the rebellion, a spokesman for the force told Reuters.

The protests were triggered by a law passed by Congress on Wednesday that would end the practice of giving medals and bonuses with each promotion, part of Correa's effort to save costs and slim bureaucracy.

Ecuador is one of South America's most volatile countries, with a tradition of protests, but nobody expected to see scores of uniformed men overrunning the main airport of the capital, Quito, forcing its closure and the declaration of a state of emergency.

It was just the beginning. Hundreds of rank and file soldiers and police took over barracks in Quito, Guayaquil and other cities. They also set up roadblocks of burning tyres and occupied Congress, shouting "respect our rights!" and "long civil war!".

Smoke wafted over Quito and sporadic looting left several banks and supermarkets ransacked. A state TV channel showed police trying to enter its studio. The channel said the police shattered windows and tried to cut the power supply.

Correa, a 47-year-old economist with a firebrand style, went to a regimental barracks to try to negotiate with protesters but was surrounded, punched, doused with hot water and almost blinded with teargas.

Paladino's Driver/Adviser Has Open Criminal Warrant Pending?

Nice company that Carl Paladino keeps. He wants to be governor of New York and complains bitterly that the Albany political environment is toxic and needs to be cleaned up. He says he's the guy to do it and has the backing of the GOP and Tea Party.

He better start by cleaning up his own political advisory committee, because he didn't exactly do a good job of vetting his advisers.

In fact, it now turns out that Rus Thompson is on the lamb and has an open arrest warrant pending in Arizona under a different pseudonym. Thompson for his part claims that he has done nothing wrong and that it's probably a paperwork error:

He resolved the DUI charge by pleading guilty in September 1990, serving jail time and paying a fine, but the suspended license charge somehow remained on the books.

Nearly nine years later in October 1998, an arrest warrant was issued for Thompson under yet another name - John Lloyd Thompson-Alden.

The warrant said Thompson-Alden had failed to appear in court on the misdemeanor charge of driving with a suspended license.

In the meantime, he'd moved to Buffalo and obtained a New York license under yet another name - John R. Thompson, records show.

Running for state controller on the Tea Party line, he uses Rus Thompson, a name he claims to have had since he was a child. He is registered to vote in Erie County under that name.

Thompson said yesterday he has no idea why there's a warrant out for him.

"This is nuts," he said. "Everything was resolved. My probation officer advised me to leave Arizona."

He said he couldn't remember why he switched from John L. Thompson and John Lloyd Thompson-Alden to John R. Thompson when he got his New York license.

He also vowed to get to the bottom of the outstanding arrest warrant.

Of course, it doesn't quite explain why he kept changing names.

Meanwhile, candidate Paladino now says that he didn't intend to smear Andrew Cuomo when he made unsubstantiated allegations that Cuomo had an extramarital affair.

The Tea Party-backed Republican told his hometown paper that his remarks had been misunderstood.

He said he meant only to question coverage of his own extramarital escapade when he urged a reporter for Politico.com to ask Cuomo "about his paramours."

"I'm sick and tired of people asking me about if I've had affairs," Paladino told The Buffalo News last night.

"I was talking to [Politico] and said, 'Why don't you ask Andrew Cuomo if he has had extramarital affairs?' It's not that I was accusing him."

Right.

He was busy trying to go after the New York Post and Fred Dicker after the Post tried to get photos of Paladino's love-child and threatened Dicker Wednesday night after a business event when he made those comments.

Paladino's trying to divert attention from his own philandering ways and lack of family values by casting aspersions on Cuomo, who divorced from Kerry Kennedy after Kennedy admitted to having an affair with Bruce Colley. Kennedy also now supports Cuomo's run for governor.

UPDATE:
The Village Voice goes through Paladino's political filings and finds quite a bit of interesting information - both in what was revealed, and what it was meant to hide, and who is responsible for backing Paladino: Roger Stone.

The $53,000 tax lien against campaign spokesman Michael Caputo unearthed by the Times got a taunting "so what" from Caputo himself. Stiffing the IRS just proved again, as Caputo put it, that this is "a campaign of junkyard dogs."

No wonder Caputo, Carl, and the rest chat so comfortably with Duke, the untethered pit bull that accompanies Paladino on baby-kiss-free campaign swings. "Carl knows each of us comes to the campaign with warts," Caputo continued, acknowledging even that the candidate "has his own" warts. "We don't hide anything."

Actually, the so-called disclosure forms that People for Paladino filed with the State Board of Elections were designed to hide a lot, in apparent violation of state law.

Most hidden was the viral hand of the man who manufactured Paladino but never directly appears on his campaign filings, Roger Stone, the infamous Republican dirty trickster who suggested to the Times in August that he was advising Paladino pro-bono, which literally means "for the public good."

With a tattoo of Richard Nixon's head on his back, Stone's scandals started with Watergate, when he was 19, and peaked in 1996 when ads he placed in Local Swing Fever picturing himself and his wife seeking "athletes and military men" cost him a key role in Bob Dole's presidential campaign. He reached legendary proportions in a New Yorker profile in 2008 subtitled "Campaign tips from the man who's done it all," lodged over a bare-chested photo of a smug Stone, who'd described himself as "handsome body builder husband" in that long-ago ad.