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US Federal Judge Thomas Griesa scheduled Argentina to appear for a contempt hearing on Monday, September 29. At issue is Argentina's failure to follow a court order to only continue to pay the 92% of bondholders who restructured after the country's 2001 default if Argentina pays a group of hold-out hedge funds. Argentina organized payment to restructured bondholders via an Argentine bank to avoid paying the hedge funds. The hedge funds, popularly known as "vulture funds," are asking the judge to hold Argentina in contempt and fine the South American country $50,000 per day.
"A contempt ruling probably won't help resolve the situation," said Eric LeCompte, executive director of the religious financial reform organization Jubilee USA. "The case continues to highlight how ineffective US courts are at resolving debt disputes."
At a similar hearing in August, Judge Griesa declined to find Argentina in contempt, noting: "In my judgment, it does not add to the scales of settlement to make a finding of contempt." In September, however, the Argentine Congress approved a debt swap bill to pay the restructured bondholders and circumvent the US court's decision to pay the hold-outs. Judge Griesa has called that bill "illegal." In a brief to the US Appeals Court in 2012, the US government argued Judge Griesa's ruling would harm New York as a center of finance because countries would avoid jurisdictions where predatory behavior is tolerated.
"This predatory behavior hurts investors and countries of all sizes," noted LeCompte. "The precedent in this case will hurt developing countries like Grenada and the Democratic Republic of the Congo."
Monday's contempt hearing comes days after Argentine President Christina Fernandez de Kirchner's speech to the United Nations General Assembly about the dangers of predatory behavior. Fernandez thanked countries that supported a recent UN resolution to advance an international bankruptcy process. The resolution passed September 9 by a vote of 124-11. A global debt resolution process could potentially prevent holdout litigation and limit defaults.
"In UN votes and IMF meetings, most of the world is saying the status quo is not working," said LeCompte, who serves on UN debt expert groups and attended the Argentine President's UN speech. "World leaders want both the predators to be stopped and defaults to become less likely. Only a bankruptcy process can achieve both."
Read a timeline and history of the Argentina case here.
Read the US government's 2012 brief here.
Read Jubilee USA's filing that urged the Supreme Court to take the case here.
Jubilee USA Network is an interfaith, non-profit alliance of religious, development and advocacy organizations. We are 75 U.S. institutions and more than 750 faith groups working across the United States and around the globe. We address the structural causes of poverty and inequality in our communities and countries around the world.(202) 783-3566
Five U.S. senators wrote that the Pentagon "can no longer expect Congress or the American taxpayer to underwrite record military spending while simultaneously failing to account for the hundreds of billions it hands out every year."
Sen. Bernie Sanders on Thursday led a group of senators in urging the Pentagon to investigate price gouging by military contractors after a CBS Newsprobe that aired on "60 Minutes" earlier this week confirmed that private corporations are drastically overcharging the Defense Department for weaponry and other equipment, resulting in hundreds of millions of dollars in excess taxpayer spending and huge profits for the arms industry.
"The six-month investigation by CBS News, including extensive interviews with former DOD contracting officials, uncovered massive overcharges from defense contractors accounting for hundreds of millions of dollars," reads a letter that Sanders and four of his Senate colleagues—Sens. Elizabeth Warren (D-Mass.), Ron Wyden (D-Ore.), Mike Braun (R-Ind.), and Chuck Grassley (R-Iowa)—sent to Defense Secretary Lloyd Austin.
"As CBS reported, DOD's fixed price contracts would often provide for private profits of 12-15%," the letter continues. "Pentagon analysts found overcharges that boosted total profits to nearly 40% and sometimes as high as 4,000%. Lockheed Martin, Boeing, Raytheon, and TransDigm are among the offenders, dramatically overcharging the department and U.S. taxpayers while reaping enormous profits, seeing their stock prices soar, and handing out massive executive compensation packages."
The senators also fault the Pentagon for staggering oversight failures, noting that the "60 Minutes" investigation "underlines longstanding concerns around the department's inability to pass an audit, accurately track its finances, or mitigate against fraud risk in the hundreds of billions of dollars in contracts it awards every year."
In 2021, Sanders, Wyden, Grassley, and other lawmakers teamed up to introduce legislation that would require the Pentagon to pass a full, independent audit. The bill did not get a floor vote in either chamber of Congress.
"The DOD can no longer expect Congress or the American taxpayer to underwrite record military spending while simultaneously failing to account for the hundreds of billions it hands out every year to spectacularly profitable private corporations," the letter reads. "We ask that you please provide us an update on the department’s efforts to implement outstanding GAO recommendations related to financial management and fraud risk reduction, as well as your efforts to investigate the price gouging uncovered by CBS' recent reporting."
"Proposals to push weapons out the door more quickly with less scrutiny, coupled with the sheer volume of systems being produced, will open the way to additional price gouging."
The senators' letter comes as the Pentagon is requesting $842 billion for fiscal year 2024 and as Republicans are pushing for higher military spending in debt ceiling talks with the Biden White House, even amid fresh evidence of wasteful spending that they claim to oppose.
The U.S. currently spends more on its military than over 144 countries combined, and roughly half of the Pentagon's annual budget ends up in the coffers of private corporations which—according to a recent Defense Department-backed study—are "profitable" and "generate substantial amounts of cash beyond their needs for operations or capital investment."
William Hartung, a senior research fellow at the Quincy Institute for Responsible Statecraft, wrote earlier this week that the Pentagon's systematic and persistent oversight lapses will likely "be exacerbated by the push to rapidly expand production to deal with supplying Ukraine and stockpiling systems relevant to a potential conflict with China."
"Proposals to push weapons out the door more quickly with less scrutiny, coupled with the sheer volume of systems being produced, will open the way to additional price gouging," Hartung warned.
"As spending rises and vetting decreases, the prospects for fraud, waste, and abuse will grow," he added. "And the arms industry and its allies in Congress and the Pentagon are intent on making any changes made to deal with the Ukraine emergency permanent, which could supersize the weapons industry while reducing oversight and accountability—a recipe for relentless, unnecessary price increases that could continue well beyond the end of the Ukraine war."
"Two Democrats voted with Republicans to say that not only should student debt relief be repealed, not only should the pause on payments end, but that you should make retroactive payments from previous months."
Two House Democrats—Reps. Jared Golden of Maine and Marie Gluesenkamp Perez of Washington—faced backlash on Wednesday after voting for a GOP resolution that would repeal President Joe Biden's student debt relief program, which is currently on hold as the U.S. Supreme Court weighs a pair of deeply flawed legal challenges.
The resolution, led by Rep. Bob Good (R-Va.), aims to make use of a law called the Congressional Review Act (CRA), which allows members of Congress to overturn rules issued by federal agencies. The GOP's student debt measure passed the House by a vote of 218 to 203.
Debt relief campaigners warned that the resolution's impact would be disastrous.
In addition to blocking the potential cancellation of up to $20,000 in student debt per eligible borrower, the measure would roll back "at least four months of paused payments and $5 billion per month in waived interest charges, requiring the U.S. Department of Education to send surprise loan bills to tens of millions of borrowers, even potentially impacting the 8th (and current) payment pause," the Student Borrower Protection Center warned.
A report published earlier this week by the American Federation of Teachers and the Student Borrower Protection Center says the Republican measure would "reinstate the debt of more than 260,000 public service workers who have achieved [Public Service Loan Forgiveness] since September 2022, restoring a debt burden that amounts to more than $19 billion overall and more than $72,000 per person."
The Debt Collective, the United States' first debtors' union, decried the Republican resolution and its two Democratic supporters, both of whom represent tens of thousands of people who would benefit from student debt cancellation.
"Jared Golden represents Maine-02. We know there are at least 100,975 student debtors in his district that he voted against today," the Debt Collective tweeted following Wednesday's vote. "Marie Gluesenkamp Perez represents Washington-03. There are at least 93,749 student debtors in her district that she voted against today. Shame."
"Today," the group wrote, "two Democrats voted with Republicans to say that not only should student debt relief be repealed, not only should the pause on payments end, but that you should make retroactive payments from previous months."
As of this writing, Golden and Perez—co-chairs of the right-wing Blue Dog Coalition—have not issued statements explaining their votes.
Golden publicly criticized the Biden administration's student debt relief plan last year, calling it "out of touch" even though polling has shown the program is popular.
\u201cToday, two Democrats voted with Republicans to say that not only should student debt relief be repealed, not only should the pause on payments end, but that you should make *retroactive* payments from previous months.\n\nIntroducing Jared Golden and Marie Gluesenkamp P\u00e9rez:\u201d— The Debt Collective \ud83d\udfe5 (@The Debt Collective \ud83d\udfe5) 1684984087
Republican backers of the resolution dismissed advocates' claims that repealing the Education Department's student debt relief program would hit borrowers with surprise bills, brushing aside such concerns as "not based in reality."
But critics of the resolution stress that it would both block Biden's student debt relief plan and nullify the most recent federal student loan payment pause.
According to the Congressional Research Service, any rule revoked by a CRA resolution of disapproval "would be deemed not to have had any effect at any time, and even provisions that had become effective would be retroactively negated."
Thus the warnings of retroactive interest payments and other consequences for those who have benefited from programs that are "intertwined with the payment pause," such as Public Service Loan Forgiveness.
"Right-wing proponents have gone to great lengths to mislead their own colleagues and deny the truth—this effort would push hundreds of thousands of public service workers back into debt and require the government to charge tens of millions borrowers for interest that has already been canceled," Mike Pierce, executive director of the Student Borrower Protection Center, said in a statement Wednesday.
"Should this become law, it will cause irreparable damage to the student loan system and undermine Americans' trust in their government," said Pierce. "This is exactly what extreme conservative lawmakers want, they are just afraid to say it."
The resolution now heads to the U.S. Senate, where—under the CRA—Republicans can force a vote despite being in the minority.
The measure would require just a simple majority to pass the narrowly Democratic upper chamber, though President Joe Biden has threatened to veto the resolution if it reaches his desk.
Sen. Bill Cassidy (R-La.) is leading the Senate resolution, which currently has 47 Republican co-sponsors.
The Washington Postreported Wednesday that "although Sens. Joe Manchin III (D-W.Va.) and Jon Tester (D-Mont.) have criticized the debt relief plan, it's unclear whether they will join the Republican effort to dismantle the program."
"Tester's office said he is taking a look at the resolution, while Manchin's office declined to comment," the Post added.
In a floor speech ahead of Wednesday's vote, Rep. Ayanna Pressley (D-Mass.) said it is "unconscionable but unsurprising" that Republicans are attempting to overturn the Biden administration's student debt relief program.
"Rather than work to alleviate the burden of the student debt crisis," Pressley said, "Republicans are advancing a cruel proposal that would harm 43 million people, hit tens of millions of borrowers with surprise loan bills, and reinstate the debt of over 260,000 public service workers—including our nurses, educators, firefighters, and servicemembers."
"The Senate must vote down this measure," Pressley continued. "The president has made clear he would veto this harmful resolution and stands by his decisive action on student debt relief. Millions of people, from all walks of life, stand to benefit from the president's plan, and we won't stop fighting to deliver the relief the people demand and deserve."
"From his hostility toward racial equity and LGBTQ+ rights, to book bans, to one of the most draconian abortion bans on record, he poses an immense threat to our freedoms and our country's most vulnerable communities," said one critic.
"Of all the extremists gunning for the GOP nomination, Ron DeSantis might be the worst."
That's what NARAL Pro-Choice America president Mini Timmaraju said in a statement Wednesday as Florida's Republican governor formally launched his long-anticipated campaign for the party's 2024 presidential nomination.
"From his hostility toward racial equity and LGBTQ+ rights, to book bans, to one of the most draconian abortion bans on record, he poses an immense threat to our freedoms and our country's most vulnerable communities," Timmaraju warned. "NARAL and our 4 million members will keep fighting side-by-side with those that DeSantis has targeted, and we are ready to mobilize to ensure that his extremism gets nowhere near the White House."
In a series of tweets Wednesday, Women's March also slammed "fascist, anti-choice" DeSantis, and listed some of the policies he has fought for as governor, including a six-week abortion ban and the "Don't Say Gay" law. The Florida Republican has also recently engaged in attacks on academic freedom, the rights of immigrants and transgender people, and democracy.
\u201cRon DeSantis is going to position himself as some anti-business populist but he's actually just an off-putting errand boy for the world's wealthiest people. \n\nThis should be the story about his campaign. He's like a homophobic Cousin Greg without the charm.\u201d— Jordan Zakarin (@Jordan Zakarin) 1684971187
Jenny Lawson, executive director of Planned Parenthood Votes, similarly stressed Wednesday that "Ron DeSantis' governorship has been an unmitigated disaster for Floridians, and his candidacy is a grave threat to every American's reproductive freedom."
"He's shown time and time again that he will put himself and his political ambitions over anything and everyone—including the health and lives of Floridians," Lawson continued. "While Floridians demand affordable healthcare and safer communities, DeSantis has pushed policies that endanger Florida's future."
"Voters in Florida don't support his anti-abortion, anti-LGBTQ+ agenda, and DeSantis will soon learn that the rest of the country doesn't, either," she added. "Everyone will see him for the dangerous, out-of-touch, overzealous politician he is. Planned Parenthood Votes will make sure of it."
\u201cA world of censorship, restricted access to life-saving care and suppression of our community is not a world we want to live in.\n\nWe cannot allow Ron DeSantis to become president and undo the progress we\u2019ve made.\u201d— Human Rights Campaign (@Human Rights Campaign) 1684954507
DeSantis on Wednesday filed paperwork with the Federal Election Commission and then officially announced his candidacy during a Twitter "Spaces" event—hosted by the social media giant's billionaire owner, Elon Musk—that, as Politicoput it, was "marred by horrendous tech failures."
Nora Benavidez, Free Press Action's senior counsel and director of digital justice and civil rights, said that "it's no surprise that the Spaces suffered a tech meltdown during tonight's big announcement. Musk has cut back on the personnel needed to keep Twitter glitch-free. It's fitting that his reckless management style would bite him just as so many are tuning in."
"Giving airtime to Ron DeSantis is not about free speech on Twitter or making the platform a public square. Elon Musk is instead prioritizing voices like his that promote bigotry and hate," Benavidez added. "This latest Musk stunt merely showcases a man who has misused his power in Florida to attack every basic right Floridians have. From DeSantis' attacks on voting rights, protest rights, and academic freedoms to denying basic protections for the LGBTQIA+ community, his presidential announcement this evening shows us all what Twitter has become: a megaphone for right-wing reactionary views."
As Politico reported:
President Joe Biden was quick to chime in, tweeting: "This link works," followed by a link to the president's campaign donation site.Polling results released Wednesday by Quinnipiac University show that despite his various legal issues, Trump is the top choice for 56% of Republican and Republican-leaning voters, followed by DeSantis with 25%. Former United Nations Ambassador and South Carolina Gov. Nikki Haley got just 3% while ex-New Jersey Gov. Chris Christie, former Vice President Mike Pence, and U.S. Sen. Tim Scott (S.C.) all tied at 2%; the other eight declared or potential candidates each received less than that.
A spokesperson for former President Donald Trump responded: "Glitchy. Tech issues. Uncomfortable silences. A complete failure to launch. And that's just the candidate!"
As Common Dreamsreported earlier Wednesday, DeSantis entered the 2024 race as he faced scrutiny from campaign finance watchdogs.
This article has been updated with comment from Free Press Action.