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In ‘Fiscal Cliff’ Talks, First Step Is the Hardest

December 3, 2012 by Leave a Comment

President Obama and the House speaker, John A. Boehner, are in general agreement on the overarching issue: that the relevant Congressional committees must sit down next year and work out changes to the tax code and entitlement programs to save well more than $1 trillion over the next decade.

But before that work begins, both men want Congress to approve a first installment on deficit reduction that would replace the automatic spending cuts and tax increases that make up the “fiscal cliff,” while signaling Washington’s seriousness about getting its fiscal house in order. That is where the chasm lies in size and scope.

Mr. Obama says the down payment should be large, real and made up almost completely of tax increases on top incomes. He is putting such emphasis on the tax increases partly because he and Congressional leaders last year agreed on some spending cuts over the next decade but have yet to agree on any tax increases.

Republicans have countered by arguing for a smaller down payment that must include immediate savings from Medicare and other entitlements. Republicans, using almost the mirror-image language of Mr. Obama, have said that they do not want to agree to specific tax increases and vague promises of future spending cuts.

“I think there’s a lot of confusion between the initial down payment and the framework. That’s for sure,” said Senator Kent Conrad of North Dakota, chairman of the Senate Budget Committee and part of a bipartisan “Gang of Six” senators who devised the two-stage process.

The two sides are trying to get to a deal that would start with a specific down payment and then fix targets for larger savings in the tax code and entitlement programs. They are expected to spend much of the next year hashing out the specific policy changes needed to hit those targets.

The argument over the size of the down payment is critical. Republicans and Democrats alike worry that canceling roughly $600 billion in deficit-reducing tax increases and spending cuts next year might spook financial markets, which could take the move as proof that the United States’ fiscal problems are politically intractable.

But neither side believes Congress could meaningfully overhaul the main drivers of future deficits — Medicare and Medicaid — in the four weeks that remain before the fiscal deadline.

“Entitlement reform is a big step, and it affects tens of millions of people,” said Senator Richard J. Durbin, Democrat of Illinois and another architect of the two-stage framework. “It’s not just a matter of cutting spending in an appropriation. It’s changing policy. And that’s why I was reluctant to include it in the down-payment conversation. I want this to be a thoughtful effort on both sides that doesn’t jeopardize this program.”

Republican leaders have said that they are willing to raise new revenues in a broad deficit deal, but they want taxes to rise by closing loopholes and curbing tax deductions and credits — a tall order for Congress in a year, let alone a month. They explicitly do not want to allow tax rates to rise on income over $250,000, an issue that is becoming the main stumbling block in the talks.

Mr. Obama is seeking to lock in $1.6 trillion in higher revenue as the bulk of the first stage of deficit reductions before stage two even begins. House Republicans say the down payment should be at least $110 billion, the value of the automatic spending cuts they would cancel next year, and they want those savings to come largely from cuts in Medicare and other benefit programs.

Article source: http://www.nytimes.com/2012/12/04/us/politics/in-fiscal-cliff-talks-first-step-is-the-hardest.html?partner=rss&emc=rss

Filed Under: Business News Tagged With: , ,

Italy’s Leader, Silvio Berlusconi, Offers to Resign

November 9, 2011 by Leave a Comment

Although Mr. Berlusconi’s exit was not immediate — weeks of political wrangling over the austerity measures probably lie ahead — political commentators said they could see no escape this time for the prime minister, whose Houdini-like ability to wriggle free from scandals is legendary.

“A season is over,” said Mario Calabresi, the editor in chief of the Turin daily newspaper La Stampa, who said Mr. Berlusconi told him that he was not only stepping down, but also would not run for office again.

In the end, it was not the sex scandals, the corruption trials against him or even a loss of popular consensus that appeared to end Mr. Berlusconi’s 17 years as a dominant figure in Italian political life. It was, instead, the pressure of the markets — which drove Italy’s borrowing costs to record highs this week — and the European Union, which could not risk his dragging down the euro and with it the world economy.

With fears that the debt crisis would spread from Greece to Italy, whose economy is too big to bail out, pressure had been building on Mr. Berlusconi to resign for weeks, including recently from members of his center-right coalition. Even the Roman Catholic Church, whose support is crucial for any Italian government, began harshly criticizing him.

European leaders, who have long questioned Mr. Berlusconi’s commitment to fundamental economic changes, had become especially concerned that he no longer had enough control of his coalition to deliver on promises of crucial reforms and that in a crisis built partly on perception, Italy’s reputation was too closely linked to his own.

In a sign of the seriousness of the fears, a delegation from the European Commission was due in Rome on Wednesday to check on the country’s reform program, days after the International Monetary Fund said it would monitor Italy’s progress, a rare intrusion for an economy the size of Italy’s.

Mr. Berlusconi’s announcement came just days after Greece’s leader, Prime Minister George A. Papandreou, also overcome by financial troubles, agreed to resign in favor of a unity government.

The immediate trigger for Mr. Berlusconi’s decision was a procedural vote in Parliament that made it clear that he had lost his majority after defections from his coalition. Umberto Bossi, a crucial ally and the leader of the Northern League, a coalition member, said he had told the prime minister to step aside for the good of the country.

After the parliamentary vote, a photographer’s zoom lens caught Mr. Berlusconi writing “8 traitors” on a piece of paper on which he had also written “resignation.”

Hours later, he met with the president of Italy, Giorgio Napolitano, and said he would resign.

A statement issued by the president’s office after the meeting said that the prime minister had acknowledged “the implications of the result of the day’s vote in the lower house,” but at the same time had expressed “concerns” about the need to pass the urgent reforms requested by Italy’s “European partners.”

In a telephone call to the state broadcaster RAI, Mr. Berlusconi said, “Today’s vote reinforced my concerns about the moment that we are experiencing, a situation where the markets do not believe that we really want to introduce the liberalizing measures that Europe insistently asked us to carry out.”

By linking his fortunes to the austerity package — whose contents have not yet been made final — Mr. Berlusconi effectively blocked both the opposition and dissidents within his own party from bringing him down in a humiliating confidence vote over the measures.

His announcement, in a meeting with Mr. Napolitano, made the event seem almost anticlimactic, allowing Mr. Berlusconi to exit somewhat gracefully.

Stephen Castle contributed reporting from Brussels.

Article source: http://www.nytimes.com/2011/11/09/world/europe/support-for-berlusconi-ebbs-before-crucial-vote.html?partner=rss&emc=rss

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Supreme Court to Weigh Sociology Issue in Wal-Mart Discrimination Case

March 28, 2011 by Leave a Comment

Plaintiffs in the class-action suit, who claim that Wal-Mart owes billions of dollars to as many as 1.5 million women who they say were unfairly treated on pay and promotions, enlisted the support of William T. Bielby, an academic specializing in “social framework analysis.”

A central question in the case is whether he should have been allowed, in preliminary proceedings, to go beyond describing general research about gender stereotypes in the workplace to draw specific conclusions about what he called flaws in Wal-Mart’s personnel policies.

“Bielby made a conclusion that he had no basis to make,” said Laurens Walker, one of two University of Virginia professors who coined the term for the analysis almost 25 years ago. “He hasn’t done the research.”

But a brief supporting the plaintiffs from the American Sociological Association said that Professor Bielby’s work explaining how Wal-Mart’s policies may have led to discrimination “is well within our discipline’s accepted methods.”

The sharp arguments are a testament to the central role that social framework analysis has come to play in scores of major employment discrimination cases. Describing what was at stake in such cases, a 2009 article in The Fordham Law Review defending Professor Bielby said the debate was “about the existence of unconscious or implicit bias, the continued seriousness of discrimination as a force in the modern workplace and the appropriate reach of legal remedies to challenge discrimination.”

The Supreme Court is not considering whether Wal-Mart, the country’s largest retailer and biggest private employer, in fact discriminated against women who worked there. For now, the question before the justices in the case, Wal-Mart Stores v. Dukes, No. 10-277, is only whether hundreds of thousands of female workers have enough in common to join together in a single suit.

To make that case, the plaintiffs submitted 120 sworn statements describing what they said was anecdotal evidence of discrimination. They also offered statistics showing what they said were suspicious gaps in pay and promotion between men and women.

Wal-Mart disputes the plaintiffs’ evidence as unrepresentative and unreliable. But even if all of it were established fact, anecdotes and statistics would not be enough. Supreme Court precedent also requires lawyers pursuing a class action to identify the common policy that they say led to unlawful discrimination.

For that, the lawyers for the plaintiffs in the Wal-Mart case turned to Professor Bielby, who teaches at the University of Illinois at Chicago and has testified in scores of similar cases.

Social framework analysis gives courts general information — a framework — drawn from social science. Testimony about the reliability of eyewitness identification can, for instance, serve a valuable role in cases in which prosecutors seek to rely on such evidence.

Professor Bielby, who declined a request for an interview, told the trial court that he had collected general “scientific evidence about gender bias, stereotypes and the structure and dynamics of gender inequality in organizations.” He said he also reviewed extensive litigation materials gathered by the lawyers in the case.

He concluded that two aspects of Wal-Mart’s corporate culture might be to blame for pay and other disparities. One was a centralized personnel policy. The other was allowing subjective decisions by managers in the field. Together, he said, those factors allowed stereotypes to infect personnel choices, making “decisions about compensation and promotion vulnerable to gender bias.”

The methodology he used, Professor Bielby explained, was social framework analysis. He cited the seminal work of the two law professors at the University of Virginia, Professors Walker and John Monahan, in the first of 123 footnotes in his 41-page sworn declaration in the case.

But Professors Walker and Monahan contend in their academic writing that Professor Bielby has misused social framework analysis. It is fine, they say, to give courts general information about social science research. But it is improper, they continue, to draw conclusions about the matter in dispute without conducting first-hand research.

Article source: http://feeds.nytimes.com/click.phdo?i=51dc14269d3cb41de45d01d536e90e50

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