It's Congress That's Broke
Most of the major papers today are covering two 45 day investigations that CFIUS is conducting on take over bids, one by an Israeli software company, the other by another UAE company.
Checkpoint Software, the Israeli company, had it's review started before the Dubai Ports World fiasco hit the press, but Dubai Capital's was started this week, with the Administration briefing congress on both deals. Every indicator is that Dubai Capital's investigation was started earlier than CFIUS normally does them, to placate the folks on the hill.
I'll point out here, though Congress won't care, that these briefings are actually illegal under the 1988 CFIUS statute. Congress passed that statute exactly for the reasons brought up by the DPW issue, to keep politics out of the business world when it came to foriegn investment in the US. The origins of CFIUS in 1975, created by an Executive Order, was to stop congressional interference in business operations in the US by offshore companies.
In a completely related, but separate article, Peter King and Chuck Schumer are hollering for Congress to have the right to veto the President on deals that CFIUS approves.
Unfortunately, the President is already partially caving on this issue, as was apparent yesterday in the House,
Again, that's exactly the opposite of how the law is written, and has the potential to do a lot more damage than good.
The international implications of this have the possibility of becoming staggering, if you actually think it through. Robert J. Samuelson has an outstanding Op/Ed piece in yesterday's paper about increased consumer spending and emerging markets in India, China, and other countries.
A lot of that spending is generated by US companies investing there, creating jobs, and opening new markets for US products. He points out that US exports are rising at the rate of about 8.3% per year, which is a very good pace.
The back end of that money, profits and dividends, flows back to the US economy for reinvestment. End the US investment in those countries, and you lose a bunch of money coming here directly in profits, and possible revenue streams from our own rising number of exports.
"Is CFIUS broken? I think the process is broken," said Rep. J. Gresham Barrett (R-S.C.).
Checkpoint Software, the Israeli company, had it's review started before the Dubai Ports World fiasco hit the press, but Dubai Capital's was started this week, with the Administration briefing congress on both deals. Every indicator is that Dubai Capital's investigation was started earlier than CFIUS normally does them, to placate the folks on the hill.
I'll point out here, though Congress won't care, that these briefings are actually illegal under the 1988 CFIUS statute. Congress passed that statute exactly for the reasons brought up by the DPW issue, to keep politics out of the business world when it came to foriegn investment in the US. The origins of CFIUS in 1975, created by an Executive Order, was to stop congressional interference in business operations in the US by offshore companies.
In a completely related, but separate article, Peter King and Chuck Schumer are hollering for Congress to have the right to veto the President on deals that CFIUS approves.
It's essentially saying, 'We want the right to politicize this, and by implication any other CFIUS review,' " said Edward M. Graham, a scholar at the Institute for International Economics who co-authored a pending book on the committee. "And yet the law was scrupulously framed as to make it a nonpolitical determination."I guess when you are looking for wedge issues, and ways to stir up your political base in an election year long term implications aren't really a consideration.
Unfortunately, the President is already partially caving on this issue, as was apparent yesterday in the House,
Robert M. Kimmitt, the deputy treasury secretary, reiterated the Treasury
Department's promise to consult frequently with congressional leaders on cases
pending before CFIUS, rather than just brief them on decisions that have already
been made.
Again, that's exactly the opposite of how the law is written, and has the potential to do a lot more damage than good.
The international implications of this have the possibility of becoming staggering, if you actually think it through. Robert J. Samuelson has an outstanding Op/Ed piece in yesterday's paper about increased consumer spending and emerging markets in India, China, and other countries.
A lot of that spending is generated by US companies investing there, creating jobs, and opening new markets for US products. He points out that US exports are rising at the rate of about 8.3% per year, which is a very good pace.
The back end of that money, profits and dividends, flows back to the US economy for reinvestment. End the US investment in those countries, and you lose a bunch of money coming here directly in profits, and possible revenue streams from our own rising number of exports.
"Is CFIUS broken? I think the process is broken," said Rep. J. Gresham Barrett (R-S.C.).
Yes it is, Mr. Barrett, and when you try and find out why, I'll loan you a mirror.
Faeriebell's Blog has more on the issue from Saturday the 4th.
Technorati Tags: Islamophobia, United Arab Emirates, Ports, Congress, Bush, Charles Schumer, Investment CFIUS,Peter King, Washington Post
posted by Crazy Politico at 3:57 AM
9Comments:
Every day it is something new on this issue....In my opinion, the confusion only gets worse. You see ones teaming up that normally would not be. Myself I feel for the President on this...he is definitely backed in the corner. However, I do trust him on the War on Terror...and within this period of time...reviewing and dissecting this deal hopefully the right outcome will happen.
Bravo, it seems that our "good-ole-boys" on the HILL are trying to bypass something that was agreed upon 31 years ago. As you stated, CFIUS was formed to keep Congress out of the process and were only to be notified by the president of his decision under sec. 721 of Section 5021 of Omnibus Trade and CompetitivenessAct of 1988. Wonder why this wasn't done for the Chinese Deal back in 1999?
Great read. The Samuelson Op/Ed was good too, thanks. :)
Suzie, He is definitely backed into the corner on this one. Unfortunately because of politics, not actual problems at this point.
Old Sgt: Welcome, this is the first time I've seen you post here. Thanks for the law reference. I look up a lot of references, but when it comes to US Codes, well they scare me :)
Uber, glad you enjoyed it. The Samuelson piece kind of helps put the global aspect into perspective on what this deal could cost if we screw it up.
It seems that some of the GOP, possibly most, is operating in the fear of public opinion mode, which is sometimes a good thing. However we need to pay attention to what is influencing public opinion, and sometimes go against it.
Well, I am in the camp that believes it's a totally stupid idea.
But the worst thing is how transparent the Democratic "outrage" over it is. They'd let two Muslim brothers who are over here at flight school fly Air Force One for fear of "profiling".
This is pure politics.
If the idiot pols go ahead & try to intervene to scuttle this deal after Bush approves it, then I hope DPW and some other party will take this to court. I am virtually certain that the Supreme Court will throw out any legislation Congress passes that gives it final say over issues like this.
Throughout our history some of the worst excesses of our legislative branch have involved intervening in commercial disputes for purely political (as opposed to commercial) reasons.
My only regret is that judicial review would take far too long. But at least it would get us all back on constitutional ground. Right now we're sky high in hysteria.
If you have any links that explain in more detail your argument that Congressional intervention is a violation of CFUS I'd like to see it.
Rebekah wrote: "...The worst thing is how transparent the Democratic "outrage" over it is. They'd let two Muslim brothers who are over here at flight school fly Air Force One for fear of 'profiling.'"
Your Republican smugness knows no ends. What a load of hooey that this is a "Democratic" issue. If anything there are more Republicans than Dems lining up against this deal.
I am a liberal Democrat and detest George Bush. But I agree w. him completely on this issue. ALL the pols fr. whatever party who are pandering on this issue are bad news. Why do we need to score unwarranted pts. against Dems on this issue when there's more than enough blame to go around for both parties?
Here's a very partial list of Repubs & conservative media types who are banging the drums on the wrong side of this issue:
Peter King, Duncan Hunter, Denny Hastert, Bill Frist, FoxNews, Michelle Malkin, Captain's Quarters.
Need I say more?
Richard, for more on CFIUS, you can check the law referenced in Old Sgt's comment above, I believe he has the whole thing on his blog.
I Think I overstepped when I said they couldn't be informed, they can, but they have no power under the law, which is strange for something they write.
As for Rebekah's comment, I think she based it on the tone of the debate,which is much different from the left side of the aisle, though King sounds like Howard Dean's brother on this issue.
Frist can come off your list, after the first couple of Senate briefings he realized it was a good idea and is behind it now.
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