BEIRUT (Reuters) – Lebanon announced it cannot meet its debt payments and halted a March 9 bond payment of $1.2 billion on Saturday, setting the heavily indebted state on course for a sovereign default as it grapples with a major financial crisis.
In a televised address to the nation, Prime Minister Hassan Diab said foreign currency reserves had hit a “critical and dangerous” level and were needed to meet basic needs. He called for “fair” negotiations with lenders to restructure the debt.
The default will mark a new phase in a crisis that has hammered the economy since October, slicing around 40% off the value of the local currency, denying savers free access to their deposits and fuelling unemployment and unrest.
The crisis is seen as the biggest risk to Lebanon’s stability since the end of the 1975-90 civil war.
“How can we pay creditors abroad when the Lebanese cannot get their money from their bank accounts?” Diab said. “Our debt has become greater than Lebanon can bear, and greater than the ability of the Lebanese to meet interest payments.”
The long-brewing crisis came to a head last year as capital inflows slowed and protests erupted over decades of state corruption and bad governance.
“We are paying the price for the mistakes of the past years. Must we bequeath them to our children?” Diab said.
The Lebanese had “lived a dream that was a delusion as though things were just fine, while Lebanon was drowning in more debt”, he said.
There has been no sign of a bailout from foreign states that aided Lebanon in the past. Western governments insist Beirut first enact long-delayed reforms to fight waste and corruption.
Diab was appointed in January with backing from the Iran-backed group Hezbollah and its allies. Former prime minister Saad al-Hariri, a traditional ally of the West and Gulf Arab states, stayed out of the government.
NOT PRODUCTIVE ENOUGH
Diab, a little-known academic when he became prime minister, said corruption had drained the state while also criticizing economic policies adopted since the war. Lebanon was importing 80% of its needs and was not productive enough, he said.
He took aim at a banking system that drew capital to the country with dollar interest rates five to 10 times greater than those offered abroad.
“We do not need a banking sector four times the size of our economy. We will have to come up with a plan to restructure the banking sector,” he said.
The gross public debt has reached around 170% of gross domestic product, meaning Lebanon is close to being the world’s most heavily indebted state, he added.
Citing the World Bank, Diab said more than 40% of people could soon find themselves under the poverty line. Lebanon has a population of around 6 million, including about 1 million Syrian refugees.
Lebanon has a total of some $31 billion in dollar bonds that sources told Reuters on Friday the government would seek to restructure.
A set of Lebanon’s bond holders are to step up efforts to form a creditor group in the coming days, one of the members of the group said.
“From what we understand the government wants to be reasonable and so do most creditors. They understand the country is in a difficult situation,” the member said.
Lebanon’s public debt is worth about $89.5 billion, with around 37% of that in foreign currency.
Lebanon has sought technical but not financial assistance from the IMF, though many analysts believe that the only way for the country to secure financial support would be through an IMF program.
“Watch now if bondholders can block any deal,” said Nick Eisinger, principal, fixed income emerging markets at Vanguard, which holds some Lebanese debt but has been underweight in the market for a long time.
“It’s unclear how quick they can go down the restructuring route or get a deal because they need reforms first or at the same time,” he said.
Banks began restricting cash withdrawals and transfers abroad four months ago. Diab indicated the controls could soon be standardized, saying a draft law would “regulate the relationship between the banks and their customers, for it to become more fair and just”.
Category Archives: Legislation
AG Sessions Lawsuit and Big Win for President Trump
A 3 judge panel…unanimous decision by the way.
The program began in 2006. The Federal government created a grant assistance program for states, local and tribal governments to reduce crime and violence….let that sink it. It is called the Byrne Memorial Justice Assistance Grant Program….let that sink in….justice.
This would have been easy to argue in court actually to stop the violators from receiving the grants. Just understand the simple premise —>
BJA helps to make American communities safer by strengthening the nation’s criminal justice system: Its grants, training and technical assistance, and policy development services provide state, local, and tribal governments with the cutting edge tools and best practices they need to reduce violent and drug-related crime, support law enforcement, and combat victimization.
BJA is a component of the Office of Justice Programs, U.S. Department of Justice, which also includes the Bureau of Justice Statistics, National Institute of Justice, Office of Juvenile Justice and Delinquency Prevention, Office for Victims of Crime, and Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking.
FILE – In this Tuesday, March 20, 2018 file photo, Attorney General Jeff Sessions, left, speaks during a roundtable talks on sanctuary cities hosted by President Donald Trump, third from right, in the Roosevelt Room of the White House, in Washington. The Trump administration can withhold millions of dollars in law enforcement grants to force states to cooperate with U.S. immigration enforcement, a federal appeals court in New York ruled Wednesday, Feb. 26, 2020 in a decision that conflicted with three other federal appeals courts. (AP Photo/Manuel Balce Ceneta)
Anyway…
(AP) — The Trump administration can withhold millions of dollars in law enforcement grants to force states to cooperate with U.S. immigration enforcement, a federal appeals court in New York ruled Wednesday in a decision that conflicted with three other federal appeals courts.
The ruling by the 2nd U.S. Circuit Court of Appeals in Manhattan overturned a lower court’s decision ordering the administration to release funding to New York City and seven states — New York, Connecticut, New Jersey, Washington, Massachusetts, Virginia and Rhode Island.
The states and city sued the U.S. government after the Justice Department announced in 2017 that it would withhold grant money from cities and states until they gave federal immigration authorities access to jails and provide advance notice when someone in the country illegally is about to be released.
Before the change, cities and states seeking grant money were required only to show they were not preventing local law enforcement from communicating with federal authorities about the immigration status of people who were detained.
At the time, then-Attorney General Jeff Sessions said: “So-called ‘sanctuary’ policies make all of us less safe because they intentionally undermine our laws and protect illegal aliens who have committed crimes.”
In 2018, the Justice Department imposed additional conditions on the grant money, though challenges to those have not yet reached the appeals court in New York.
The 2nd Circuit said the plain language of relevant laws make clear that the U.S. attorney general can impose conditions on states and municipalities receiving money.
And it noted that the U.S. Supreme Court has repeatedly observed that the federal government maintains broad power over states when it comes to immigration policies.
In the past two years, federal appeals courts in Chicago, Philadelphia and San Francisco have ruled against the federal government by upholding lower-court injunctions placed on the enforcement of some or all of the challenged conditions.
“While mindful of the respect owed to our sister circuits, we cannot agree that the federal government must be enjoined from imposing the challenged conditions on the federal grants here at issue,” the 2nd Circuit three-judge panel said in a decision written by Judge Reena Raggi.
“These conditions help the federal government enforce national immigration laws and policies supported by successive Democratic and Republican administrations. But more to the authorization point, they ensure that applicants satisfy particular statutory grant requirements imposed by Congress and subject to Attorney General oversight,” the appeals court said.
The Justice Department praised the decision, issuing a statement calling it a “major victory for Americans” and saying it recognizes that the attorney general has authority to ensure that grant recipients are not thwarting federal law enforcement priorities.
The department added that the ruling’s effect will be limited because other courts have ruled the other way, giving the plaintiffs in the New York case the opportunity to point to those as reasons to ignore the new conditions.
Cody Wofsy, a staff attorney with the American Civil Liberties Union, called the decision a “real outlier,” saying he believed the 2nd Circuit was the nation’s first court to side with the Trump administration on the issue.
“Over and over, courts have said the Department of Justice doesn’t have authority under governing statutes to impose these conditions,” he said. “These conditions are part of the administration’s attempts to bully, cajole and coerce state and local governments into participating in federal immigration enforcement activities.”
Under the Constitution’s federalism principles and the 10th Amendment, Wofsy said, states and municipalities “are entitled to decline to become part of the administration’s deportation force.”
The appeals rulings pertain to the issuance of the Edward Byrne Memorial Justice Assistance Grant Program.
US Navy Seizes Iran Ship with SAMs on Board
Our turn eh? Hummm, the same say that the Senate votes to limit the President’s war power measures on declaring war with Iran, this event from last week hits the headlines. By the way, President Trump has never indicated he would go to war with Iran with or without Congressional approval so that whold bi-partisan measure in the Senate was just a formality…gesture.
The Senate passed a war powers resolution Thursday that constrains President Donald Trump’s ability to authorize military strikes against Iran.
The resolution from Democratic Sen. Tim Kaine received bipartisan support. It passed 55–45 with eight Republicans voting with Democrats in favor. However, Trump has signaled he will veto the resolution, and there are not enough votes in Congress to override the veto.
Kaine introduced the resolution in early January after escalating tensions with Iran culminated in an American strike killing Iranian general Qassem Soleimani and Iran responding by firing missiles at two American bases in Iraq. The administration gave Congress a briefing to justify the strike after the fact, which didn’t satisfy Democrats and infuriated two administration allies, Republican Reps. Mike Lee and Rand Paul.
“The nation should not be at war without a vote of Congress,” said Kaine Wednesday. “Even if he chooses to veto it and we can’t override, the will of both bodies and the public they represent, that could be a factor in his decision making.” h/t
Anyway, back to the SAMs…surface to air missiles…
***
Ticonderoga-class guided-missile cruiser USS Normandy (CG-60) seized a cache of Iranian-made anti-tank missiles and other munitions aboard a dhow in the Arabian Sea over the weekend.
Normandy stopped the dhow while conducting maritime security operations over the weekend, in accordance with international law, according to a statement released Thursday by U.S. Central Command.
The seized weapons include:
- 150 Dehlavieh anti-tank missiles, which are Iranian-made version of the Russian Kornet anti-tank missiles
- Three Iranian-made surface-to-air missiles
- Thermal imaging weapon scopes
- Components for manned and unmanned aerial and surface vessels
The CENTCOM statement noted that many of the munitions seized over the weekend by Normandy are similar to weapons and components seized in November by the crew of Arleigh Burke-class guided-missile destroyer USS Forrest Sherman (DDG-98).
The weapons included 358 surface-to-air missile components and ‘Dehlavieh’ anti-tank guided missiles (ATGM), intended for the Houthis in Yemen, aboard a stateless dhow during a maritime interdiction operation in the U.S. Fifth Fleet area of operations on Feb. 9, 2020. US Navy Photo
The weapons seized by Forrest Sherman were determined to be destined for Houthi rebels fighting in Yemen, according to CENTCOM. Houthi rebels have been fighting Saudi Arabian forces in Yemen for five years. The force has used unmanned aerial and surface vessels to attack Saudi Arabian forces in the past, using equipment that U.S. military experts say comes from Iran.
The shipment of weapons seized over the weekend would violate a United Nations Security Council resolution prohibiting the “direct or indirect supply, sale, or transfer of weapons to the Houthis,” the CENTCOM statement notes.
Meet the Billion Dollar Boondoggle Act
It would be ironic if the report itself came in $1 billion over budget and five years behind schedule.
(Really? Behind schedule and over budget and it has to be $1 billion? Your thoughts?) It is a start however introduced by 2 Republicans, Rep. Mike Gallagher (R-WI8) and Sen. Joni Ernst (R-IA).
Context
A number of taxpayer-funded projects are taking significantly longer or costing significantly more than originally projected. Prominent examples include everything from the current 2020 Census to NASA space missions, plutonium cleanup sites to New York City subway construction.
What the bill does
The Billion Dollar Boondoggle Act would require an annual public report detailing all federal projects that are running at least $1 billion over budget or at least five years behind schedule.
(That would likely include President Trump’s proposed border wall, for which U.S. Customs and Border Protection last week increased its original cost estimate up to $11 billion.)
The report would be compiled by the Office of Management and Budget (OMB). It would feature such components as both the original and current estimated costs of the projects, and supposed explanations justifying the increased expenses or late arrivals.
The Senate version was introduced last February 26 as bill number S. 565, by Sen. Joni Ernst (R-IA). The House version was introduced a month later last March 27 as bill number H.R. 1917, by Rep. Mike Gallagher (R-WI8).
What supporters say
Supporters argue the legislation allows for better management of misused and mishandled money allocated funded by American taxpayers.
“There are far too many taxpayer-funded projects that are billions of dollars over budget and years behind schedule,” Sen. Ernst said in a press release. The bill “will require the disclosure of the cost and timeline of these federal projects, bringing overdue accountability and transparency to the process, which will allow us to identify problems before they become a bottomless pit of taxpayer dollars.”
“Mismanagement of multibillion-dollar government projects should not be treated like business as usual,” Rep. Gallagher said in a separate press release. “It’s our job in Congress to be responsible stewards of taxpayer dollars, and this bill provides much-needed transparency of large-scale projects so we can get to the bottom of a problem before it becomes a bottomless pit of money.”
GovTrack Insider was unable to locate any explicit statements of opposition.
Odds of passage
The Senate version has attracted five cosponsors: four Republicans and one Democrat. It passed the Senate Homeland Security and Governmental Affairs Committee on November 6, and now goes for a potential vote by the full chamber.
The House version has attracted 12 cosponsors: eight Republicans and four Democrats. It awaits a potential vote in either the House Budget or Oversight and Reform Committee.
GovTrack Data on 2020 Candidates in the Senate
As we go through these primary states, do voters really do the work to determine the backgrounds of the candidates? Likely no, so below is a little cheat sheet that voters must consider for some of these candidates during their time in the Senate. It is voter’s duty to know.
Last May, we published an article highlighting differences between the 2020 democratic candidates based on their legislative records in 2017 and 2018. We also published several articles highlighting some of the key legislation that candidates have introduced more recently to give an understanding of their current policy concerns. As we finally reach the 2020 democratic primaries, it’s a good time to revisit what GovTrack data can tell us about the remaining viable candidates who are currently serving in or have served in the US Senate.
Bernie Sanders
Bernie Sanders has secured his position as the most progressive candidate by championing significant reform for popular issues. He has introduced a bill in this session of Congress for almost all of his major talking points, such as his Medicare for All Act, Raise the Wage Act, and College for All Act. The titles of these bills are more or less self-explanatory, which is fitting of Sanders style. Sanders introduces relatively few bills compared to other Senators, but the ones he does introduce tend to propose sweeping changes.
While Sanders legislative focus tends to be on health and the economy, he’s also touched on other key progressive issues. He introduced two environmental bills: the Green New Deal for Public Housing Act, which would set energy efficiency standards for all public housing among other things, and the Prevent Future American Sickness Act, which in a break from Sanders’ loftier policy goals would designate per- and polyfluoroalkyl substances (PFAS) as hazardous substances. He also introduced the No War Against Iran Act in response to increased tensions earlier this year.
Only two of the 27 bills Sanders introduced this session were supported by a Republican, and he’s only signed on to 19 Republican bills.
Elizabeth Warren
Elizabeth Warren has a clear focus on financial and economic policy. She introduced several bills to regulate large corporations, like her Accountable Capitalism Act, which would set responsibilities for United States corporations and enforce them with a new federal office, or her Ending Too Big to Jail Act intended to crack down on financial crime.
While not all of the bills she introduces are specific to that focus, most of them are presented from a financial perspective. For example, two of the major educational reforms Warren proposes, the Student Loan Debt Relief Act and the Universal Child Care and Early Learning Act, are centered around the affordability of preschool and higher education. Affordability is a key issue to Warren, appearing in the titles of two of her recent bills, the Affordable Safe Drinking Water Act and the Affordable Drug Manufacturing Act, which show off her approach to environmental and health policy respectively.
Warren and Sanders have both built their campaigns on progressive reforms meant to relieve stress for low-income Americans. However, looking at the legislative records we can find some contrast. While Sanders rarely ever trades cosponsorship with Republicans, Warren is much more likely to have a Republican or two sign on to her bills. In the previous session of Congress over half the bills Warren introduced had a Republican cosponsor and in this session almost a third were the same. She also has cosponsored 98 Republican bills this session.
Amy Klobuchar
One legislative issue stands out for Amy Klobuchar more so than for the other candidates: campaigns and elections. She has introduced 15 bills such as her Stopping Harmful Interference for a Lasting Democracy Act, which would require Federal campaigns report any foreign assistance offered or given, her Redistricting Reform Act, intended to combat partisan gerrymandering, and her Same Day Registration Act, which would allow voter registration on the same day of an election.
But with 81 bills introduced this session, Klobuchar has covered a wide range of topics. She has introduced environmental bills such as the Expanding Access to Sustainable Energy Act, which would provide grants and technology assistance to rural electric cooperatives, and finance bills such as the Monopolization Deterrence Act, which would allow monetary penalties against corporations that engage in monopolization offenses.
Klobuchar introduced more bills than the other senators running for President. She tends to focus less on lofty goals like Sanders’ Medicare for All or Warren’s Universal Child Care, opting to legislate for smaller policy adjustments rather than large scale reform. She also is much more likely to get Republican cosponsors. 51 of the 81 bills she introduced this session had at least one Republican cosponsor.
Joe Biden
Although Joe Biden didn’t introduce any bills in this session of Congress, we can look into his record from his last years as a senator. From 2007 to 2009 Biden focused on criminal justice and sentencing reform. He introduced bills such as the Bail Bond Fairness Act which would have required that bail bonds only be forfeited if the defendant fails to appear in court, the Justice Integrity Act, which would have created a program to prevent racial bias in law enforcement and to improve public confidence in the police, and the the Drug Sentencing Reform and Cocaine Kingpin Trafficking Act, which would have eliminated mandatory minimums for possession of crack or powder cocaine, among other things. He took an interest in preventing drug abuse through bills like the Recognizing Addiction as a Disease Act and Dextromethorphan Abuse Reduction Act.
Biden also had bills on clean energy and college affordability. His College Affordability and Creating Chances for Educational Success for Students Act would have assisted college students with tax credits and Pell grants, and his International Clean Development Technology Fund Act would have appropriated $2 billion for developing and implementing technologies to reduce greenhouse gas emissions across the globally.
65 of the 89 bills Biden introduced in his last session of Congress had Republican cosponsors. Biden signed on to 71 bills introduced by Republicans.