news.notes20090513a

[Biography of the Day] from [Britannica]

Georges Braque
Born this day in 1882, French painter Georges Braque revolutionized the art world by creating, with Pablo Picasso, Cubism and became in 1961 the first living painter to have his work exhibited in the Louvre Museum.

[On This Day] from [Britannica]

1846: U.S. declaration of war on Mexico approved
Tensions between Mexico and the United States—stemming from the U.S. annexation of Texas (1845)—led the U.S. Congress on this day in 1846 to approve overwhelmingly a declaration of war against its southern neighbour.


[TODAY'S TOP STORIES] from [The Japan Times]

[NATIONAL NEWS]

Wednesday, May 13, 2009
Saturday poll set to choose new DPJ boss
Hatoyama or Okada eyed to succeed Ozawa

By MASAMI ITO
Staff writer

A day after embattled Democratic Party of Japan President Ichiro Ozawa abruptly announced he plans to resign, the top opposition party scrambled to set the stage for electing its next leader.

The DPJ decided to hold its presidential election Saturday. The winner, if the party prevails in the Lower House election that must be held by fall, could become prime minister.

As of Tuesday, only two key names were being floated — DPJ Secretary General Yukio Hatoyama and former President Katsuya Okada — although neither had officially declared his candidacy.

Asked if he would run, Okada said in the morning he was thinking about it "carefully."

"I have not come to a conclusion yet," he said.

But according to sources, Okada contacted party members to ask for their support if he takes a run at the presidency. Depending on the response, he could declare his bid as early as Wednesday, the sources said.

Meanwhile, Hatoyama on Tuesday night had not ruled himself out of the race.

"I want to keep an open mind about (what I should do). I want to make a decision as soon as possible," Hatoyama said.

Senior DPJ adviser Kozo Watanabe predicted the election will be a one-on-one fight. Both heavyweights are considered conservatives, but Hatoyama, who has advocated amending the Constitution, is believed to be slightly farther right than Okada, who once voiced support for a consumption tax hike.

"Both are great lawmakers who would not be considered inferior to (Prime Minister Taro) Aso and they are both ready to boldly become candidates for prime minister," Watanabe said. "Regardless of the results, the party will unite and be ready to win against the ruling Liberal Democratic Party in the next general election."

The DPJ will officially accept candidates Saturday morning before its Diet members cast their votes later in the day.

The vote will be limited to Diet members so the party can elect a new leader swiftly and avoid disrupting the current legislative session.

Because of the importance of the election, some lawmakers argued it should be pushed back so the public can have time to learn what policies the two would pursue.

"I think we should take the time and create an opportunity for the (presumed) candidates to express their opinions to the public," said Jun Azumi, the DPJ's deputy Diet affairs chief. "But considering the various political schedules, I agreed" that it should be held Saturday.

Azumi said he already knows how he will vote but wouldn't elaborate.

"The new leader will have to challenge (the Aso-led LDP), and I think it is important that the new president have a clean image," Azumi said. Information from Kyodo added.


[NATIONAL NEWS]

Wednesday, May 13, 2009
Aso, Putin ink nuclear-power deal
Exchange of fuel for technology advances trade ties, but territorial dispute goes nowhere

By JUN HONGO
Staff writer
Prime Minister Taro Aso and Russian Prime Minister Vladimir Putin agreed Tuesday to strengthen bilateral economic ties, including promoting peaceful use of nuclear energy, but made no significant progress on the territorial dispute that dates back to 1945.

While expressing the will to resolve the island row, Putin did not discuss any specific steps during a joint news conference at the prime minister's office.

"Russia is ready to initiate a dialogue with Japan," Putin said, but he refrained from commenting on the possibility of a partial return of the disputed islands.

Japan officially demands that all of the Russian-held islands off Hokkaido be returned, but the notion of a partial return has repeatedly been floated here as a means of breaking the stalemate.

"President Dmitry Medvedev will be holding an independent meeting at the Group of Eight summit in Italy to discuss possible measures" over territorial issues, Putin said.

Aso added that "removing the thorn" will make it possible for Japan and Russia to become true partners, but he mentioned no no new proposals to resolve the issue.

The nuclear agreement, in the works since 2007, will pave the way for joint research and reactor contracts, and expand the import of atomic fuel from Russia.

"We can expect mutual benefits," Aso told the news conference, adding the deal holds a strategic relevance for Russo-Japanese relations.

Tokyo is ready to work as a partner with Moscow on developing the Asia-Pacific region, Aso said, expressing the will to collaborate in such areas as energy conservation and information technology.

"This is an agreement of mutual benefit," a Foreign Ministry official said of the nuclear pact under which Japan will provide its knowhow and technology on building nuclear plants in exchange for Russia's rich uranium resources and enrichment capabilities.

The agreement, which Japan has already signed with six other countries, including the United States and China, took a while to reach because Japan insisted on "100 percent transparency" on how its nuclear technology was going to be applied in Russia.

The ministry official said Moscow finally agreed to security requirement standards of the International Atomic Energy Agency, including strict prevention of nuclear technology proliferation.

Putin, on his first visit to Japan since being elected prime minister, also agreed on several intergovernmental pacts, including a mutual legal assistance treaty, a customs mutual assistance agreement and collaboration to prevent the export of illegal fisheries catches.

The mutual legal assistance treaty will strengthen collaboration between Japanese and Russian police agencies amid rising cross-border crimes, according to the Foreign Ministry.

Legal authorities will directly contact each other for cooperation and information under the treaty, improving the efficiency and accuracy of investigations.

Japan has signed similar treaties with the U.S., China and South Korea.

Putin arrived Monday along with a delegation of business personnel. He attended a working breakfast and business forums Tuesday with Russian and Japanese private-sector representatives.

He also met with former Prime Ministers Junichiro Koizumi and Yoshiro Mori.

Putin had declared before his arrival that bilateral ties must develop in all dimensions for the island issue to be resolved.

The two countries have yet to sign a peace treaty to end World War II due to the dispute over the islands of Kunashiri, Etorofu, Shikotan and the Habomai islets, which Soviet forces seized in the closing days of World War II.

news.notes20090513b

[TODAY'S TOP STORIES] from [The Japan Times]

[NATIONAL NEWS]

Wednesday, May 13, 2009
CITIZEN JUSTICE
Preparation for quicker criminal trials enhances focus

By SETSUKO KAMIYA SECOND IN A SERIES
Staff writer
Second in a series

Criminal trials in Japan have tended to take months — sometimes even years — to reach an initial verdict.

But when ordinary people take part in the new lay judge system and together with professional judges try accused criminals, most trials are expected to wrap up in a matter of days, legal professionals say.

Speeding up trial proceedings has been an important goal in the runup to the "saibanin" system, in part because the people summoned for the de facto jury duty will have to take time away from work, home and other responsibilities.

Prosecutors, defense lawyers and judges have been making efforts to dramatically transform the way they operate. They all agree that trials as well as their way of thinking have undergone drastic change.

"Cases that will be tried under the lay judge system are often not very complicated compared with those related to the financial system or the stock market. They are straightforward and easy to understand," said Shozo Fujita, director of the Saibanin Trial Department of the Supreme Public Prosecutor's Office. "Thus, it is possible for us to narrow down the necessary evidence and keep examinations short, while proving what needs to be proved."

Until now, trials dragged on for months because both the prosecution and defense submitted reams of written "evidence" covering even minor details not necessary in proving the facts of an alleged crime. But once submitted, judges had to pour over them to come to a decision, and an ultimate verdict.

And instead of being held every day, trial sessions were spread out over weeks to accommodate the schedules of the legal professionals, not the defendants.

Since the decision in 2004 to introduce the lay judge system, expediting trials has been a major goal.

This inevitably led to revision of the criminal procedure law in November 2005 so that pretrial meetings must be held for all cases that will be subject to the lay judge system.

In the pretrial meetings, both the prosecution and defense are supposed to submit their arguments and divulge the evidence they plan to submit in court. They clarify the points at issue and narrow down the evidence and witnesses to be called.

Professional judges presiding over the pretrial meetings see the main points to be argued in court, along with the names and number of witnesses. But they will not learn details of the evidence until the trial begins. In the end, they can estimate a trial's length and thus schedule sessions.

But what was meant to speed up the proceedings may prove a tail wind for defense lawyers, who say the pretrial meetings are improving the environment to defend their clients.

One major benefit, they say, is that courts have become more apt to grant bail. Bail was rarely granted before because judges feared defendants might use the opportunity to tamper with evidence.

"Even if we asked for bail, it was always rejected," said lawyer Takeshi Nishimura, general secretary of the Japan Federation of Bar Association's lay judge preparation task force.

But now that defense teams must plan and present their arguments under the pretrial meetings, the courts have begun to realize that unless they grant bail, lawyers cannot talk with their clients and thus will not be able to prepare, he said.

Similarly, defense lawyers now can extract more evidence from prosecutors, Nishimura said. This is particularly important because new evidence will not be allowed once a trial begins.

Before the 2005 revision, prosecutors did not have to submit evidence to their opponents in advance. It was up to the courts to order them to do so.

"But now, it is spelled out in the law that the defense has the right to access evidence when conditions allow, and courts seem to be aware of the need to get the evidence out before the trial starts," he said.

Fujita of the Supreme Public Prosecutor's Office acknowledges that prosecutors will have to be better prepared because the more evidence they divulge, the more counterarguments will be made in court. Still, he is confident the new process will go smoothly.

"If all parties utilize the pretrial meetings carefully, we'll be able to set a reasonable schedule and have a very focused argument," he said.

When legal circles began practice trials, the evidence was sometimes excessively narrowed down during the pretrial phase. This caused problems when the trials started, said Masaya Kawamoto, a judge currently serving as an administrative official in the criminal division of the Supreme Court.

"We had to remind ourselves it wasn't just about speeding up. It's a procedure to secure the rights of the defendant, so the trials must be thorough," he said.

As part of the preparation process, the top court sent around 100 judges overseas to observe courts where civic participation in criminal trials is a matter of course. The different systems included those in the United States, the United Kingdom, Germany, France and Italy.

"Everyone came back shocked," Kawamoto said. "Evidence introduced in the hearings was well narrowed down to what was really necessary, and the questions were to the point. They noticed that the sense of time was completely different" from conventional Japanese criminal proceedings, he said.

But Kawamoto believes professional judges here are now prepared to achieve expeditious trials. "In the course of time, I believe we've really seen a major change in our mind-set," he said, adding there is an overall reduction in unnecessary evidence being submitted in other trials and arguments are more honed.

However, shortening the trial process still has critics.

Some say the pretrial meetings limit access to case details. They also argue the courts have stressed too much that the lay judges will only have to serve just a few days.

Nobuo Gohara, a professor at Meijo University and a former prosecutor, said that while he believes opening up the legal system to the public is important, cases that will be handled by lay judges should have been those involving political funds or businesses, because the public is more familiar with these offenses than heinous crimes.

"Authorities have stressed that most cases only last three days, but how can serious cases that could result in life imprisonment or a death penalty be judged in such a short time? It's going to take a lot longer than that, and I don't think the public is ready for all that," said Gohara, who spoke last month to Diet members who suddenly formed a group across party lines aiming to postpone the system's start.

"This system will inevitably invite rough justice," he said.

Others warn there is an overall lack of education of the public on the justice system itself and media crime reports could bias ordinary people.

The lawmakers who joined the group raised 12 major issues to back their opposition to the lay judge system, even though the law bringing in the system sailed through the Diet unanimously.

Lawyer Satoru Shinomiya, who took part in designing the lay judge system, said that while he agrees with many issues that were raised, trying to stop system from starting now would return things to how they were.

"The fact that lay judges are coming has already brought many positive changes to the criminal justice system," he said. "If we have to wait until all the problems are solved, then when will that day come?"

The law calls for the government to review the lay judge system three years after its introduction, if necessary.

What's important to make the system better, Shinomiya said, is for lawyers to make the effort to persuade the lay judges to be fair and do the right thing.

"When the public comes to court, they want to do the right thing and leave. And it is the role of lawyers to encourage them to do that. I'm confident the Japanese people will respond to the call."

news.notes20090513c

[Today's News] from [The Guardian]

Junior minister to pay back £42,000 in expenses
Phil Hope returning money because of 'massive blow' to his reputation

Andrew Sparrow and agencies
guardian.co.uk, Wednesday 13 May 2009 10.49 BST
Article history

Phil Hope, the junior health minister, today announced that he will repay nearly £42,000 to the Commons authorities to cover money he claimed on expenses for furniture, fittings and household items.

In a statement, the minister said that he was returning the money because of the "massive blow" caused to his reputation by the revelation that he had spent so much furnishing a two-bedroom flat in London.

Other Labour and Tory MPs have agreed to repay money since the Daily Telegraph started publishing details of parliamentary expense claims last week, but the amount being returned by Hope is larger than any other repayment made so far.

In his statement Hope said that, although he followed the rules laid down by parliament, he wanted to restore the "trust" and the relationship he had with his constituents. He said the impression given by the revelations about his expenses was "dreadful".

Hope made his announcement following a flurry of activity in the Commons on Tuesday involving all three main political parties apparently trying to compete with each other in proposing rival crackdowns on expenses.

David Cameron, the Tory leader, seized the initiative with the announcement that shadow cabinet ministers were repaying some money claimed from the taxpayer and the vow that in future his MPs would have to comply with strict Conservative rules governing what they could claim.

But late yesterday Gordon Brown said that a government initiative would lead to all expenses claims submitted by MPs over the last four years being reassessed. He was referring to a decision taken by the committee on members' allowances last night, which could lead to MPs being asked to repay money if its audit of previous claims concludes that some payments were inappropriate.

Brown said this was "a radical move" but a necessary one. He said that a comprehensive review was necessary because "it is not enough for one or two MPs to make announcements here and there".

Nick Clegg, the Liberal Democrat leader, said that his MPs would repay any profits made from the sale of second homes funded by parliamentary allowances.

Nick Brown, the government chief whip, has been meeting Labour MPs deemed to have made excessive claims to urge them to consider repaying the money. But, in an interview on Sky News, Hope said that his decision to pay the money back was a personal one.

He also denied that his move was motivated by his desire to save his seat at the election. He holds Corby with a majority of just 1,517. "It's not about votes," Hope said.

The Telegraph published details of Hope's claims on Saturday. It listed all the items he had bought over four years, at a cost of £37,000, to furnish his two-bedroom second home in London. Hope told the paper that he had acted "entirely within the rules" and that he had bought the fittings and furniture to make the flat usable.

Among items claimed for by Hope were a new kitchen, seven doors, wooden flooring, bedroom furniture, chairs and tables, two bookcases and a television. A £120 barbecue and £61 for gardening materials – despite rules stating that MPs can only claim for garden maintenance – were also included for what was said to be a "modest" two-bedroom flat in south London.

In his statement Hope said: "The anger of my constituents and the damage done to perceptions of my integrity concerning the money I have received to make my London accommodation habitable has been a massive blow to me that I cannot allow to continue.

"I have worked very hard over the last 12 years to represent and fight for my constituents and their opinion of me as a person matters hugely to both myself and my wife, Allison. We feel very badly hurt by what has happened and, although I kept to the rules laid down by parliament, I cannot allow this dreadful perception about what I claimed in allowances to continue. Whatever the right and wrongs of the allowance system this issue has fundamentally changed the view people have of me and that is something I cannot bear.

"I have decided to try to restore the trust and relationships I have with my constituents. I am returning all of the money that I have claimed for fittings, furniture and household items that I received over a five year period: the sum of £41,709. This will be paid to the house authorities as soon as the necessary arrangements can be made."

As Hope made his announcement, the Labour backbencher Mark Lazarowicz said he was going to repay £2,675 of his expenses claims for legal and professional fees because they were "much higher than many of the public would be prepared to accept". The sum is half of what he claimed for the fees in connection with his London flat.

The Edinburgh North and Leith MP said the Commons fees office had given him written prior approval for the claims which were "entirely within the existing parliamentary rules".

"Nevertheless, it is clear to me that the payment would look high to many people, and that it would only be reasonable for me to repay a substantial part of the bill," he went on.

"The reason why the claim was so high was that what should have been a relatively straightforward legal transaction ended up in a protracted legal dispute lasting for many months.

"I hadn't realised quite how much the legal bill was until I checked my expenses and added them up on Tuesday this week."

Lazarowicz added: "If we are to have any hope of restoring public confidence in our political system, all of us must examine both our claims and consciences and pay back any payments which we cannot defend with full confidence in the cold light of day."

news.notes20090513d

[Today's Paper] from [Los Angeles Times]

Pakistan gets a say in drone attacks on militants
Islamabad and the U.S. military team up to carry out Predator attacks on the Taliban and Al Qaeda. The program marks broad new roles for both.

By Julian E. Barnes and Greg Miller
May 13, 2009

Reporting from Washington -- The U.S. military has launched a program of armed Predator drone missions against militants in Pakistan that for the first time gives Pakistani officers significant control over routes, targets and decisions to fire weapons, U.S. officials said.

The joint effort is aimed at getting the government in Islamabad, which has bitterly protested Predator strikes, more directly engaged in one of the most successful elements of the battle against Islamist insurgents.

It also marks a broad new role for the U.S. military in hunting the Taliban and its Al Qaeda allies, who pose a growing threat to both Pakistan and Afghanistan. For years, that task has been the domain of the CIA, which has flown its own Predator missions over Pakistan.

Under the new partnership, a separate fleet of U.S. drones operated by the Defense Department will be free for the first time to venture beyond the Afghan border under the direction of Pakistani military officials, who are working alongside American counterparts at a command center in Jalalabad, Afghanistan.

"This is about building trust," said a senior U.S. military official, speaking on condition of anonymity because the program has not been publicly acknowledged. "This is about giving them capabilities they do not currently have to help them defeat this radical extreme element that is in their country."


The program represents a significant departure from how the war against the Taliban has been fought for most of the last seven years. The heavy U.S. military presence in Afghanistan has been largely powerless to pursue the Islamic extremists who routinely escape into Pakistan.

But the initiative carries serious risks for Pakistan, which is struggling to balance a desire for more control over the Predators with a deep reluctance to become complicit in U.S. drone strikes on its people.

Pakistani President Asif Ali Zardari, on a visit to Washington last week, reiterated his nation's request for its own fleet of Predators. U.S. officials have all but ruled that out, and they described the new, jointly operated flights as an effective compromise.

Pakistani officials said Tuesday that they were working with U.S. officials to better utilize the American technology. In a statement, Husain Haqqani, Islamabad's ambassador to Washington, said Pakistan remained concerned that the "unilateral" CIA drone strikes violated the nation's sovereignty.

"Pakistan has not been averse to using every available means in tracking down Al Qaeda and other terrorists," Haqqani said. "We have been working with the U.S. side to find ways in which the U.S. technological advantage matches up with our desire to uphold our sovereignty within our borders."

CIA Predators flown covertly in Pakistan continue to focus on the United States' principal target, Al Qaeda. The military drones, however, are intended to undermine the militant networks that have moved closer to Islamabad, the capital, in recent weeks.

Over the last month, officials said, the U.S. has offered Pakistan control over multiple flights involving the Defense Department's Predator and more heavily armed Reaper drones.

Pakistan declined an offer to use the drones for its recent military offensives in the Swat Valley and Buner areas, and poor weather has caused other sorties to be scrapped. But the senior U.S. military official said that at least two missions had been flown in recent weeks under Pakistani direction.

The missions have not involved the firing of any missiles, and some U.S. officials have expressed frustration that the Pakistanis have not used the Predator capabilities more aggressively. Officials said Pakistan was given the authority to order strikes on the jointly operated flights as long as there was U.S. agreement on the targets.

Over the last year, Navy Adm. Michael G. Mullen, chairman of the Joint Chiefs of Staff, has made repeated trips to Islamabad to push for greater Pakistani cooperation.

The program is part of a broader overhaul of the U.S. military approach in the region. Army Lt. Gen. Stanley McChrystal, named this week to become the new top U.S. commander in Afghanistan, expanded the use of Predators while in Iraq and is expected to do the same in his new post.

The missions are being controlled from the jointly operated command center in Jalalabad. The center contains a "fusion cell" that merges information gathered from American surveillance with human intelligence collected by Pakistani and Afghanistan forces.

Debates between Pakistanis and Americans have taken place within the center over whether potential targets are Taliban leaders or Pakistani tribesmen with only a loose affiliation with the extremists. Nonetheless, U.S. officials said most Pakistani officers in the command center understood the militant threat and were eager to move aggressively.

Pakistani superiors have had more reservations and have equivocated when asked for permission to fire on suspected militants.

Pakistanis have repeatedly emphasized to U.S. military officers that they are reluctant to fire missiles at their own citizens. "They have asked us to try and understand what it is like to be a military that is now required to go against its own people," said the senior military officer. "I do not think we always have the right perspective of how difficult it is."

The Pakistani reluctance may also reflect ambivalence in Islamabad over the CIA's Predator program. The intelligence agency is in the midst of a campaign of strikes on Al Qaeda operatives in Pakistan's tribal frontier.

The most recent strike came Tuesday, reportedly killing eight people in the South Waziristan region of Pakistan's Federally Administered Tribal Areas. Since August, the agency has carried out at least 55 strikes, compared with 10 reported attacks in 2006 and 2007 combined. U.S. officials have said the flights are authorized by the Pakistani government. CIA officials credit Pakistan's Inter-Services Intelligence agency with providing on-the-ground information that often leads to Predator strikes. In turn, the CIA has shared sensitive imagery and intercepts with Pakistani counterparts.

Despite that arrangement, U.S. officials avoided offering Pakistan greater control over the CIA drones, in part out of concern about giving Pakistan direct access to a sensitive and secret intelligence operation. At times, U.S. intelligence officials have voiced suspicions that elements of the ISI, which has long-standing relationships with Taliban leaders, have warned targets in advance of U.S. strikes.

U.S. officials also cited a reluctance to take CIA drones away from their efforts to track and kill senior Al Qaeda figures, and stressed that the military drones would pursue a different set of targets, mainly Taliban-linked fighters.

"If it's true that Pakistan is actually controlling some of these drones, that undermines the concerns [they express] about the attacks," said Seth Jones, a counter-terrorism expert at Rand Corp.

Pakistan's permission is crucial to Predator operations, experts said.

"The key is you've got to have the approval of the host government," said Scott Silliman, a former Air Force lawyer who is now a law professor at Duke University. "If you do not, you cross over the line of invading the territorial sovereignty of another country."

news.notes20090513e

[Today's Paper] from [The New York Times]

Recession Drains Social Security and Medicare

By ROBERT PEAR
Published: May 12, 2009

WASHINGTON — Even as Congress hunted for ways to finance a major expansion of health insurance coverage, the Obama administration reported Tuesday that the financial condition of the two largest federal benefit programs, Medicare and Social Security, had deteriorated, in part because of the recession.

As a result, the administration said, the Medicare fund that pays hospital bills for older Americans is expected to run out of money in 2017, two years sooner than projected last year. The Social Security trust fund will be exhausted in 2037, four years earlier than predicted, it said.

Spending on Social Security and Medicare totaled more than $1 trillion last year, accounting for more than one-third of the federal budget.

The fragility of the two programs is a concern not just for current beneficiaries, but also for future retirees, taxpayers and politicians. Lawmakers say they would never allow Medicare’s trust fund to run out of money. But beneficiaries could be required to pay higher premiums, co-payments and deductibles to help cover the costs.

The projected date of insolvency, a widely used measure of the benefit programs’ financial health, shows the immense difficulties Mr. Obama and Congress will face in trying to shore them up while also extending health coverage to millions of Americans.

The labor secretary, Hilda L. Solis, noted that 5.7 million jobs had been lost since the recession began in December 2007. With fewer people working, the government collects less in payroll taxes, a major source of financing for Medicare and Social Security.

A resumption of economic growth is not expected to close the financing gap. The trustees’ bleak projections already assume that the economy will begin to recover late this year.

The Treasury secretary, Timothy F. Geithner, said the only way to keep Medicare solvent was to “control runaway growth in both public and private health care expenditures.” And he said Mr. Obama intended to do that as part of his plan to guarantee access to health insurance for all Americans.

But if cost controls do not produce the expected savings, Congress is likely to find it difficult to preserve benefits without increasing taxes.

Just hours before the trustees of Medicare and Social Security issued their annual report, suggesting that the nation could not afford the programs it had, the Senate Finance Committee finished a hearing on how to pay for the expansion of health insurance coverage that Mr. Obama seeks.

Mr. Obama has said he does not want to finance expanded health coverage with more deficit spending. Rather, he says, Congress must find ways to offset the costs, so they do not add to the deficit over the next decade.

Federal deficits and debt are soaring because of the recession and federal efforts to shore up banks and other industries while trying to revive the economy with a huge infusion of federal spending.

“The financial outlook for the hospital insurance trust fund is significantly less favorable than projected in last year’s annual report,” the Medicare trustees said. “Actual payroll tax income in 2008 and projected future amounts are significantly lower than previously projected, due to lower levels of average wages and fewer covered workers.”

In coming years, the trustees said, Medicare spending will increase faster than either workers’ earnings or the economy over all.

The trustees predicted that, for the first time in more than three decades, Social Security recipients would not receive any increase in their benefits next year or in 2011. In 2012, they predicted, the cost-of-living adjustment will be 1.4 percent.

The updates are calculated under a statutory formula and reflect changes in the Consumer Price Index, which was unusually high last year because of energy prices.

If there is no cost-of-living adjustment for Social Security, about three-fourths of Medicare beneficiaries will not see any change in their basic premiums for Part B, which covers doctors’ services. The monthly premium, now $96.40, is usually deducted from Social Security checks, the main source of income for more than half of older Americans.

The trustees said that one-fourth of Medicare beneficiaries would face sharply higher premiums: about $104 next year and $120 in 2011. This group includes new Medicare beneficiaries and those with higher incomes (over about $85,000 a year for individuals and $170,000 for couples).

Seventy-five percent of beneficiaries will not pay any increase, so the remaining 25 percent have to pay more to keep the trust fund at the same level, Medicare officials said.

The aging of baby boomers will strain both Medicare and Social Security, but Medicare’s financial problems are more urgent.

The trustees predict a 30 percent increase in the number of Medicare beneficiaries in the coming decade, to 58.8 million in 2018, from 45.2 million last year.

But the projected increase in health costs and the use of medical care is a more significant factor in the growth of Medicare. The trustees predict that average Medicare spending per beneficiary will increase more than 50 percent, to $17,000 in 2018, from $11,000 last year.

Representative Pete Stark, the California Democrat who is chairman of the Ways and Means Subcommittee on Health, said the Medicare report “underscores the urgent need for health reform.”

news.notes20090513f

[Today's Newspaper] fom [The Washington Post]

Alarm Sounded On Social Security
Report Also Warns Of Medicare Collapse

By Amy Goldstein
Washington Post Staff Writer
Wednesday, May 13, 2009

The financial health of the Social Security system has eroded more sharply in the past year than at any time since the mid-1990s, according to a government forecast that ratchets up pressure on the Obama administration and Congress to stabilize the retirement system that keeps many older Americans out of poverty.

The report, issued yesterday by the trustees who monitor the government's two main forms of help for the elderly, shows that Medicare has become more fragile as well and is at greater risk than Social Security of imminent fiscal collapse. Starting eight years from now, the report says, the health insurance program will be unable to pay all its hospital bills.

The findings put a stark new face on the toll the recession has taken on the two enormous entitlement programs. They also intensify a political debate, gathering strength among Democrats and Republicans, over how quickly President Obama should tackle Social Security when health-care reform is his administration's most urgent domestic priority.

In announcing the results of the trustees' annual forecast with other Cabinet members, Treasury Secretary Timothy F. Geithner said, "The president explicitly rejects the notion that Social Security is untouchable politically." Still, he reiterated that the administration intends to "work to build a bipartisan consensus to ensure the long-term solvency of Social Security" only after it collaborates with Congress to slow health-care spending and enable more Americans to obtain medical insurance.

Congressional Republicans and some Democrats seized upon the findings to argue that the administration should work rapidly to ward off the looming insolvency of Social Security and Medicare. Sen. Judd Gregg (R-N.H.), who withdrew from nomination as Obama's commerce secretary, said yesterday's report shows that the recession is "accelerating the arrival of a massive, trillion-dollar entitlement crisis on our doorstep." He added: "Trying to kick the can down the road will not make it go away. We need to take meaningful action now."

Specifically, the trustees' report predicts that the trust fund from which Social Security payments are made will be unable to pay retirees full benefits by 2037, four years earlier than forecast a year ago. In particular, the trustees single out the financial weakness of the part of the program that subsidizes disabled Americans, saying that fund will run out of money in 2020.

Only three times in the past 15 years have the trustees predicted that Social Security would run out of money sooner than previously expected. Last year, they forecast no change from the 2007 prediction, and in 2007, they predicted that the fund would last a year longer than they had previously thought.

Yesterday's report also said the Social Security trust fund will begin to spend more money than it takes in through tax revenue in 2016, one year sooner than predicted a year ago.

Administration officials said that if Congress were to act immediately, the impending gap could be filled three ways: by raising workers' Social Security payroll taxes by 2 percentage points, from 12.4 percent to 14.4 percent; by reducing benefits by 13 percent; or a combination of the two approaches. The officials briefed reporters on the condition of anonymity on the technical aspects of the trustees' findings.

Medicare's financial health, the report shows, deteriorated less sharply in the past year than Social Security's, but it remains the more urgent problem. The trust fund that pays for hospital care under Medicare is now predicted to run out of money in 2017, two years earlier than forecast a year ago. That fund does not involve the parts of Medicare that cover doctor's visits or coverage for prescription drugs.

The nation's economic downturn has added to the fragility of Medicare and Social Security because worsening unemployment means that fewer workers are contributing to the two trust funds through payroll taxes. Since the recession began in December 2007, the country has lost 5.7 million jobs.

But even if the economy were stronger, the programs would be facing pressure in coming years as the large baby-boom generation reaches old age and people tend to live longer, leaving comparatively fewer workers to pay benefits for a large cadre of retirees.

Health and Human Services Secretary Kathleen Sebelius sought to use the report to build momentum for health-care reform, reiterating the administration's contention that the best way to strengthen Medicare's finances is to, as she put it, "fix what's broken in the rest of the health-care system." If Americans have health insurance and receive adequate medical care when they are younger, she said, they will be healthier and less expensive patients when they become old enough to join Medicare, usually at age 65.

Some key lawmakers in both parties have said they want to devise a plan to keep the retirement program solvent by increasing the retirement age, slowing the growth in the size of retirement checks to wealthy Americans and bringing in new revenue.

Several Democrats and Republicans would prefer to create an independent commission to propose Social Security reforms, but congressional leaders, particularly in the House, have balked, saying the matter should be handled by Congress's regular committees.

Last week, House Majority Leader Steny H. Hoyer (D-Md.) said Congress could start work on the retirement program this fall if it passes health-care legislation by late summer -- a timetable that others called unrealistic. Yesterday, Hoyer said he was encouraged that Geithner, the Treasury secretary, "stated the administration's support for moving forward with Social Security reform after health-care reform has passed."

news.notes20090513g

[Today's Papers] from [Slate Magazine]

Medicare's New Expiration Date

By Daniel Politi
Posted Wednesday, May 13, 2009, at 6:49 AM ET

The Los Angeles Times leads with word that the U.S. military has started working with the Pakistani government on a new program that uses armed Predator drones to go after Islamist insurgents inside Pakistan. By cooperating with Pakistani officers, the hope is that the government in Islamabad will be more open to using drones to go after militants. But that's hardly the only reason this new program is significant. It also marks the beginning of a new role for the U.S. military since the CIA has been the agency that has used drones along the Pakistan-Afghanistan border. The CIA drones won't cease operating, but a separate group of drones will now be under the purview of the Defense Department and, for the first time, will be allowed to venture beyond the border areas.

The New York Times, Washington Post, and Wall Street Journal 's world-wide newsbox lead with a new government report that paints a dire picture of the financial situation of the nation's two largest benefit programs. Partly as a result of the recession, the Medicare fund for hospital care will run out of money in 2017, two years earlier than the government had predicted a year ago. The Social Security trust fund is in a bit better shape but will still start spending more money than it receives in 2016 and will be depleted by 2037, four years sooner than projected last year. At a time when lawmakers are arguing over whether the country can really afford expanding health insurance coverage, the report sparked calls for the administration to start working on a plan to prevent the two entitlement programs from becoming insolvent. USA Today leads with news that the pilots of the plane that crashed Feb. 12 in Buffalo, N.Y., that killed 50 people spent their last few moments chatting with each other about the icy conditions and their careers. According to a transcript of the cockpit recorder released yesterday, the pilots bantered away and didn't seem to realize that the airplane had slowed dramatically.

When Pakistan's president visited Washington last week, he once again said his country wanted its own drones. U.S. officials never liked that idea but see this new joint partnership as a compromise that can serve the interests of both nations. Pakistani military officials will be able to direct the drones inside Pakistan. As opposed to the drones run by the CIA, the new program would go after local militants who are threatening to take over Pakistan rather than al-Qaida targets. Still, the Pakistani military seems reluctant to use this newly available technology. Pakistani officials didn't want to use the drones in the recent Swat Valley offensive, and have yet to order the firing of any missiles.

The recession has sped up the decline of Medicare and Social Security because rising unemployment means the government gets less in the payroll taxes that fund a big chunk of the programs. But even if things turnaround later this year it won't help them avoid their predicted fate. White House officials said the new report on Medicare's finances illustrates why it's so important that the government succeed in its widespread effort to bring down health care costs. But Republicans questioned whether Social Security—the so-called third rail of American politics—shouldn't be Obama's first priority. The new numbers were also great fodder for Republicans who don't like the idea of creating a new government health insurance program. "The government-run healthcare programs we already have are unsustainable," said Rep. Tom Price of Georgia.

The WSJ points out that Medicare's outlook may be even bleaker than the numbers indicate. The report released yesterday takes into account a 21 percent cut in payments this year to doctors who work for Medicare. The cut is required by law but over the past several years Congress has canceled it.

The chit-chat between the pilots of the plane that crashed in Buffalo violated rules that forbid any kind of idle chatter in the cockpit, particularly during takeoff and landing. Apparently distracted by the ice, the pilots didn't realize that the plane had slowed down 57 mph in less than 30 seconds. When a safety device that alerts pilots to a critical slow-down was activated, the pilot apparently did exactly the wrong thing. The device automatically lowers the plane's nose in order to gain speed, but the pilot overrode it and instead tried to raise it. The pilots weren't trained on how to use the safety device.

The WSJ goes high with, and the NYT buries deep inside the business section, word that White House officials are embroiled in serious discussions about how to change the compensation practices in the financial-services industry. Congressional leaders are also batting around ideas. The rules would likely apply to companies that didn't receive any bailout money and could extend beyond banks to include regulated hedge funds, private-equity firms, and mortgage brokers. Although the WSJ's high placement of the story is clearly meant to scare executives in the financial industry, the truth is that nothing has been decided yet. And besides, as the WSJ points out, the government has "long had the power to sanction a bank for excessive pay structures," even if that authority has rarely been used. Both papers say the ultimate goal is to find a way to structure pay at these companies in such a way that it is closely linked with performance. But officials insist they don't want to micromanage payment structures or set compensation limits. Several proposals are currently in the works, and the NYT says new rules could be released before Memorial Day.

CONTINUED ON news.notes20090513h

news.notes20090513h

[Today's Papers] from [Slate Magazine]

Medicare's New Expiration Date

By Daniel Politi
Posted Wednesday, May 13, 2009, at 6:49 AM ET

CONTINUED FROM news.notes20090513g