Pentagon to Detail Troops to Bolster Domestic Security

By Spencer S. Hsu and Ann Scott Tyson
Washington Post Staff Writers
Monday, December 1, 2008



The U.S. military expects to have 20,000 uniformed troops inside the United States by 2011 trained to help state and local officials respond to a nuclear terrorist attack or other domestic catastrophe, according to Pentagon officials.

The long-planned shift in the Defense Department's role in homeland security was recently backed with funding and troop commitments after years of prodding by Congress and outside experts, defense analysts said.

There are critics of the change, in the military and among civil liberties groups and libertarians who express concern that the new homeland emphasis threatens to strain the military and possibly undermine the Posse Comitatus Act, a 130-year-old federal law restricting the military's role in domestic law enforcement.

But the Bush administration and some in Congress have pushed for a heightened homeland military role since the middle of this decade, saying the greatest domestic threat is terrorists exploiting the proliferation of weapons of mass destruction.

Before the terrorist attacks of Sept. 11, 2001, dedicating 20,000 troops to domestic response -- a nearly sevenfold increase in five years -- "would have been extraordinary to the point of unbelievable," Paul McHale, assistant defense secretary for homeland defense, said in remarks last month at the Center for Strategic and International Studies. But the realization that civilian authorities may be overwhelmed in a catastrophe prompted "a fundamental change in military culture," he said.

The Pentagon's plan calls for three rapid-reaction forces to be ready for emergency response by September 2011. The first 4,700-person unit, built around an active-duty combat brigade based at Fort Stewart, Ga., was available as of Oct. 1, said Gen. Victor E. Renuart Jr., commander of the U.S. Northern Command.

If funding continues, two additional teams will join nearly 80 smaller National Guard and reserve units made up of about 6,000 troops in supporting local and state officials nationwide. All would be trained to respond to a domestic chemical, biological, radiological, nuclear, or high-yield explosive attack, or CBRNE event, as the military calls it.

Military preparations for a domestic weapon-of-mass-destruction attack have been underway since at least 1996, when the Marine Corps activated a 350-member chemical and biological incident response force and later based it in Indian Head, Md., a Washington suburb. Such efforts accelerated after the Sept. 11 attacks, and at the time Iraq was invaded in 2003, a Pentagon joint task force drew on 3,000 civil support personnel across the United States.

In 2005, a new Pentagon homeland defense strategy emphasized "preparing for multiple, simultaneous mass casualty incidents." National security threats were not limited to adversaries who seek to grind down U.S. combat forces abroad, McHale said, but also include those who "want to inflict such brutality on our society that we give up the fight," such as by detonating a nuclear bomb in a U.S. city.

In late 2007, Deputy Defense Secretary Gordon England signed a directive approving more than $556 million over five years to set up the three response teams, known as CBRNE Consequence Management Response Forces. Planners assume an incident could lead to thousands of casualties, more than 1 million evacuees and contamination of as many as 3,000 square miles, about the scope of damage Hurricane Katrina caused in 2005.

Last month, McHale said, authorities agreed to begin a $1.8 million pilot project funded by the Federal Emergency Management Agency through which civilian authorities in five states could tap military planners to develop disaster response plans. Hawaii, Massachusetts, South Carolina, Washington and West Virginia will each focus on a particular threat -- pandemic flu, a terrorist attack, hurricane, earthquake and catastrophic chemical release, respectively -- speeding up federal and state emergency planning begun in 2003.

Last Monday, Defense Secretary Robert M. Gates ordered defense officials to review whether the military, Guard and reserves can respond adequately to domestic disasters.

Gates gave commanders 25 days to propose changes and cost estimates. He cited the work of a congressionally chartered commission, which concluded in January that the Guard and reserve forces are not ready and that they lack equipment and training.

Bert B. Tussing, director of homeland defense and security issues at the U.S. Army War College's Center for Strategic Leadership, said the new Pentagon approach "breaks the mold" by assigning an active-duty combat brigade to the Northern Command for the first time. Until now, the military required the command to rely on troops requested from other sources.

"This is a genuine recognition that this [job] isn't something that you want to have a pickup team responsible for," said Tussing, who has assessed the military's homeland security strategies.

The American Civil Liberties Union and the libertarian Cato Institute are troubled by what they consider an expansion of executive authority.

Domestic emergency deployment may be "just the first example of a series of expansions in presidential and military authority," or even an increase in domestic surveillance, said Anna Christensen of the ACLU's National Security Project. And Cato Vice President Gene Healy warned of "a creeping militarization" of homeland security.

"There's a notion that whenever there's an important problem, that the thing to do is to call in the boys in green," Healy said, "and that's at odds with our long-standing tradition of being wary of the use of standing armies to keep the peace."

McHale stressed that the response units will be subject to the act, that only 8 percent of their personnel will be responsible for security and that their duties will be to protect the force, not other law enforcement. For decades, the military has assigned larger units to respond to civil disturbances, such as during the Los Angeles riot in 1992.

U.S. forces are already under heavy strain, however. The first reaction force is built around the Army's 3rd Infantry Division's 1st Brigade Combat Team, which returned in April after 15 months in Iraq. The team includes operations, aviation and medical task forces that are to be ready to deploy at home or overseas within 48 hours, with units specializing in chemical decontamination, bomb disposal, emergency care and logistics.

The one-year domestic mission, however, does not replace the brigade's next scheduled combat deployment in 2010. The brigade may get additional time in the United States to rest and regroup, compared with other combat units, but it may also face more training and operational requirements depending on its homeland security assignments.

Renuart said the Pentagon is accounting for the strain of fighting two wars, and the need for troops to spend time with their families. "We want to make sure the parameters are right for Iraq and Afghanistan," he said. The 1st Brigade's soldiers "will have some very aggressive training, but will also be home for much of that."

Although some Pentagon leaders initially expected to build the next two response units around combat teams, they are likely to be drawn mainly from reserves and the National Guard, such as the 218th Maneuver Enhancement Brigade from South Carolina, which returned in May after more than a year in Afghanistan.

Now that Pentagon strategy gives new priority to homeland security and calls for heavier reliance on the Guard and reserves, McHale said, Washington has to figure out how to pay for it.

"It's one thing to decide upon a course of action, and it's something else to make it happen," he said. "It's time to put our money where our mouth is."

Quote of the Day

"The will of the people is the only legitimate foundation of any government, and to protect its free expression should be our first object."

- Thomas Jefferson

Gay Marriage and the California Courts

Democracy loses if Prop. 8 is overruled.
By WILLIAM MCGURN

If it walks like a culture war, squawks like a culture war, and has all the ugliness of a culture war, surely it is a culture war -- right?

APMaybe not. It's true that we've seen some wild things in the days since California voters approved Proposition 8 -- a measure on the state ballot prohibiting same-sex marriage. We've had the burning of the Book of Mormon. The mailing of envelopes filled with white powder to Mormon temples. And activists marching on Mormon churches with signs and shouts of "hate" and "bigot" directed at anyone who might have a difference of opinion.

In modern America, of course, these acts all come under the banner of "tolerance." And it's interesting that all those so outraged by the alleged disrespect toward the Quran shown by Guantanamo prison guards (the most sensational report was later retracted by Newsweek) appear unperturbed by the ugliness directed against our Mormon brothers and sisters. The temptation can be to saddle up the horse and ride out to take one's assigned place in the Great American Culture War.
Except for one little thing. What we have in America is less a culture war than a constitutional war. And if we could just straighten out the latter, we'd go a long way toward diffusing the former.

That much has become clearer in the wake of last week's decision by the California Supreme Court to review the legality of Proposition 8. In California, gay Americans have marriage in all but name -- which many Americans might think a pretty reasonable compromise. But courts tend to think in absolutes -- and when they intervene, woe unto the losing side.

The great achievement of our system was to create a political order where these great moral disputes, as a matter of policy, are left to the people -- with allowance for differences according to region and locale. Moral agents have a role to play, generally by shaping the larger culture in which these decisions are framed and debated. But the outcome is left to the people acting through their elected representatives, a process that inevitably involves compromise, trade-offs and messy accommodations.

These political accommodations can be thought illogical or even corrupt by those focused solely on the moral. Partial-birth abortion is a good example. In the moral sense, surely the humanity of an unborn child is not affected by whether he or she happens to be aborted inside the womb or, a few minutes later, outside the womb. And gay-rights activists see no moral difference between two men who want to get married and the traditional male-female couple making their walk to the altar.

What people hold as a moral ideal, however, and what they will accept as a workable compromise are two different things. Left to their own devices, most Americans can work these differences out in politics much as they do in their everyday lives, as untidy as these solutions may be. Unfortunately, when the courts short-circuit this process, they do three things corrosive to our politics.

First, they act as dishonest referees, imposing one set of preferences over another.

Second, they cheat the American people of an honest political contest, where candidates need to persuade the people of their views to put them into effect. Ed Whelan, a former Justice Department official who now runs the D.C.-based Ethics and Public Policy Center, notes that when moderator Gwen Ifill asked Joe Biden in the vice-presidential debate whether he and Barack Obama support gay marriage, Mr. Biden answered, "No."

"The gay-rights activists know it's not true -- or they would be protesting," says Mr. Whelan. "As supporters of liberal judicial activism, Mr. Obama and Mr. Biden have the luxury of winking as the courts do their work for them. That leaves them free to pretend to public positions they do not actually hold -- and that they will subvert through their judicial appointments."

Finally, when courts usurp the role of the people, they inject cynicism and bitterness into America's body politic. In his dissent in Casey v. Planned Parenthood (1992), Supreme Court Justice Antonin Scalia put it this way: "[B]y foreclosing all democratic outlet for the deep passions this issue [legalized abortion] arouses, by banishing the issue from the political forum that gives all participants, even the losers, the satisfaction of a fair hearing and an honest fight, by continuing the imposition of a rigid national rule instead of allowing for regional differences, the Court merely prolongs and intensifies the anguish."

Plainly this is what we have seen with abortion. With the latest intervention by the California Supreme Court, it is beginning to look the same for same-sex marriage. How much healthier our politics would be if those so convinced of the rightness of their views would have equal faith in the decency of their fellow Americans -- and their openness to being persuaded by clear, fair and honest argument.

Find A Happy Place (Yes, Again)

The news coming out of Washington day after day keeps getting worse and worse.

Don't be fearful. Be prepared.

I know it is hard and a bit scary, but there is no more time for complacent procrastination because trouble is no longer 'coming', its here.

From one American to another, if you haven't been paying attention and the recently exposed state of our economy has come as a complete surprise, then I can't stress enough how important it is that you educate yourself on the issues. Most of the panic and chaos is going to come from individuals who have no idea what is going on.

By understanding where we are and how we got here, you will be in a much better position to know where we are going so that you can prepare yourself mentally as well as spiritually and emotionally.

In the mean time, I'd like to offer another piece of comfort in the form of a "wascally wabbit".

Quote of the Day

"Government is like a baby: An alimentary canal with a big appetite at one end and no sense of responsibility at the other."

"Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."

- Ronald Reagan

U.S. Pledges Top $7.7 Trillion to Ease Frozen Credit

By Mark Pittman and Bob Ivry
November 24, 2008


The U.S. government is prepared to provide more than $7.76 trillion on behalf of American taxpayers after guaranteeing $306 billion of Citigroup Inc. debt yesterday. The pledges, amounting to half the value of everything produced in the nation last year, are intended to rescue the financial system after the credit markets seized up 15 months ago.

The unprecedented pledge of funds includes $3.18 trillion already tapped by financial institutions in the biggest response to an economic emergency since the New Deal of the 1930s, according to data compiled by Bloomberg. The commitment dwarfs the plan approved by lawmakers, the Treasury Department’s $700 billion Troubled Asset Relief Program. Federal Reserve lending last week was 1,900 times the weekly average for the three years before the crisis.

When Congress approved the TARP on Oct. 3, Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson acknowledged the need for transparency and oversight. Now, as regulators commit far more money while refusing to disclose loan recipients or reveal the collateral they are taking in return, some Congress members are calling for the Fed to be reined in.

“Whether it’s lending or spending, it’s tax dollars that are going out the window and we end up holding collateral we don’t know anything about,” said Congressman Scott Garrett, a New Jersey Republican who serves on the House Financial Services Committee. “The time has come that we consider what sort of limitations we should be placing on the Fed so that authority returns to elected officials as opposed to appointed ones.”

Too Big to Fail

Bloomberg News tabulated data from the Fed, Treasury and Federal Deposit Insurance Corp. and interviewed regulatory officials, economists and academic researchers to gauge the full extent of the government’s rescue effort.

The bailout includes a Fed program to buy as much as $2.4 trillion in short-term notes, called commercial paper, that companies use to pay bills, begun Oct. 27, and $1.4 trillion from the FDIC to guarantee bank-to-bank loans, started Oct. 14.

William Poole, former president of the Federal Reserve Bank of St. Louis, said the two programs are unlikely to lose money. The bigger risk comes from rescuing companies perceived as “too big to fail,” he said.

‘Credit Risk’

The government committed $29 billion to help engineer the takeover in March of Bear Stearns Cos. by New York-based JPMorgan Chase & Co. and $122.8 billion in addition to TARP allocations to bail out New York-based American International Group Inc., once the world’s largest insurer.

Citigroup received $306 billion of government guarantees for troubled mortgages and toxic assets. The Treasury Department also will inject $20 billion into the bank after its stock fell 60 percent last week.

“No question there is some credit risk there,” Poole said.

Congressman Darrell Issa, a California Republican on the Oversight and Government Reform Committee, said risk is lurking in the programs that Poole thinks are safe.

“The thing that people don’t understand is it’s not how likely that the exposure becomes a reality, but what if it does?” Issa said. “There’s no transparency to it so who’s to say they’re right?”

The worst financial crisis in two generations has erased $23 trillion, or 38 percent, of the value of the world’s companies and brought down three of the biggest Wall Street firms.

Markets Down

The Dow Jones Industrial Average through Friday is down 38 percent since the beginning of the year and 43 percent from its peak on Oct. 9, 2007. The S&P 500 fell 45 percent from the beginning of the year through Friday and 49 percent from its peak on Oct. 9, 2007. The Nikkei 225 Index has fallen 46 percent from the beginning of the year through Friday and 57 percent from its most recent peak of 18,261.98 on July 9, 2007. Goldman Sachs Group Inc. is down 78 percent, to $53.31, on Friday from its peak of $247.92 on Oct. 31, 2007, and 75 percent this year.

Regulators hope the rescue will contain the damage and keep banks providing the credit that is the lifeblood of the U.S. economy.

Most of the spending programs are run out of the New York Fed, whose president, Timothy Geithner, is said to be President- elect Barack Obama’s choice to be Treasury Secretary.

‘They Got Snookered’

The money that’s been pledged is equivalent to $24,000 for every man, woman and child in the country. It’s nine times what the U.S. has spent so far on wars in Iraq and Afghanistan, according to Congressional Budget Office figures. It could pay off more than half the country’s mortgages.

“It’s unprecedented,” said Bob Eisenbeis, chief monetary economist at Vineland, New Jersey-based Cumberland Advisors Inc. and an economist for the Atlanta Fed for 10 years until January. “The backlash has begun already. Congress is taking a lot of hits from their constituents because they got snookered on the TARP big time. There’s a lot of supposedly smart people who look to be totally incompetent and it’s all going to fall on the taxpayer.”

President Franklin D. Roosevelt’s New Deal of the 1930s, when almost 10,000 banks failed and there was no mechanism to bolster them with cash, is the only rival to the government’s current response. The savings and loan bailout of the 1990s cost $209.5 billion in inflation-adjusted numbers, of which $173 billion came from taxpayers, according to a July 1996 report by the U.S. General Accounting Office, now called the Government Accountability Office.

‘Worst Crisis’

The 1979 U.S. government bailout of Chrysler consisted of bond guarantees, adjusted for inflation, of $4.2 billion, according to a Heritage Foundation report.

The commitment of public money is appropriate to the peril, said Ethan Harris, co-head of U.S. economic research at Barclays Capital Inc. and a former economist at the New York Fed. U.S. financial firms have taken writedowns and losses of $666.1 billion since the beginning of 2007, according to Bloomberg data.

“This is the worst capital markets crisis in modern history,” Harris said. “So you have the biggest intervention in modern history.”

Bloomberg has requested details of Fed lending under the U.S. Freedom of Information Act and filed a federal lawsuit against the central bank Nov. 7 seeking to force disclosure of borrower banks and their collateral.

Collateral is an asset pledged to a lender in the event a loan payment isn’t made.

‘That’s Counterproductive’

“Some have asked us to reveal the names of the banks that are borrowing, how much they are borrowing, what collateral they are posting,” Bernanke said Nov. 18 to the House Financial Services Committee. “We think that’s counterproductive.”

The Fed should account for the collateral it takes in exchange for loans to banks, said Paul Kasriel, chief economist at Chicago-based Northern Trust Corp. and a former research economist at the Federal Reserve Bank of Chicago.

“There is a lack of transparency here and, given that the Fed is taking on a huge amount of credit risk now, it would seem to me as a taxpayer there should be more transparency,” Kasriel said.

Bernanke’s Fed is responsible for $4.74 trillion of pledges, or 61 percent of the total commitment of $7.76 trillion, based on data compiled by Bloomberg concerning U.S. bailout steps started a year ago.

“Too often the public is focused on the wrong piece of that number, the $700 billion that Congress approved,” said J.D. Foster, a former staff member of the Council of Economic Advisers who is now a senior fellow at the Heritage Foundation in Washington. “The other areas are quite a bit larger.”

Fed Rescue Efforts

The Fed’s rescue attempts began last December with the creation of the Term Auction Facility to allow lending to dealers for collateral. After Bear Stearns’s collapse in March, the central bank started making direct loans to securities firms at the same discount rate it charges commercial banks, which take customer deposits.

In the three years before the crisis, such average weekly borrowing by banks was $48 million, according to the central bank. Last week it was $91.5 billion.

The failure of a second securities firm, Lehman Brothers Holdings Inc., in September, led to the creation of the Commercial Paper Funding Facility and the Money Market Investor Funding Facility, or MMIFF. The two programs, which have pledged $2.3 trillion, are designed to restore calm in the money markets, which deal in certificates of deposit, commercial paper and Treasury bills.

Lehman Failure

“Money markets seized up after Lehman failed,” said Neal Soss, chief economist at Credit Suisse Group in New York and a former aide to Fed chief Paul Volcker. “Lehman failing made a lot of subsequent actions necessary.”

The FDIC, chaired by Sheila Bair, is contributing 20 percent of total rescue commitments. The FDIC’s $1.4 trillion in guarantees will amount to a bank subsidy of as much as $54 billion over three years, or $18 billion a year, because borrowers will pay a lower interest rate than they would on the open market, according to Raghu Sundurum and Viral Acharya of New York University and the London Business School.

Congress and the Treasury have ponied up $892 billion in TARP and other funding, or 11.5 percent.

The Federal Housing Administration, overseen by Department of Housing and Urban Development Secretary Steven Preston, was given the authority to guarantee $300 billion of mortgages, or about 4 percent of the total commitment, with its Hope for Homeowners program, designed to keep distressed borrowers from foreclosure.

Federal Guarantees

Most of the federal guarantees reduce interest rates on loans to banks and securities firms, which would create a subsidy of at least $6.6 billion annually for the financial industry, according to data compiled by Bloomberg comparing rates charged by the Fed against market interest currently paid by banks.

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Not included in the calculation of pledged funds is an FDIC proposal to prevent foreclosures by guaranteeing modifications on $444 billion in mortgages at an expected cost of $24.4 billion to be paid from the TARP, according to FDIC spokesman David Barr. The Treasury Department hasn’t approved the program.

Bernanke and Paulson, former chief executive officer of Goldman Sachs, have also promised as much as $200 billion to shore up nationalized mortgage finance companies Fannie Mae and Freddie Mac, a pledge that hasn’t been allocated to any agency. The FDIC arranged for $139 billion in loan guarantees for General Electric Co.’s finance unit.

Automakers Struggle

The tally doesn’t include money to General Motors Corp., Ford Motor Co. and Chrysler LLC. Obama has said he favors financial assistance to keep them from collapse.

Paulson told the House Financial Services Committee Nov. 18 that the $250 billion already allocated to banks through the TARP is an investment, not an expenditure.

“I think it would be extraordinarily unusual if the government did not get that money back and more,” Paulson said.

In his Nov. 18 testimony, Bernanke told the House Financial Services Committee that the central bank wouldn’t lose money.

“We take collateral, we haircut it, it is a short-term loan, it is very safe, we have never lost a penny in these various lending programs,” he said.

A haircut refers to the practice of lending less money than the collateral’s current market value.

Requiring the Fed to disclose loan recipients might set off panic, said David Tobin, principal of New York-based loan-sale consultants and investment bank Mission Capital Advisors LLC.

‘Mark to Market’

“If you mark to market today, the banking system is bankrupt,” Tobin said. “So what do you do? You try to keep it going as best you can.”

“Mark to market” means adjusting the value of an asset, such as a mortgage-backed security, to reflect current prices.

Some of the bailout assistance could come from tax breaks in the future. The Treasury Department changed the tax code on Sept. 30 to allow banks to expand the deductions on the losses banks they were buying, according to Robert Willens, a former Lehman Brothers tax and accounting analyst who teaches at Columbia University Business School in New York.

Wells Fargo & Co., which is buying Charlotte, North Carolina-based Wachovia Corp., will be able to deduct $22 billion, Willens said. Adding in other banks, the code change will cost $29 billion, he said.

“The rule is now popularly known among tax lawyers as the ‘Wells Fargo Notice,’” Willens said.

The regulation was changed to make it easier for healthy banks to buy troubled ones, said Treasury Department spokesman Andrew DeSouza.

House Financial Services Committee Chairman Barney Frank said he was angry that banks used the money for acquisitions.

“The only purpose for this money is to lend,” said Frank, a Massachusetts Democrat. “It’s not for dividends, it’s not for purchases of new banks, it’s not for bonuses. There better be a showing of increased lending roughly in the amount of the capital infusions” or Congress may not approve the second half of the TARP money.

To contact the reporters on this story: Mark Pittman in New York at mpittman@bloomberg.net; Bob Ivry in New York at bivry@bloomberg.net.

Last Updated: November 24, 2008 13:26 EST







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Quote of the Day

"Every step we take towards making the State the Caretaker of our lives, by that much we move toward making the State our Master."

-Dwight D. Eisenhower