Washington, DC - October 10, 2008

Washington, DC
October 10, 2008

In Palm Beach on October 3, we concluded the Fifth ë08 Action Forum of the Diaz Presidency. That's Five Forums in Five Cities. These Forums were a great success. Launched by President Diaz at The National Press Club on August, 4 we went the next day to Philadelphia, then to New York City, on to Denver, aborted in St. Paul when Gustav hit the Gulf, on to Los Angeles and Miami and Palm Beach ñ all in roughly eight weeks. This effort, this hard work and focus by all is a testament to our organization and breathes life into what has been described as the agility and mobility of The Conference.

At our Fall Leadership, all Five Forum Reports were adopted, plus we announced our plans to bring forth our proposals for realistic immigration reform. Reforming the Transportation Security Administration (TSA) was discussed as experts and travel industry representatives continue to stress the need for more friendly and improved welcoming attitude from TSA employees. Airline reform was on the agenda and the discussion turned again to the need for an improved attitude for airline service employees. The comments bordered on airline bashing while there were issues such as alternative fuel, a new traffic control system, increased funding for airport improvements, raising the passenger facility charges and full funding of the essential and universal service program for certain cities challenged by a cut back of the number of flights to and from certain airports that took less dialogue. No doubt new technology and even existing technology used in other countries is needed. These discussions will no doubt continue as we head toward our January Winter Meeting as there were no clear and concluding recommendations emerging.

On the national economic front, on the eve of our Fall Leadership Meeting, Conference President Diaz sent a letter to Congress urging them to move with haste to take action. The response was the $700 billion ìbail-outî of Wall Street.

Oakland (CA) Mayor Ron Dellums continues to raise the question about ìthe other sideî of the $700 billion bail-out. As a former Congressman he had had conversations with House Banking Chair Barney Frank in which he raised the question if there will be any money left to fund the multi-billion dollar investments that are contained in Five Forum Reports adopted for consideration when our next President takes office in January. After some discussion, a letter was approved to be sent to Congress to remind them of infrastructure, energy, crime and work force training investments needed throughout America.

While the $700 billion bailout package for Wall Street passed, Stamford (CT) Mayor Dannel Malloy raised the question of fiscal assistance for Main Street. He indicated he has reports that there will be a third proposed Congressional stimulus package before the next President takes office that will provide stimulus to the states. Many states are going through serious shortfalls and are taking drastic budget actions that are being passed down to our cities for our citizens to bear the brunt. In addition to these reductions of needed service, many of our citizens are being hit hard by a loss of their retirement nest eggs' value based on the losses of their stocks and mutual fund investments.

USA Today this week reports a majority of Americans are bordering on depression and rage over the current economic decisions that are going to help Wall Street and not to their retirement funds or to "Main Street" where they live and work.

The economic mood darkens and declines deepen and somehow the $700 billion dollar bailout doesn't seem to be working. Further, the $85 billion bailout loan to AIG wasnít enough and yesterday the Federal Reserve announced $38 billion more in cash is on the way.

At our Leadership Meeting, I reported that the second Pelosi stimulus package totaling $60 billion for infrastructure, food stamps, extended unemployment benefits, to struggling state governments was blocked in the Senate. This report was printed in the last issue of U.S. Mayor on September 29.

The first stimulus package last February totaling $168 billion was an issue at our Conference of Mayors Executive Committee last January at our Washington Winter Meeting. This package was a total tax rebate initiative. Mayors at our Winter Meeting voiced concern about a lack of infrastructure funding but there was consensus we should hold our concern and wait for infrastructure funding in the second stimulus.

According to reports, many tax rebates went straight into gas tanks as the gasoline prices spiked earlier this year and hit $4.00 a gallon.

The second stimulus package, $60 billion, as mentioned above failed last month.
Mayor Malloy had received word from his sources as I had received which indicates another stimulus, the third one, is coming.

After we returned to Washington from our Fall Leadership Meeting, the Governors continue to make announcements about fiscal relief for their "cash-strapped" budgets. California Governor Arnold Schwarzenegger has stated he needs a $7 billion loan. Almost every day another Governor comes forth. Many Governors are in trouble and are not talking about it and more bad news will come out after certain state elections.

On Wednesday of this week, House Speaker Nancy Pelosi announced she may call Congress back to Washington after the November 4 election to put together a new federal spending package worth $150 million. That's $90 billion more than was passed by the House and blocked by the Senate last month. As U.S. Mayor goes to press, Speaker Pelosi has announced that House Democrats will convene an Economic Forum on October 13 to consider when, not if, we will have another federal spending stimulus package for consideration.

At issue in the third proposed stimulus package is to what extent federal funds will be provided directly to cities to meet our challenges and needs. We are making every effort and we will need the focused attention of our USCM leadership and member mayors to present viable options for job producing initiatives.

It's very difficult to keep up with the pace and swiftness of Congress as they sometimes put together stimulus and bailout initiatives without mayoral or any consultation. These packages, as we indicated to our leadership in Palm Beach, are inside operations. They are presented to us and we do our best to support them even though the spending usually favors the states. And in many instances, badly needed funds somehow donít seem to flow down to our city halls once they are sent nonstop to state capitols. We will monitor the situation and report to our membership as the third stimulus takes shape. Our goal is to demand a city portion of the total for our cities and we will need your help.

No doubt, Washington is in turmoil over the economic crisis in our nation. And the old order of our financial structure which has been propped up and protected by both the Democratic and Republican parties is experiencing a meltdown. And a new order will emerge. Today, our federal government announced they not only will loan banks money; they will move to actually buy portions of our banks.

And the other issue is the lack of both Senator Obama and Senator McCain to give us their specific proposals. The first debate was a sleeper. Jim Lehrer, of PBS, let them drone on. He asked them to talk to each other. They refused. He just sat there.

In the second debate when the candidates did start talking to one another and seemed to want to engage, Tom Brokaw acted like a high school basketball referee with a quick whistle and he impeded the dialogue. The Washington Post on the day of the second debate published five questions from mayors to be asked if they were there. Brokaw was armed with these questions but he refused to use them. Senator McCain did open with a suggested remedy on distressed mortgage holders but there was no follow up and it didnít stick. The second debate in Tennessee, left us like the first debate in Mississippi, both without a clear picture as to what specific economic recovery plans they have to propose for national financial crisis. No doubt, the national financial issue will be the number one agenda item when one of them is our President-elect in less than a month from now.

David Broder, as I have said before, one of the last true journalists left in America, wrote yesterday in his Washington Post column entitled, "Running From Reality."

"Something strange is happening in this strangest of all presidential contests. The longer it goes on, the less we know about what either of these men would do if he were in the Oval Office next year."

Broder writes that they have been asked twice once in Mississippi and in Tennessee last night what their priorities will be and, "It was a stunning rejection of reality, this nation is mired in two wars it does not know how to end. It is struggling to escape the worst economic crisis since the Great Depression. The federal government is staring at record deficits, with no plausible plan for financing the retirement and health care needs of a giant generation of retirees. Our transportation and education systems need help, and we are dependent on other countries for the energy we use. In the face of all this, Obama and McCain are stubbornly repeating promises they made in happier times, if either of them has a clue what to do to help this tottering economy, he is keeping it to himself."

Broder goes on to say that both men have given us "every reason to admire their character."

Today, October 9, the rhetoric from Senator McCain is to force Senator Obama to tell the truth about his association with terrorists and Senator Obama says that Senator McCain is guilty of "erratic behavior." It's as if they don't recognize what's going on on Wall Street or Main Street.

Let's hope the third debate will offer more specifics.

Meantime, hello folks! Back in Washington, we're about to go for a third try on some infrastructure stimulus.

And we have Five Reports from Five Diaz Forums with recommendations and innovations all waiting for one of them once the election is over, the sooner the better.