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Page   1 - Duke Energy Employee Advocate

Washington - Page 3

"A true friend is one who overlooks your failures and tolerates your successes." - Doug Larson

Back of the Hand to the Safety Net

L. A. Times - By ROBERT B. REICH - June 21, 2001

In Washington, a "gaffe" occurs when a high-level official accidentally says what he means. The Bush administration has been remarkably gaffe-free so far, with almost everyone sticking to the same bland script. All except Treasury Secretary Paul O'Neill, that is, whose gaffes offer a glimpse into the real philosophy of the Bush corporation that now runs the United States.

O'Neill's latest occurred in a recent interview with the Financial Times in which he questioned why the government should provide Social Security, Medicare or any other social insurance.

"Able-bodied adults should save enough on a regular basis so that they can provide for their own retirement and, for that matter, health and medical needs," he said.

The Treasury secretary's candor goes a long way toward explaining why Bush's giant $1.3-trillion tax cut--most of whose benefits will go to multimillionaires like O'Neill--hasn't caused more worry in the White House about what will happen to Social Security and Medicare when the baby boomers retire and there's no money left to pay the bill. Bush Inc. assumes that boomers will just take care of themselves.

Seen in this light, the commission recently launched by George W. Bush to recommend ways to save Social Security (packed with people already committed to "privatizing" it) and the new White House move to overhaul Medicare with "market-based changes" are fig leafs for a long-term strategy to get rid of these social insurance schemes altogether.

O'Neill's candor is refreshing. It deserves more than a "gotcha" from Democrats looking for ways to scare elderly voters in the 2002 mid-term elections and the 2004 presidential contest. The Treasury secretary raises one of the most fundamental questions society faces: Why should there be any social insurance at all?

The idea for Social Security was dreamed up by Labor Secretary Frances Perkins and signed into law by Franklin D. Roosevelt in 1935. Unemployment insurance and welfare were parts of the original scheme. Medicare was President Johnson's doing, 30 years later.

The broad idea was easily understood by the generations that experienced the Depression, World War II, the Cold War and some deep recessions. Any family could find itself down on its luck through no fault of its own. Family savings could go down the drain if the economy turned really sour. Its breadwinner might lose his (almost always "his") job and have a hard time finding another. Or he might become disabled or die, leaving his wife and children destitute. An elderly person or couple might lose everything in an economic down draft and face their twilight years in grinding poverty.

A humane society, it was assumed, would pool some of its resources to guard against these personal misfortunes. Like any insurance system, citizens would be expected to pay small premiums. But unlike private insurance, everyone would be included regardless of the likelihood that they'd need to draw on the insurance pool. Rich and poor, healthy and sick, young workers and older workers--all would pitch in.

Treasury Secretary O'Neill would prefer going back to the days before social insurance, when individuals either had to save their own earnings against the possibility they'd need help down the line or buy their own private insurance. Presumably, if the responsibility rested entirely on their shoulders, they'd save more and take better precaution to avoid harm's way.

Some families, however, don't earn enough to allow them to save much of anything. And some harms--a catastrophic illness, a disabling accident, a factory closing, a stock-market plunge--can't be avoided.

Meanwhile, private insurers naturally will do everything they can to sign up clients at the lowest risk of needing them, while eschewing the high risks. After all, insurance companies and HMOs aren't charitable institutions--they need to show profits. And all are becoming more efficient at discriminating among potential consumers, weeding out the high risks and marketing to the low.

So without social insurance, people who are poorer or who face higher risk of having bad things happen to them won't be covered.

People at the other end--richer and at lower risk--will efficiently pool their resources and get insurance at a much lower rate than if they had to bear the extra cost of insuring the poorer and the riskier.

It's coming to be like that all over the land. The richer, healthier, younger, well-educated and well-connected and their children are doing better and better. (They even got a big tax windfall just now.) And the gap between them and the bottom half of the nation widens.

It's not just an income and wealth gap. It's also a geographical gap--they live farther and farther apart. And a psychological gap--the better off don't even encounter the other half or understand them or empathize with the daily burdens and challenges they face.

The welfare "safety net" that was included in the Social Security Act of 1935 already is in shreds. Unemployment insurance reaches a far smaller percentage of people who lose their jobs than it did two decades ago. And now Social Security and Medicare are on the dock.

When Americans faced a common problem--the Depression, a hot war, a cold war--we understood intuitively that we were all in it together. Someone's misfortune could be anyone's: "There but for the grace of God go I." Social insurance was a natural impulse, a first cousin to patriotism. But that sense of commonality is waning as we drift into separate worlds of privilege and resignation.

Treasury Secretary O'Neill and the administration of which he is a part may see the future of American society better than we would like to admit to ourselves. But if that's the future, it won't be much of a society.

(Robert B. Reich, Secretary of Labor in the Clinton Administration, Is a Professor of Economic and Social Policy at Brandeis University)

Federal Regulators to Consider Price Caps

The Charlotte Observer - By STELLA M. HOPKINS - June 17, 2001

Duke Energy proceeds warily with California investment of $1.4 billion

As California taxpayers spend tens of millions of dollars more for power than two years ago, federal regulators will hold a special meeting Monday to discuss toughening price controls for Duke Energy and other generators.

The Federal Energy Regulatory Commission is not scheduled to act on the state's June 8 request to strip generators of their ability to charge whatever the market will bear. Such a move would re-regulate wholesale power prices in a state that three years ago took the nation's boldest move toward deregulation.

But the commission - under growing pressure to act in California's energy crisis - is expected to greatly expand pricing fixes criticized as inadequate.

Anticipated changes include monitoring and possibly capping power prices at all hours, not just during times of very low power reserves. The commission also will consider extending price monitoring to the other 10 western states with transmission systems connected to California. Generators in the region would have to sell available power to California during acute power shortages - times when power prices jump most.

For example, an Observer investigation found that during an extreme January power shortage - including two days of blackouts - Duke Energy charged nearly $4,000 for the amount of power a Carolinas home uses in one month. The sales, totaling $19.4 million, represented a very small amount of the power Duke sold in the state, and the company's average California power prices were far lower - less than twice its Carolinas residential rate.

Duke and at least four other generators face investigations and lawsuits for California pricing practices. Last week, the state's attorney general announced a grand jury will investigate whether generators illegally manipulated the market to boost profits.

Duke - banking on deregulated markets for growth - opposes re-regulation and, like other generators, says California power prices reflect tight supply. They point to a recent cool spell, which helped push prices to the lowest level in over a year.

"We're gratified prices have come down," said Tom Williams, Duke's spokesman in California. "It shows the simple laws of supply and demand are working."

Duke bought three California power plants in 1998 and leased another in 1999 as the state's monopoly utilities sold plants - part of the state's plan to foster competition under deregulation. The three plants give Duke, the Carolinas' largest utility, 5 percent of California's generating capacity.

When California deregulated, the state had adequate supplies even though it hadn't built a power plant in 10 years. A cool summer in 1999 masked the strain on power supplies as the state rebounded from a long recession.

Last year, light rain and snow drastically cut hydropower. Rapid growth in surrounding states meant they had much less power to sell California. Growth, especially in California's power-hungry high-tech sector, quickly outstripped supply. This year, the state has had six days of blackouts.

As wholesale power prices soared, utilities couldn't pay, and the largest filed for bankruptcy. The state stepped in with tax dollars to buy power. Regulators then passed the state's largest retail rate increase.

This month, California's residential power users begin paying as much as fontíthree times the rate paid by similar Duke customers in the Carolinas.

"The system wasn't designed to work in this type of environment," said Roger Salazar, a spokesman for California Gov. Gray Davis. "It creates all sorts of chaos and you see the outrageous prices we're paying."

Salazar said the state needs "some tempering of wholesale prices" until more power plants come on line.

The federal energy commission - charged with ensuring "just and reasonable" wholesale electrical rates - has not been as aggressive with generators as state and federal legislators feel it should be.

But these critics say two new commissioners, weighing in for the first time in Monday's meeting in Washington, might be tougher.

"We are hopeful they will provide some price relief for California," Salazar said.

The request for re-regulation comes from the California Independent System Operator, the agency that runs the transmission lines carrying about 75 percent of the state's power. The ISO buys power - often at the highest prices - when the state's purchases don't meet the day's demands.

The ISO also wants the commission to order refunds since May of last year. The commission has ordered generators to refund $124 million, including $20 million from Duke, for January and February sales.

In what may be largely a warning to generators, a California State Assembly committee last week approved a bill that would allow the state to seize power plants charging unreasonable prices.

To become law, the bill would have to survive a full vote and get through the Senate.

Analysts say talk of re-regulation, windfall profits taxes and power plant seizure could drive away badly needed investment.

"They want to cap prices and they think that will encourage people to come into the state and build?" said Tom Hamlin, energy analyst with First Union Securities.

On June 1, a generator delayed construction of a big California power plant. Mirant, based in Atlanta, cited "a great deal of uncertainty."

Salazar said talk of pulling out of the nation's largest energy market is rhetoric. Harvey Rosenfield, president of The Foundation for Taxpayer & Consumer Rights, goes further.

"It's like a bully saying to someone in the schoolyard, `Don't you dare fight back when I steal your milk money.' The only way I know to deal with it is to hit them back hard."

Duke is spending $500 million expanding one California plant, and applied for a $600 million renovation at another. The company also plans to apply soon to build a $300 million plant.

But lawsuits, investigations and the grand jury inquiry make Duke wary. The California team convenes a conference call most afternoons to assess the day's developments.

A lawyer specializing in energy project financing said it's "nonsense" to think re-regulating California's power prices would end investment. After all, generators have built plants for decades in regulated markets.

"The real question is, are the (price caps) high enough to earn a reasonable rate of return, to pay for projects," said the lawyer, who asked not to be identified.

He also said temporary price caps could encourage investment by soothing lenders nervous because of legal and regulatory uncertainties and the inability of power buyers to pay their bills.

Duke, for example, says the ISO owes it $20 million for power bought from one of its plants this year. The company has reserved $110 million to cover potential bad debts in California.

"It's a false freedom," the lawyer said of California's market. "You can charge whatever the market will bear, but people can't afford to pay you."

When Truth Is 'Treason'

New York Times - By ANTHONY LEWIS - June 9, 2001

Despite all the gains for democracy in the world, in many countries anyone who wants to publish truths unwelcome to the government risks suppression and criminal punishment. If Henry Kissinger and Richard Nixon had had their way, that would be so in the United States, too.

On June 13, 1971, 30 years ago next Wednesday, The New York Times began publishing a series on the secret official history of the Vietnam War that became known as the Pentagon Papers. That afternoon President Nixon spoke on the telephone with Dr. Kissinger, his national security adviser. The conversation has now been declassified, and published by the National Security Archive.

"It's treasonable, there's no question," Dr. Kissinger said. "It's actionable, I'm absolutely certain that this violates all sorts of security laws."

Dr. Kissinger suggested that he talk with the attorney general, John Mitchell. President Nixon agreed. Two days later Mr. Mitchell asked the courts to bar further publication of the Times series.

An extraordinary legal struggle followed. It ended 15 days later, when the Supreme Court, by a vote of 6 to 3, rejected the Nixon administration's claim.

The First Amendment and other legal doctrines, the court said, protect the right to publish even these highly classified documents - unless, as Justice Potter Stewart put it, publication would "surely result in direct, immediate and irreparable damage to our nation or its people." The government had not made that showing.

So it was judges who saved this country from the repressive spirit that prevails in so many others. The Pentagon Papers case stands today as a barrier to silence by official edict.

But there is another meaning in the Pentagon Papers episode. It was caught in an exchange between President Nixon and Dr. Kissinger later in that same June 13 conversation.

"My God," the president said, "can you imagine The New York Times doing a thing like this 10 years ago?" Dr. Kissinger replied, "And then, when [Senator Joseph] McCarthy accused them of treason, they were screaming bloody murder."

Mr. Nixon was right. Ten years earlier The Times was unlikely to have published such a volume of classified documents on a national security matter. What had changed? That was the question Mr. Nixon did not ask, and did not understand.

What changed the attitude of The Times and other mainstream publications was the experience of the Vietnam War. In the old days in Washington the press respected the confidence of officials because it respected their superior knowledge and good faith. But the war had shown that their knowledge was dim, and respect for their good faith had died with their false promises and lies.

Reporters and editors of The Times in the past had accepted the need for some secrecy. (James Reston, the great Times reporter and columnist, knew for years but did not write that we were flying U-2 spy planes over the Soviet Union.) Now they were all for publishing the Pentagon Papers. The decision was up to the publisher, Arthur O. Sulzberger, and it was not an easy one. He was a former U.S. marine with a deep concern for national security. But when we were fighting a dubious war by dubious means, where did that security lie? Mr. Sulzberger gave the go-ahead for publication.

This country is now firmly committed to freedom of expression on even the most sensitive subjects. So we believe. But it would be a great mistake to think that the Pentagon Papers case settled the issue forever on the side of freedom.

Just last year Congress passed a bill that would have made publication of any classified information a crime. The press paid little attention to the menacing legislation until it had gone through both House and Senate and been sent to the White House. President Clinton then saved the day by vetoing the bill.

Every generation has to relearn the lesson of the Pentagon Papers case. William B. Macomber, deputy under secretary of state at the time, testified for the government, saying that diplomatic disclosures might have "irreparably damaged the chance of free government to endure." But years later he said:

"Even though . . . nothing is more important to me than the security of the United States, the First Amendment is, in another way, the security of the United States. You can't save something and take the heart out of it."

Rights Panel Finds Florida Vote 'Injustice'

L. A. Times - By BOB DROGIN - June 5, 2001

Draft report urges immediate inquiry into the harm done to minorities, especially blacks. State officials "failed to fulfill" duties, federal commission says.

WASHINGTON - Disenfranchisement of Florida's voters in November "fell most harshly on the shoulders of African Americans" in a presidential election marked by "injustice, ineptitude and inefficiency," according to a draft report by the U.S. Commission on Civil Rights.

The confidential report by the independent federal agency repeatedly urges the U.S. Justice Department and Florida's attorney general to immediately investigate whether Florida officials violated state or U.S. law by employing policies and practices that unfairly harmed minority voters.

"Despite the closeness of the election, it was widespread voter disenfranchisement, not the dead-heat contest, that was the extraordinary feature in the Florida election," according to the 197-page document, key portions of which were obtained by The Times.

"The disenfranchisement was not isolated or episodic," it adds. "State officials failed to fulfill their duties in a manner that would prevent this disenfranchisement."

African American voters were nearly 10 times more likely than white voters to have had their ballots rejected in Florida, the report states. Of the 100 precincts in the state with the highest number of disqualified ballots, 83 are majority black. Overall, 54% of the ballots disqualified were cast by black voters, the report says.

The draft report says investigators found no "conclusive evidence" that state officials conspired to disenfranchise blacks or anyone else in Florida. Nor will it affect President Bush's 537-vote statewide margin of victory over Al Gore, which gave him the White House.

But the panel sharply criticizes the president's brother, Florida Gov. Jeb Bush, Secretary of State Katherine Harris and other Florida officials for neglecting widespread weaknesses in the voting system and failing to prepare for increased voter turnout. In testimony before the commission, Bush and Harris argued that their powers were limited under the state's constitution and denied any wrongdoing.

The advisory commission has no power to enforce its findings, which the panel will consider at a meeting Friday. But ever since Congress created the panel as an independent agency in 1957, its reports on major racial conflicts and controversies have helped mold public opinion and guide government action.

Both the Justice Department and the state attorney general's office launched investigations into possible civil rights violations after the election. No results have been announced and it wasn't immediately clear if the commission's recommendations would lead to wider inquiries. The commission consists of four Democrats, three independents and one Republican.

Even unintentional acts that have a disparate effect on minority voters are illegal under a 1982 amendment to the Voting Rights Act of 1965.

The draft report focuses heavily on the now-familiar litany of problems that bedeviled Florida's voters: error-prone punch-card ballots, confusing ballot designs, unreliable voting machines, inadequate resources and a botched effort to cut felons from voter rolls that mistakenly disenfranchised legitimate voters.

According to the report, the data on the computerized felon list had "at least a 14.1% error rate." The state's use of the list, combined with a state law that forced voters to get themselves off the list, "resulted in denying countless African Americans the right to vote."

Florida's Legislature approved sweeping election reforms in early May in an effort to correct many of those problems, so the effect of the commission report and its recommendations may be limited.

The Legislature voted to eliminate punch-cards, paper ballots, mechanical lever machines and counting systems that contributed to high error rates, for example. They also agreed to allow "provisional ballots" for voters who are challenged at the polls, and provided money to train poll workers.

The civil rights panel plans to return to Florida next year to monitor the reforms before the state's 2002 gubernatorial elections. "The commission is quite accustomed to legislatures passing laws and then never doing anything," the commission chairwoman, Mary Frances Berry, said in a recent interview.

Commission hearings in Tallahassee and Miami earlier this year focused on election irregularities. Panel members quizzed more than 100 witnesses as they sought to determine who made critical decisions and how they affected minority communities. At issue: why 180,000 presidential ballots were disqualified and not counted last fall. Florida saw a record black turnout last year thanks to registration and get-out-the-vote drives by unions, students and other groups. About 893,000 African Americans went to polls across the state, a 65% increase from 1996. "If it was a systematic plan" to discourage black voters, "it failed," said Darryl Paulson, political science professor at the University of South Florida.

But the huge turnout caused huge problems. State and county officials did little or nothing to ensure that affected precincts were adequately prepared, creating long lines and jammed phones. And no one taught the new voters how to cast ballots.

"We didn't do any voter education," said Isiah Rumlin, head of the National Assn. for the Advancement of Colored People in Duval County, which consists of Jacksonville and its environs. "We didn't know we needed to. . . . In retrospect, we should have done a better job."

The civil rights commission also investigated widely circulated reports that Florida police stopped and intimidated vast numbers of black voters near polling places across the state.

In reality, the Florida Highway Patrol ran three roadblocks that day--in Leon, Escambia and Bay counties--to check licenses, registration and safety equipment. Troopers erect similar posts almost every day across the state.

The Leon County checkpoint was unauthorized, however, because troopers hadn't obtained proper approval. Col. Charles Hall, head of the highway patrol, said about 150 cars were stopped at midmorning more than 2 miles from the nearest polling station. Six of the 16 drivers who were issued traffic tickets or warnings were non-white, he added.

"No member of the community was unreasonably delayed or prohibited from visiting their voting precinct" because of a checkpoint, Hall said.

But Bob Butterworth, Florida's attorney general, called the checkpoints "inexcusable" and "flat-out wrong," even though an investigation by his office found no evidence that voters were intimidated.

"It was absolutely not necessary for law enforcement purposes, and similar checkpoints should never again be implemented on election day," Butterworth said.

Far more important than roadblocks were confusing ballot designs and the failure of many counties to use so-called "second chance" technology: counting machines that reject ballots with double votes and other errors so the voter can cast another ballot.

To be sure, white voters were also affected by such problems. Thousands of white retirees complained about the confusing "butterfly" ballot in Palm Beach County, for example, and spoiled their votes. But heavily black precincts there had far higher error rates.

Duval County also had a ballot that was a design disaster. Gore, Bush, Ralph Nader and two other candidates were on one page. Five other candidates were on another page. Even worse, the official sample ballot printed in local newspapers before the election instructed voters to "vote all pages." Anyone who did so spoiled their vote. "If you read the instructions on the sample ballot, you would have voted wrong," complained Rep. Corrine Brown (D-Fla.).

About 16,500 ballots were rejected as double-votes in the county's four black-majority districts. About 4,500 ballots were tossed out in the 10 mostly white districts. Put another way, 1 in 5 ballots was tossed out in black districts compared to 1 in 20 in white areas.

Experts blame several factors, including lower literacy rates among minorities and a reluctance to challenge officials in a state where violent racial attacks once were common and voting rights were sharply curtailed.

Whatever the cause, the state's voting process is "systematically biased" against minorities, argued Lance deHaven-Smith, assistant director of the Florida Institute of Government at Florida State University in Tallahassee. "Is it intentional? Obviously not. Unless we don't fix it now that we know it's a problem."

The election was widely discussed at a recent legal clinic in the NAACP office in northern Jacksonville, a dimly lit room behind a heavily barred door in a dingy roadside shopping center.

A videotape documentary about Florida's bloody civil rights battles played in one corner, while wall posters bore grisly details of scores of 19th and early 20th century lynchings. Two dozen people waited patiently for a chance to talk to a lawyer.

Some said they were stymied by hostile poll workers who wrongly demanded multiple photo IDs, even though state law only requires one.

Others said that some polling stations closed at 7 p.m., turning away those already in line, or changed locations without notice.

"You had to go all over town to find out where you were supposed to vote," charged the Rev. James B. Sampson, pastor of the First New Zion Missionary Baptist Church.

Still others said they voted--but now fear it wasn't counted.

"I was so confused," admitted Emory Kinsey, 45, a public works driver. "I don't even know if I voted for the right person or not."

Off on the side, L. Ross Davis, a fiery NAACP organizer, boiled with fury. He helped register 3,228 new voters in churches, schools, malls and slums. He is convinced of a conspiracy to disenfranchise blacks. And he is determined not to let it happen again.

"Yeah, I'm mad . . . ," Davis said, "mad that someone would pollute a system that was pure. But we won't be fooled again. We'll redouble our efforts next time. That I promise you."

Even the Rich Rip Bush's Tax Scheme

Madison Capital Times - by Dave Zweifel - June 4, 2001

"The power of organized money has won another round."

Who, you ask, was the anti-corporate, wide-eyed liberal who said that?

The answer is none. It was written by William H. Gates Sr., the father of Bill Gates, the multibillionaire of Microsoft fame, following Congress' passage of the 2001 tax cut bill.

Included in the tax cut, of course, was the eventual repeal of the nation's estate tax. The senior Gates had been advocating for months that it would be unwise to repeal the tax, even though he, his son and many other rich people who joined him would benefit by its repeal.

"A hundred years ago, we did have a rigorous debate about the need to tax large accumulations of wealth," he wrote in a piece in the Washington Post. "Then, as now, wealthy people took a stand in favor of inheritance taxes. Andrew Carnegie personally testified before Congress in favor of the estate tax.

"The fate of the estate tax goes to the heart of the American experiment," he continued. "What has made America distinct from Europe is our effort not to create hereditary aristocracies and our suspicion of concentrated wealth and power weakening our democracy.

"It was understood a century ago that the estate tax was an attempt to balance conflicting American values: on the one hand, our respect for private enterprise and personal wealth, and on the other, our concern for democracy and equality of opportunity."

Gates Sr. had organized more than 1,000 American business people to oppose the repeal of the tax, but their pleas fell on deaf ears with this Congress, which is more concerned with passing tax breaks for those who lavish them with campaign contributions.

As Gates said, "They cited the plight of farmers, but when a reporter asked for living examples of real small farmers who had lost their farms, they couldn't be found. The deliberative tradition of the Senate caved under the pressure of ideology over reality."

Yes, to all too many in Congress today, the U.S. government is an evil, to be disdained and ridiculed. To them, and to too many Americans, sending it taxes to do its work is to be avoided at all costs.

Perhaps they should stop to listen to one more thing Bill Gates Sr. said:

"Our society has facilitated wealth-building by creating order, protecting freedom, creating laws to govern property relations and our marketplace, and investing in an educated work force. What's wrong with the most successful people putting one-quarter of their wealth back into the place that made their wealth and success possible? Many people repay their universities this way. Why not their country?"

Washington - Page 2