“The status quo is unsustainable whether we look at it from an economic perspective or a matter of national security,” she said. “Obama is fiercely determined to stop kicking this down the road and get this moving.”

It’s a promise administration officials have made before — and that Republican inaction has made next to impossible. Still, Barnes said the White House would continue to push for immigration reform and the DREAM Act, which would help some illegal immigrant students and military service members gain legal status.

Barnes seemed to be trying to establish the administration’s position on immigration near the center, arguing the White House wants immigration reform, but not amnesty for illegal immigrants. Of course, most immigrants rights advocates don’t argue for blanket amnesty either, but it’s common for the Obama administration to use this debate tactic: Argue both sides of a debate are too extreme and situate the administration position in the middle.

Barnes rejected claims that DREAM Act provisions amounted to amnesty, and argued that any reform bill would have to include back taxes, learning English and background checks for current illegal immigrants to gain legal status. It would also include increased enforcement measures to ensure the U.S. does not allow more illegal immigrants into the country, she said.

While some immigrants rights groups argue comprehensive immigration reform should not have “excessive fees, endless and discriminatory background checks, and grinding bureaucracy,” most don’t advocate blanket amnesty, either — even though conservatives often argue anything but deportation can be considered amnesty.

If the main problem facing immigration is finding a compromise both camps might accept, it makes sense for the Obama administration to try to stake out this place in the middle. It remains to be seen whether conservatives will take the bait.

With many people locked in homes by underwater mortgages, only 1.6 percent of Americans moved between states in a one-year period that ended in March 2009 — a labor stagnation not seen in half a century. Though household mobility has gradually declined for more than two decades, the recent sharp downturn has caused economists to worry that it could harm the already struggling recovery.

“In the past, people tended to move to where the jobs are,” said Assistant Treasury Secretary Alan B. Krueger, who oversees economic policy for the department. “Now it is necessary to have more of a strategy to move the jobs — and create new jobs — in areas where the people are.”

The labor migration rate is down sharply since the start of the economic downturn in 2007 and is just half the rate of a decade earlier, according to William H. Frey, a Brookings Institution demographer who has analyzed Internal Revenue Service and census data. “Overall, interstate migration has reached its lowest point since World War II,” Frey said.

This is part of the reason that, to take care of the long-term unemployment situation, the government will likely need to subsidize or create massive jobs programs in regions with the worst unemployment and housing problems — interior California, Nevada, Arizona, Michigan. Making Detroit the new home of green jobs is one example.

Sen. Blanche Lincoln (D-Ark.) has written an aggressive proposal to regulate the derivatives market. (WDCpix)

This week, Sen. Chris Dodd’s (D-Conn.) financial regulatory reform bill moved to the floor of the Senate. And with that bill close to passage, Wall Street and lobbyists turned their attention to Sen. Blanche Lincoln (D-Ark.) and the Senate Agriculture Committee’s proposal to regulate derivatives, a $450 trillion market and a major source of investment-banking profits.

[Economy1]Derivatives are essentially a type of financial insurance. They let two parties trade a contract derived from the price of some underlying security, currency or commodity. For instance, say you were a major airline. You might go to your bank to purchase a derivative locking in the price of gas, just in case a summertime oil shortage pushed up prices at the pump. In this case, you would be an “end user,” meaning you actually take delivery of the good. About 90 percent of the derivatives market involves financial firms trading derivatives like credit-default swaps back and forth for profit — and just 10 percent involves end users, non-financial firms using derivatives to mitigate risk.

Still, end users have become the unlikely center of the fight on derivatives legislation. With the reputation and credibility of big financial firms weak, companies in industries from agriculture to aviation came forward to say that this legislation might not only dampen big business’ profits but also hurt them. On Tuesday, the U.S. Chamber of Commerce and other business lobbies — via a group called the Coalition for Derivatives End-Users — took to the Hill for a flurry of meetings between corporate representatives of those worried end users and members of Congress.

“The legislation has the potential to take hundreds of billions of dollars out of the economy through margin and capital requirements,” says Cady North, a lobbyist at Financial Executives International and a member of the Coalition for Derivatives End-Users’ steering committee. “We estimate that the bill could require up to $900 billion in capital expenditures.” Moreover, the Coalition argues, the bill will increase the cost of derivatives for end users. (The Coalition declined to provide a list of participating executives or their companies, or a list of the legislators or assistants with whom they met, and the Chamber of Commerce did not respond to repeated requests for comment.)

But there’s just one problem. The Lincoln bill forces financial firms to put up collateral and use clearinghouses when they trade derivatives, but specifically exempts end users from those requirements. Banks are using their end-using clients as proxies to help kill off the legislation, lawyers and lobbyists contend. And for most end users, the opposition to the bill makes little sense.

Other lobbying organizations representing end-using white-collar companies said they had no issues with the legislation. For instance, Michael Griffith, a legislative analyst at the Association for Financial Professionals, which represents 16,000 of “the folks that manage your average companies’ money,” says he has no issues with it. “We’re pretty happy with what the Agriculture Committee approved,” he says. “It has a broad end user exemption on it, and we haven’t had many complaints from our members.”

“I know the banks are screaming about it,” says Brian Kalish, the director of AFP’s finance practice. “[My members are] getting panicky emails from their bankers. But [of] my members, no one’s panicking.”

But this week, some end users got more than panicky emails from their banks. Lawyers and lobbyists say that banks clearly misled companies about how the legislation might impact their business costs. In one case, a derivatives broker told a company that the legislation would force it to pay the same fees and put up the same collateral as financial firms, even where it explicitly would not.

“I’ve heard of a few folks who use derivatives [as end users who] called up their banks to talk about the legislation,” another lobbyist said. “Of course, their bankers told them to expect the whole market getting disrupted, price increases, collateral calls. Now, for most of them, they’re buying swaps to hedge. The legislation specifically exempts them.”

Legislators this week repeated the concern. Senate Banking Committee Chairman Dodd said he sees evidence of the bankers’ influence when end users lobby him. “The end users have been basically used by the major investment banks,” he told the Huffington Post’s Ryan Grim on Tuesday.

Indeed, Lincoln took pains to ensure most end users are not impacted by the legislation. Some firms with “captive finance entities” — financial-products divisions within big, diversified companies, like Cargill — might not qualify as end users on some transactions, and might have to post collateral when they use derivatives to speculate rather than hedge. But they represent a small proportion of end users, who represent a small portion of derivatives users.

Furthermore, the legislation might eventually drive end-users’ costs down. Many derivatives experts — off of Wall Street, at least — believe that Lincoln’s reforms will increase competition and transparency, reducing prices. Robert Litan, a derivatives expert at the Brookings Institution, explains, “In a world of nontransparency, the world the derivatives market is in right now, the way I understand it, if you try to call four or five dealers, to shop around, none give you a real price. They might quote you an indicative price. If you commit, then they give you pricing information.”
The White House concurs. Jen Psaki, the deputy communications director, recently argued, “The unregulated OTC derivatives markets were at the center of the recent financial crisis. The Wall Street banks that dominate this market want to keep it unregulated so they can make money off regular firms.”

As I note in my story, Gude and Kate Martin, Director of the Center for National Security Studies, have both written in support of the president’s right to detain combatants under the laws of war. But that support raises two key questions: who is a combatant and what is a war?

Congress, in passing the Authorization for the Use of Military Force (AUMF) in 2001, allowed the president to wage war “against those responsible for the recent attacks launched against the United States” — namely, al-Qaeda and the Taliban, when they ran Afghanistan. But since no one walks around wearing al-Qaeda or Taliban uniforms, who’s actually a member and therefore detainable remains a major point of contention.

Similarly, the laws of war allow for the detention of a combatant captured on the battlefield until the conflict is over. But whether the battlefield is the specific zone where U.S. forces are stationed in Afghanistan or Iraq, or an area as broad as anywhere in the world that terrorists who hate the United States may be found, is hotly debated. Many of the lawyers I cite in my piece today, such as Martin, Gude and the eleven lawyers who signed the letter to President Obama imploring him not to authorize some new form of preventive detention, argue for the geographically more limited definition of detention.

As Gude wrote in The Guardian: “During this ongoing military conflict, the US clearly possess the authority to detain enemy fighters captured on the battlefield or fleeing from it.”

And as the military and defense lawyers write in their letter to Obama, the laws of war “do not authorize the detention of people for terrorist activities far from the battlefield, which are not acts of war but criminal acts.”

The Bush administration interpreted the laws of war far more expansively than that, however, seizing and detaining for years suspected terrorist sympathizers as far away as Thailand, Bosnia and Illinois. Few, if any, civil libertarians would approve of such an expansive reading of the president’s wartime detention authority.

Yet those who advocate new detention legislation, such as Benjamin Wittes at Brookings, think that distinction makes little sense. And that’s why they want an entirely new system that is not constrained by the laws of war.

Because in Wittes’s view, the laws of war allow you to detain, say, a not-very-important Taliban foot soldier, but not a leading al-Qaeda agent who’s found in Pakistan, far from the zone of conflict.

“Say you raid a safe-house in Pakistan,” he said yesterday. “You capture Abu Zubaydah. There are 10 people there with him, but nowhere near the battlefield. But they’re close enough to a very senior al-Qaeda member, and involved with building live bombs.” The government ought to be able to detain them all, says Wittes, yet the laws of war don’t necessarily allow that.

“My basic point is that the laws of war unambiguously detain a group of people who are frankly not the real problem in the counter-terrorism arena. And they give you only very ambiguous detention authority with respect to people who are the molten core of the problem … so why not have a detention authority that is designed for the group of people you actually want to detain?”

That question is sure to spark more controversy in the months to come.

As Spencer wrote today, someone in the administration told ProPublica’s Dafna Linzner and The Washington Post’s Peter Finn that yes, civil liberties groups support the idea of an order that “would embrace claims by former President George W. Bush that certain people can be detained without trial for long periods under the laws of war.” That statement amazed the civil liberties groups that Spencer then spoke to. I’ve gotten similar reactions from civil liberties lawyers I’ve been speaking to since Friday as well.

But it turns out that there are some progressives, and some who’d even traditionally be called civil libertarians — though not representatives of the traditional civil liberties groups Spencer and I have spoken to — who have been floating the idea, but in a more limited way than the Post story suggested.

Specifically, a group of prominent military and criminal defense lawyers and academics on June 8 sent President Obama a letter urging him not to create a new system of preventive detention, but instead, to rely on the one we already have — with modifications, if necessary. Although they don’t specifically recommend an executive order, that’s the logical way for the administration to modify and clarify its authority.

“Our country can achieve its legitimate goals through existing laws which authorize the detention of those who should be detained in the fight against international terrorism,” says the letter, which I received just this afternoon. It’s signed by 11 prominent lawyers, including Retired Rear Admirals Donald Guter and John Hutson of the Navy’s Judge Advocate General’s Corps; Abner Mikva, a former federal appellate court judge, University of Chicago law professor, White House counsel under President Bill Clinton and a mentor to president Obama; and Thomas Wilner, a prominent corporate defense lawyer who’s represented Guantanamo detainees in some of the landmark cases decided by the U.S. Supreme Court.

“Longstanding law-of-war principles authorize the detention for the duration of armed hostilities of those who engage in armed conflict against the United States or its allies,” these experts write, adding: “Some modifications to the existing system may be warranted, but no new system is necessary.”

The letter specifically tries to steer President Obama away from proposing or supporting any new legislation that would create a new preventive detention authority.

Ken Gude at the influential Center for American Progress has also suggested that the president should clarify his authority of detention under the laws of war. In a recent memo he co-authored with Kate Martin of the Center for National Security Studies, he and Martin write that the “ambiguities” left by the Bush administration over who is detainable under the laws of war “compound the lack of fundamental fairness in treating suspected criminals as combatants and holding them without trial.” Given how the detention authority has been used over the past eight years, “the new administration should now reassert the traditional understanding of the limits of the law of war and reject the former administration’s effort to read the word “organization” in the AUMF [Authorization for the Use of Military Force] as effecting an unprecedented extension of the traditional understanding of the military’s extraordinary powers of detention during war.”

In an e-mail this afternoon that he sent from Paris, Gude says he never specifically proposed an executive order, but supports the idea and adamantly opposes new legislation.

Gude laid out his support publicly for a limited system of preventive detention, authorized by the laws of war which allow detention of combatants during a military conflict, on CAP’s site and in The Guardian.

Even David Cole, the normally staunch civil libertarian law professor at Georgetown, has argued that the administration has that authority, calling it “an appropriate and necessary means of dealing with enemy fighters during wartime.” (Cole was pilloried for taking that position by Kenneth Anderson in Opinio Juris, who asks, “if it’s sensible and legal now, why wasn’t it sensible and legal during the Bush years? Is this the same David Cole who appeared on panels with me over the last few years and who didn’t seem in those years to have any daylight between him and the Center for Constitutional Rights, Human Rights Watch, or Human Rights First on the principle of try-or-release?”)

Let’s set aside for now the very legitimate question of whether these progressive civil libertarians would have taken the same position during the Bush years, or if they just inherently trust President Obama to handle battlefield detention against a non-traditional enemy better than Bush did. The positions these people are taking is informed, at least, by what the Supreme Court ruled in Hamdi v. Rumsfeld, although that case pertained only to the detention of Taliban fighters, while we were at war with Afghanistan. And it’s in line with what the federal courts have been ruling, with some variations, in a string of habeas corpus cases.

The proposal for an executive order to clarify the Obama administration’s position on the extent of its wartime authorities of preventive detention is very different, however, from the controverisal position that some more conservative lawyers and think-tank scholars like Jack Goldsmith, Benjamin Wittes and Neal Katyal (traditionally a moderate Democrat and now deputy solicitor general in the Obama administration) have been promoting. The Wittes proposal released on Friday with Brookings colleague Colleen Peppard, for example, would create an entirely new system of preventive detention that’s not limited to the president’s authority under the laws of war.

On Monday, Goldsmith, a Harvard law professor and former head of the Office of Legal Counsel at DOJ under President Bush, joined Wittes, a Brookings scholar, in a Washington Post op-ed to argue that a preventive detention scheme should be debated in Congress and spelled out clearly through legislation, not by the president by executive order. To them, an executive order would be “a nearly wholesale adoption of the Bush administration’s unilateral approach to detention.”

That, it seems, is where the current debate lies. Committed civil liberties advocates such as the ACLU, Center for Constitutional Rights, Human Rights Watch and others may still be arguing against a preventive detention scheme entirely, but given that the Obama administration has consistently argued its right to detain “combatants” (however they’re defined) during what it continues to call a “war” — not only in the Gitmo habeas cases but in regards to the detention of some 600 men imprisoned at the U.S. Air base in Bagram, Afghanistan — it’s impossible to imagine that the administration is going give up that authority in the future.

Although as Spencer pointed out, White House spokesman Robert Gibbs did say on Monday that the president is not considering issuing an order that “relies on legal theories that we have the inherent authority to detain people,” he certainly didn’t rule out basing a preventive detention system on some other authority — whether granted by the laws of war, or by an act of Congress.

I’ll be writing more soon about what that Congressional act might look like.