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Flexible Reality
Saturday, May 01, 2004
 

Tax All Income? or only Wage Income?

Do Fat Cats Pay Less?
By Robert S. McIntyre
Issue Date: 05.05.04
American Prospect Online

When then-presidential candidate John Edwards complained that "something is deeply wrong when a billionaire has a lower tax rate than his secretary," he was talking about George W. Bush's cut in the top tax rate on dividends and capital gains to only 15 percent. But it got me thinking: Even with Bush's huge new loophole, do we really tax total personal investment income much more lightly than wages? This April, I spent a few weeks working out the arithmetic.

The short answer is that when Edwards charged that workers pay "at more than twice the rate" of wealthy investors, he understated his case. In fact, these days the average tax rate people pay on earnings is a lot more than double the rate on investment income.

If the income tax treated earned and unearned income by the same rules, its graduated rates would naturally hit unearned income the hardest. But besides all the various tax shelters for capital gains, dividends, municipal bonds, real estate, and so forth, there's the fact that a major portion of investment income is never reported. Together, legal loopholes and cheating cut the average tax rate on unearned income by more than half, down to only 9.6 percent.

Meanwhile, earned income is almost entirely reported on tax returns and, on top of that, pays two taxes. First, there's the income tax, which averages 10.7 percent, and second, there's the payroll tax, which averages 12.7 percent. So the total tax on earnings is 23.4 percent -- two and a half times the rate on investment income.

Looked at another way, earnings make up 71 percent of total personal income, but taxes on earnings account for 88 percent of total income and employment taxes. In contrast, investment income is 22 percent of total personal income, but it accounts for only 11 percent of personal taxes.

President Bush deserves some of the blame for this situation. His new tax breaks for capital gains and dividends, along with his cuts in income-tax rates generally, have lowered personal taxes on unearned income by more than a fifth. His tax cuts for earned income, however, are less than a tenth. On top of that disparity, Bush's tolerance for tax shelters and cheating has encouraged even more upper-income tax avoidance and evasion on investment income.

But things have been moving in a Bushian direction for decades. Before Ronald Reagan took office, the top income-tax rate on most unearned income was 70 percent, compared with a 50-percent top rate on earnings. The capital-gains-tax rate, now 15 percent, was 35 percent. And payroll taxes were almost a quarter lower than they are today. Back then, our lawmakers seemed to understand that working is harder than clipping coupons.

Of course, for radical right-wingers, even our current low taxes on investment earnings remain far too high. Their affection for a "flat tax" is not just its single rate but, even more important, its full exemption for investment income. They hope that if there's a second Bush term, they may get their way.

Those who think otherwise can find some reassurance in John Kerry's call for restoring the pre-Bush top income-tax rates and curbing Bush's capital-gains and dividends tax breaks. (The latter is a nice reversal, seeing as Kerry had previously called for a dividend tax cut even before Bush proposed it.)

But Kerry also should take a hard look at getting more unearned income reported on tax returns. Right now, for instance, small-time investors see all their capital gains reported to the Internal Revenue Service by their mutual funds. In contrast, big-time investors can pretty much make up their own numbers, and many of them do -- which is why total reported capital gains are estimated to be about a quarter below what legally ought to be declared. Stockbrokers have all the information that the IRS needs to enforce the law; they're just not required to report it.

Then there's the big enchilada: Why do we exempt investment income from Social Security and Medicare taxes? Those who fear that an additional 15-percent tax on investors' incomes would be too big a burden need to explain why they don't feel that way when it comes to workers

 

Charles P. Pierce: April 2004:
"It is preposterous -- even in politics -- to pretend that there is a single "Christian" view on, say, taxation, when there isn't even a single "Christian" view on Jesus Christ, let alone to whom he entrusted his message."

 

Four vs Twenty Four

Posted on Thu, Apr. 29, 2004

Treasury devoting more resources to Cuba than terror suspects

BY NANCY SAN MARTIN

Knight Ridder Newspapers

MIAMI - (KRT) - A Treasury Department report acknowledging that it has only four employees chasing Osama bin Laden and Saddam Hussein's money and nearly two dozen chasing Cuba embargo violators brought withering criticism on the federal agency Thursday.

"The magnitude of the discrepancy is just stunning,'' said Rep. William Delahunt, D-Mass., a member of the bipartisan Cuba Working Group, which favors lifting U.S. restrictions on travel to the island. "We're chasing old ladies on bicycle trips in Cuba when we should be concentrating on using a significant tool against shadowy terrorist organizations,'' he added.

 

Derivatives: The Next Shoe?

Buffett criticizes hedge funds at Omaha meeting
Sat May 1, 2004 06:27 PM ET
By Philip Klein

OMAHA, Neb., May 1 (Reuters) - Warren Buffett on Saturday criticized hedge funds and warned of the dangers of derivatives and looming inflation in front of nearly 20,000 shareholders who trekked to Omaha, Nebraska for the annual meeting of his Berkshire Hathaway Inc.

Buffett called hedge funds a "fad" that was more about Wall Street marketing than sound investing. "People that are now investing in hedge funds in aggregate are going to be disappointed," Buffett, who is known as the "Oracle of Omaha", said. The fees that hedge fund managers charge were unfair, he said.

In his remarks to shareholders, he used the example of the $6 billion accounting scandal at mortgage financier Freddie Mac to demonstrate the risks of derivatives. Despite having intelligent board members, being chartered by the U.S. Congress, and being followed by dozens of Wall Street analysts, he said Freddie Mac could not get a hold on the complexity of these financial instruments. "Sometime in the next 10 years you will have a huge problem that will either be caused by or accentuated by people's activities in derivatives," he said.

 

It's always about sex, degradation, and someone else to blame it on

General Suggests Abuses at Iraq Jail Were Encouraged
By PHILIP SHENON
NY Times
Published: May 2, 2004

WASHINGTON, May 1 — The Army Reserve general whose military police officers were photographed as they mistreated Iraqi prisoners said Saturday that she had been "sickened" by the pictures and had known nothing about the sexual humiliation and other abuse until weeks later.

But the officer, Brig. Gen. Janis Karpinski of the 800th Military Police Brigade, said the special high-security cellblock at the Abu Ghraib prison, west of Baghdad, where the abuses took place had been under the tight control of a separate group of military intelligence officers who had so far avoided any public blame.

In her first public comments about the brutality — which drew wide attention and condemnation after photographs documenting it were broadcast Wednesday night by CBS News — General Karpinski said that while the reservists involved were "bad people" and deserved punishment, she suspected they were acting with the encouragement, if not at the direction, of military intelligence units that ran the special cellblock used for interrogation.

Speaking in a telephone interview from her home in South Carolina, the general said military commanders in Iraq were trying to shift the blame exclusively to her and the reservists.

"We're disposable," she said of the military's attitude toward reservists. "Why would they want the active-duty people to take the blame? They want to put this on the M.P.'s and hope that this thing goes away. Well, it's not going to go away."

She said the special cellblock, known as 1A, was one of about two dozen in the large prison and was essentially off limits to soldiers who were not part of the interrogations.

She said repeatedly in the interview that she was not defending the actions of the reservists who took part in the brutality, who were part of her command. She said that when she was first presented with the photographs of the abuse in January, they "sickened me."

"I put my head down because I really thought I was going to throw up," she said. "It was awful. My immediate reaction was: These are bad people, because their faces revealed how much pleasure they felt at this."

But she said the context of the brutality had been lost, including the fact that the military police officers involved represented only a small fraction of the nearly 3,400 reservists who reported to her from 16 different prisons and similar locations around Iraq.

She said she was also alarmed that little attention has been paid to the military unit that controlled Cellblock 1A, where her soldiers guarded the Iraqi detainees between interrogations.

She said that the floor space of the two-story cellblock was only about 40 feet by 20 feet, and that military intelligence officers were in and out of the cellblock "24 hours a day."

"They were in there at 2 in the morning, they were at 4 in the afternoon," said General Karpinski, who arrived in Iraq last June and who was the only woman to hold a command in the war zone. "This was no 9-to-5 job."

The photographs of American soldiers smiling, laughing and signaling "thumbs up" as Iraqi detainees were forced into sexually humiliating positions provoked outrage just as the American military was seeking to pacify a rising insurgency and gain the trust of more Iraqis before turning over sovereignty to a new government on June 30.

General Karpinski, who has returned to South Carolina and her civilian profession as a business consultant, said she visited Abu Ghraib as often as twice a week last fall and had repeatedly instructed military police officers under her command to treat prisoners humanely and in accord with international human rights agreements.

"I can speak some Arabic," she said. "I'm not fluent, but when I went to any of my prison facilities, I would make it a point to try to talk to the detainees."

But she said she did not visit Cellblock 1A, in keeping with the wishes of military intelligence officers who, she said, worried that unnecessary visits might interfere with their interrogations of Iraqis.

She acknowledged that she "probably should have been more aggressive" about visiting the interrogation cellblock. She stressed that she had received no reports from any of her commanders of possible prisoner abuses in the cellblock.

After the first allegations of abuse circulated earlier this year, Lt. Gen. Ricardo S. Sanchez, the senior American commander in Iraq, ordered sweeping inquiries into whether any commanders — including General Karpinski — should be held responsible. He also ordered a review of policies and procedures at all of the prisons controlled by occupation forces in Iraq.

The administrative review, known in the military criminal justice system as an AR15-6, was completed March 1 by Army Maj. Gen. Antonio M. Taguba, who had assembled a team of officers trained in military detention. The report was approved by his superior, Lt. Gen. David D. McKiernan, commander of American ground forces in the Middle East, and forwarded to General Sanchez on April 4.

The finding documented the abuses illustrated by the photographs circulating this week, as well as other problems in the military's detainee system in Iraq.

Friday, April 30, 2004
 

Citing Pullback, Antigraft Team Quits Teamsters
By STEVEN GREENHOUSE
AP
Published: April 30, 2004

The former federal prosecutor who heads the Teamsters' internal anticorruption program resigned yesterday, along with 20 other investigators and lawyers involved in that effort, saying the union's president was not fully committed to fighting corruption.

The former prosecutor, Edwin H. Stier, sent a sharply worded letter that accused James P. Hoffa, the Teamsters president, of blocking a broad investigation into possible union corruption in Chicago and of dragging his feet in a case of alleged embezzlement by a Teamsters leader in Houston. "In spite of our efforts to convince General President Jim Hoffa to remain committed to fighting corruption," Mr. Stier wrote, "I have concluded that he has backed away from the Teamsters' anticorruption plan in the face of pressure from self-interested individuals."

The anticorruption program was created five years ago by Mr. Hoffa in an effort to persuade the federal government to abandon its longtime oversight of the union. The Teamsters had agreed to far-reaching federal supervision in 1989 to settle a federal racketeering lawsuit charging the union with being controlled by organized crime. The resignations could jeopardize the union's push to end federal oversight.

 

One Year Later, and ...

In Front of Your Nose
By PAUL KRUGMAN
NY Times Op-Ed
Published: April 30, 2004

We are all capable of believing things which we know to be untrue, and then, when we are finally proved wrong, impudently twisting the facts so as to show that we were right. Intellectually, it is possible to carry on this process for an indefinite time: the only check on it is that sooner or later a false belief bumps up against solid reality, usually on a battlefield." That's from George Orwell's 1946 essay "In Front of Your Nose." It seems especially relevant right now, as we survey the wreckage of America's Iraq adventure.

Tomorrow a year will have passed since George Bush's "Mission Accomplished" carrier landing. Throughout that year — right up to the surge in violence this month — administration officials assured us that things were going well in Iraq. Living standards, they said, were steadily improving. The resistance, they insisted, consisted of a handful of dead-enders aided by a few foreign infiltrators — and each lull in attacks brought pronouncements that the campaign against the insurgents had turned the corner.

So they lied to us; what else is new? But there's more at stake here than the administration's credibility. The official story line portrayed a virtuous circle of nation-building, one that could eventually lead to a democratic Iraq, allied with the U.S. In fact, we seem to be faced with a vicious circle, in which a deteriorating security situation undermines reconstruction, and the lack of material progress adds to popular discontent. Can this situation be saved?

Even among harsh critics of the administration's Iraq policy, the usual view is that we have to finish the job. You've heard the arguments: We broke it; we bought it. We can't cut and run. We have to stay the course.

I understand the appeal of those arguments. But I'm worried about the arithmetic.

All the information I've been able to get my hands on indicates that the security situation in Iraq is really, really bad. It's not a good sign when, a year into an occupation, the occupying army sends for more tanks. Western civilians have retreated to armed enclaves. U.S. forces are strong enough to defend those enclaves, and probably strong enough to keep essential supplies flowing. But we don't have remotely enough troops to turn the vicious circle around. The Iraqi forces that were supposed to fill the security gap collapsed — or turned against us — at the first sign of trouble.

And all of the proposals one hears for resolving this ugly situation seem to be either impractical or far behind the curve.

Some say we should send more troops. But the U.S. military doesn't have more troops to send, unless it resorts to extreme measures, like withdrawing a large part of the forces currently in South Korea. Did I mention that North Korea is building nuclear weapons, and may already have eight?

Others say we should seek more support from other countries. There may once have been a time — say, last summer — when the U.S. could have struck a deal: by ceding a lot of authority to the U.N., we might have been able to persuade countries with large armies, like India, to contribute large numbers of peacekeeping troops. But it's hard to imagine that anyone will now send significant forces into the Iraqi cauldron.

Some pin their hopes on a political solution: they believe that violence will subside if the U.N. is allowed to appoint a caretaker government that Iraqis don't view as a U.S. puppet.

Let's hope they're right. But bear in mind that right now the U.S. is still planning to hand over "sovereignty" to a body, yet to be named, that will have hardly any power at all. For practical purposes, the U.S. ambassador will be running the country. Americans may believe that everything will change on June 30, but Iraqis are unlikely to be fooled. And by the way, much of the Arab world believes that we've been committing war crimes in Falluja.

I don't have a plan for Iraq. I strongly suspect, however, that all the plans you hear now are irrelevant. If America's leaders hadn't made so many bad decisions, they might have had a chance to shape Iraq to their liking. But that window closed many months ago.
 

Former Navy Secretary unleashes tide of Iraq criticism
By Eric Weslander, Journal-World
LJ World
Thursday, April 29, 2004

A critical question for citizens and journalists to ask the U.S. government right now is this: "Under what circumstances will the United States military withdraw from Iraq?"

That's according to James Webb, the novelist, decorated Vietnam veteran and Reagan-administration Secretary of the Navy, who spoke Wednesday night at Kansas University. Webb says he's never heard a good answer from the Bush administration to the question about troop withdrawal.

"What are the conditions?" Webb asked a crowd of more than 300 people in Woodruff Auditorium in the Kansas Union. "If you can't answer the question, then you shouldn't have been there in the first place."
Thursday, April 29, 2004
 

There's a simple explanation

Note: What is it that ties together several of the perceptions about George W. Bush that would provide a simple explanation for his actions, and inactions? How about cowardice?

Cow"ard*ice\ (-[i^]s), n. [F. couardise, fr. couard. See Coward.] Want of courage to face danger; extreme timidity; pusillanimity; base fear of danger or hurt; lack of spirit.

Applied to his: "Bring it On" comment, which suggest the opposite, just what a coward would seek to project.
Applied to his National Guard Duty wherein no-one seems to remember him.
Applied to his zeal to go after basically defenseless foes.
Applied to his 'not-there' status on Sept 11th, 2001
Applied to his avoidance of remaining in Washington versus his affinity to staying at his ranch.
Applied to his fondness for using surrogates to attack politcal adversaries.
Applied to his demand to appear before the 9/11 Commission only in consort with VP Cheney.
Applied to his donning of a aviator flight suit for a photo op session where there was no danger
Applied to his early adulthood drinking binges.
Applied to his preference for meeting other powerful people on his home turf.
And lastly, applied to his lack of willingness to deal constructively with issues at odds with his peer groups' positions.
Makes sense to me.

<------------------------------------->


 

CLAIM VS. FACT
New Database Launched

The Center for American Progress today launched a new, searchable database to help journalists, activists and the public compare conservatives' rhetoric to factual truth. The Claim vs. Fact database, found at www.claimvfact.org, contains more than 400 separate quotes on all kinds of issues from top conservatives including Bush administration officials, members of Congress and Fox News personalities. The database contrasts these quotes with well-documented facts. And you don't have to take our word for the facts we cite – in as many places as possible, we include direct Web links to primary source materials.

WE NEED YOUR HELP: We are soliciting the public to help us build this database by submitting examples of conservatives' distortions and dishonesty not already documented in the database. Simply go to the submission page, and fill out the form. And please pass on the Web address www.claimvfact.org to as many people as possible.

Wednesday, April 28, 2004
 

UN chief hits at oil-for-food claims
By Mark Turner at the United Nations
Published: April 29 2004 5:00 | Last Updated: April 29 2004 5:00

Kofi Annan, the UN secretary-general, took the offensive yesterday against continuing allegations of corruption in Iraq's oil-for-food programme, saying the UN was being blamed for areas over which it had no control and that national governments shared responsibility for any lack of oversight.

"Some of the comments that I have read have been rather outrageous and exaggerated," he said.

"When you read the reports, it looks as if the Saddam regime had nothing to do with it: [that] it was all the UN." But Mr Annan said there was "no way" the UN could have stopped illegal oil smuggling, which accounted for $5.7bn (€4.8bn, �3.2bn) of an estimated $10.1bn in illegal revenues acquired by the Iraq regime.

National governments, through a committee of UN Security Council officials, had had a significant role in approving contracts, through which Iraq diverted an estimated $4.1bn in illegal surcharges and kickbacks.

"We had no mandate to stop oil smuggling," Mr Annan said. "There was a maritime taskforce that was supposed to do that. They were driving the trucks through northern Iraq to Turkey. The US and the British had planes in the air. We were not there. Why is all this being dumped on the UN?"

As for the approval of contracts, "of course the member states are not coming out, saying we had a role, or we had an oversight responsibility, so all is dumped on the secretariat", he said. "Be that as it may, these allegations are doing damage and we need to face it sternly."

Some of the accusations have hit close to home, focusing on the relationship between Kojo, Mr Annan's son, and Cotecna, the company that monitored imports. Yesterday Mr Annan explicitly denied any familial wrongdoing.

"There is nothing in the accusations about my son. He joined the company, even before I became secretary-general, as a 22-year-old, as a trainee in Geneva. He was assigned to work for them in west Africa, mainly in Nigeria and Ghana," he said.

"Neither he nor I had anything to with the [Iraq] contract for Cotecna. That was done in strict accordance with UN rules."

But UN officials remain concerned at the possibility that some staff were on the take. "If at the end any UN staff members are found guilty of wrongdoing we will deal with them," Mr Annan said.

"In some situations we may even want to lift immunity, so that we do not impede the judicial process."
Note: Yes, indeed. And the US Government should also lift immunity from prosecution against those who made the charges in the first place. Make the claimants prove their claims have some merit, and are not willful figments of Karl Rowe's imagination.There should be some punishment for willful lying about dishonesty and theft by Governmental agents and bureaus by other Governmental agents and agencies, especially if the lying supports the Junta's politically motivated fabrications.
<------------------------------------->
Tuesday, April 27, 2004
 




The Human Cost


They were sent to fight for their country. But some GIs didn't have all they
needed to protect themselves








IMG: war dead

U.S. Air Force-thememoryhole.org


Resting place:  A soldier prepares coffins of U.S. military
personnel returning home at Dover Air Force Base in Delaware





By Melinda Liu, John Barry and Michael Hirsh


Newsweek



May 3 issue - The inaugural mission of the 1st
Cavalry's 2d Battalion, 5th Cavalry Regiment was, in its humble way, a bid for
hearts and minds. It was to safely dispose of Iraqi sewage. Having arrived in
Iraq in late March, a 19-man patrol from the battalion, traveling in four
Humvees, had just finished escorting three Iraqi "honey wagons" on
their rounds in the grim slum of Sadr City, where vendors stash eggs and
chickens in bamboo crates next to puddles of viscous black mud. ("You're
lucky if it's mud," joked one U.S. officer.) Suddenly the street became
"a 300-meter-long kill zone," recalls platoon leader Sgt. Shane
Aguero, courtesy of gunmen from the Mahdi militia of Shiite rebel Moqtada al-Sadr.
The Humvees swerved and ran onto sidewalks, rolling on the rims of flat tires,
as gunmen kept up the barrage of bullets. Sgt. Yihjyh (Eddie) Chen, gunner in
the lead vehicle, was shot dead. Another soldier was hit and began bleeding
from the mouth. As they'd been drilled to do, the soldiers set out to strip
the disabled vehicles of sensitive items and to "zee off the
radio"—to see that codes and equipment don't fall into enemy hands.
When another group got ambushed nearby, an enemy round came through the
Humvee's right rear door—through retrofitted panels that the soldiers had
been told would repel AK-47 rounds. Miraculously, none of the three people
inside were hit. Then a third Humvee sputtered to a halt: debris had pierced
the fuel tank. "It just wouldn't start; we coasted the last 50 yards out
of the kill zone," said its driver, Spc. Dee Foster. At last an armored
Bradley fighting vehicle arrived, and its steel ramp opened to scoop him and
his buddies to safety.



For the Bush administration it has been a mantra, one the president intones
repeatedly: America's troops will get whatever they need to do the job. But as
Iraq's liberation has turned into a daily grind of low-intensity combat—and
Defense Secretary Donald Rumsfeld grudgingly raises troop levels—many
soldiers who are there say the Pentagon is failing to protect them with the
best technology America has to offer. Especially tanks, Bradleys and other
heavy vehicles, even in some cases body armor. That has been the tragic lesson
of April, a month in which a record 115 U.S. soldiers have died so far and 879
others have been wounded, 560 of them fairly seriously. Those numbers greatly
exceed the tallies in the combat-heavy weeks of the invasion last spring. And
the impact of those deaths was felt more fully last week when blogger Russ
Kick, after filing a Freedom of Information Act request, won the release of
photos showing coffins returning to Dover Air Force Base in Delaware.

Soldiers in Iraq complain that Washington has been
too slow to acknowledge that the Iraqi insurgency consists of more than
"dead-enders." And even at the Pentagon many officers say Rumsfeld
and his brass have been too reluctant to modify their long-term plans for a
lighter military. On the battlefield, that has translated into a lack of
armor. Perhaps the most telling example: a year ago the Pentagon had more than
400 main battle tanks in Iraq; as of recently, a senior Defense official told
NEWSWEEK, there was barely a brigade's worth of operational tanks still there.
(A brigade usually has about 70 tanks.)

In continuing adherence to the Army's "light is
better" doctrine, even units recently rotated to Iraq have left most of
their armor behind. These include the I Marine Expeditionary Force, which has
paid dearly for that decision with an astonishing 30 percent-plus casualties
(45 killed, more than 300 wounded) in Fallujah and Ar Ramadi. The Army's 1st
Cavalry Division—which includes the unit in Sadr City—left five of every
six of its tanks at home, and five of every six Bradleys.


A breakdown of the casualty figures suggests that
many U.S. deaths and wounds in Iraq simply did not need to occur. According to
an unofficial study by a defense consultant that is now circulating through
the Army, of a total of 789 Coalition deaths as of April 15 (686 of them
Americans), 142 were killed by land mines or improvised explosive devices,
while 48 others died in rocket-propelled-grenade attacks. Almost all those
soldiers were killed while in unprotected vehicles, which means that perhaps
one in four of those killed in combat in Iraq might be alive if they had had
stronger armor around them, the study suggested. Thousands more who were
unprotected have suffered grievous wounds, such as the loss of limbs.


 










IMG: lack of vehicles


Maurizio Gambarini / EPA


In harm's way: A U.S. Marine driving a bullet-riddled Humvee in Iraq
in early April




The military is 1,800 armored Humvees short of its own stated requirement for
Iraq. Despite desperate attempts to supply bolt-on armor, many soldiers still
ride around in light-skinned Humvees. This is a latter-day jeep that, as Brig.
Gen. Mark P. Hertling, assistant division commander of the 1st Armored
Division, conceded in an interview, "was never designed to do this ... It
was never anticipated that we would have things like roadside bombs in the
vast number that we've had here." One newly arrived officer, Lt. Col.
Timothy Meredith, says his battalion had just undergone months of training to
rid itself of "tank habits" and get used to the Humvees. "We
arrived here expecting to do a lot of civil works," says Meredith.

According to internal Pentagon e-mails obtained by NEWSWEEK, the Humvee
situation is so bad that the head of the U.S. Army Forces Command, Gen. Larry
Ellis, has urged that more of the new Stryker combat vehicles be put into the
field. Sources say that the Army brass back in Washington have not yet
concurred with that. The problem: the rubber-tire Strykers are thin-skinned
and don't maneuver through dangerous streets as well as the fast-pivoting,
treaded Bradley. According to a well-placed Defense Department source, the
Army is so worried about the Stryker's vulnerability that most of the
300-vehicle brigade currently in Iraq has been deployed up in the safer
Kurdish region around Mosul. "Any further south, and the Army was afraid
the Arabs would light them up," he said.

Other quick fixes are being rushed in. In Ohio,
O'Gara-Hess and Eisenhardt Armoring Co. says it is flush with new orders to
crank out 300 "up-armored" Humvees per month. And Rumsfeld has just
approved a quiet plan to fly 28 M1A1 tanks from Germany into Iraq by April 27,
NEWSWEEK has learned. The move comes as the military is planning for a final
assault on the insurgent stronghold of Fallujah. Meanwhile, soldiers are
rushing to jury-rig their Humvees with anything hard they can find: bolt-on
armor, sandbags, even plywood panels, creating what one senior officer calls
"Mad Max-mobiles." But Pentagon sources say many of the retrofitted
Humvees cannot take the extra weight, and their suspension or transmission
systems fail. Another method is to spray shock-absorbing polyurethane
foam—one popular brand name is called Rhino—to the inside or outside of
unarmored vehicles.


The biggest problem, perhaps, is that the insurgents—whoever they
are—continue to be quick to spot vulnerabilities. It is probably no
coincidence that attacks have picked up significantly in April as the Marines,
the 1st Cav and other fresh—and untried—troops have rotated in. U.S.
bomb-disposal personnel generally succeed in discovering and disarming about
half of the homemade bombs that are planted. In March, an estimated 600 to 700
attacks involving homemade devices were either discovered or foiled. In April,
one administration source said, as many as 1,000 homemade bomb attacks have
been attempted.

The need for more armor—and possibly
troops—erupted as an issue on Capitol Hill last week in combative hearings
of the Senate and House Armed Services committees. "We are not structured
for the security environment we're in," Joint Chiefs Chairman Gen.
Richard Myers told senators and congressmen, including some angry Republicans.
As part of his 2005 budget request, Rumsfeld had originally cut the Army
budget by 6 percent. But the Army has identified nearly $6 billion in unfunded
requests—and more are on the way. "The costs are going to be
staggering," says Sen. Jack Reed, a Rhode Island Democrat who has
pestered the Pentagon for months for better estimates. Deputy Defense
Secretary Paul Wolfowitz told the House committee that military operations in
Iraq are now costing about $4.7 billion a month—a sum that approaches the $5
billion a month (on average) that the Vietnam War cost, adjusted for
inflation.


Sen. John McCain says the Pentagon needs an
additional division beyond the 20,000 men it is leaving in Iraq for 90-day
extensions. Another senator and Vietnam vet, Chuck Hagel of Nebraska, even
suggested the nation might have to take a long-term look at reviving the
draft. Few others went that far, but one knowledgeable Army officer points out
that Rumsfeld's standing "stop-loss" order—basically a freeze on
retirements—is a "silent draft." It is not expected to be lifted
"for the foreseeable future," the officer said. On Capitol Hill,
Myers spoke of transforming old field-artillery and air-defense battalions
into new units. But the Pentagon has yet to come to grips with its armor
crisis—or its human cost.


With Babak Dehghanpisheh in Baghdad, Mark
Hosenball and Tamara Lipper in Washington and T. Trent Gegax in New York





 
Chicago Tribune: AP: 10 U.S. Contractors in Iraq Penalized

By MATT KELLEY
Associated Press Writer

April 26, 2004, 10:16 PM CDT

WASHINGTON -- Ten companies with billions of dollars in U.S. contracts for Iraq reconstruction have paid more than $300 million in penalties since 2000 to resolve allegations of bid rigging, fraud, delivery of faulty military parts and environmental damage. "

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