Proposed budget will reportedly shrink Army to pre-WWII numbers

Defense Secretary Chuck Hagel will reportedly propose a Pentagon budget that will shrink the U.S. Army to its smallest number since 1940 and eliminate an entire class of Air Force attack jets. 
The New York Times reported late Sunday that Hagel's proposal, which will be released to lawmakers and the public on Monday, will call for a reduction in size of the military that will leave it capable of waging war, but unable to carry out protracted occupations of foreign territory, as in Afghanistan and Iraq.
Under Hagel's plan, the number of troops in the Army will drop to between 440,000 and 450,000, a reduction of at least 120,000 soldiers from its post-Sept.11 peak.
Officials told the Times that Hagel's plan has been endorsed by the Joint Chiefs of Staff and protects funding for Special Operations forces and cyberwarfare. It also calls for the Navy to maintain all eleven of its aircraft carriers currently in operation. However, the budget proposal mandates the elimination of the entire fleet of Air Force A-10 attack aircraft, as well as the retiring of the U-2 spy plane, a stalwart of Cold War operations.
The budget plan does keep money for the F-35 warplane, a project which has been beset by delays and criticism over design flaws.
Other characteristics of the budget will likely draw further ire from veterans groups and members of Congress. The Wall Street Journal reported Friday that Hagel would recommend a limit on military pay raises, higher fees for health-care benefits, less generous housing allowances, and a one-year freeze on raises for top military brass.
"Personnel costs reflect some 50% of the Pentagon budget and cannot be exempted in the context of the significant cuts the department is facing," Defense Department spokesman Adm. John Kirby told the Journal. "Secretary Hagel has been clear that, while we do not want to, we ultimately must slow the growth of military pay and compensation."
"This is a real uphill battle with Congress," Mieke Eoyang, director of the National Security Program at Third Way, a centrist think tank in Washington, told the Journal
"God bless [Hagel] for trying to get a handle on these costs," she said. "But in this political environment, in an election year, it's going to be hard for members of Congress to accept anything that's viewed as taking benefits away from troops."

Rice acknowledges some of her Benghazi info was incorrect but has no regrets

National Security Adviser Susan Rice said Sunday she has no regrets over what she told the American public about the 2012 Benghazi terror attacks in the immediate aftermath of the deadly strikes.
Rice did a round of Sunday TV interviews a few days after the attacks, in which some of the information she gave was later proven incorrect.
“What I said to you that morning, and what I did every day since, was to share the best information that we had at the time,” Rice told NBC's “Meet the Press” moderator David Gregory on Sunday. “The information I provided … was what we had at the moment.”
Rice said “No,” when Gregory asked whether she had any regrets about her statements.
She also said nobody in the administration intended to mislead the public but acknowledged some of her information was inaccurate.
“That information turned out, in some respects, not to be 100 percent correct," Rice said. "But the notion that somehow I or anybody else in the administration misled the American people is patently false. And I think that that's been amply demonstrated."
She was, at the time, the U.S. ambassador to the United Nations and a top candidate to become secretary of state.
However, Rice withdrew herself from consideration in the wake of the attacks on the U.S. outpost in Benghazi, Libya, after the firestorm of criticism she received for her response.
Rice said Sunday she didn’t know whether her responses killed her chances of getting the top U.S. diplomatic post.
“I don’t know,” she said. “What I do know is that I [now] have a great job.”
Four Americans were killed in the Sept. 11, 2012, attacks, including U.S. Ambassador Christopher Stevens. The other three killed were State Department information management officer Sean Smith and former Navy SEALs Tyrone Woods and Glen Doherty.
Rice said the Benghazi attacks appeared to be a "spontaneous reaction” to an anti-Islamic video on the Internet.
The administration later said the attacks appeared pre-planned, but exactly who and what started them remains unclear, despite several investigations.

Kerry sees Russia, China agreeing on UN resolution on Syria as possible turning point

Secretary of State John Kerry on Saturday hailed the U.N. Security Council uniting for the first time on a resolution regarding Syria's humanitarian crisis, calling it a potential “hinge-point” in ending that country’s deadly, 3-year-long civil war.
The agreement calls for Syrian President Bashar Assad's government and opposition forces to provide immediate access across the country to humanitarian aid for all Syrians.
“This could be a hinge-point in the tortured three years of a Syria crisis bereft of hope,” Kerry said. “After three years of slaughter and savagery, people rightfully will question whether progress is possible, but this resolution holds the promise of something real.”
Still, Kerry warned that such an agreement is only the first steps toward ending the international crisis in which hundreds of thousands have been killed and millions forced from Syria and into refugee camps.
“The test is whether the words of the Security Council are matched with the life-saving actions the Syrian people so desperately and urgently need,” he said.
The breakthrough this weekend came when Russia, Syria's closest ally, and China, another supporter, agreed with the Western and Arab-backed resolution.
After two weeks of negotiations and a watering-down of the original text, the two countries decided to join the rest of the 15-member council in sending a strong message, especially to the Assad government, that food, medicine and other essentials must not be blocked to civilians caught in the conflict.
Strong evidence suggests Assad troops killed hundreds Aug. 21 in a chemical weapons attack on rebels in suburb Damascus.
According to the United Nations, 9.3 million Syrians are in need of humanitarian assistance and 6.8 million have fled their homes but remain in the country.
The resolution does not threaten sanctions -- Russia insisted that this reference be dropped from the original text. Instead, it asks U.N. Secretary-General Ban Ki-moon to report to the council every 30 days on implementation and expresses the council's intention to take "further steps" if the resolution's demands aren't fulfilled.
All Security Council resolutions are legally binding, but what remains to be seen is whether this resolution has an impact on the ground, especially since it doesn't have real "teeth."
The resolution demands that all parties, especially the Syrian government, "promptly allow rapid, safe and unhindered access ... across conflict lines and across borders" for humanitarian aid, and it calls on both sides "to immediately lift the sieges of populated areas."
It demands that all parties "cease depriving civilians of food and medicine indispensable to their survival." It also demands a halt to all attacks against civilians, including indiscriminate shelling and aerial attacks using barrel bombs in populated areas.
Russia and China had vetoed three previous resolutions backed by Western nations that would have pressured Assad to end the conflict, which according to activists has killed more than 136,000 people.
Russia's U.N. Ambassador Vitaly Churkin said Moscow supported the humanitarian resolution because "many Russian considerations were borne in mind, and as a result the document took on a balanced nature."
He accused the resolution's sponsors -- Australia, Luxembourg and Jordan -- and its supporters of raising the humanitarian crisis in the council "only after it became clear that attempts to use a deterioration of this humanitarian situation in order to carry out a regime change was unsuccessful."
China's U.N. Ambassador Liu Jieyi strongly urged all parties to implement the resolution "in good faith."
"China is gravely concerned at the worsening humanitarian situation in Syria," he said. "We deeply sympathize with people and we hope to see an early and prompt amelioration of the situation in Syria."
Syria's U.N. Ambassador Bashar Ja'afari Syria told the council that since the beginning of the crisis "the Syrian government was keen to improve the humanitarian situation of the people" and "it has continued to work day and night in order to perform all the humanitarian needs of its citizens."
Ja'afari added that the Syrian government is providing 75 percent of the humanitarian assistance in the country while the U.N. and other organizations have supplied only 25 percent. He accused some unnamed countries of politicizing the delivery of humanitarian aid, misleading international public opinion, and refusing to provide ambulances and wheelchairs for people with special needs.
The main Western-backed Syrian opposition group, the Syrian National Coalition, welcomed the resolution saying the international community should guarantee "full implementation."
The Security Council came together in October to approve a weaker presidential statement on the worsening humanitarian crisis.
The resolution also focuses on strongly condemns the increased terrorist attacks by Al Qaeda and its affiliates and other terrorist groups, calls on the government and opposition to defeat the terrorists, and "demands that all foreign fighters immediately withdraw from Syria."
Churkin said Russia will ask the council to quickly move to discuss a draft document on combating terrorism in Syria.
The resolution also demands that the government and opposition work toward "a genuine political transition that meets the legitimate aspirations of the Syrian people and enables them independently and democratically to determine their own future."

More IRS trouble as agency complains about resources

The latest trouble for the Internal Revenue Service has emerged from a Treasury Inspector General report, which reveals some senior IRS executives should have paid taxes on expenses they ran up for out-of- town travel.
Rep. Jim Jordan, R-Ohio, is furious.
"Here were the top people doing what no other citizen can do,” Jordan told Fox. “You underreport income, you don't pay your taxes, you can't get away with it. And yet the very people who run the IRS were doing just that."
The IRS issued a statement saying, "Cutting costs is a top priority, and the IRS has put in place a number of steps to reduce expenses involving executive travel. The IRS agreed with (the Inspector General report’s) recommendations and has put in place new steps to prevent future issues in this area."
Meanwhile, the IRS has been complaining about a lack of resources.
The Obama administration sought $13 billion for the 2014 IRS budget, but Congress slashed it to $11.3 billion.
The number of audits, which generate revenue, has dropped, with less than 1% now facing extra scrutiny.
New IRS Commissioner John Koskinen told lawmakers earlier this month the lack of funding is having an impact on service to the taxpayers.
"I can guarantee you, that we would answer more calls, if we had more people. I can guarantee you we don't have the people because we don't have the funding," Koskinen told members of the House Ways and Means Subcommittee on Oversight.
And now the agency is working on implementing ObamaCare.
"Those are very significant duties for the service, and in an era of tightened resources, frankly, everything else gets squeezed,” former IRS Commissioner Mark Everson told Fox.
"That's going to be a very daunting moment for them, let alone the enforcement mechanisms, so that's going to be… navigating that is going to be very delicate for the service. Particularly of the fact that this law is so, well, it's so controversial," said Everson.
"Now they're going to have a greater role in ObamaCare?” Jordan asked. “With a website that's not secure and all the problems we've already seen with this, with this legislation? Certainly doesn't instill a lot of confidence in the minds of taxpayers and citizens across the country."

'Windfalls of war': Companies with spotty records making billions off Afghanistan

The United States government has paid a company based in Switzerland more than $5 billion to feed the troops in Afghanistan, and thanks to a succession of no-bid contract extensions, the company, Supreme Foodservice, overcharged American taxpayers as much as $757 million, officials say.
The U.S. has appropriated more than $100 billion for Afghan reconstruction, which includes not only building and development, but training and arming the Afghan security forces -- and the dispute over the massive payments to this single company is just one example of how, more than 12 years into the war, America is struggling to account for how its money has been spent.
So who's getting rich off the war?
A review conducted by FoxNews.com shows several companies with questionable track records have been able to snag a sizable piece of the pie.
While Supreme Foodservice, a foreign firm, has profited immensely, several American companies have also made out like kings despite delays, accusations of shoddy construction and prolonged contract disputes over the last dozen years.
The biggest American benefactors of contracts in Afghanistan in recent years have been DynCorp International, KBR and Fluor Corporation -- though Fluor has not faced complaints like the other two.
Critics say no-bid contracts -- which grant companies a monopoly on huge deals without having to compete for them -- and a lack of oversight on those contracts once they've been awarded have contributed not only to the enormous sums spent, but to waste, fraud and abuse, as well.
"This is the byproduct of what has been an explosive growth in federal contracting over the last decade or so," said Neil Gordon, an investigator for the Washington, D.C.-based Project on Government Oversight (POGO) and the manager of the watchdog's Federal Contractor Misconduct Database.
"Contracting has grown at an incredible pace -- especially after 9/11. The terror attacks really touched it off, especially in national security, and unfortunately, government oversight of that contracting hasn't kept pace. That's why we are seeing all of these problems of fraud and waste and other abuses."
The Center for Public Integrity has called the billions of dollars poured into the reconstruction of Afghanistan "windfalls of war" for contractors. Lawmakers have referred to the myriad reports that point to the billions of dollars in missing and misappropriated American funds as the failure and shame of a broken system.
The House Oversight and Government Reform Committee held a hearing last April in the case of Supreme Foodservice, whose initial 2005 contract, reportedly worth about $725 million, called for supplying food and water to troops. The Defense Logistics Agency accused the company of overbilling by $757 million, and later recouped some of the money by reducing other payments. But lawmakers complained that the agency, which is in charge of overseeing the contracts, allowed the company to get no-bid extensions worth billions before it questioned the alleged overcharges.
Amid the dispute, the U.S. government in 2012 awarded new contracts worth roughly $8 billion to a competitor, Dubai-based Anham FZCO. But even as Supreme Foodservice challenged the decision, the Pentagon reportedly struck a $1.5 billion deal with the Swiss company to continue its work during the transition.
Supreme Foodservice, for its part, says it is still owed another billion dollars. Michael Schuster, a managing director at Supreme Foodservice, testified, "despite operating in the most isolating and dangerous area of the world, we have achieved consistently outstanding performance, exceeding contractual requirements."
"This has to be the prime poster child for government contracts spun out of control," Rep. John Mica, R-Fla., said at the April 17 hearing.
As for DynCorp, KBR and Fluor, all three American companies were named prime contractors in LOGCAP IV (Logistics Civil Augmentation Program), the umbrella contract through which all military funding for Afghan reconstruction (except Afghan security training) flows. According to the contract announcement in 2009, "each of the three contracts has a maximum value of up to $5 billion per year." Since then, however, KBR has not continued to receive Afghanistan contracts under the agreement, reportedly because of its checkered oversight and performance in prior LOGCAP contracts.
Meanwhile, DynCorp and Fluor currently hold multibillion-dollar contracts in and out of LOGCAP IV, ranging from Afghan security training to delivering food and services to the troops.
John F. Sopko, the special inspector general for Afghanistan reconstruction (SIGAR), has spent several years tracking where taxpayer money is going, whether projects are followed through, and how contractors and individuals are allegedly trying to cheat the system. The results aren't pretty, as the now-defunct congressional Commission on Wartime Contracting learned. It noted that in 2011, $31 billion had already been lost to "contract waste and fraud" in both Iraq and Afghanistan.
FoxNews.com, in a review of recent SIGAR investigations, found several examples, including:
DynCorp accused of shoddy construction, overbilling for food
DynCorp is a big target, because, as POGO points out, it's been around since the war in Bosnia and has left a trail of criminal complaints and other contract-related charges along the way. In October 2012 SIGAR filed a report charging that the U.S. Army Corps of Engineers had paid DynCorp $73 million for building a police garrison in Afghanistan's Kunduz province that turned out to have "severe settling and site grading issues," as well as "inadequate construction quality and noncompliance with contract specifications."
The result was a safety nightmare, with parts of the building already cracking and falling into sinkholes. According to SIGAR, DynCorp was not held accountable for the problems or for the repairs that needed to be made. It got the money, and the contract was closed out.
Meanwhile, SIGAR calculated that DynCorp might have overcharged the government nearly $1 million for food at just one base between 2010 and 2011. And the company's longtime security training of Afghan police was called into question after a scathing 2010 military report found a gross lack of oversight in the State Department-directed program, citing unaccounted-for funds, potential overcharging and missing weapons inventories.
While the report did not criticize DynCorp directly, Pratap Chatterjee, an investigator for the research group CorpWatch, noted at the time that DynCorp was the primary police trainer in Afghanistan since the early days of the war. In fact, DynCorp won another contract with the military after police training shifted from the State Department to the Pentagon.
"If the measures that are used to track the capabilities of the Afghan police are any guide, the contract has not been a resounding success," Chatterjee wrote.
DynCorp has continued to get police and military training contracts worth millions.
When contacted for comment, DynCorp spokeswoman Ashley Burke said the company billed the government for food "consistent with its proposal" and the IG report on the matter was not "factual." She also disputed the Kunduz garrison charges, saying the report was based on conditions at the facility after the contractor had turned it over to the Afghans who were responsible for its maintenance.
"The Company did everything possible -- including providing work at no cost to the government -- to deliver in challenging and unusual circumstances," she said in an email.
Meanwhile, KBR continues to hold contracts with the U.S. government for projects in Iraq and elsewhere. But spokesman Mark Lowes noted that the Army's review of its work gave the company far better ratings than did inspector general reports.
"So I think there's a little bit of disconnect between the Army in the field and civilians reviewers a decade later," he said. Lowes added: "If you were able to talk to people on the round (in Iraq) and ask them about the quality of what we did I believe you will get nothing but stellar reviews."
Unsafe hospitals and schools 
Many of SIGAR's recent audits involve international contractors. The stories are generally the same -- millions in taxpayer money is appropriated and all it seems to buy is shoddy, unfinished, unsanitary and unsafe construction. Record-keeping is horrendous and oversight is scarce. Many of the projects are expected to rot where they stand if there isn't money for adequate repairs or the ability to maintain them.
This includes four border police stations that were found to have serious structural and utility flaws and remain essentially unoccupied after four years, according to a SIGAR report issued in July 2012. The U.S. Army Corps of Engineers awarded a $19 million contract to Afghan-based Road & Roof Construction Company in 2008, and according to the inspection report, a lack of quality control has led to construction deficiencies at the four bases. One is said to be close to "uninhabitable."
Meanwhile, the Shafi Hakimi Construction Company, an Afghan outfit, was paid $600,000 to build a 20-bed hospital in Parwan province. When it was finished, SIGAR said, it had so many utility and structural issues that it was a health hazard to patients, including newborn babies who were being washed with dirty water.
Similarly, a multi-building education center in Balkh commissioned by the USAID office is still unfinished after five years, and is plagued with health and safety problems.
According to an inspector general review, Mercury Development, an Iraq-based company, was awarded $2.9 million to build centers in three cities. The company was cited for numerous problems and was eventually dropped from the project. Afghan contractors were brought in to finish the job, but the structural deficiencies persisted.
Despite that, some classes are being taught at Balkh, leading Sopko to say ominously in his report last month, "USAID lacks adequate assurance that these structures will not collapse at some point in time."
Taxpayers bought multimillion-dollar 'scrap' 
In 2009, the U.S. military gave $5.4 million to Denver-based International Home Finance & Development, LCC, to build and operate two massive trash incinerators on one of its forward operating bases in Afghanistan.
But the machines remained inoperable after nearly three years because of construction and safety deficiencies and poor contractor performance, according to a report two months ago. After Camp Sharana was closed last year due to the impending U.S. troop withdrawal, no one really knows what happened to the incinerators, though one official guessed in a recent report, "they have already been deconstructed by the Afghans, presumably for scrap."
More than taxpayer money was at stake here. The incinerators were supposed to replace the massive open-air burn pits that many returning troops have blamed for chronic health problems. In his sharply worded report Sopko said that because the incinerators never ran, "base personnel faced continued exposure to potentially hazardous emissions, and $5.4 million of U.S. taxpayer dollars could have been put to better use."
International Home Finance & Development, LCC, was paid in full. When asked for comment, Rafaat Ludin, the company's president and CEO, disputed that the incinerators were never in working order and claimed the delays were not his company's fault.
"At the time of [the] hand over, the incinerators were working very well and there were no additional issues," Ludin said in a statement. "What happened to the incinerators after we left is outside our control."

Biden

Judge strikes down Nebraska law that allowed Keystone pipeline to proceed through state

A Nebraska judge on Wednesday struck down a law that allowed the Keystone XL pipeline to proceed through the state, a setback for the project that would carry oil from Canada to Texas refineries.
Lancaster County Judge Stephanie Stacy issued a ruling that invalidated Nebraska Gov. Dave Heineman's approval of the route. Stacy agreed with opponents' arguments that a law passed in 2011 improperly allowed Heineman to give TransCanada eminent domain powers within the state. Stacy said the decision should have been made by the Nebraska Public Service Commission, which regulates pipelines and other utilities.
Heineman said Wednesday that state Attorney General Jon Bruning is appealing the ruling.
The ruling could cause more delays in finishing the pipeline. State officials who defended the law are likely to appeal to the Nebraska Supreme Court. Nebraska lawmakers may have to pass a new pipeline-sitting law to allow the Public Service Commission to act.
If they do, it's not yet clear how long the five-member PSC might take on the issue or whether it would approve the pipeline. Staff members were still reviewing the ruling Wednesday, said Angela Melton, the commission's attorney.
A spokesman for pipeline developer TransCanada said company officials were disappointed and disagreed with the decision, which came in a lawsuit filed by three Nebraska landowners who oppose the pipeline. The company planned to review the ruling before deciding how to proceed.
"TransCanada continues to believe strongly in Keystone XL and the benefits it would provide to Americans — thousands of jobs and a secure supply of crude oil from a trusted neighbor in Canada," said spokesman Shawn Howard.
Dave Domina, the landowners' attorney, said in a statement that the ruling means TransCanada has "no approved route in Nebraska."
"TransCanada is not authorized to condemn the property against Nebraska landowners. The pipeline project is at standstill in this state," he said.
The Keystone XL would carry 830,000 barrels of oil daily from Canada to Texas Gulf Coast refineries. In its latest environmental analysis, the U.S. State Department raised no major environmental objections to the $7 billion pipeline. Opponents disagree, saying the pipeline threatens ground- and surface water and would disrupt soil in the Nebraska Sandhills, a region of grass-covered dunes used as ranchland.
The Nebraska Legislature in 2011 gave Heineman the ability to approve the route after landowners complained that the pipeline posed a threat to the Sandhills. Heineman approved a new route that went around an area designated as the Sandhills, although opponents insist it still traverses the delicate soil.
Domina said the ruling means that the governor's office has no role to play in the pipeline, and decisions within the state must be made by the Public Service Commission. The commission was created in 1890s to prevent governors from granting political favors to railroad executives who wanted to expand through private property.
The decision on a federal permit still rests with President Obama.
Pipeline opponents called Wednesday's ruling a victory for landowners.
"TransCanada learned a hard lesson today: Never underestimate the power of family farmers and ranchers protecting their land and water," said Jane Kleeb, executive director of the anti-pipeline group Bold Nebraska.