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Thursday, February 26, 2009
No Water In Vegas = No Lights in L.A.
On a cloudless December day in the Nevada desert, workers in white hard hats descend into a 30- foot-wide shaft next to Lake Mead.
As they’ve been doing since June, they’ll blast and dig straight down into the limestone surrounding the reservoir that supplies 90 percent of Las Vegas’s water. In September, when they hit 600 feet, they’ll turn and burrow for 3 miles, laying a new pipe as they go.
The crew is in a hurry. They’re battling the worst 10-year drought in recorded history along the Colorado River, which feeds the 110-mile-long reservoir. Since 1999, Lake Mead has dropped about 1 percent a year. By 2012, the lake’s surface could fall below the existing pipe that delivers 40 percent of the city’s water.
As Las Vegas’s economy worsens, the workers are also racing against a recession that threatens the ability to sell $500 million in bonds so they can complete the job.
Patricia Mulroy, manager of the Southern Nevada Water Authority, is the general in this region’s war to stem a water emergency that’s playing out worldwide. It’s the biggest battle of her 31-year career.
‘We’ve Tried Everything’
“We’ve tried everything,” says Mulroy, 56, who made no secret of her desire to become secretary of the U.S. Interior Department before President Barack Obama picked U.S. Senator Ken Salazar of Colorado in December.
“The way you look at water has to fundamentally change,” adds Mulroy, who, after 20 years of running the authority, said in January she’s ready to start thinking about looking for a new job, declining to say where.
Across the planet, people like Mulroy are struggling to solve the next global crisis.
From 2500 B.C., when King Urlama of Lagash diverted water in the Tigris and Euphrates Valley in a border dispute with nearby Umma, to 1924, when Owens Valley, California, farmers blew up part of the aqueduct that served a parched Los Angeles, societies have bargained, fought and rearranged geographies to get the water they need.
Mulroy started her push with conservation. She’s paying homeowners $1.50 a square foot (0.09 square meter) to replace lawns with gravel and asking golf courses to dig up turf. That helped cut Las Vegas’s water use by 19.4 percent in the seven years ended in 2008, even as the metropolitan area added 482,000 people, bringing the total to 2 million. It wasn’t enough.
Paul Bunyan
So she’s planning a $3.5 billion, 327-mile (525-kilometer) underground pipeline to tap aquifers beneath cattle-raising valleys northeast of the city. She’s even suggested refashioning the plumbing of the entire continent, Paul Bunyan style, by diverting floodwaters from the Mississippi River west toward the Rocky Mountains.
If Mulroy’s ideas are extreme, one reason is that the planet’s most essential resource doesn’t work like other commodities.
There’s no global marketplace for water. Deals for property, wells and water rights, such as the ones Mulroy must negotiate to build the pipeline, are done piecemeal. As the world grows needier, neither governments nor companies nor investors have figured out an effective and sustainable response.
“We have 19th-century ways of utilizing water and 21st- century needs,” says Brad Udall, director of Western Water Assessment at the University of Colorado at Boulder.
Unyielding Pressure
Water upheavals are intensifying because the population is growing fastest in places where fresh water is either scarce or polluted. Dry areas are becoming drier and wet areas wetter as the oceans and atmosphere warm. Economic roadblocks, such as the global credit crunch and its effects on Mulroy’s attempts to sell bonds, multiply during a recession.
Yet local governments that control water face unyielding pressure from constituents to keep the price low, regardless of cost. Agricultural interests, commercial developers and the housing industry clash over dwindling supplies. Companies, burdened by slowing profits, will be forced to move from dry areas such as the American Southwest, Udall says.
“Water is going to be more important than oil in the next 20 years,” says Dipak Jain, dean of the Kellogg School of Management at Northwestern University in Evanston, Illinois, who studies why corporations locate where they do.
No Cheap Water
Even before the now decade-long drought began punishing Las Vegas, people used more than 75 percent of the water in northern Africa and western Asia that they could get their hands on in 2000, according to the United Nations.
In 2002, 8 percent of the world suffered chronic shortages. By 2050, 40 percent of the projected world population, or about 4 billion people, will lack adequate water as entire regions turn dry, the UN predicts.
“We can no longer assume that cheap water is available,” says Peter Gleick, editor of The World’s Water 2008-2009 (Island Press, 2009). “We have to start living within our means.”
Over the Sierra Mountains from Las Vegas, Shasta Lake, California’s biggest reservoir, is less than a third full because melting snow that fed it for six decades is dwindling. A winter as dry as the previous two may mean rationing for 18 million people in Southern California this year, says Jeffrey Kightlinger, general manager of the Metropolitan Water District.
Across the Pacific Ocean, wildfires fueled by a 10-year drought and fanned by 60-mile-per-hour winds around Melbourne killed more than 200 people in February.
Developing Giants
In Asia, developing giants are battling pollution as their populations grow. China, home to 21 percent of the world’s people last year, has just 7 percent of the water. Nine in 10 Chinese-city groundwater systems are fouled by industrial toxins, pesticides and human waste, says Maude Barlow, the first senior adviser on water to the UN and author of “Blue Covenant” (New Press, 2007).
In India, with 1.2 billion people, three-quarters of the surface water is contaminated, that country’s government said in September.
In the Mideast, where the Dead Sea is dropping 3 feet (1 meter) a year, Israel, Jordan and Syria are diverting water upstream from the Jordan River. That’s adding another source of discord to an already volatile region.
‘Gambling, Gluttony and Girls’
“There’s a growing risk of conflict over water shared by nations, ethnic groups or economic interests,” Gleick says.
Las Vegas, an adult-entertainment haven carved into the Mojave Desert, may not draw much sympathy as a poster child for water emergencies.
For decades, new residents imported their cravings for lawns, sprinklers, pools and golf courses to a region that receives 4 inches (10 centimeters) of rain a year, about 1/10 of what Chicago enjoys. Casinos and hotels with water slides and river rides sucked up limited groundwater.
Until the real estate meltdown, Nevada was the fastest- growing U.S. market, with a 33 percent surge in new homes from 2000 to ‘07.
Now the city is getting a dose of reality, says Cecil Garland, a rancher in neighboring Utah who opposes Mulroy’s groundwater pipeline.
“Las Vegas is a place of gambling, gluttony and girls,” Garland, 83, says.
He says there’s no extra water along the proposed route, which travels through valleys green with 3-foot-tall shrubs called greasewood. If pumping kills the greasewood, dust storms that plague his town of Callao would soar 5,000 feet into the sky, he says.
‘Driest Areas’
“We live in one of the driest areas of the driest part of the U.S.,” Garland says. “How in the world can anybody with reason or common sense think they can pump water in the amount they’re talking about and leave the integrity of the valley in place?”
Mulroy says Nevada’s resorts use 3 percent of the state’s water compared with 90 percent going for farms and ranches.
For the past two decades, Mulroy, a lifelong government employee whose business attire tends toward pantsuits with the collar of her blouses pointed up behind her neck, has wrestled with the competing truths that dog all water managers: There’s only so much to go around, somebody has already claimed most of it, and citizens and companies keep demanding more.
“People view water as a human right and expect it to be virtually free,” says Michael LoCascio at Boston-based Lux Research Inc., which analyzes water issues. “Governments respond to that, and you end up with inefficiency.”
Without price-setting markets, water that cost 33 cents a cubic meter for the first 15 cubic meters delivered to homes in Memphis, Tennessee, in June 2007 was $3.01 in Atlanta and 57 cents in Las Vegas.
That’s cheap compared with Copenhagen, where the same amount that month was $7.71 per cubic meter, Gleick says.
Human Survival
Robert Glennon, a University of Arizona law professor, says governments must provide enough water for human survival. Beyond that, only freely functioning markets can allot it to people who need it most, he says.
Fast-growing cities should buy from farmers who use water on marginal land, says Glennon, author of “Unquenchable” (Island Press, 2009). That would cut inefficiency caused by irrigating deserts, such as those around Las Vegas, to raise alfalfa or beef, he says.
Worldwide, about 60 percent of fresh water goes to irrigate crops through flooding, losing 70 percent of the moisture to evaporation, Lux Research says.
Rudimentary Markets
The rudiments of water markets are cropping up across the American West.
In 2005, after 19 years of negotiations, Los Angeles’s Metropolitan Water District signed a 35-year “dry year option” with the Palo Verde Irrigation District south of Las Vegas in California. Los Angeles pays 7,000 farmers to leave land fallow during droughts and ship their water to city residents. The city gives a one-time payment of $3,170 an acre (0.4 hectare) to farmers who sign up and then $630 per year for every acre not farmed.
Companies and investors that see moneymaking opportunities in strategies to quench the world’s thirst may draw lessons from corporations that have tried.
In October, General Electric Co. named the third head of its water unit in three years. GE had paid $3.8 billion to buy several treatment and filtration companies, including Watertown, Massachusetts-based Ionics Inc., which makes reverse-osmosis membranes for purifying salt water.
Big Deals
Last year, GE opened a $250 million desalination plant, Africa’s largest, with state-owned Algerian Energy Co. GE had hoped to profit from its newly acquired water technologies with the backing of its General Electric Capital Corp. financing arm, says Jeffrey Fulgham, chief marketing officer for the Trevose, Pennsylvania-based unit. Instead, GE wound up footing a lot of the building work for the plant, he says.
“At the end of these big hardware deals, there isn’t much profit,” says Fulgham, who adds that GE now focuses on water technology and avoids construction.
Pure Cycle Corp., which buys and transports water for housing developments near Denver, seemed to have scored a windfall. Starting in 1976, it paid $110 million for water rights valued at $4 billion last year, Chief Executive Officer Mark Harding says. Yet shares in the Thornton, Colorado, company tumbled by 47 percent during the six months ended on Feb. 25. to trade at $3.25 apiece.
The real estate slowdown convinced investors that profits from water rights may be years away, Harding says.
Just financing water for municipal use is getting harder in the global recession.
$8.3 Billion
The southern Nevada authority is about halfway through a 30-year, $8.3 billion construction campaign. Last year, 57 percent of the money for it came from a $6,310 fee to hook up new homes. The Las Vegas real estate slump is so severe that total hookup collections dropped to $61.5 million last year from $188.4 million in 2006. Mulroy says the authority actually lost money on hookups in January because of refunds to developers who abandoned construction projects.
As a result, reserves in the construction fund dropped 6 percent in the first six weeks of 2009, to $480 million. Without those reserves, Mulroy says, she couldn’t assure investors the authority would be able to repay the $500 million in bonds she plans to start selling by early fall to complete the Lake Mead project. The authority had $3.9 billion in liabilities on June 30.
‘Rub Two Sticks Together’
The authority also gets money from water deliveries, property taxes and fees from federal land sales. If she has to protect the reserves, Mulroy says, she’ll raise water rates, which total about $21 a month for a single-family home.
She’s asked fellow Nevadan Harry Reid, the U.S. Senate majority leader, for a federal guarantee on the bonds. Reid is exploring how to help big municipal water systems, including Mulroy’s, get easier access to credit, spokesman Jon Summers says.
In February, Mulroy presented such a dire description of the authority’s finances to the Nevada legislature that Jerry Claborn, chairman of the Natural Resources Committee, told her, “You’ll have to do like you did years ago: rub two sticks together.”
Mulroy said afterward she wanted to quash any notion that cash-strapped legislators could appropriate her reserves for some other purpose.
To Richard Bunker, who hired her as an administrative assistant when he managed Clark County, Nevada, in 1978, Mulroy’s hardball tactics are a delight.
“She walks into a room with guys who’ve been on the river 50 and 60 years and they just cringe,” he says with a smile.
‘Pay Me Enough’
One thing Mulroy has ruled out, even in the economic meltdown, is using water as an excuse to limit Las Vegas’s growth.
“During the next 50 years, this country’s population is expected to explode by another 140 million,” she says, citing U.S. Census projections. “I always ask, ‘Where do you want the people to go?’”
Mulroy also opposes the idea of privatizing water, or giving investors power to set prices.
“You’d be telling people, ‘Pay me enough or I withhold it,’” she says, her voice rising, in the cafeteria of Clark County’s terra cotta-colored municipal headquarters. “It’s like you’re telling me I can live.”
Mulroy’s unflagging commitment to keeping Las Vegas green and growing gets the blessing of casino owner Stephen Wynn.
“Pat is the best public servant I’ve met in my 40 years on the Strip,” says Wynn, who credits her with teaching him to save money by using treated groundwater for the lagoons surrounding the artificial volcano at the Mirage hotel, now owned by MGM Mirage.
Lake Mead
Finding the water for casinos is one reason crews are working around the clock at Lake Mead.
In 2002 alone, lack of rainfall lowered the deep-blue waters by 24.6 feet, leaving white bathtub-ring-like marks on the brown cliffs and stranding docks half a mile from shore.
Today, the lake is 1,112 feet above sea level. Should it fall to 1,075 feet, the federal government would cut the water to seven states that depend on the Colorado River, according to an agreement they all signed in 2007. If that happens, the states would likely renegotiate a 1922 pact that divided up the river’s water rights in the first place, Mulroy says. Mexico’s allocation under a 1944 treaty could also change.
If the drought persists and more water is diverted from the Colorado, the lake could drop to 1,050 feet. That would prevent water from flowing into the intake pipe and cut 40 percent of Las Vegas’s supply -- the disaster Mulroy is trying to head off. Hoover Dam, completed in 1935 to regulate the river and form Lake Mead, wouldn’t be able to produce electricity for the 750,000 people it supplies in Los Angeles.
No More Water
At 1,000 feet, the remaining intakes and the rest of the Lake Mead water would go. Because of climate change and population growth, chances of this are as great as 50 percent by 2026, the University of Colorado’s Udall says.
When Mulroy, a daughter of a civilian employee of the U.S. Air Force, arrived in Las Vegas in 1974, the city had yet to be consumed by a water quest. Until the 1940s, parts of downtown had freely flowing springs.
Mulroy, a native of Germany, studied German literature; got her master’s degree from the University of Nevada, Las Vegas; and went to work for Bunker at Clark County. A Mormon bishop, he later ran the state’s Gaming Control Board and the Nevada Resort Association.
Shoeboxes
Bunker supported her promotion to administrator for the county justice court, which was storing records in shoeboxes when she took over. In 1989, he backed her as general manager of the Las Vegas Valley Water District, which the state legislature had formed four decades earlier. Mulroy helped create the seven- community Southern Nevada Water Authority two years later.
“Absent her being here, I don’t know where we’d be,” Bunker says.
Around the time Mulroy became water czar, Wynn unleashed the era of Wall Street-financed megaresorts with his 30-story Mirage. He tinted the hotel’s windows with real gold.
Mulroy raced to boost water deliveries throughout the city by as much as 20 percent a year. With Bunker’s help, she started planning the pipeline to tap melting snow under Wheeler Peak, Nevada’s second-highest mountain.
The pipeline’s planned path runs northeast out of Las Vegas, enters Lincoln County and passes through the Pahranagat National Wildlife Refuge, where, in December, gold leaves of cottonwoods shimmer and migratory birds swoop onto lakes fed by artesian springs. Farther north, hilltops are dotted with abandoned mining towns and bands of wild horses.
‘Already Spoken For’
As Mulroy marched north to secure land and permits, she ran headfirst into what Gleick says is a fundamental truth about water across the U.S. and other parts of the world.
“Nearly every drop is already spoken for, often more than once,” he says.
Determined to get what she required, Mulroy went into horse-trading mode.
“You need a large amount of money and some very powerful people to make water projects happen,” says Greg James, a California water rights attorney and a consultant for pipeline opponents.
She struck a deal with Harvey Whittemore, then Nevada’s top gambling lobbyist. Members of Whittemore’s law firm include Rory Reid, Harry Reid’s son. The younger Reid later served as the water authority’s vice chairman, from 2003 to ‘08.
120,000 New Homes
Whittemore, 56, is also a developer who’s planning a new suburb called Coyote Springs, 55 miles north of the Las Vegas Strip. Even with the real estate crash, Coyote Springs will have 120,000 homes and a dozen golf courses when it’s finished in four or five decades, he says.
Whittemore’s land included one of the most productive wells ever drilled in southern Nevada. He sold 9,000 acre-feet of groundwater that he wasn’t using to Mulroy for $30.1 million. (One acre-foot equals about 326,000 gallons, or 1,240 kiloliters, enough for two average U.S. homes for a year.) That led to what Mulroy describes as a partnership in which Whittemore will help pay for the pipeline and use it to ship water to Coyote Springs.
In 2003, Mulroy bargained with reluctant officials in neighboring Lincoln County, persuading them to drop opposition to the project by ceding back to them some of the water rights that she held.
In 2006, farther up the route, she learned how tough the water business can be. She paid $22 million for a ranch that had cost $4.5 million six years earlier. The seller, Carson City, Nevada-based Vidler Water Co., a unit of PICO Holdings Inc., based the price on similar purchases Whittemore had made, Vidler President Dorothy Timian-Palmer says.
Fight Over Greasewood
Last year, Mulroy got into a fight over greasewood with Tim Durbin, a hydrologist who’d once been a consultant for her. Durbin disputed Mulroy’s assessment that the pipeline would avoid major damage to the shrub. In his rebuttal, Durbin described a scene that still touches an open wound in the psyche of the American West.
In 1913, William Mulholland built a 223-mile aqueduct from Owens Valley in California’s Sierras to Los Angeles, where he was water superintendent. The aqueduct drained a 40-foot-deep lake, exposing the valley floor and unleashing dust storms that plagued Los Angeles throughout the 20th century. The aqueduct also inspired the 1974 movie “Chinatown.” In 1970, Los Angeles built a second aqueduct.
‘A Model’
Today, the valley’s 75-mile-long expanse looks like it did a millennium ago. The water diverted to Los Angeles makes economic development in the valley impossible.
“Because of groundwater pumping, vegetation was disappearing in the Owens Valley,” says Durbin, who was chief hydrologist for the U.S. Geological Survey in California and Nevada before becoming a private consultant in 1984. “It’s a model for what one would expect in eastern Nevada.”
Because of such memories, Mulroy hasn’t won many friends among eastern Nevada’s old-timers.
Rancher Dean Baker fears Mulroy’s pipeline would drain the water that’s let him survive in Snake Valley, in the shadow of Wheeler Peak, for more than half a century.
Baker, 69, remembers when people staked uranium claims only to realize their Geiger counters were clicking because of residue from atomic tests outside Las Vegas. He recalls flying solo in a Piper J-3 Cub before he could drive.
Most of all, Baker remembers water. He rose at dawn to deliver it to cattle 50 miles away. He culled his herd and watched greasewood wither during droughts. It took 20 years for him to afford a backhoe with a jackhammer that could break rocks that covered a spring on his ranch.
Legacy of Dust
“Water is the limiting factor in everything we do,” Baker says. “The legacy of this pipeline will be dust.”
Baker says people who want to move to Las Vegas should look instead to Mississippi and Louisiana. “People should go where there’s water,” he says.
Mulroy says her job is to bring water to the people. Last year, she said she thought the proposed pipeline could begin transporting water in 2015. Now, because of the recession, she doesn’t know when she’ll have the money to build it.
She says she’ll wait for the economy to recover to decide -- unless Lake Mead drops even more and forces her to act.
Mulroy’s struggle to get water to a growing desert population wouldn’t have surprised John Wesley Powell, the first known explorer to pass through the entire Grand Canyon 130 miles east of Las Vegas.
“You are piling up a heritage of conflict and litigation over the water rights,” he told the International Irrigation Congress in Los Angeles in 1893. “There is no sufficient water to supply the land.”
‘Little Bubbles’
Four generations later, Mulroy is a veteran of these age- old conflicts. She says the region’s water emergency is becoming more dangerous because of climate change and population growth. The crisis is too big to be solved one river or one continent at a time, she says.
“We’ve managed water in such small, incremental units,” she says. “We won’t be able to survive in our little bubbles.”
Even people who agree with Mulroy’s warning won’t have an easy time acting on it. As she has, they’ll discover the effort it will take to quench the world’s thirst and realize that the time and money to do so -- like water itself -- are running short.
As they’ve been doing since June, they’ll blast and dig straight down into the limestone surrounding the reservoir that supplies 90 percent of Las Vegas’s water. In September, when they hit 600 feet, they’ll turn and burrow for 3 miles, laying a new pipe as they go.
The crew is in a hurry. They’re battling the worst 10-year drought in recorded history along the Colorado River, which feeds the 110-mile-long reservoir. Since 1999, Lake Mead has dropped about 1 percent a year. By 2012, the lake’s surface could fall below the existing pipe that delivers 40 percent of the city’s water.
As Las Vegas’s economy worsens, the workers are also racing against a recession that threatens the ability to sell $500 million in bonds so they can complete the job.
Patricia Mulroy, manager of the Southern Nevada Water Authority, is the general in this region’s war to stem a water emergency that’s playing out worldwide. It’s the biggest battle of her 31-year career.
‘We’ve Tried Everything’
“We’ve tried everything,” says Mulroy, 56, who made no secret of her desire to become secretary of the U.S. Interior Department before President Barack Obama picked U.S. Senator Ken Salazar of Colorado in December.
“The way you look at water has to fundamentally change,” adds Mulroy, who, after 20 years of running the authority, said in January she’s ready to start thinking about looking for a new job, declining to say where.
Across the planet, people like Mulroy are struggling to solve the next global crisis.
From 2500 B.C., when King Urlama of Lagash diverted water in the Tigris and Euphrates Valley in a border dispute with nearby Umma, to 1924, when Owens Valley, California, farmers blew up part of the aqueduct that served a parched Los Angeles, societies have bargained, fought and rearranged geographies to get the water they need.
Mulroy started her push with conservation. She’s paying homeowners $1.50 a square foot (0.09 square meter) to replace lawns with gravel and asking golf courses to dig up turf. That helped cut Las Vegas’s water use by 19.4 percent in the seven years ended in 2008, even as the metropolitan area added 482,000 people, bringing the total to 2 million. It wasn’t enough.
Paul Bunyan
So she’s planning a $3.5 billion, 327-mile (525-kilometer) underground pipeline to tap aquifers beneath cattle-raising valleys northeast of the city. She’s even suggested refashioning the plumbing of the entire continent, Paul Bunyan style, by diverting floodwaters from the Mississippi River west toward the Rocky Mountains.
If Mulroy’s ideas are extreme, one reason is that the planet’s most essential resource doesn’t work like other commodities.
There’s no global marketplace for water. Deals for property, wells and water rights, such as the ones Mulroy must negotiate to build the pipeline, are done piecemeal. As the world grows needier, neither governments nor companies nor investors have figured out an effective and sustainable response.
“We have 19th-century ways of utilizing water and 21st- century needs,” says Brad Udall, director of Western Water Assessment at the University of Colorado at Boulder.
Unyielding Pressure
Water upheavals are intensifying because the population is growing fastest in places where fresh water is either scarce or polluted. Dry areas are becoming drier and wet areas wetter as the oceans and atmosphere warm. Economic roadblocks, such as the global credit crunch and its effects on Mulroy’s attempts to sell bonds, multiply during a recession.
Yet local governments that control water face unyielding pressure from constituents to keep the price low, regardless of cost. Agricultural interests, commercial developers and the housing industry clash over dwindling supplies. Companies, burdened by slowing profits, will be forced to move from dry areas such as the American Southwest, Udall says.
“Water is going to be more important than oil in the next 20 years,” says Dipak Jain, dean of the Kellogg School of Management at Northwestern University in Evanston, Illinois, who studies why corporations locate where they do.
No Cheap Water
Even before the now decade-long drought began punishing Las Vegas, people used more than 75 percent of the water in northern Africa and western Asia that they could get their hands on in 2000, according to the United Nations.
In 2002, 8 percent of the world suffered chronic shortages. By 2050, 40 percent of the projected world population, or about 4 billion people, will lack adequate water as entire regions turn dry, the UN predicts.
“We can no longer assume that cheap water is available,” says Peter Gleick, editor of The World’s Water 2008-2009 (Island Press, 2009). “We have to start living within our means.”
Over the Sierra Mountains from Las Vegas, Shasta Lake, California’s biggest reservoir, is less than a third full because melting snow that fed it for six decades is dwindling. A winter as dry as the previous two may mean rationing for 18 million people in Southern California this year, says Jeffrey Kightlinger, general manager of the Metropolitan Water District.
Across the Pacific Ocean, wildfires fueled by a 10-year drought and fanned by 60-mile-per-hour winds around Melbourne killed more than 200 people in February.
Developing Giants
In Asia, developing giants are battling pollution as their populations grow. China, home to 21 percent of the world’s people last year, has just 7 percent of the water. Nine in 10 Chinese-city groundwater systems are fouled by industrial toxins, pesticides and human waste, says Maude Barlow, the first senior adviser on water to the UN and author of “Blue Covenant” (New Press, 2007).
In India, with 1.2 billion people, three-quarters of the surface water is contaminated, that country’s government said in September.
In the Mideast, where the Dead Sea is dropping 3 feet (1 meter) a year, Israel, Jordan and Syria are diverting water upstream from the Jordan River. That’s adding another source of discord to an already volatile region.
‘Gambling, Gluttony and Girls’
“There’s a growing risk of conflict over water shared by nations, ethnic groups or economic interests,” Gleick says.
Las Vegas, an adult-entertainment haven carved into the Mojave Desert, may not draw much sympathy as a poster child for water emergencies.
For decades, new residents imported their cravings for lawns, sprinklers, pools and golf courses to a region that receives 4 inches (10 centimeters) of rain a year, about 1/10 of what Chicago enjoys. Casinos and hotels with water slides and river rides sucked up limited groundwater.
Until the real estate meltdown, Nevada was the fastest- growing U.S. market, with a 33 percent surge in new homes from 2000 to ‘07.
Now the city is getting a dose of reality, says Cecil Garland, a rancher in neighboring Utah who opposes Mulroy’s groundwater pipeline.
“Las Vegas is a place of gambling, gluttony and girls,” Garland, 83, says.
He says there’s no extra water along the proposed route, which travels through valleys green with 3-foot-tall shrubs called greasewood. If pumping kills the greasewood, dust storms that plague his town of Callao would soar 5,000 feet into the sky, he says.
‘Driest Areas’
“We live in one of the driest areas of the driest part of the U.S.,” Garland says. “How in the world can anybody with reason or common sense think they can pump water in the amount they’re talking about and leave the integrity of the valley in place?”
Mulroy says Nevada’s resorts use 3 percent of the state’s water compared with 90 percent going for farms and ranches.
For the past two decades, Mulroy, a lifelong government employee whose business attire tends toward pantsuits with the collar of her blouses pointed up behind her neck, has wrestled with the competing truths that dog all water managers: There’s only so much to go around, somebody has already claimed most of it, and citizens and companies keep demanding more.
“People view water as a human right and expect it to be virtually free,” says Michael LoCascio at Boston-based Lux Research Inc., which analyzes water issues. “Governments respond to that, and you end up with inefficiency.”
Without price-setting markets, water that cost 33 cents a cubic meter for the first 15 cubic meters delivered to homes in Memphis, Tennessee, in June 2007 was $3.01 in Atlanta and 57 cents in Las Vegas.
That’s cheap compared with Copenhagen, where the same amount that month was $7.71 per cubic meter, Gleick says.
Human Survival
Robert Glennon, a University of Arizona law professor, says governments must provide enough water for human survival. Beyond that, only freely functioning markets can allot it to people who need it most, he says.
Fast-growing cities should buy from farmers who use water on marginal land, says Glennon, author of “Unquenchable” (Island Press, 2009). That would cut inefficiency caused by irrigating deserts, such as those around Las Vegas, to raise alfalfa or beef, he says.
Worldwide, about 60 percent of fresh water goes to irrigate crops through flooding, losing 70 percent of the moisture to evaporation, Lux Research says.
Rudimentary Markets
The rudiments of water markets are cropping up across the American West.
In 2005, after 19 years of negotiations, Los Angeles’s Metropolitan Water District signed a 35-year “dry year option” with the Palo Verde Irrigation District south of Las Vegas in California. Los Angeles pays 7,000 farmers to leave land fallow during droughts and ship their water to city residents. The city gives a one-time payment of $3,170 an acre (0.4 hectare) to farmers who sign up and then $630 per year for every acre not farmed.
Companies and investors that see moneymaking opportunities in strategies to quench the world’s thirst may draw lessons from corporations that have tried.
In October, General Electric Co. named the third head of its water unit in three years. GE had paid $3.8 billion to buy several treatment and filtration companies, including Watertown, Massachusetts-based Ionics Inc., which makes reverse-osmosis membranes for purifying salt water.
Big Deals
Last year, GE opened a $250 million desalination plant, Africa’s largest, with state-owned Algerian Energy Co. GE had hoped to profit from its newly acquired water technologies with the backing of its General Electric Capital Corp. financing arm, says Jeffrey Fulgham, chief marketing officer for the Trevose, Pennsylvania-based unit. Instead, GE wound up footing a lot of the building work for the plant, he says.
“At the end of these big hardware deals, there isn’t much profit,” says Fulgham, who adds that GE now focuses on water technology and avoids construction.
Pure Cycle Corp., which buys and transports water for housing developments near Denver, seemed to have scored a windfall. Starting in 1976, it paid $110 million for water rights valued at $4 billion last year, Chief Executive Officer Mark Harding says. Yet shares in the Thornton, Colorado, company tumbled by 47 percent during the six months ended on Feb. 25. to trade at $3.25 apiece.
The real estate slowdown convinced investors that profits from water rights may be years away, Harding says.
Just financing water for municipal use is getting harder in the global recession.
$8.3 Billion
The southern Nevada authority is about halfway through a 30-year, $8.3 billion construction campaign. Last year, 57 percent of the money for it came from a $6,310 fee to hook up new homes. The Las Vegas real estate slump is so severe that total hookup collections dropped to $61.5 million last year from $188.4 million in 2006. Mulroy says the authority actually lost money on hookups in January because of refunds to developers who abandoned construction projects.
As a result, reserves in the construction fund dropped 6 percent in the first six weeks of 2009, to $480 million. Without those reserves, Mulroy says, she couldn’t assure investors the authority would be able to repay the $500 million in bonds she plans to start selling by early fall to complete the Lake Mead project. The authority had $3.9 billion in liabilities on June 30.
‘Rub Two Sticks Together’
The authority also gets money from water deliveries, property taxes and fees from federal land sales. If she has to protect the reserves, Mulroy says, she’ll raise water rates, which total about $21 a month for a single-family home.
She’s asked fellow Nevadan Harry Reid, the U.S. Senate majority leader, for a federal guarantee on the bonds. Reid is exploring how to help big municipal water systems, including Mulroy’s, get easier access to credit, spokesman Jon Summers says.
In February, Mulroy presented such a dire description of the authority’s finances to the Nevada legislature that Jerry Claborn, chairman of the Natural Resources Committee, told her, “You’ll have to do like you did years ago: rub two sticks together.”
Mulroy said afterward she wanted to quash any notion that cash-strapped legislators could appropriate her reserves for some other purpose.
To Richard Bunker, who hired her as an administrative assistant when he managed Clark County, Nevada, in 1978, Mulroy’s hardball tactics are a delight.
“She walks into a room with guys who’ve been on the river 50 and 60 years and they just cringe,” he says with a smile.
‘Pay Me Enough’
One thing Mulroy has ruled out, even in the economic meltdown, is using water as an excuse to limit Las Vegas’s growth.
“During the next 50 years, this country’s population is expected to explode by another 140 million,” she says, citing U.S. Census projections. “I always ask, ‘Where do you want the people to go?’”
Mulroy also opposes the idea of privatizing water, or giving investors power to set prices.
“You’d be telling people, ‘Pay me enough or I withhold it,’” she says, her voice rising, in the cafeteria of Clark County’s terra cotta-colored municipal headquarters. “It’s like you’re telling me I can live.”
Mulroy’s unflagging commitment to keeping Las Vegas green and growing gets the blessing of casino owner Stephen Wynn.
“Pat is the best public servant I’ve met in my 40 years on the Strip,” says Wynn, who credits her with teaching him to save money by using treated groundwater for the lagoons surrounding the artificial volcano at the Mirage hotel, now owned by MGM Mirage.
Lake Mead
Finding the water for casinos is one reason crews are working around the clock at Lake Mead.
In 2002 alone, lack of rainfall lowered the deep-blue waters by 24.6 feet, leaving white bathtub-ring-like marks on the brown cliffs and stranding docks half a mile from shore.
Today, the lake is 1,112 feet above sea level. Should it fall to 1,075 feet, the federal government would cut the water to seven states that depend on the Colorado River, according to an agreement they all signed in 2007. If that happens, the states would likely renegotiate a 1922 pact that divided up the river’s water rights in the first place, Mulroy says. Mexico’s allocation under a 1944 treaty could also change.
If the drought persists and more water is diverted from the Colorado, the lake could drop to 1,050 feet. That would prevent water from flowing into the intake pipe and cut 40 percent of Las Vegas’s supply -- the disaster Mulroy is trying to head off. Hoover Dam, completed in 1935 to regulate the river and form Lake Mead, wouldn’t be able to produce electricity for the 750,000 people it supplies in Los Angeles.
No More Water
At 1,000 feet, the remaining intakes and the rest of the Lake Mead water would go. Because of climate change and population growth, chances of this are as great as 50 percent by 2026, the University of Colorado’s Udall says.
When Mulroy, a daughter of a civilian employee of the U.S. Air Force, arrived in Las Vegas in 1974, the city had yet to be consumed by a water quest. Until the 1940s, parts of downtown had freely flowing springs.
Mulroy, a native of Germany, studied German literature; got her master’s degree from the University of Nevada, Las Vegas; and went to work for Bunker at Clark County. A Mormon bishop, he later ran the state’s Gaming Control Board and the Nevada Resort Association.
Shoeboxes
Bunker supported her promotion to administrator for the county justice court, which was storing records in shoeboxes when she took over. In 1989, he backed her as general manager of the Las Vegas Valley Water District, which the state legislature had formed four decades earlier. Mulroy helped create the seven- community Southern Nevada Water Authority two years later.
“Absent her being here, I don’t know where we’d be,” Bunker says.
Around the time Mulroy became water czar, Wynn unleashed the era of Wall Street-financed megaresorts with his 30-story Mirage. He tinted the hotel’s windows with real gold.
Mulroy raced to boost water deliveries throughout the city by as much as 20 percent a year. With Bunker’s help, she started planning the pipeline to tap melting snow under Wheeler Peak, Nevada’s second-highest mountain.
The pipeline’s planned path runs northeast out of Las Vegas, enters Lincoln County and passes through the Pahranagat National Wildlife Refuge, where, in December, gold leaves of cottonwoods shimmer and migratory birds swoop onto lakes fed by artesian springs. Farther north, hilltops are dotted with abandoned mining towns and bands of wild horses.
‘Already Spoken For’
As Mulroy marched north to secure land and permits, she ran headfirst into what Gleick says is a fundamental truth about water across the U.S. and other parts of the world.
“Nearly every drop is already spoken for, often more than once,” he says.
Determined to get what she required, Mulroy went into horse-trading mode.
“You need a large amount of money and some very powerful people to make water projects happen,” says Greg James, a California water rights attorney and a consultant for pipeline opponents.
She struck a deal with Harvey Whittemore, then Nevada’s top gambling lobbyist. Members of Whittemore’s law firm include Rory Reid, Harry Reid’s son. The younger Reid later served as the water authority’s vice chairman, from 2003 to ‘08.
120,000 New Homes
Whittemore, 56, is also a developer who’s planning a new suburb called Coyote Springs, 55 miles north of the Las Vegas Strip. Even with the real estate crash, Coyote Springs will have 120,000 homes and a dozen golf courses when it’s finished in four or five decades, he says.
Whittemore’s land included one of the most productive wells ever drilled in southern Nevada. He sold 9,000 acre-feet of groundwater that he wasn’t using to Mulroy for $30.1 million. (One acre-foot equals about 326,000 gallons, or 1,240 kiloliters, enough for two average U.S. homes for a year.) That led to what Mulroy describes as a partnership in which Whittemore will help pay for the pipeline and use it to ship water to Coyote Springs.
In 2003, Mulroy bargained with reluctant officials in neighboring Lincoln County, persuading them to drop opposition to the project by ceding back to them some of the water rights that she held.
In 2006, farther up the route, she learned how tough the water business can be. She paid $22 million for a ranch that had cost $4.5 million six years earlier. The seller, Carson City, Nevada-based Vidler Water Co., a unit of PICO Holdings Inc., based the price on similar purchases Whittemore had made, Vidler President Dorothy Timian-Palmer says.
Fight Over Greasewood
Last year, Mulroy got into a fight over greasewood with Tim Durbin, a hydrologist who’d once been a consultant for her. Durbin disputed Mulroy’s assessment that the pipeline would avoid major damage to the shrub. In his rebuttal, Durbin described a scene that still touches an open wound in the psyche of the American West.
In 1913, William Mulholland built a 223-mile aqueduct from Owens Valley in California’s Sierras to Los Angeles, where he was water superintendent. The aqueduct drained a 40-foot-deep lake, exposing the valley floor and unleashing dust storms that plagued Los Angeles throughout the 20th century. The aqueduct also inspired the 1974 movie “Chinatown.” In 1970, Los Angeles built a second aqueduct.
‘A Model’
Today, the valley’s 75-mile-long expanse looks like it did a millennium ago. The water diverted to Los Angeles makes economic development in the valley impossible.
“Because of groundwater pumping, vegetation was disappearing in the Owens Valley,” says Durbin, who was chief hydrologist for the U.S. Geological Survey in California and Nevada before becoming a private consultant in 1984. “It’s a model for what one would expect in eastern Nevada.”
Because of such memories, Mulroy hasn’t won many friends among eastern Nevada’s old-timers.
Rancher Dean Baker fears Mulroy’s pipeline would drain the water that’s let him survive in Snake Valley, in the shadow of Wheeler Peak, for more than half a century.
Baker, 69, remembers when people staked uranium claims only to realize their Geiger counters were clicking because of residue from atomic tests outside Las Vegas. He recalls flying solo in a Piper J-3 Cub before he could drive.
Most of all, Baker remembers water. He rose at dawn to deliver it to cattle 50 miles away. He culled his herd and watched greasewood wither during droughts. It took 20 years for him to afford a backhoe with a jackhammer that could break rocks that covered a spring on his ranch.
Legacy of Dust
“Water is the limiting factor in everything we do,” Baker says. “The legacy of this pipeline will be dust.”
Baker says people who want to move to Las Vegas should look instead to Mississippi and Louisiana. “People should go where there’s water,” he says.
Mulroy says her job is to bring water to the people. Last year, she said she thought the proposed pipeline could begin transporting water in 2015. Now, because of the recession, she doesn’t know when she’ll have the money to build it.
She says she’ll wait for the economy to recover to decide -- unless Lake Mead drops even more and forces her to act.
Mulroy’s struggle to get water to a growing desert population wouldn’t have surprised John Wesley Powell, the first known explorer to pass through the entire Grand Canyon 130 miles east of Las Vegas.
“You are piling up a heritage of conflict and litigation over the water rights,” he told the International Irrigation Congress in Los Angeles in 1893. “There is no sufficient water to supply the land.”
‘Little Bubbles’
Four generations later, Mulroy is a veteran of these age- old conflicts. She says the region’s water emergency is becoming more dangerous because of climate change and population growth. The crisis is too big to be solved one river or one continent at a time, she says.
“We’ve managed water in such small, incremental units,” she says. “We won’t be able to survive in our little bubbles.”
Even people who agree with Mulroy’s warning won’t have an easy time acting on it. As she has, they’ll discover the effort it will take to quench the world’s thirst and realize that the time and money to do so -- like water itself -- are running short.
Republican Response
Good evening. I'm Bobby Jindal, Governor of Louisiana.
Tonight, we witnessed a great moment in the history of our Republic. In the very chamber where Congress once voted to abolish slavery, our first African-American President stepped forward to address the state of our union. With his speech tonight, the President completed a redemptive journey that took our nation from Independence Hall ... to Gettysburg ... to the lunch counter ... and now, finally, the Oval Office.
Regardless of party, all Americans are moved by the President's personal story - the son of an American mother and a Kenyan father, who grew up to become leader of the free world. Like the President's father, my parents came to this country from a distant land. When they arrived in Baton Rouge, my mother was already 4 ∏ months pregnant. I was what folks in the insurance industry now call a 'pre-existing condition.' To find work, my dad picked up the yellow pages and started calling local businesses. Even after landing a job, he could still not afford to pay for my delivery - so he worked out an installment plan with the doctor. Fortunately for me, he never missed a payment.
As I grew up, my mom and dad taught me the values that attracted them to this country - and they instilled in me an immigrant's wonder at the greatness of America. As a child, I remember going to the grocery store with my dad. Growing up in India, he had seen extreme poverty. And as we walked through the aisles, looking at the endless variety on the shelves, he would tell me: 'Bobby, Americans can do anything.' I still believe that to this day. Americans can do anything. When we pull together, there is no challenge we cannot overcome.
As the President made clear this evening, we are now in a time of challenge. Many of you listening tonight have lost jobs. Others have seen your college and retirement savings dwindle. Many of you are worried about losing your health care and your homes. And you are looking to your elected leaders in Washington for solutions.
Republicans are ready to work with the new President to provide those solutions. Here in my state of Louisiana, we don't care what party you belong to if you have good ideas to make life better for our people. We need more of that attitude from both Democrats and Republicans in our nation's capital. All of us want our economy to recover and our nation to prosper. So where we agree, Republicans must be the President's strongest partners. And where we disagree, Republicans have a responsibility to be candid and offer better ideas for a path forward.
Today in Washington, some are promising that government will rescue us from the economic storms raging all around us.
Those of us who lived through Hurricane Katrina, we have our doubts.
Let me tell you a story.
During Katrina, I visited Sheriff Harry Lee, a Democrat and a good friend of mine. When I walked into his makeshift office I'd never seen him so angry. He was yelling into the phone: 'Well, I'm the Sheriff and if you don't like it you can come and arrest me!' I asked him: 'Sheriff, what's got you so mad?' He told me that he had put out a call for volunteers to come with their boats to rescue people who were trapped on their rooftops by the floodwaters. The boats were all lined up ready to go - when some bureaucrat showed up and told them they couldn't go out on the water unless they had proof of insurance and registration. I told him, 'Sheriff, that's ridiculous.' And before I knew it, he was yelling into the phone: 'Congressman Jindal is here, and he says you can come and arrest him too!' Harry just told the boaters to ignore the bureaucrats and start rescuing people.
There is a lesson in this experience: The strength of America is not found in our government. It is found in the compassionate hearts and enterprising spirit of our citizens. We are grateful for the support we have received from across the nation for the ongoing recovery efforts. This spirit got Louisiana through the hurricanes - and this spirit will get our nation through the storms we face today.
To solve our current problems, Washington must lead. But the way to lead is not to raise taxes and put more money and power in hands of Washington politicians. The way to lead is by empowering you - the American people. Because we believe that Americans can do anything.
That is why Republicans put forward plans to create jobs by lowering income tax rates for working families ... cutting taxes for small businesses ... strengthening incentives for businesses to invest in new equipment and hire new workers ... and stabilizing home values by creating a new tax credit for home-buyers. These plans would cost less and create more jobs.
But Democratic leaders in Congress rejected this approach. Instead of trusting us to make wise decisions with our own money, they passed the largest government spending bill in history - with a price tag of more than $1 trillion with interest. While some of the projects in the bill make sense, their legislation is larded with wasteful spending. It includes $300 million to buy new cars for the government, $8 billion for high-speed rail projects, such as a 'magnetic levitation' line from Las Vegas to Disneyland, and $140 million for something called 'volcano monitoring.' Instead of monitoring volcanoes, what Congress should be monitoring is the eruption of spending in Washington, DC.
Democratic leaders say their legislation will grow the economy. What it will do is grow the government, increase our taxes down the line, and saddle future generations with debt. Who among us would ask our children for a loan, so we could spend money we do not have, on things we do not need? That is precisely what the Democrats in Congress just did. It's irresponsible. And it's no way to strengthen our economy, create jobs, or build a prosperous future for our children.
In Louisiana, we took a different approach. Since I became governor, we cut more than 250 earmarks from our state budget. And to create jobs for our citizens, we cut taxes six times - including the largest income tax cut in the history of our state. We passed those tax cuts with bipartisan majorities. Republicans and Democrats put aside their differences, and worked together to make sure our people could keep more of what they earn. If it can be done in Baton Rouge, surely it can be done in Washington, DC.
To strengthen our economy, we need urgent action to keep energy prices down. All of us remember what it felt like to pay $4 at the pump - and unless we act now, those prices will return. To stop that from happening, we need to increase conservation ... increase energy efficiency ... increase the use of alternative and renewable fuels ... increase our use of nuclear power - and increase drilling for oil and gas here at home. We believe that Americans can do anything - and if we unleash the innovative spirit of our citizens, we can achieve energy independence.
To strengthen our economy, we also need to address the crisis in health care. Republicans believe in a simple principle: No American should have to worry about losing their health coverage - period. We stand for universal access to affordable health care coverage. We oppose universal government-run health care. Health care decisions should be made by doctors and patients - not by government bureaucrats. We believe Americans can do anything - and if we put aside partisan politics and work together, we can make our system of private medicine affordable and accessible for every one of our citizens.
To strengthen our economy, we also need to make sure every child in America gets the best possible education. After Katrina, we reinvented the New Orleans school system - opening dozens of new charter schools, and creating a new scholarship program that is giving parents the chance to send their children to private or parochial schools of their choice. We believe that, with the proper education, the children of America can do anything. And it should not take a devastating storm to bring this kind of innovation to education in our country.
To strengthen our economy, we must promote confidence in America by ensuring ours is the most ethical and transparent system in the world. In my home state, there used to be saying: At any given time, half of Louisiana is under water - and the other half is under indictment. No one says that anymore. Last year, we passed some of the strongest ethics laws in the nation - and today, Louisiana has turned her back on the corruption of the past. We need to bring transparency to Washington, DC - so we can rid our Capitol of corruption ... and ensure we never see the passage of another trillion dollar spending bill that Congress has not even read and the American people haven't even seen.
As we take these steps, we must remember for all our troubles at home, dangerous enemies still seek our destruction. Now is no time to dismantle the defenses that have protected this country for hundreds of years, or make deep cuts in funding for our troops. America's fighting men and women can do anything. And if we give them the resources they need, they will stay on the offensive ... defeat our enemies ... and protect us from harm.
In all these areas, Republicans want to work with President Obama. We appreciate his message of hope - but sometimes it seems we look for hope in different places. Democratic leaders in Washington place their hope in the federal government. We place our hope in you - the American people. In the end, it comes down to an honest and fundamental disagreement about the proper role of government. We oppose the National Democrats' view that says -- the way to strengthen our country is to increase dependence on government. We believe the way to strengthen our country is to restrain spending in Washington, and empower individuals and small businesses to grow our economy and create jobs.
In recent years, these distinctions in philosophy became less clear - because our party got away from its principles. You elected Republicans to champion limited government, fiscal discipline, and personal responsibility. Instead, Republicans went along with earmarks and big government spending in Washington. Republicans lost your trust - and rightly so.
Tonight, on behalf of our leaders in Congress and my fellow Republican governors, I say: Our party is determined to regain your trust. We will do so by standing up for the principles that we share ... the principles you elected us to fight for ... the principles that built this into the greatest, most prosperous country on earth.
A few weeks ago, the President warned that our nation is facing a crisis that he said 'we may not be able to reverse.' Our troubles are real, to be sure. But don't let anyone tell you that we cannot recover - or that America's best days are behind her. This is the nation that cast off the scourge of slavery ... overcame the Great Depression ... prevailed in two World Wars ... won the struggle for civil rights ... defeated the Soviet menace ... and responded with determined courage to the attacks of September 11, 2001. The American spirit has triumphed over almost every form of adversity known to man - and the American spirit will triumph again.
We can have confidence in our future - because, amid today's challenges, we also count many blessings: We have the most innovative citizens ...the most abundant resources ... the most resilient economy ... the most powerful military ... and the freest political system in the history of the world. My fellow citizens, never forget: We are Americans. And like my dad said years ago, Americans can do anything.
Thank you for listening. God bless you. And God bless America.
Obama Addresses the Congress
Address to Joint Session of Congress
As Prepared for Delivery
Madame Speaker, Mr. Vice President, Members of Congress, and the First Lady of the United States:
I've come here tonight not only to address the distinguished men and women in this great chamber, but to speak frankly and directly to the men and women who sent us here.
I know that for many Americans watching right now, the state of our economy is a concern that rises above all others. And rightly so. If you haven't been personally affected by this recession, you probably know someone who has - a friend; a neighbor; a member of your family. You don't need to hear another list of statistics to know that our economy is in crisis, because you live it every day. It's the worry you wake up with and the source of sleepless nights. It's the job you thought you'd retire from but now have lost; the business you built your dreams upon that's now hanging by a thread; the college acceptance letter your child had to put back in the envelope. The impact of this recession is real, and it is everywhere.
But while our economy may be weakened and our confidence shaken; though we are living through difficult and uncertain times, tonight I want every American to know this:
We will rebuild, we will recover, and the United States of America will emerge stronger than before.
The weight of this crisis will not determine the destiny of this nation. The answers to our problems don't lie beyond our reach. They exist in our laboratories and universities; in our fields and our factories; in the imaginations of our entrepreneurs and the pride of the hardest-working people on Earth. Those qualities that have made America the greatest force of progress and prosperity in human history we still possess in ample measure. What is required now is for this country to pull together, confront boldly the challenges we face, and take responsibility for our future once more.
Now, if we're honest with ourselves, we'll admit that for too long, we have not always met these responsibilities - as a government or as a people. I say this not to lay blame or look backwards, but because it is only by understanding how we arrived at this moment that we'll be able to lift ourselves out of this predicament.
The fact is, our economy did not fall into decline overnight. Nor did all of our problems begin when the housing market collapsed or the stock market sank. We have known for decades that our survival depends on finding new sources of energy. Yet we import more oil today than ever before. The cost of health care eats up more and more of our savings each year, yet we keep delaying reform. Our children will compete for jobs in a global economy that too many of our schools do not prepare them for. And though all these challenges went unsolved, we still managed to spend more money and pile up more debt, both as individuals and through our government, than ever before.
In other words, we have lived through an era where too often, short-term gains were prized over long-term prosperity; where we failed to look beyond the next payment, the next quarter, or the next election. A surplus became an excuse to transfer wealth to the wealthy instead of an opportunity to invest in our future. Regulations were gutted for the sake of a quick profit at the expense of a healthy market. People bought homes they knew they couldn't afford from banks and lenders who pushed those bad loans anyway. And all the while, critical debates and difficult decisions were put off for some other time on some other day.
Well that day of reckoning has arrived, and the time to take charge of our future is here.
Now is the time to act boldly and wisely - to not only revive this economy, but to build a new foundation for lasting prosperity. Now is the time to jumpstart job creation, re-start lending, and invest in areas like energy, health care, and education that will grow our economy, even as we make hard choices to bring our deficit down. That is what my economic agenda is designed to do, and that's what I'd like to talk to you about tonight.
It's an agenda that begins with jobs.
As soon as I took office, I asked this Congress to send me a recovery plan by President's Day that would put people back to work and put money in their pockets. Not because I believe in bigger government - I don't. Not because I'm not mindful of the massive debt we've inherited - I am. I called for action because the failure to do so would have cost more jobs and caused more hardships. In fact, a failure to act would have worsened our long-term deficit by assuring weak economic growth for years. That's why I pushed for quick action. And tonight, I am grateful that this Congress delivered, and pleased to say that the American Recovery and Reinvestment Act is now law.
Over the next two years, this plan will save or create 3.5 million jobs. More than 90% of these jobs will be in the private sector - jobs rebuilding our roads and bridges; constructing wind turbines and solar panels; laying broadband and expanding mass transit.
Because of this plan, there are teachers who can now keep their jobs and educate our kids. Health care professionals can continue caring for our sick. There are 57 police officers who are still on the streets of Minneapolis tonight because this plan prevented the layoffs their department was about to make.
Because of this plan, 95% of the working households in America will receive a tax cut - a tax cut that you will see in your paychecks beginning on April 1st.
Because of this plan, families who are struggling to pay tuition costs will receive a $2,500 tax credit for all four years of college. And Americans who have lost their jobs in this recession will be able to receive extended unemployment benefits and continued health care coverage to help them weather this storm.
I know there are some in this chamber and watching at home who are skeptical of whether this plan will work. I understand that skepticism. Here in Washington, we've all seen how quickly good intentions can turn into broken promises and wasteful spending. And with a plan of this scale comes enormous responsibility to get it right.
That is why I have asked Vice President Biden to lead a tough, unprecedented oversight effort - because nobody messes with Joe. I have told each member of my Cabinet as well as mayors and governors across the country that they will be held accountable by me and the American people for every dollar they spend. I have appointed a proven and aggressive Inspector General to ferret out any and all cases of waste and fraud. And we have created a new website called recovery.gov so that every American can find out how and where their money is being spent.
So the recovery plan we passed is the first step in getting our economy back on track. But it is just the first step. Because even if we manage this plan flawlessly, there will be no real recovery unless we clean up the credit crisis that has severely weakened our financial system.
I want to speak plainly and candidly about this issue tonight, because every American should know that it directly affects you and your family's well-being. You should also know that the money you've deposited in banks across the country is safe; your insurance is secure; and you can rely on the continued operation of our financial system. That is not the source of concern.
The concern is that if we do not re-start lending in this country, our recovery will be choked off before it even begins.
You see, the flow of credit is the lifeblood of our economy. The ability to get a loan is how you finance the purchase of everything from a home to a car to a college education; how stores stock their shelves, farms buy equipment, and businesses make payroll.
But credit has stopped flowing the way it should. Too many bad loans from the housing crisis have made their way onto the books of too many banks. With so much debt and so little confidence, these banks are now fearful of lending out any more money to households, to businesses, or to each other. When there is no lending, families can't afford to buy homes or cars. So businesses are forced to make layoffs. Our economy suffers even more, and credit dries up even further.
That is why this administration is moving swiftly and aggressively to break this destructive cycle, restore confidence, and re-start lending.
We will do so in several ways. First, we are creating a new lending fund that represents the largest effort ever to help provide auto loans, college loans, and small business loans to the consumers and entrepreneurs who keep this economy running.
Second, we have launched a housing plan that will help responsible families facing the threat of foreclosure lower their monthly payments and re-finance their mortgages. It's a plan that won't help speculators or that neighbor down the street who bought a house he could never hope to afford, but it will help millions of Americans who are struggling with declining home values - Americans who will now be able to take advantage of the lower interest rates that this plan has already helped bring about. In fact, the average family who re-finances today can save nearly $2000 per year on their mortgage.
Third, we will act with the full force of the federal government to ensure that the major banks that Americans depend on have enough confidence and enough money to lend even in more difficult times. And when we learn that a major bank has serious problems, we will hold accountable those responsible, force the necessary adjustments, provide the support to clean up their balance sheets, and assure the continuity of a strong, viable institution that can serve our people and our economy.
I understand that on any given day, Wall Street may be more comforted by an approach that gives banks bailouts with no strings attached, and that holds nobody accountable for their reckless decisions. But such an approach won't solve the problem. And our goal is to quicken the day when we re-start lending to the American people and American business and end this crisis once and for all.
I intend to hold these banks fully accountable for the assistance they receive, and this time, they will have to clearly demonstrate how taxpayer dollars result in more lending for the American taxpayer. This time, CEOs won't be able to use taxpayer money to pad their paychecks or buy fancy drapes or disappear on a private jet. Those days are over.
Still, this plan will require significant resources from the federal government - and yes, probably more than we've already set aside. But while the cost of action will be great, I can assure you that the cost of inaction will be far greater, for it could result in an economy that sputters along for not months or years, but perhaps a decade. That would be worse for our deficit, worse for business, worse for you, and worse for the next generation. And I refuse to let that happen.
I understand that when the last administration asked this Congress to provide assistance for struggling banks, Democrats and Republicans alike were infuriated by the mismanagement and results that followed. So were the American taxpayers. So was I.
So I know how unpopular it is to be seen as helping banks right now, especially when everyone is suffering in part from their bad decisions. I promise you - I get it.
But I also know that in a time of crisis, we cannot afford to govern out of anger, or yield to the politics of the moment. My job - our job - is to solve the problem. Our job is to govern with a sense of responsibility. I will not spend a single penny for the purpose of rewarding a single Wall Street executive, but I will do whatever it takes to help the small business that can't pay its workers or the family that has saved and still can't get a mortgage.
That's what this is about. It's not about helping banks - it's about helping people. Because when credit is available again, that young family can finally buy a new home. And then some company will hire workers to build it. And then those workers will have money to spend, and if they can get a loan too, maybe they'll finally buy that car, or open their own business. Investors will return to the market, and American families will see their retirement secured once more. Slowly, but surely, confidence will return, and our economy will recover.
So I ask this Congress to join me in doing whatever proves necessary. Because we cannot consign our nation to an open-ended recession. And to ensure that a crisis of this magnitude never happens again, I ask Congress to move quickly on legislation that will finally reform our outdated regulatory system. It is time to put in place tough, new common-sense rules of the road so that our financial market rewards drive and innovation, and punishes short-cuts and abuse.
The recovery plan and the financial stability plan are the immediate steps we're taking to revive our economy in the short-term. But the only way to fully restore America's economic strength is to make the long-term investments that will lead to new jobs, new industries, and a renewed ability to compete with the rest of the world. The only way this century will be another American century is if we confront at last the price of our dependence on oil and the high cost of health care; the schools that aren't preparing our children and the mountain of debt they stand to inherit. That is our responsibility.
In the next few days, I will submit a budget to Congress. So often, we have come to view these documents as simply numbers on a page or laundry lists of programs. I see this document differently. I see it as a vision for America - as a blueprint for our future.
My budget does not attempt to solve every problem or address every issue. It reflects the stark reality of what we've inherited - a trillion dollar deficit, a financial crisis, and a costly recession.
Given these realities, everyone in this chamber - Democrats and Republicans - will have to sacrifice some worthy priorities for which there are no dollars. And that includes me.
But that does not mean we can afford to ignore our long-term challenges. I reject the view that says our problems will simply take care of themselves; that says government has no role in laying the foundation for our common prosperity.
For history tells a different story. History reminds us that at every moment of economic upheaval and transformation, this nation has responded with bold action and big ideas. In the midst of civil war, we laid railroad tracks from one coast to another that spurred commerce and industry. From the turmoil of the Industrial Revolution came a system of public high schools that prepared our citizens for a new age. In the wake of war and depression, the GI Bill sent a generation to college and created the largest middle-class in history. And a twilight struggle for freedom led to a nation of highways, an American on the moon, and an explosion of technology that still shapes our world.
In each case, government didn't supplant private enterprise; it catalyzed private enterprise. It created the conditions for thousands of entrepreneurs and new businesses to adapt and to thrive.
We are a nation that has seen promise amid peril, and claimed opportunity from ordeal. Now we must be that nation again. That is why, even as it cuts back on the programs we don't need, the budget I submit will invest in the three areas that are absolutely critical to our economic future: energy, health care, and education.
It begins with energy.
We know the country that harnesses the power of clean, renewable energy will lead the 21st century. And yet, it is China that has launched the largest effort in history to make their economy energy efficient. We invented solar technology, but we've fallen behind countries like Germany and Japan in producing it. New plug-in hybrids roll off our assembly lines, but they will run on batteries made in Korea.
Well I do not accept a future where the jobs and industries of tomorrow take root beyond our borders - and I know you don't either. It is time for America to lead again.
Thanks to our recovery plan, we will double this nation's supply of renewable energy in the next three years. We have also made the largest investment in basic research funding in American history - an investment that will spur not only new discoveries in energy, but breakthroughs in medicine, science, and technology.
We will soon lay down thousands of miles of power lines that can carry new energy to cities and towns across this country. And we will put Americans to work making our homes and buildings more efficient so that we can save billions of dollars on our energy bills.
But to truly transform our economy, protect our security, and save our planet from the ravages of climate change, we need to ultimately make clean, renewable energy the profitable kind of energy. So I ask this Congress to send me legislation that places a market-based cap on carbon pollution and drives the production of more renewable energy in America. And to support that innovation, we will invest fifteen billion dollars a year to develop technologies like wind power and solar power; advanced biofuels, clean coal, and more fuel-efficient cars and trucks built right here in America.
As for our auto industry, everyone recognizes that years of bad decision-making and a global recession have pushed our automakers to the brink. We should not, and will not, protect them from their own bad practices. But we are committed to the goal of a re-tooled, re-imagined auto industry that can compete and win. Millions of jobs depend on it. Scores of communities depend on it. And I believe the nation that invented the automobile cannot walk away from it.
None of this will come without cost, nor will it be easy. But this is America. We don't do what's easy. We do what is necessary to move this country forward.
For that same reason, we must also address the crushing cost of health care.
This is a cost that now causes a bankruptcy in America every thirty seconds. By the end of the year, it could cause 1.5 million Americans to lose their homes. In the last eight years, premiums have grown four times faster than wages. And in each of these years, one million more Americans have lost their health insurance. It is one of the major reasons why small businesses close their doors and corporations ship jobs overseas. And it's one of the largest and fastest-growing parts of our budget.
Given these facts, we can no longer afford to put health care reform on hold.
Already, we have done more to advance the cause of health care reform in the last thirty days than we have in the last decade. When it was days old, this Congress passed a law to provide and protect health insurance for eleven million American children whose parents work full-time. Our recovery plan will invest in electronic health records and new technology that will reduce errors, bring down costs, ensure privacy, and save lives. It will launch a new effort to conquer a disease that has touched the life of nearly every American by seeking a cure for cancer in our time. And it makes the largest investment ever in preventive care, because that is one of the best ways to keep our people healthy and our costs under control.
This budget builds on these reforms. It includes an historic commitment to comprehensive health care reform - a down-payment on the principle that we must have quality, affordable health care for every American. It's a commitment that's paid for in part by efficiencies in our system that are long overdue. And it's a step we must take if we hope to bring down our deficit in the years to come.
Now, there will be many different opinions and ideas about how to achieve reform, and that is why I'm bringing together businesses and workers, doctors and health care providers, Democrats and Republicans to begin work on this issue next week.
I suffer no illusions that this will be an easy process. It will be hard. But I also know that nearly a century after Teddy Roosevelt first called for reform, the cost of our health care has weighed down our economy and the conscience of our nation long enough. So let there be no doubt: health care reform cannot wait, it must not wait, and it will not wait another year.
The third challenge we must address is the urgent need to expand the promise of education in America.
In a global economy where the most valuable skill you can sell is your knowledge, a good education is no longer just a pathway to opportunity - it is a pre-requisite.
Right now, three-quarters of the fastest-growing occupations require more than a high school diploma. And yet, just over half of our citizens have that level of education. We have one of the highest high school dropout rates of any industrialized nation. And half of the students who begin college never finish.
This is a prescription for economic decline, because we know the countries that out-teach us today will out-compete us tomorrow. That is why it will be the goal of this administration to ensure that every child has access to a complete and competitive education - from the day they are born to the day they begin a career.
Already, we have made an historic investment in education through the economic recovery plan. We have dramatically expanded early childhood education and will continue to improve its quality, because we know that the most formative learning comes in those first years of life. We have made college affordable for nearly seven million more students. And we have provided the resources necessary to prevent painful cuts and teacher layoffs that would set back our children's progress.
But we know that our schools don't just need more resources. They need more reform. That is why this budget creates new incentives for teacher performance; pathways for advancement, and rewards for success. We'll invest in innovative programs that are already helping schools meet high standards and close achievement gaps. And we will expand our commitment to charter schools.
It is our responsibility as lawmakers and educators to make this system work. But it is the responsibility of every citizen to participate in it. And so tonight, I ask every American to commit to at least one year or more of higher education or career training. This can be community college or a four-year school; vocational training or an apprenticeship. But whatever the training may be, every American will need to get more than a high school diploma. And dropping out of high school is no longer an option. It's not just quitting on yourself, it's quitting on your country - and this country needs and values the talents of every American. That is why we will provide the support necessary for you to complete college and meet a new goal: by 2020, America will once again have the highest proportion of college graduates in the world.
I know that the price of tuition is higher than ever, which is why if you are willing to volunteer in your neighborhood or give back to your community or serve your country, we will make sure that you can afford a higher education. And to encourage a renewed spirit of national service for this and future generations, I ask this Congress to send me the bipartisan legislation that bears the name of Senator Orrin Hatch as well as an American who has never stopped asking what he can do for his country - Senator Edward Kennedy.
These education policies will open the doors of opportunity for our children. But it is up to us to ensure they walk through them. In the end, there is no program or policy that can substitute for a mother or father who will attend those parent/teacher conferences, or help with homework after dinner, or turn off the TV, put away the video games, and read to their child. I speak to you not just as a President, but as a father when I say that responsibility for our children's education must begin at home.
There is, of course, another responsibility we have to our children. And that is the responsibility to ensure that we do not pass on to them a debt they cannot pay. With the deficit we inherited, the cost of the crisis we face, and the long-term challenges we must meet, it has never been more important to ensure that as our economy recovers, we do what it takes to bring this deficit down.
I'm proud that we passed the recovery plan free of earmarks, and I want to pass a budget next year that ensures that each dollar we spend reflects only our most important national priorities.
Yesterday, I held a fiscal summit where I pledged to cut the deficit in half by the end of my first term in office. My administration has also begun to go line by line through the federal budget in order to eliminate wasteful and ineffective programs. As you can imagine, this is a process that will take some time. But we're starting with the biggest lines. We have already identified two trillion dollars in savings over the next decade.
In this budget, we will end education programs that don't work and end direct payments to large agribusinesses that don't need them. We'll eliminate the no-bid contracts that have wasted billions in Iraq, and reform our defense budget so that we're not paying for Cold War-era weapons systems we don't use. We will root out the waste, fraud, and abuse in our Medicare program that doesn't make our seniors any healthier, and we will restore a sense of fairness and balance to our tax code by finally ending the tax breaks for corporations that ship our jobs overseas.
In order to save our children from a future of debt, we will also end the tax breaks for the wealthiest 2% of Americans. But let me perfectly clear, because I know you'll hear the same old claims that rolling back these tax breaks means a massive tax increase on the American people: if your family earns less than $250,000 a year, you will not see your taxes increased a single dime. I repeat: not one single dime. In fact, the recovery plan provides a tax cut - that's right, a tax cut - for 95% of working families. And these checks are on the way.
To preserve our long-term fiscal health, we must also address the growing costs in Medicare and Social Security. Comprehensive health care reform is the best way to strengthen Medicare for years to come. And we must also begin a conversation on how to do the same for Social Security, while creating tax-free universal savings accounts for all Americans.
Finally, because we're also suffering from a deficit of trust, I am committed to restoring a sense of honesty and accountability to our budget. That is why this budget looks ahead ten years and accounts for spending that was left out under the old rules - and for the first time, that includes the full cost of fighting in Iraq and Afghanistan. For seven years, we have been a nation at war. No longer will we hide its price.
We are now carefully reviewing our policies in both wars, and I will soon announce a way forward in Iraq that leaves Iraq to its people and responsibly ends this war.
And with our friends and allies, we will forge a new and comprehensive strategy for Afghanistan and Pakistan to defeat al Qaeda and combat extremism. Because I will not allow terrorists to plot against the American people from safe havens half a world away.
As we meet here tonight, our men and women in uniform stand watch abroad and more are readying to deploy. To each and every one of them, and to the families who bear the quiet burden of their absence, Americans are united in sending one message: we honor your service, we are inspired by your sacrifice, and you have our unyielding support. To relieve the strain on our forces, my budget increases the number of our soldiers and Marines. And to keep our sacred trust with those who serve, we will raise their pay, and give our veterans the expanded health care and benefits that they have earned.
To overcome extremism, we must also be vigilant in upholding the values our troops defend - because there is no force in the world more powerful than the example of America. That is why I have ordered the closing of the detention center at Guantanamo Bay, and will seek swift and certain justice for captured terrorists - because living our values doesn't make us weaker, it makes us safer and it makes us stronger. And that is why I can stand here tonight and say without exception or equivocation that the United States of America does not torture.
In words and deeds, we are showing the world that a new era of engagement has begun. For we know that America cannot meet the threats of this century alone, but the world cannot meet them without America. We cannot shun the negotiating table, nor ignore the foes or forces that could do us harm. We are instead called to move forward with the sense of confidence and candor that serious times demand.
To seek progress toward a secure and lasting peace between Israel and her neighbors, we have appointed an envoy to sustain our effort. To meet the challenges of the 21st century - from terrorism to nuclear proliferation; from pandemic disease to cyber threats to crushing poverty - we will strengthen old alliances, forge new ones, and use all elements of our national power.
And to respond to an economic crisis that is global in scope, we are working with the nations of the G-20 to restore confidence in our financial system, avoid the possibility of escalating protectionism, and spur demand for American goods in markets across the globe. For the world depends on us to have a strong economy, just as our economy depends on the strength of the world's.
As we stand at this crossroads of history, the eyes of all people in all nations are once again upon us - watching to see what we do with this moment; waiting for us to lead.
Those of us gathered here tonight have been called to govern in extraordinary times. It is a tremendous burden, but also a great privilege - one that has been entrusted to few generations of Americans. For in our hands lies the ability to shape our world for good or for ill.
I know that it is easy to lose sight of this truth - to become cynical and doubtful; consumed with the petty and the trivial.
But in my life, I have also learned that hope is found in unlikely places; that inspiration often comes not from those with the most power or celebrity, but from the dreams and aspirations of Americans who are anything but ordinary.
I think about Leonard Abess, the bank president from Miami who reportedly cashed out of his company, took a $60 million bonus, and gave it out to all 399 people who worked for him, plus another 72 who used to work for him. He didn't tell anyone, but when the local newspaper found out, he simply said, ''I knew some of these people since I was 7 years old. I didn't feel right getting the money myself."
I think about Greensburg, Kansas, a town that was completely destroyed by a tornado, but is being rebuilt by its residents as a global example of how clean energy can power an entire community - how it can bring jobs and businesses to a place where piles of bricks and rubble once lay. "The tragedy was terrible," said one of the men who helped them rebuild. "But the folks here know that it also provided an incredible opportunity."
And I think about Ty'Sheoma Bethea, the young girl from that school I visited in Dillon, South Carolina - a place where the ceilings leak, the paint peels off the walls, and they have to stop teaching six times a day because the train barrels by their classroom. She has been told that her school is hopeless, but the other day after class she went to the public library and typed up a letter to the people sitting in this room. She even asked her principal for the money to buy a stamp. The letter asks us for help, and says, "We are just students trying to become lawyers, doctors, congressmen like yourself and one day president, so we can make a change to not just the state of South Carolina but also the world. We are not quitters."
We are not quitters.
These words and these stories tell us something about the spirit of the people who sent us here. They tell us that even in the most trying times, amid the most difficult circumstances, there is a generosity, a resilience, a decency, and a determination that perseveres; a willingness to take responsibility for our future and for posterity.
Their resolve must be our inspiration. Their concerns must be our cause. And we must show them and all our people that we are equal to the task before us.
I know that we haven't agreed on every issue thus far, and there are surely times in the future when we will part ways. But I also know that every American who is sitting here tonight loves this country and wants it to succeed. That must be the starting point for every debate we have in the coming months, and where we return after those debates are done. That is the foundation on which the American people expect us to build common ground.
And if we do - if we come together and lift this nation from the depths of this crisis; if we put our people back to work and restart the engine of our prosperity; if we confront without fear the challenges of our time and summon that enduring spirit of an America that does not quit, then someday years from now our children can tell their children that this was the time when we performed, in the words that are carved into this very chamber, "something worthy to be remembered." Thank you, God Bless you, and may God Bless the United States of America.
As Prepared for Delivery
Madame Speaker, Mr. Vice President, Members of Congress, and the First Lady of the United States:
I've come here tonight not only to address the distinguished men and women in this great chamber, but to speak frankly and directly to the men and women who sent us here.
I know that for many Americans watching right now, the state of our economy is a concern that rises above all others. And rightly so. If you haven't been personally affected by this recession, you probably know someone who has - a friend; a neighbor; a member of your family. You don't need to hear another list of statistics to know that our economy is in crisis, because you live it every day. It's the worry you wake up with and the source of sleepless nights. It's the job you thought you'd retire from but now have lost; the business you built your dreams upon that's now hanging by a thread; the college acceptance letter your child had to put back in the envelope. The impact of this recession is real, and it is everywhere.
But while our economy may be weakened and our confidence shaken; though we are living through difficult and uncertain times, tonight I want every American to know this:
We will rebuild, we will recover, and the United States of America will emerge stronger than before.
The weight of this crisis will not determine the destiny of this nation. The answers to our problems don't lie beyond our reach. They exist in our laboratories and universities; in our fields and our factories; in the imaginations of our entrepreneurs and the pride of the hardest-working people on Earth. Those qualities that have made America the greatest force of progress and prosperity in human history we still possess in ample measure. What is required now is for this country to pull together, confront boldly the challenges we face, and take responsibility for our future once more.
Now, if we're honest with ourselves, we'll admit that for too long, we have not always met these responsibilities - as a government or as a people. I say this not to lay blame or look backwards, but because it is only by understanding how we arrived at this moment that we'll be able to lift ourselves out of this predicament.
The fact is, our economy did not fall into decline overnight. Nor did all of our problems begin when the housing market collapsed or the stock market sank. We have known for decades that our survival depends on finding new sources of energy. Yet we import more oil today than ever before. The cost of health care eats up more and more of our savings each year, yet we keep delaying reform. Our children will compete for jobs in a global economy that too many of our schools do not prepare them for. And though all these challenges went unsolved, we still managed to spend more money and pile up more debt, both as individuals and through our government, than ever before.
In other words, we have lived through an era where too often, short-term gains were prized over long-term prosperity; where we failed to look beyond the next payment, the next quarter, or the next election. A surplus became an excuse to transfer wealth to the wealthy instead of an opportunity to invest in our future. Regulations were gutted for the sake of a quick profit at the expense of a healthy market. People bought homes they knew they couldn't afford from banks and lenders who pushed those bad loans anyway. And all the while, critical debates and difficult decisions were put off for some other time on some other day.
Well that day of reckoning has arrived, and the time to take charge of our future is here.
Now is the time to act boldly and wisely - to not only revive this economy, but to build a new foundation for lasting prosperity. Now is the time to jumpstart job creation, re-start lending, and invest in areas like energy, health care, and education that will grow our economy, even as we make hard choices to bring our deficit down. That is what my economic agenda is designed to do, and that's what I'd like to talk to you about tonight.
It's an agenda that begins with jobs.
As soon as I took office, I asked this Congress to send me a recovery plan by President's Day that would put people back to work and put money in their pockets. Not because I believe in bigger government - I don't. Not because I'm not mindful of the massive debt we've inherited - I am. I called for action because the failure to do so would have cost more jobs and caused more hardships. In fact, a failure to act would have worsened our long-term deficit by assuring weak economic growth for years. That's why I pushed for quick action. And tonight, I am grateful that this Congress delivered, and pleased to say that the American Recovery and Reinvestment Act is now law.
Over the next two years, this plan will save or create 3.5 million jobs. More than 90% of these jobs will be in the private sector - jobs rebuilding our roads and bridges; constructing wind turbines and solar panels; laying broadband and expanding mass transit.
Because of this plan, there are teachers who can now keep their jobs and educate our kids. Health care professionals can continue caring for our sick. There are 57 police officers who are still on the streets of Minneapolis tonight because this plan prevented the layoffs their department was about to make.
Because of this plan, 95% of the working households in America will receive a tax cut - a tax cut that you will see in your paychecks beginning on April 1st.
Because of this plan, families who are struggling to pay tuition costs will receive a $2,500 tax credit for all four years of college. And Americans who have lost their jobs in this recession will be able to receive extended unemployment benefits and continued health care coverage to help them weather this storm.
I know there are some in this chamber and watching at home who are skeptical of whether this plan will work. I understand that skepticism. Here in Washington, we've all seen how quickly good intentions can turn into broken promises and wasteful spending. And with a plan of this scale comes enormous responsibility to get it right.
That is why I have asked Vice President Biden to lead a tough, unprecedented oversight effort - because nobody messes with Joe. I have told each member of my Cabinet as well as mayors and governors across the country that they will be held accountable by me and the American people for every dollar they spend. I have appointed a proven and aggressive Inspector General to ferret out any and all cases of waste and fraud. And we have created a new website called recovery.gov so that every American can find out how and where their money is being spent.
So the recovery plan we passed is the first step in getting our economy back on track. But it is just the first step. Because even if we manage this plan flawlessly, there will be no real recovery unless we clean up the credit crisis that has severely weakened our financial system.
I want to speak plainly and candidly about this issue tonight, because every American should know that it directly affects you and your family's well-being. You should also know that the money you've deposited in banks across the country is safe; your insurance is secure; and you can rely on the continued operation of our financial system. That is not the source of concern.
The concern is that if we do not re-start lending in this country, our recovery will be choked off before it even begins.
You see, the flow of credit is the lifeblood of our economy. The ability to get a loan is how you finance the purchase of everything from a home to a car to a college education; how stores stock their shelves, farms buy equipment, and businesses make payroll.
But credit has stopped flowing the way it should. Too many bad loans from the housing crisis have made their way onto the books of too many banks. With so much debt and so little confidence, these banks are now fearful of lending out any more money to households, to businesses, or to each other. When there is no lending, families can't afford to buy homes or cars. So businesses are forced to make layoffs. Our economy suffers even more, and credit dries up even further.
That is why this administration is moving swiftly and aggressively to break this destructive cycle, restore confidence, and re-start lending.
We will do so in several ways. First, we are creating a new lending fund that represents the largest effort ever to help provide auto loans, college loans, and small business loans to the consumers and entrepreneurs who keep this economy running.
Second, we have launched a housing plan that will help responsible families facing the threat of foreclosure lower their monthly payments and re-finance their mortgages. It's a plan that won't help speculators or that neighbor down the street who bought a house he could never hope to afford, but it will help millions of Americans who are struggling with declining home values - Americans who will now be able to take advantage of the lower interest rates that this plan has already helped bring about. In fact, the average family who re-finances today can save nearly $2000 per year on their mortgage.
Third, we will act with the full force of the federal government to ensure that the major banks that Americans depend on have enough confidence and enough money to lend even in more difficult times. And when we learn that a major bank has serious problems, we will hold accountable those responsible, force the necessary adjustments, provide the support to clean up their balance sheets, and assure the continuity of a strong, viable institution that can serve our people and our economy.
I understand that on any given day, Wall Street may be more comforted by an approach that gives banks bailouts with no strings attached, and that holds nobody accountable for their reckless decisions. But such an approach won't solve the problem. And our goal is to quicken the day when we re-start lending to the American people and American business and end this crisis once and for all.
I intend to hold these banks fully accountable for the assistance they receive, and this time, they will have to clearly demonstrate how taxpayer dollars result in more lending for the American taxpayer. This time, CEOs won't be able to use taxpayer money to pad their paychecks or buy fancy drapes or disappear on a private jet. Those days are over.
Still, this plan will require significant resources from the federal government - and yes, probably more than we've already set aside. But while the cost of action will be great, I can assure you that the cost of inaction will be far greater, for it could result in an economy that sputters along for not months or years, but perhaps a decade. That would be worse for our deficit, worse for business, worse for you, and worse for the next generation. And I refuse to let that happen.
I understand that when the last administration asked this Congress to provide assistance for struggling banks, Democrats and Republicans alike were infuriated by the mismanagement and results that followed. So were the American taxpayers. So was I.
So I know how unpopular it is to be seen as helping banks right now, especially when everyone is suffering in part from their bad decisions. I promise you - I get it.
But I also know that in a time of crisis, we cannot afford to govern out of anger, or yield to the politics of the moment. My job - our job - is to solve the problem. Our job is to govern with a sense of responsibility. I will not spend a single penny for the purpose of rewarding a single Wall Street executive, but I will do whatever it takes to help the small business that can't pay its workers or the family that has saved and still can't get a mortgage.
That's what this is about. It's not about helping banks - it's about helping people. Because when credit is available again, that young family can finally buy a new home. And then some company will hire workers to build it. And then those workers will have money to spend, and if they can get a loan too, maybe they'll finally buy that car, or open their own business. Investors will return to the market, and American families will see their retirement secured once more. Slowly, but surely, confidence will return, and our economy will recover.
So I ask this Congress to join me in doing whatever proves necessary. Because we cannot consign our nation to an open-ended recession. And to ensure that a crisis of this magnitude never happens again, I ask Congress to move quickly on legislation that will finally reform our outdated regulatory system. It is time to put in place tough, new common-sense rules of the road so that our financial market rewards drive and innovation, and punishes short-cuts and abuse.
The recovery plan and the financial stability plan are the immediate steps we're taking to revive our economy in the short-term. But the only way to fully restore America's economic strength is to make the long-term investments that will lead to new jobs, new industries, and a renewed ability to compete with the rest of the world. The only way this century will be another American century is if we confront at last the price of our dependence on oil and the high cost of health care; the schools that aren't preparing our children and the mountain of debt they stand to inherit. That is our responsibility.
In the next few days, I will submit a budget to Congress. So often, we have come to view these documents as simply numbers on a page or laundry lists of programs. I see this document differently. I see it as a vision for America - as a blueprint for our future.
My budget does not attempt to solve every problem or address every issue. It reflects the stark reality of what we've inherited - a trillion dollar deficit, a financial crisis, and a costly recession.
Given these realities, everyone in this chamber - Democrats and Republicans - will have to sacrifice some worthy priorities for which there are no dollars. And that includes me.
But that does not mean we can afford to ignore our long-term challenges. I reject the view that says our problems will simply take care of themselves; that says government has no role in laying the foundation for our common prosperity.
For history tells a different story. History reminds us that at every moment of economic upheaval and transformation, this nation has responded with bold action and big ideas. In the midst of civil war, we laid railroad tracks from one coast to another that spurred commerce and industry. From the turmoil of the Industrial Revolution came a system of public high schools that prepared our citizens for a new age. In the wake of war and depression, the GI Bill sent a generation to college and created the largest middle-class in history. And a twilight struggle for freedom led to a nation of highways, an American on the moon, and an explosion of technology that still shapes our world.
In each case, government didn't supplant private enterprise; it catalyzed private enterprise. It created the conditions for thousands of entrepreneurs and new businesses to adapt and to thrive.
We are a nation that has seen promise amid peril, and claimed opportunity from ordeal. Now we must be that nation again. That is why, even as it cuts back on the programs we don't need, the budget I submit will invest in the three areas that are absolutely critical to our economic future: energy, health care, and education.
It begins with energy.
We know the country that harnesses the power of clean, renewable energy will lead the 21st century. And yet, it is China that has launched the largest effort in history to make their economy energy efficient. We invented solar technology, but we've fallen behind countries like Germany and Japan in producing it. New plug-in hybrids roll off our assembly lines, but they will run on batteries made in Korea.
Well I do not accept a future where the jobs and industries of tomorrow take root beyond our borders - and I know you don't either. It is time for America to lead again.
Thanks to our recovery plan, we will double this nation's supply of renewable energy in the next three years. We have also made the largest investment in basic research funding in American history - an investment that will spur not only new discoveries in energy, but breakthroughs in medicine, science, and technology.
We will soon lay down thousands of miles of power lines that can carry new energy to cities and towns across this country. And we will put Americans to work making our homes and buildings more efficient so that we can save billions of dollars on our energy bills.
But to truly transform our economy, protect our security, and save our planet from the ravages of climate change, we need to ultimately make clean, renewable energy the profitable kind of energy. So I ask this Congress to send me legislation that places a market-based cap on carbon pollution and drives the production of more renewable energy in America. And to support that innovation, we will invest fifteen billion dollars a year to develop technologies like wind power and solar power; advanced biofuels, clean coal, and more fuel-efficient cars and trucks built right here in America.
As for our auto industry, everyone recognizes that years of bad decision-making and a global recession have pushed our automakers to the brink. We should not, and will not, protect them from their own bad practices. But we are committed to the goal of a re-tooled, re-imagined auto industry that can compete and win. Millions of jobs depend on it. Scores of communities depend on it. And I believe the nation that invented the automobile cannot walk away from it.
None of this will come without cost, nor will it be easy. But this is America. We don't do what's easy. We do what is necessary to move this country forward.
For that same reason, we must also address the crushing cost of health care.
This is a cost that now causes a bankruptcy in America every thirty seconds. By the end of the year, it could cause 1.5 million Americans to lose their homes. In the last eight years, premiums have grown four times faster than wages. And in each of these years, one million more Americans have lost their health insurance. It is one of the major reasons why small businesses close their doors and corporations ship jobs overseas. And it's one of the largest and fastest-growing parts of our budget.
Given these facts, we can no longer afford to put health care reform on hold.
Already, we have done more to advance the cause of health care reform in the last thirty days than we have in the last decade. When it was days old, this Congress passed a law to provide and protect health insurance for eleven million American children whose parents work full-time. Our recovery plan will invest in electronic health records and new technology that will reduce errors, bring down costs, ensure privacy, and save lives. It will launch a new effort to conquer a disease that has touched the life of nearly every American by seeking a cure for cancer in our time. And it makes the largest investment ever in preventive care, because that is one of the best ways to keep our people healthy and our costs under control.
This budget builds on these reforms. It includes an historic commitment to comprehensive health care reform - a down-payment on the principle that we must have quality, affordable health care for every American. It's a commitment that's paid for in part by efficiencies in our system that are long overdue. And it's a step we must take if we hope to bring down our deficit in the years to come.
Now, there will be many different opinions and ideas about how to achieve reform, and that is why I'm bringing together businesses and workers, doctors and health care providers, Democrats and Republicans to begin work on this issue next week.
I suffer no illusions that this will be an easy process. It will be hard. But I also know that nearly a century after Teddy Roosevelt first called for reform, the cost of our health care has weighed down our economy and the conscience of our nation long enough. So let there be no doubt: health care reform cannot wait, it must not wait, and it will not wait another year.
The third challenge we must address is the urgent need to expand the promise of education in America.
In a global economy where the most valuable skill you can sell is your knowledge, a good education is no longer just a pathway to opportunity - it is a pre-requisite.
Right now, three-quarters of the fastest-growing occupations require more than a high school diploma. And yet, just over half of our citizens have that level of education. We have one of the highest high school dropout rates of any industrialized nation. And half of the students who begin college never finish.
This is a prescription for economic decline, because we know the countries that out-teach us today will out-compete us tomorrow. That is why it will be the goal of this administration to ensure that every child has access to a complete and competitive education - from the day they are born to the day they begin a career.
Already, we have made an historic investment in education through the economic recovery plan. We have dramatically expanded early childhood education and will continue to improve its quality, because we know that the most formative learning comes in those first years of life. We have made college affordable for nearly seven million more students. And we have provided the resources necessary to prevent painful cuts and teacher layoffs that would set back our children's progress.
But we know that our schools don't just need more resources. They need more reform. That is why this budget creates new incentives for teacher performance; pathways for advancement, and rewards for success. We'll invest in innovative programs that are already helping schools meet high standards and close achievement gaps. And we will expand our commitment to charter schools.
It is our responsibility as lawmakers and educators to make this system work. But it is the responsibility of every citizen to participate in it. And so tonight, I ask every American to commit to at least one year or more of higher education or career training. This can be community college or a four-year school; vocational training or an apprenticeship. But whatever the training may be, every American will need to get more than a high school diploma. And dropping out of high school is no longer an option. It's not just quitting on yourself, it's quitting on your country - and this country needs and values the talents of every American. That is why we will provide the support necessary for you to complete college and meet a new goal: by 2020, America will once again have the highest proportion of college graduates in the world.
I know that the price of tuition is higher than ever, which is why if you are willing to volunteer in your neighborhood or give back to your community or serve your country, we will make sure that you can afford a higher education. And to encourage a renewed spirit of national service for this and future generations, I ask this Congress to send me the bipartisan legislation that bears the name of Senator Orrin Hatch as well as an American who has never stopped asking what he can do for his country - Senator Edward Kennedy.
These education policies will open the doors of opportunity for our children. But it is up to us to ensure they walk through them. In the end, there is no program or policy that can substitute for a mother or father who will attend those parent/teacher conferences, or help with homework after dinner, or turn off the TV, put away the video games, and read to their child. I speak to you not just as a President, but as a father when I say that responsibility for our children's education must begin at home.
There is, of course, another responsibility we have to our children. And that is the responsibility to ensure that we do not pass on to them a debt they cannot pay. With the deficit we inherited, the cost of the crisis we face, and the long-term challenges we must meet, it has never been more important to ensure that as our economy recovers, we do what it takes to bring this deficit down.
I'm proud that we passed the recovery plan free of earmarks, and I want to pass a budget next year that ensures that each dollar we spend reflects only our most important national priorities.
Yesterday, I held a fiscal summit where I pledged to cut the deficit in half by the end of my first term in office. My administration has also begun to go line by line through the federal budget in order to eliminate wasteful and ineffective programs. As you can imagine, this is a process that will take some time. But we're starting with the biggest lines. We have already identified two trillion dollars in savings over the next decade.
In this budget, we will end education programs that don't work and end direct payments to large agribusinesses that don't need them. We'll eliminate the no-bid contracts that have wasted billions in Iraq, and reform our defense budget so that we're not paying for Cold War-era weapons systems we don't use. We will root out the waste, fraud, and abuse in our Medicare program that doesn't make our seniors any healthier, and we will restore a sense of fairness and balance to our tax code by finally ending the tax breaks for corporations that ship our jobs overseas.
In order to save our children from a future of debt, we will also end the tax breaks for the wealthiest 2% of Americans. But let me perfectly clear, because I know you'll hear the same old claims that rolling back these tax breaks means a massive tax increase on the American people: if your family earns less than $250,000 a year, you will not see your taxes increased a single dime. I repeat: not one single dime. In fact, the recovery plan provides a tax cut - that's right, a tax cut - for 95% of working families. And these checks are on the way.
To preserve our long-term fiscal health, we must also address the growing costs in Medicare and Social Security. Comprehensive health care reform is the best way to strengthen Medicare for years to come. And we must also begin a conversation on how to do the same for Social Security, while creating tax-free universal savings accounts for all Americans.
Finally, because we're also suffering from a deficit of trust, I am committed to restoring a sense of honesty and accountability to our budget. That is why this budget looks ahead ten years and accounts for spending that was left out under the old rules - and for the first time, that includes the full cost of fighting in Iraq and Afghanistan. For seven years, we have been a nation at war. No longer will we hide its price.
We are now carefully reviewing our policies in both wars, and I will soon announce a way forward in Iraq that leaves Iraq to its people and responsibly ends this war.
And with our friends and allies, we will forge a new and comprehensive strategy for Afghanistan and Pakistan to defeat al Qaeda and combat extremism. Because I will not allow terrorists to plot against the American people from safe havens half a world away.
As we meet here tonight, our men and women in uniform stand watch abroad and more are readying to deploy. To each and every one of them, and to the families who bear the quiet burden of their absence, Americans are united in sending one message: we honor your service, we are inspired by your sacrifice, and you have our unyielding support. To relieve the strain on our forces, my budget increases the number of our soldiers and Marines. And to keep our sacred trust with those who serve, we will raise their pay, and give our veterans the expanded health care and benefits that they have earned.
To overcome extremism, we must also be vigilant in upholding the values our troops defend - because there is no force in the world more powerful than the example of America. That is why I have ordered the closing of the detention center at Guantanamo Bay, and will seek swift and certain justice for captured terrorists - because living our values doesn't make us weaker, it makes us safer and it makes us stronger. And that is why I can stand here tonight and say without exception or equivocation that the United States of America does not torture.
In words and deeds, we are showing the world that a new era of engagement has begun. For we know that America cannot meet the threats of this century alone, but the world cannot meet them without America. We cannot shun the negotiating table, nor ignore the foes or forces that could do us harm. We are instead called to move forward with the sense of confidence and candor that serious times demand.
To seek progress toward a secure and lasting peace between Israel and her neighbors, we have appointed an envoy to sustain our effort. To meet the challenges of the 21st century - from terrorism to nuclear proliferation; from pandemic disease to cyber threats to crushing poverty - we will strengthen old alliances, forge new ones, and use all elements of our national power.
And to respond to an economic crisis that is global in scope, we are working with the nations of the G-20 to restore confidence in our financial system, avoid the possibility of escalating protectionism, and spur demand for American goods in markets across the globe. For the world depends on us to have a strong economy, just as our economy depends on the strength of the world's.
As we stand at this crossroads of history, the eyes of all people in all nations are once again upon us - watching to see what we do with this moment; waiting for us to lead.
Those of us gathered here tonight have been called to govern in extraordinary times. It is a tremendous burden, but also a great privilege - one that has been entrusted to few generations of Americans. For in our hands lies the ability to shape our world for good or for ill.
I know that it is easy to lose sight of this truth - to become cynical and doubtful; consumed with the petty and the trivial.
But in my life, I have also learned that hope is found in unlikely places; that inspiration often comes not from those with the most power or celebrity, but from the dreams and aspirations of Americans who are anything but ordinary.
I think about Leonard Abess, the bank president from Miami who reportedly cashed out of his company, took a $60 million bonus, and gave it out to all 399 people who worked for him, plus another 72 who used to work for him. He didn't tell anyone, but when the local newspaper found out, he simply said, ''I knew some of these people since I was 7 years old. I didn't feel right getting the money myself."
I think about Greensburg, Kansas, a town that was completely destroyed by a tornado, but is being rebuilt by its residents as a global example of how clean energy can power an entire community - how it can bring jobs and businesses to a place where piles of bricks and rubble once lay. "The tragedy was terrible," said one of the men who helped them rebuild. "But the folks here know that it also provided an incredible opportunity."
And I think about Ty'Sheoma Bethea, the young girl from that school I visited in Dillon, South Carolina - a place where the ceilings leak, the paint peels off the walls, and they have to stop teaching six times a day because the train barrels by their classroom. She has been told that her school is hopeless, but the other day after class she went to the public library and typed up a letter to the people sitting in this room. She even asked her principal for the money to buy a stamp. The letter asks us for help, and says, "We are just students trying to become lawyers, doctors, congressmen like yourself and one day president, so we can make a change to not just the state of South Carolina but also the world. We are not quitters."
We are not quitters.
These words and these stories tell us something about the spirit of the people who sent us here. They tell us that even in the most trying times, amid the most difficult circumstances, there is a generosity, a resilience, a decency, and a determination that perseveres; a willingness to take responsibility for our future and for posterity.
Their resolve must be our inspiration. Their concerns must be our cause. And we must show them and all our people that we are equal to the task before us.
I know that we haven't agreed on every issue thus far, and there are surely times in the future when we will part ways. But I also know that every American who is sitting here tonight loves this country and wants it to succeed. That must be the starting point for every debate we have in the coming months, and where we return after those debates are done. That is the foundation on which the American people expect us to build common ground.
And if we do - if we come together and lift this nation from the depths of this crisis; if we put our people back to work and restart the engine of our prosperity; if we confront without fear the challenges of our time and summon that enduring spirit of an America that does not quit, then someday years from now our children can tell their children that this was the time when we performed, in the words that are carved into this very chamber, "something worthy to be remembered." Thank you, God Bless you, and may God Bless the United States of America.
Tuesday, February 24, 2009
U.S. To Help Rebuild Gaza
WASHINGTON (Reuters) – The United States plans to offer more than $900 million to help rebuild Gaza after Israel's invasion and to strengthen the Western-backed Palestinian Authority, U.S. officials said on Monday.
The money, which needs U.S. congressional approval, will be distributed through U.N. and other bodies and not via the militant group Hamas, which rules Gaza, said one official.
"This money is for Gaza and to help strengthen the Palestinian Authority. It is not going to go to Hamas," said the official, who asked not to be named as Secretary of State Hillary Clinton planned to announce the funding at a donors' conference in Egypt next week.
Neither the United States nor Israel have direct contact with the Islamist Hamas movement which runs Gaza and remains formally committed to the destruction of the Jewish state.
The official said the pledge was a mix of money already earmarked for the Palestinians and some new funding.
"The package is still shaping up," he said, when asked for specifics over how the money would be spent and a breakdown of old and new funding.
In December, the former Bush administration said it would give $85 million to the U.N. agency that provides aid to Palestinian refugees in the West Bank, Gaza, Jordan, Lebanon and Syria.
The March 2 donors' conference in Egypt's Sharm el-Sheikh resort aims to raise humanitarian and rebuilding funds for Gaza after Israel's invasion last December to suppress rocket fire against its cities.
Preliminary estimates put damage from the offensive, in which 1,300 Palestinians died, at nearly $2 billion.
Clinton's bid to get "substantial" funds could face an uphill battle in Congress because Hamas continues to rule Gaza and the U.S. focus is on its own souring economy.
BOOST FOR ABBAS
Part of the goal of the new funding is to boost the Palestinian Authority of President Mahmoud Abbas, which controls the occupied West Bank.
The United States wants Abbas's PA to play a central role in the reconstruction effort in Gaza, hoping this will increase its influence in the Hamas stronghold. Washington is also putting pressure on other donors to bolster Abbas.
"We call on donor countries to focus their pledges to meet the Palestinian Authority's priorities, including budget support, and on projects that can be funded through the Palestinian Authority and other existing, trusted mechanisms," said a State Department official.
The quartet of Middle East mediators -- the United States, the European Union, Russia and the United Nations -- are expected to meet on the sidelines of the Egyptian conference where they will work on strategy on Gaza, U.S. officials said.
After attending the conference in Egypt, Clinton is expected to go to Israel and the West Bank -- a public demonstration of Obama's promise to make Arab-Israeli peacemaking a foreign policy priority.
Clinton's special envoy to the region, George Mitchell, will be there this week trying to revive stalled Palestinian statehood talks complicated both by Hamas and political uncertainty in Israel after last week's election.
California State Congressman Introduces Pot Bill
State Assemblyman Tom Ammiano, D-San Francisco, announced today he has introduced legislation to legalize and tax marijuana in the state of California.
AB 390 would require that all sales of marijuana be made by licensed sellers and that sales be taxed $50 per ounce. It would also forbid sales to anyone under 21.
"With the state in the midst of an historic economic crisis, the move towards regulating and taxing marijuana is simply common sense," Ammiano said at a morning news conference at the state building on Golden Gate Avenue in San Francisco.
Ammiano said the law, if passed, could generate more than $1.3 billion in much-needed revenue for the state.
"California has the opportunity to be the first state in the nation to enact a smart, responsible public policy for the control and regulation of marijuana," he said.
Recession Hits Caveman
You've heard plenty of stories about foreclosures, but the latest victims of this brutal recession are about to lose their cave.
That's right. For nearly five years, Curt Sleeper and his family have lived in a cave. His mortgage is about to come due and, like millions of other Americans, he can't refinance.
So now, the 17,000-square-foot, subterranean home is being auctioned off on eBay.
Sleeper and his wife Deborah bought the cave outside St. Louis in May 2004 for $160,000. To pay for it, they sold their old home, TV and even the DVD collection. They made a 50 percent down payment and borrowed the other $80,000 from the seller. It was a five-year loan with a single balloon payment at the end.
The Sleepers now have until May 1 to pay off the remaining $83,000 or sell the property. It's not a foreclosure sale yet, but if they can't come up with the money, they risk losing the house.
Besides the initial $80,000 payment, Sleeper said he spent another $150,000 on renovations to the cave and the surrounding 2.8 acres he owns.
The original plan was to refinance. But Sleeper, a self-employed computer consultant, said banks struggle to appraise the cave since there aren't any comparable properties nearby or, well any comparable properties at all. So while he might have received a loan two or three years ago, today he is in a bind.
"Right now, banks are not interested in anything odd," Sleeper said.
He also acknowledges that he's not perfect. His credit score is 650 to 710 thanks to a few blemishes, including a dispute with a cell phone company.
Now he has turned to eBay.
Sleeper is asking $300,000 for the home but is also looking preferably for somebody to refinance his mortgage. After all, he and his family did put five years of their lives into building the three-bedroom, two-bathroom house into the cave. (During construction, Sleeper, his wife and their two kids lived in tents in the back of the cave and washed dishes and laundry in buckets. Their third child, a son, was born last week in the cave.)
Cave Dwelling: Plenty of Room to Grow
The front of the cave is a finished house, but there is plenty of room for expansion in the back.
"You're never done on a project like this," Sleeper said.
The house sits at the front of the cave opening, getting natural light. Behind it is a middle chamber holding the laundry room, storage and a spare bath. Behind that is another chamber. The home gets city power, water and sewer.
The property has at least three groundwater springs, one accessible through a cistern in the middle chamber of the cave, one that yields an average of 100 gallons a day that drips into an indoor pond in the front chamber, and one near the woods that creates a shallow pond.
During heavy rain, Sleeper said, the property gets as many as 14 waterfalls from the cliffs.
Sleeper and his family are not the first to inhabit the cave. From 1958 to 1985 it was used as a roller-skating rink. It also doubled during those years as a concert venue that hosted Bob Seger, Ted Nugent and Tina Turner among others, Sleeper said.
The cave is not actually a cave but, in fact, a former mine. In the early 1900s, two brothers blasted it out of the hillside and sold the sandstone to a glassmaker.
"I personally would not support anybody living in a natural cave," Sleeper said.
Online Interest
Since posting the listing last week, Sleeper said the response has been "overwhelming." His personal Web site has crashed more than once.
On Thursday, "I spent 15 hours answering questions on eBay and I just couldn't keep up," he said. "Every time I would answer a question, three more would show up."
He said 10,000 people are watching the auction, which ends on March 11. Another 70 have pre-registered to bid.
At the same time, Sleeper said he is talking with some private investors about lending him the money to stay in his home. But he won't stop the auction until everything is finalized.
"The goal is not notoriety," he added. "The goal is either to finance or sell my house."
That's right. For nearly five years, Curt Sleeper and his family have lived in a cave. His mortgage is about to come due and, like millions of other Americans, he can't refinance.
So now, the 17,000-square-foot, subterranean home is being auctioned off on eBay.
Sleeper and his wife Deborah bought the cave outside St. Louis in May 2004 for $160,000. To pay for it, they sold their old home, TV and even the DVD collection. They made a 50 percent down payment and borrowed the other $80,000 from the seller. It was a five-year loan with a single balloon payment at the end.
The Sleepers now have until May 1 to pay off the remaining $83,000 or sell the property. It's not a foreclosure sale yet, but if they can't come up with the money, they risk losing the house.
Besides the initial $80,000 payment, Sleeper said he spent another $150,000 on renovations to the cave and the surrounding 2.8 acres he owns.
The original plan was to refinance. But Sleeper, a self-employed computer consultant, said banks struggle to appraise the cave since there aren't any comparable properties nearby or, well any comparable properties at all. So while he might have received a loan two or three years ago, today he is in a bind.
"Right now, banks are not interested in anything odd," Sleeper said.
He also acknowledges that he's not perfect. His credit score is 650 to 710 thanks to a few blemishes, including a dispute with a cell phone company.
Now he has turned to eBay.
Sleeper is asking $300,000 for the home but is also looking preferably for somebody to refinance his mortgage. After all, he and his family did put five years of their lives into building the three-bedroom, two-bathroom house into the cave. (During construction, Sleeper, his wife and their two kids lived in tents in the back of the cave and washed dishes and laundry in buckets. Their third child, a son, was born last week in the cave.)
Cave Dwelling: Plenty of Room to Grow
The front of the cave is a finished house, but there is plenty of room for expansion in the back.
"You're never done on a project like this," Sleeper said.
The house sits at the front of the cave opening, getting natural light. Behind it is a middle chamber holding the laundry room, storage and a spare bath. Behind that is another chamber. The home gets city power, water and sewer.
The property has at least three groundwater springs, one accessible through a cistern in the middle chamber of the cave, one that yields an average of 100 gallons a day that drips into an indoor pond in the front chamber, and one near the woods that creates a shallow pond.
During heavy rain, Sleeper said, the property gets as many as 14 waterfalls from the cliffs.
Sleeper and his family are not the first to inhabit the cave. From 1958 to 1985 it was used as a roller-skating rink. It also doubled during those years as a concert venue that hosted Bob Seger, Ted Nugent and Tina Turner among others, Sleeper said.
The cave is not actually a cave but, in fact, a former mine. In the early 1900s, two brothers blasted it out of the hillside and sold the sandstone to a glassmaker.
"I personally would not support anybody living in a natural cave," Sleeper said.
Online Interest
Since posting the listing last week, Sleeper said the response has been "overwhelming." His personal Web site has crashed more than once.
On Thursday, "I spent 15 hours answering questions on eBay and I just couldn't keep up," he said. "Every time I would answer a question, three more would show up."
He said 10,000 people are watching the auction, which ends on March 11. Another 70 have pre-registered to bid.
At the same time, Sleeper said he is talking with some private investors about lending him the money to stay in his home. But he won't stop the auction until everything is finalized.
"The goal is not notoriety," he added. "The goal is either to finance or sell my house."
Soldier Defies President
A U.S. soldier on active duty in Iraq has called President Obama an "impostor" in a statement in which he affirmed plans to join as plaintiff in a challenge to Obama's eligibility to be commander in chief.
The statement was publicized by California attorney Orly Taitz who, along with her Defend Our Freedom Foundation, is working on a series of legal cases seeking to uncover Obama's birth records and other documents that would reveal whether he meets the requirements of the U.S. Constitution.
"As an active-duty officer in the United States Army, I have grave concerns about the constitutional eligibility of Barack Hussein Obama to hold the office of president of the United States," wrote Scott Easterling in a "to-whom-it-may-concern" letter.
Obama "has absolutely refused to provide to the American public his original birth certificate, as well as other documents which may prove or disprove his eligibility," Easterling wrote. "In fact, he has fought every attempt made by concerned citizens in their effort to force him to do so."
Taitz told WND she had advised Easterling to obtain legal counsel before making any statements regarding the commander-in-chief, but he insisted on moving forward. His contention is that as an active member of the U.S. military, he is required to follow orders from a sitting president, and he needs – on pain of court-martial – to know that Obama is eligible.
Where's the proof Barack Obama was born in the U.S. or that he fulfills the "natural-born American" clause in the Constitution? If you still want to see it, join more than 250,000 others and sign up now!
Taitz said other legal cases questioning Obama's eligibility filed by members of the military mostly have included retired officers, and courts several times have ruled they don't have standing to issue their challenge.
Easterling, however, is subject to enemy fire and certainly would have a reason to need to know the legitimacy of his orders, she argued.
"Until Mr. Obama releases a 'vault copy' of his original birth certificate for public review, I will consider him neither my Commander in Chief nor my President, but rather, a usurper to the Office – an impostor," his statement said.
Easterling said he joined the Army at age 40 after working in Iraq as a contractor.
"I chose to work … to support my troops and then left that lucrative position when the Army raised its maximum enlistment age to 40. Upon completion of basic training, I entered Officer Candidate School and commissioned as a 2LT in August 2007. After completing the subsequent basic officer leadership courses, I was assigned to Ft. Knox and shortly thereafter deployed to Balad, Iraq," he wrote.
"I implore all service-members and citizens to contact their senators and representatives and demand that they require Mr. Obama prove his eligibility. Our Constitution and our great nation must not be allowed to be disgraced," he wrote.
Taitz said Easterling is among the plaintiffs she is assembling for a new legal action over Obama's eligibility. Others include a list of state lawmakers who also would be required in their official position to follow orders of the president.
"My conviction is such that I am compelled to join Dr. Orly Taitz's lawsuit, as a plaintiff, against Mr. Obama. As a citizen, it pains me to do this, but as an officer, my sworn oath to support and defend our Constitution requires this action," he said.
Easterling was "saluted" in a forum on Taitz' website.
"Lt. Easterling, As a retired US Army SFC, I salute you sir as a true American patriot and hero! Thank you for your unselfish service to our country. It is rare to find someone today with such moral courage to do the right thing regardless of repercussions," said one contributor.
Said another, "For your voluntary service to our country, we owe you a debt we can never pay."
As WND reported yesterday, U.S. Sen. Richard Shelby, R-Ala., said during a meeting with constituents in Cullman County he has never seen proof the new president was born in Hawaii.
"Well, his father was Kenyan and they said he was born in Hawaii, but I haven't seen any birth certificate," Shelby said. "You have to be born in America to be president."
Shelby's office later stated the senator is confident of Obama's vetting process, although it did not elaborate.
WND has reported on multiple legal challenges to Obama's status as a "natural born citizen." The Constitution, Article 2, Section 1, states, "No Person except a natural born Citizen, or a Citizen of the United States, at the time of the Adoption of this Constitution, shall be eligible to the Office of President."
Some of the lawsuits question whether he was actually born in Hawaii, as he insists. If he was born out of the country, Obama's American mother, the suits contend, was too young at the time of his birth to confer American citizenship to her son under the law at the time.
Other challenges have focused on Obama's citizenship through his father, a Kenyan subject to the jurisdiction of the United Kingdom at the time of his birth, thus making him a dual citizen. The cases contend the framers of the Constitution excluded dual citizens from qualifying as natural born.
Here is a partial listing and status update for some of the cases over Obama's eligibility:
New Jersey attorney Mario Apuzzo has filed a case on behalf of Charles Kerchner and others alleging Congress didn't properly ascertain that Obama is qualified to hold the office of president.
Philip J. Berg, a Pennsylvania Democrat, demanded that the courts verify Obama's original birth certificate and other documents proving his American citizenship. Berg's latest appeal, requesting an injunction to stop the Electoral College from selecting the 44th president, was denied.
Leo Donofrio of New Jersey filed a lawsuit claiming Obama's dual citizenship disqualified him from serving as president. His case was considered in conference by the U.S. Supreme Court but denied a full hearing.
Cort Wrotnowski filed suit against Connecticut's secretary of state, making a similar argument to Donofrio. His case was considered in conference by the U.S. Supreme Court, but was denied a full hearing.
Former presidential candidate Alan Keyes headlines a list of people filing a suit in California, in a case handled by the United States Justice Foundation, that asks the secretary of state to refuse to allow the state's 55 Electoral College votes to be cast in the 2008 presidential election until Obama verifies his eligibility to hold the office. The case is pending, and lawyers are seeking the public's support.
Chicago attorney Andy Martin sought legal action requiring Hawaii Gov. Linda Lingle to release Obama's vital statistics record. The case was dismissed by Hawaii Circuit Court Judge Bert Ayabe.
Lt. Col. Donald Sullivan sought a temporary restraining order to stop the Electoral College vote in North Carolina until Barack Obama's eligibility could be confirmed, alleging doubt about Obama's citizenship. His case was denied.
In Ohio, David M. Neal sued to force the secretary of state to request documents from the Federal Elections Commission, the Democratic National Committee, the Ohio Democratic Party and Obama to show the presidential candidate was born in Hawaii. The case was denied.
In Washington state, Steven Marquis sued the secretary of state seeking a determination on Obama's citizenship. The case was denied.
In Georgia, Rev. Tom Terry asked the state Supreme Court to authenticate Obama's birth certificate. His request for an injunction against Georgia's secretary of state was denied by Georgia Superior Court Judge Jerry W. Baxter.
California attorney Orly Taitz has brought a case, Lightfoot vs. Bowen, on behalf of Gail Lightfoot, the vice presidential candidate on the ballot with Ron Paul, four electors and two registered voters.
In addition, other cases cited on the RightSideofLife blog as raising questions about Obama's eligibility include:
In Texas, Darrel Hunter vs. Obama later was dismissed.
In Ohio, Gordon Stamper vs. U.S. later was dismissed.
In Texas, Brockhausen vs. Andrade.
In Washington, L. Charles Cohen vs. Obama.
In Hawaii, Keyes vs. Lingle, dismissed.
WND senior reporter Jerome Corsi had gone to both Kenya and Hawaii prior to the election to investigate issues surrounding Obama's birth. But his research and discoveries only raised more questions.
Wednesday, February 18, 2009
Slammer 4 Txtng
FEBRUARY 17--A 14-year-old Wisconsin girl who refused to stop texting during a high school math class was arrested and charged with disorderly conduct, according to police. The teenager was busted last Wednesday at Wauwatosa East High School after she ignored a teacher's demand that she cease texting. The girl, whose name we have redacted from the below Wauwatosa Police Department report, initially denied having a phone when confronted by a school security officer. However, the phone was located after the girl was frisked by a female cop. The Samsung Cricket, the police report noted, was recovered "from the buttocks area" of the teenager. The student was issued a criminal citation for disorderly conduct, which carried "a bail of $298," and had her phone confiscated. The girl, who was barred from school property for a week, is scheduled for an April 20 court appearance on the misdemeanor rap. (4 pages)
Track the Spending
The White House has launched a new Web site dedicated entirely to the 1,100-page American Recovery and Reinvestment Act, which President Barack Obama signed into law Tuesday.
The site explains how the $787 billion will be spent and promises Americans that they can track every dollar contained in the package. The ambitious plan, which aims to create 3.5 million jobs while shoring up the country's infrastructure and services, is historic in scope. It's also the first major test of the new administration's efforts to ensure government transparency and accountability.
The Recovery.gov Web site features links to the full text of the act, as well as breakdowns and explanations. It also contains a presidential memo explaining that the Office of Management and Budget is developing new guidelines to ensure that all federal agencies meet new requirements to track, audit, and award the funds quickly so all spending can be posted on the Web site.
The site currently breaks down the funding by category, showing that the largest portion ($288 billion) will go toward tax relief, while $144 billion will go to states and localities. About $111 billion is slated for infrastructure and science.
The Web site promises visitors that they will be able to track spending by state and congressional district once the money begins to funnel out through federal agencies. Visitors will be able to access maps, charts, graphics, and a searchable database. They'll also be able to see who has won contracts for programs funded by the stimulus package.
In a statement released by the White House, Obama said that his Cabinet and staff will set up management, oversight, and disclosure for unprecedented accountability, responsibility, and transparency, while asking state and local governments to follow suit.
"With so much on the line, it's time to begin doing things differently," he said. "Ultimately, this is your money, and you deserve to know where it's going and how it's spent."
In keeping with what appears to be a new norm, Obama also promoted online engagement by saying he encourages all Americans to watch how the money is spent and send in comments and questions.
The site explains how the $787 billion will be spent and promises Americans that they can track every dollar contained in the package. The ambitious plan, which aims to create 3.5 million jobs while shoring up the country's infrastructure and services, is historic in scope. It's also the first major test of the new administration's efforts to ensure government transparency and accountability.
The Recovery.gov Web site features links to the full text of the act, as well as breakdowns and explanations. It also contains a presidential memo explaining that the Office of Management and Budget is developing new guidelines to ensure that all federal agencies meet new requirements to track, audit, and award the funds quickly so all spending can be posted on the Web site.
The site currently breaks down the funding by category, showing that the largest portion ($288 billion) will go toward tax relief, while $144 billion will go to states and localities. About $111 billion is slated for infrastructure and science.
The Web site promises visitors that they will be able to track spending by state and congressional district once the money begins to funnel out through federal agencies. Visitors will be able to access maps, charts, graphics, and a searchable database. They'll also be able to see who has won contracts for programs funded by the stimulus package.
In a statement released by the White House, Obama said that his Cabinet and staff will set up management, oversight, and disclosure for unprecedented accountability, responsibility, and transparency, while asking state and local governments to follow suit.
"With so much on the line, it's time to begin doing things differently," he said. "Ultimately, this is your money, and you deserve to know where it's going and how it's spent."
In keeping with what appears to be a new norm, Obama also promoted online engagement by saying he encourages all Americans to watch how the money is spent and send in comments and questions.
BIN LADEN FOUND!!!! using math?
A Californian geography professor has used techniques for hunting endangered species to pinpoint three houses in Pakistan where Osama bin Laden could be hiding.
Using patterns of how animal species spread, the world's most wanted terrorist can be tracked down to a town in the tribal region of North West Pakistan it is claimed.
By factoring in his need for security, electricity, high ceilings to accommodate his 6ft 4in frame and spare rooms for his bodyguards, the search can be further narrowed to three walled compounds.
According to a team led by Thomas Gillespie, at the University of California in Los Angeles, bin Laden's location is "one of the most important political questions of our time".
Mathematical models used to explain how animal species spread out say he should be close to where he was last spotted.
Their research published in MIT International Review also concluded he should also be in a large town with a similar culture to Afghanistan where he can remain largely anonymous.
The most likely candidate is in Parachinar, 12 miles inside Pakistan, which housed many mujahideen during the Soviet invasion of Afghanistan in the 1980s.
Finally after looking at his need for electricity for dialysis, high walls, spare rooms for his entourage, and trees to hide from prying eyes, satellite pictures show just three suitable houses.
"We believe that our work involves the first scientific approach to establishing his current location" the research concludes.
"The methods are repeatable and can be updated with new information obtained from the US intelligence community."
Kim Rossmo of Texas State University, who has worked with the military to find terrorists told USA Today: "The idea of identifying three buildings in a city of half a million especially one in a country the authors have likely never visited is somewhat overconfident."
Doubling Down On Afghanistan
WASHINGTON — President Obama said Tuesday that he would send an additional 17,000 American troops to Afghanistan this spring and summer, putting his stamp firmly on a war that he has long complained is going in the wrong direction.
The order will add nearly 50 percent to the 36,000 American troops already there. A further decision on sending more troops will come after the administration completes a broader review of Afghanistan policy, White House officials said.
Mr. Obama said in a written statement that the increase was “necessary to stabilize a deteriorating situation in Afghanistan, which has not received the strategic attention, direction and resources it urgently requires.”
At least for now, Mr. Obama’s decision gives American commanders in Afghanistan most but not all of the troops they had asked for. But the decision also carries political risk for a president who will be sending more troops to Afghanistan before he has begun to fulfill a promised rapid withdrawal of troops from Iraq.
Many experts worry that Afghanistan presents an even more formidable challenge for the United States than Iraq does, particularly with neighboring Pakistan providing sanctuary for insurgents of the Taliban and Al Qaeda.
Under Mr. Obama’s plan, a unit of 8,000 marines from Camp Lejeune, N.C., will be deployed in the next few weeks, aiming to be in Afghanistan by late spring, administration officials said, while an Army brigade from Fort Lewis, Wash., composed of 4,000 soldiers, will be sent in the summer. An additional 5,000 Army support troops will also be deployed in the summer.
Antiwar groups criticized Mr. Obama’s decision even before the White House announced it.
“The president is committing these troops before he’s determined what the mission is,” said Tom Andrews, director of the coalition organization Win Without War. “We need to avoid the slippery slope of military escalation.”
Mr. Obama said in his statement that “the fact that we are going to responsibly draw down our forces in Iraq allows us the flexibility to increase our presence in Afghanistan.”
American generals in Afghanistan had been pressing for additional forces to be in place by late spring or early summer to help counter growing violence and chaos in the country. Of the 30,000 additional troops that the commanders had initially sought, some 6,000 arrived in January after being sent by President Bush.
The administration’s review of Afghanistan policy is supposed to be completed before early April, when Mr. Obama heads to Europe for a NATO summit meeting at which he is expected to press American allies for more troops and help in Afghanistan.
In an interview with the Canadian Broadcasting Corporation on Tuesday, Mr. Obama said he was “absolutely convinced that you cannot solve the problem of Afghanistan, the Taliban, the spread of extremism in that region solely through military means.”
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