Participants lamented Canada’s new status as a “laggard country” when that nation’s conservative government announced its plan to quit the Kyoto Protocol, which it called a thing of the past. And, to almost no one’s surprise, people inside the conference halls and out on the streets joined together in labeling the United States “enemy number one” for the way it is wielding its vast global influence in the service of intransigence, backpedaling and obfuscation. A top South African religious leader Tuesday called the high-profile climate-change skepticism of many U.S. leaders “immoral.”

At a well-attended briefing Tuesday morning held by NGO umbrella organization Climate Action Network, Bishop Geoff Davies, executive director of the Southern African Faith Communities’ Environment Institute, highlighted what he saw as the contradiction inherent in the fact that the people of the United States are deeply religious but also alienated from the responsibility faith demands to address suffering tied to climate-altering pollution.

“The US is a nation of great faith, of Christian commitment. We find it extraordinary that they are behaving like this. We find it immoral,” he said when a Turkish journalist asked what additional pressure could be brought to bear on the world’s lone superpower. “Environmental destruction is a sin against God. We say to faith groups in the U.S.: You’ve got to recognize your responsibilities to combat climate change.”

Watch live video from OneClimate on www.justin.tv

At a press conference on Monday, Greenpeace Executive Director Kumi Naidoo said the U.S. government was criminally confusing the interests of corporate polluters with the interests of its people.

“The US delegation is not only betraying the people of the world but they are betraying the American People,” he said, calling on President Obama to “Get here and get with the program or move aside.”

The future of the Kyoto Protocol is the main question of the negotiations because major developing nations are demanding the treaty continue if they are to participate in any future climate-change agreements.

The protocol, signed in 1997 and meant to take effect in 2005, set up tiers of countries that were supposed to cut greenhouse gas emissions by specifically tailored rates. The plan was supposed to cut annual emissions to a rate 5.2 percent below 1990 emissions levels by 2012. The treaty failed spectacularly to meet that goal, with CO2 emissions alone now up to a reported 30 billion metric tons, or a third more than were emitted in 1990.

The United States is leading efforts to delay any new legally binding agreement until 2020. So far, the countries of Europe as represented by the European Union, are the only developed nations willing to sign on to extend the Kyoto Protocol, but they’ll do so only if the United States and other big polluters like China and India agree to a new pact that would take effect by 2020.

Jim Leape, director general of World Wildlife Fund, called the negotiations “a huge failure of ambition on the part of governments.” He said that a delay in ratifying the Kyoto Protocol would be “binding ourselves to a 4-degree world.”

Scientists say that, at today’s warming-emissions rate, the global planet temperature is on course to rise by 4 degrees Celsius and they say that temperature would bring dramatic challenges to the way we presently live, causing the desertification of much farmland, widespread crop failure and major glacier loss.

Leape felt the need to point out to North Americans that climate change is not just some exotic problem for faraway lands but a domestic problem as well, whether or not politicians and corporate leaders care to admit it. He reminded reporters that 47 of the 50 U.S. states declared weather-related emergencies last year. National Oceanic and Atmospheric Administration (NOAA) scientists warn that extreme weather conditions will only increase in frequency and intensity as the planet warms.

Some analysts say that, given the political and business realities of the contemporary world, the annual meetings– known as the COP conferences (the meeting in Durban is COP17)– with their focus on emissions reduction, detract from other more realizable goals. Paul Danish, writing in the Boulder Weekly, offered a typical example this week, arguing that, at this point, focusing so much attention on cutting emissions is a fool’s errand. “Global warming is a done deal,” he wrote. “[T]he conference should really be focused on learning to live with global warming and finding ways to adapt to it.”

Photos of the Global Day of Action in Durban by Adrienne Russell and Matt Tegelberg.

Reporters often ride along on police vehicles outside the conference.

South Durban is the toxic hub of South Africa and citizens there are demanding industry clean up the region and make efforts to limit waste.

Protesters here are strongly tying the right to secure freedom of information to the issue of climate change. Without access to data, corporate and industry interests can avoid accountability, they say. In South Africa, freedom of information has been threatened recently by a bill that attaches stiff prison sentences to unauthorized possession of classified information.

Reporting from Durban by Adrienne Russell, associate professor of communication at the University of Denver. Her most recent book, Networked: A Contemporary History of News in Transition was published by Polity Press this year.

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In basic terms, what does the Durbin interchange amendment do?

It does a few things. First, it gives the Federal Reserve regulatory authority over debit interchange fees. They are tasked with making sure that the fees be reasonable and proportional to the costs of the issuer or the payment network. It also gives them a lot of information about this market — and it is hard to know much about it now. In 2009, a Government Accountability Office report had to throw up its hands in the air about this issue. The report pointed out how tough it was to get information about these fees from the companies themselves — they had to go through old merchant contracts, which were not the most direct or easy way to figure them out. Even though plastic is becoming the new standard, it remains beyond the regulatory sphere.

Second, it allows merchant to give you discounts for using debit cards. Right now, it is legal for a business to charge you less for using cash, rather than a credit or a debit card. What they can’t do by contract — and the law is not totally clear on this, but this is in the contracts that merchants sign with banks — is offer you a discount for using a debit card rather than a credit card. From your point of view, your debit card and credit card are basically the same thing. You’re somewhat indifferent to using one or the other. By offering you rewards, your credit card encourages you to use your credit card, rather than your debit card. So, you’re nudged to use your credit card.

But, for the merchant, it is cheaper for you to use your debit card, rather than your credit card — the fees that Visa and Mastercard charge are a lot lower. Plus, the pin on the debit and the security offered are better for the merchant. So, because businesses have to offer the same price whether you are paying by debit or credit or one of the fancy rewards credit cards, even though those have different interchange fees, businesses are basically subsidizing the fancy credit card customers’ airline travel tickets. Plus, those rewards cards are more likely to be fraudulent. This ends that.

Finally, this bill also effects the minimums and maximums that businesses have — where they say, you can only pay via credit card if it costs more than $5. That is technically against businesses’ contracts with the banks. This allows them to do it.

So how does this change if you’re a business owner? What happens when a customer comes up to the counter and buys something for, say, $100?

Let’s say that you could pay via a debit card, a credit card and a rewards credit card. With the last one, the rewards card, the merchant is basically subsidizing you getting airline tickets, because the good is the same but the interchange fee is more, upwards of 2.5 or 2.8 percent. With a credit card, it is 2.19 percent on average. And with a debit card, it is 1.75 percent if you sign, and 0.60 percent if you enter your pin instead. The bill doesn’t get at the difference between the rewards card and the regular credit card, but it gets at the difference between the debit card and the credit card.   As a merchant you can now put incentives out there for consumers to use the lower cost option, where as right now the system encourages extra credit consumption.

Durbin also says that this will help small businesses. How does that happen?

Well, for instance, it’s likely that Walmart gets a better interchange rate than a small business. Though this information is guarded, people often assume that this is happening. Walmart has the market power to negotiate its interchange rate. What does that mean? Groceries are a very competitive margin business — the margins are really low, and customers are price sensitive. If Walmart gets one percent off of its interchange rate from Visa or Mastercard, they can undercut on price by that much. One percent, on the other side, can shut down a small grocer. This gives small businesses a way to be competitive with that — by saying, we’ll give you $50 cents or one percent off to pay with debit.

But couldn’t Walmart still just offer a percent off for using debit?

When you get to debit, especially pin debit, there’s much thinner margins, and less negotiation, for both businesses so the small business can compete more easily with Walmart under Durbin. This is how Costco, as a company, is competitive. It doesn’t accept cards at all.

And so are there assurances that some of these savings will get passed on to consumers?

The international experience is uncertain. But we do know that the system is set up to maximize the volume and amount of credit card usage. With merchants having more negotiating power, they will likely be able to offer discounts for certain business lines.   Evidence suggests that consumers will choose to take discounts for using debit over their rewards programs, so what we’ll likely find is a lot of innovation at the business level for how to get consumers to use the best option in their wallet.

As I reported yesterday, Sens. Ron Wyden (D-Ore.), Russ Feingold (D-Wis.) and Richard Durbin (D-Ill.) sent a letter asking the attorney general to produce information that’s been classified but which they feel is necessary to allowing Congress to decide whether certain provisions of the Patriot Act — specifically section 215, known as the “business records provision” — should be renewed in their current form. That provision now allows the government to obtain personal records of people who are not suspected of any connection to terrorism, so long as the FBI claims the records are “relevant” to some terrorism investigation.

Today, Holder said that “we are working on ways to make available to senators and congressmen the information needed to vote on the Patriot Act. … That information will be made available.”

As Committee Chairman Patrick Leahy (D-Vt.) explained at the hearing, the health insurance industry — unlike any other private industry in the country — is allowed to engage in price fixing, bid rigging and market allocation, all of which would violate the law if any other sort of company did it. Last month Leahy introduced the Health Insurance Industry Antitrust Enforcement Act of 2009, which would repeal the antitrust exemption for health insurance and medical malpractice insurance providers. Sens. Harry Reid (D-Nev.), Dianne Feinstein (D-Calif.), Russell Feingold (D-Wis.), Charles Schumer (D-N.Y.), Richard Durbin (D-Ill.), Arlen Specter (D-Pa.) and Al Franken (D-Minn.) are co-sponsors.

Although Lawrence Powell, a professor at the University of Arkansas, testified on behalf of the Physician Insurers Association of America in support of continuing the antitrust exemption, even he struggled to explain why it makes sense. He repeatedly said that allowing insurers to share data on losses and costs of claims helps insurance companies price their services accurately and competitively. But as Leahy made clear in his questioning, his legislation would not prohibit such data-sharing. That led Powell to stumble and say that while he’s “not an attorney,” his understanding was that insurance companies would have to file a request to pool data, which would impose additional costs.

But Robert Hunter, Director of Insurance for the Consumer Federation of America and former Federal Insurance Administrator under Presidents Ford and Carter, saw it differently. In his view, the antitrust exemption, intended initially to be temporary but made permanent during closed-door conference committee sessions of Congress more than 50 years ago, must be repealed to overcome the insurance industry’s anticompetitive practices that have led to higher prices and reduced services. “It is high time that insurers played by the same rules of competition as virtually all other commercial enterprises operating in America‘s economy,” he testified.

According to Hunter, health insurance companies have been able to consistently pay less on claims by agreeing to lower the amounts they reimburse doctors and hospitals for services; adopting similar clauses in their contracts that limit their liability in unfair and abusive ways; agreeing to cut back coverage to certain places, and using similar claims processing systems designed to systematically underpay claims.

As Hunter testified, federal authorities have recommended eliminating or cutting back the antitrust exemption for health insurers and medical malpractice insurers on at least four different occasions after studying it. But Congress has never taken that step, presumably due to the power of the insurance industry lobby.

With the soaring cost of health care now in the spotlight, this may finally be the right time.

“We’re deeply disappointed that the Obama administration sided with the committee Republicans to pass amendments to remove reforms from the already watered-down bill,” he said this afternoon, referring to seven amendments, five of which were introduced by Senator Jeff Sessions (R-S.C.), which removed civil liberties protections and which Sessions said were mostly recommended by the Obama administration’s FBI and Justice Department in closed-door classified briefings.

“We’re very disappointed in the final bill that was voted out of committee,” said Bankston. “It has fewer reforms than the original bill from Sen. Leahy, and it’s a very far cry from Sen. Feingold and Durbin’s JUSTICE Act.” The JUSTICE Act would have required the government to specify more clearly the targets of their investigations and their connections to terrorism, to keep the FBI from using its authority to engage in broad-based data-mining of Americans’ phone, library and business records.

The amendments adopted included removing a requirement that the FBI periodically review its gag orders on National Security Letter recipients, removed judicial review for those gag orders, and watered down an effort to heighten the showing required when the FBI is seeking library records. The text of the final amendments and votes on each is available on the Judiciary Committee’s Website here.

Bankston was also disappointed that the Judiciary Committee refused to consider amendments to the FISA Amendments Act passed last year, which he calls “a much graver threat to civil liberties.” Feingold’s attempt to offer an amendment was withdrawn when Committee Chairman Leahy said he’d oppose it on procedural grounds.

To Bankston, this was all evidence that Congress is far too willing to cave to the wishes of a Democratic administration, even if its proposals are just as bad for the civil liberties of Americans as the Republican administration’s were.

“In 2005, the Judiciary Committee was able to pass much stronger reforms under a Republican administration,” said Bankston. “Now, in a position of power and with a vaunted supermajority, the Democrats are still bargaining against themselves rather than having a united front and introducing new civil liberties protections. I think it’s because of the White House’s position that these powers need to be renewed. There’s an unwillingness to consider even minor reforms.”

The American Civil Liberties Union was similarly disappointed, and Michael Macleod-Ball, Acting Director of the ACLU Washington Legislative Office, came out with this statement this afternoon:

We are disappointed that further changes were not made to ensure Americans’ civil liberties would be adequately protected by this Patriot Act legislation. This truly was a missed opportun Sity for the Senate Judiciary Committee to right the wrongs of the Patriot Act and stand up for Americans’ Fourth Amendment rights. The meager improvements made during this markup will certainly be overshadowed by allowing so many horrible amendments to be added to an already weak bill. Congress cannot continue to make this mistake with the Patriot Act again and again. We urge the Senate to adopt amendments on the floor that will bring this bill in line with the Constitution.

So far, much of the debate is focusing on whether and to what extent the law should be focused on investigations of foreign terrorists, as opposed to being open to be used for ordinary domestic law enforcement. Given that the Patriot Act was passed after the 9/11 terrorist attacks to prevent another one, Sens. Richard Durbin (D-Ill.), Russ Feingold (D-Wisc.) and Arlen Specter (D-Pa.) have all come out strongly in favor of requiring some nexus to international terrorism.

Sens. Dianne Feinstein (D-Calif.), Patrick Leahy (D-Vt.), Jeff Sessions (R-Ala.), Sheldon Whitehouse (D-R.I.), Jon Kyl (R-Ariz.) and others all appear to be leaning towards the view of the FBI and Justice Department, which has told the senators in classified sessions that the broader versions of the Patriot Act provisions are necessary to combat terrorism.

Sen. Patrick Leahy (D-Vt.) (Zuma Press)

Republicans and Democrats have been sniping about the USA Patriot Act ever since Congress passed the law in the wake of the September 11 terrorist attacks to try to forestall another such disaster. But now, it’s the Democrats who are sniping among themselves about it. While some lawmakers, like Sens. Russ Feingold and Dick Durbin, have insisted that Congress must amend the law to rein in the FBI’s powers to snoop into innocent private activities, other Democratic lawmakers, such as Sens. Dianne Feinstein and Patrick Leahy, have resisted significant reforms.

Illustration by: Matt Mahurin

Three provisions of the law will expire by the end of this year if they’re not renewed, and have been the subject of recent hearings. Those are: the “roving wiretap” provision, which allows the government to tap  phones and other electronic devices used by any person suspected of involvement in terrorism; section 215 of the Patriot Act, which allows the government to obtain a broad range of business records and other tangible things, including library records, subscription information and credit card statements, so long as the FBI shows these are “relevant” to some terrorist investigation; and the so-called “lone wolf” provision, which allows the government to wiretap any suspect believed to be involved in terrorism, even if that person has no connection to any known terrorist organization.

The other controversial provisions include the FBI’s authority to issue National Security Letters, or NSLs, which seek a broad range of information from businesses about their customers but do not require a warrant or any other court order; and the “sneak and peak law”, which allows the FBI to search a suspect’s home without informing the target that they’ve been searched.

Civil liberties advocates insist these provisions are all too broad as currently written, and allow the FBI to abuse its authority to conduct wide-scale “data mining” of the general population, searching innocent people’s records and personal information while the government tries to root out wrongdoing. Because in many cases it’s not clear how the government is using its broad authority and who gets access to the information, privacy advocates worry that the government could retain such information and use it in ways unconnected to terrorism investigations.

A 2007 report from the FBI Inspector General concluded that the FBI had issued almost 150,000 NSL requests between 2003 and 2005, often collecting information about people not even suspected of having done anything illegal. The Inspector General also found that the FBI’s record-keeping was so poor that it often didn’t know how many letters it has issued, and requested information it wasn’t entitled to receive.

Advocates worry that many sections of the Patriot Act allow similar abuses. “The concern is that the changes the Patriot Act made were such that so long as the FBI agent certifies that the information they’re seeking is relevant to a terror investigation, they can get it,” explained Farhana Khera, Executive Director of Muslim Advocates, which recently sued the government for more information about FBI surveillance practices. “We argue that’s way too broad. It should be tied to a suspected terrorist or terrorist activity.” The FBI’s current authority “has unleashed concerns about the FBI getting access to data on literally millions and millions of Americans,” she said.

Advocates for Muslim-Americans also worry that the laws are being used to target and harass law-abiding American muslims, landing them on no-fly lists, preventing them from getting hired for federal jobs, or deterring them from contributing to legal charitable organizations that assist needy Muslims in other countries.

To address these problems, in mid-September, Feingold and Durbin, both of whom have long expressed concerns about the Patriot Act, introduced the JUSTICE Act (Judiciously Using Surveillance Tools In Counterterrorism Efforts), which would renew section 215 and the roving wiretap provisions, but would require the government to provide more justification for using them, and to specify more clearly the targets of their investigation.

The bill would also rein in the FBI’s authority to issue National Security Letters by requiring the government to specify what it’s looking for and how the information is relevant to an ongoing national security investigation. Meanwhile, it would repeal the part of the FISA Amendments Act that immunized telecommunications companies such as AT&T that assisted the government in its warrantless wiretapping program.

But a week later, to the dismay of many civil libertarians, Sen. Leahy introduced the USA Patriot and Sunset Extension Act. Cosponsored by Sens. Benjamin Cardin (D-Md.) and Ted Kaufman (D-Del.), it would extend the expiring provisions with only minor modifications, and would leave the “lone wolf” and “roving wiretap” provisions intact. It also would not include any reforms to the FISA Amendments Act.

By the time of the Senate markup session last week, Sen. Leahy, the Judiciary Committee Chairman, had produced a substitute version of his bill, co-sponsored by Sen. Dianne Feinstein (D-Calif.), who chairs the Intelligence subcommittee. This bill became the basis for the markup, effectively destroying the chances for adoption of the JUSTICE bill, although pieces of it could still be introduced as amendments.

Civil liberties advocates quickly expressed their disappointment. The American Civil Liberties Union called it “a watered-down version” of the original Leahy bill. Kevin Bankston of Electronic Frontier Foundation similarly described it as having “even fewer PATRIOT reforms than the original Leahy bill.”  Although Feingold and Durbin offered amendments, the only one that succeeded was one amending the “sneak and peak” provision. The amendment would require the government to notify the subject of a search within seven days, instead of 30, as the law stands now. An amendment offered by Senator Durbin to narrow the broad Section 215 powers, which now allows the government to gain access to “any tangible thing,” failed.

Even Sen. Al Franken (D-Minn.), who at the recent Senate Judiciary Committee hearing took the time to read the Fourth Amendment to the U.S. Constitution to Justice Department official David Kris, voted to support the Leahy-Feinstein substitute bill, and against the Durbin and Feingold amendments.

Feingold has repeatedly expressed concern that the government is not providing enough information for the public to know how the Patriot Act is being used.

“I remain concerned that critical information about the implementation of the Patriot Act remains classified,” said Feingold at a recent hearing, noting that he believes that much of that classified information “would have a significant impact on the debate.” Although the Justice Department recently acknowledged that the “lone wolf” authority has never been used, said Feingold, “there also is information about the use of Section 215 orders that I believe Congress and the American people deserve to know.”

Some representatives in the House, where they’re also debating changes to the Patriot Act and will eventually put forward their own bill, feel the same way. Earlier this week, Reps. John Conyers (D-Mich.), Jerrold Nadler (D-NY), and Bobby Scott (D-Va.) wrote a letter to Attorney General Eric Holder asking for more information about how Section 215 orders have been used to help inform the House debate. (Eventually, the House and Senate bills to amend the Patriot Act will have to be reconciled before they go to the President for his signature.)

Although Feinstein has cited classified information as her reason for supporting the re-authorization of section 215 as is, Feingold disagrees. The Feingold amendment would have limited what kinds of records could be obtained under section 215, and required that the government show that those records are related either to terrorist activities, or to people in contact with a terrorist.

Interestingly, notes Michelle Richardson, legislative consultant to the ACLU, during the Patriot Act reauthorization process in 2005, “Democrats and Republicans supported amendments to section 215 to limit it to terrorist activities,” she said. “But now they don’t.”

The problem with reauthorizing many of these provisions, says Richardson, is that “we don’t know what information they’re getting, how much, and who has access,” she said. “But we believe that anytime you get the information, it’s a violation. These are principles over 200 years old in this country, that government should not be getting this information about you unless they have reason to believe you’ve done something wrong.”

That principle is increasingly being discarded. Attorney General Guidelines issued at the end of the Bush administration, for example, eliminated the requirement that the FBI must have reason to believe the target of an investigation has committed a crime before initiating that investigation.

“Who knows if the information comes back to haunt you,” said Richardson. “If you apply for federal student aid, for a federal job, or end up on a no-fly list. We don’t know who has access to the information, and where it’s supposed to go. That’s not how things are supposed to work in this country.”

On Thursday, the markup session will continue in the Senate Judiciary Committee, as specifics on the bill get hammered out. Much of the critical information necessary to determine how it’s working, though, will remain secret.

Sen. Richard Durbin (D-Ill.) (WDCpix)

A top Democrat on Monday warned the nation’s banks that, unless they get more aggressive in modifying mortgages to prevent foreclosure, Congress will renew previous efforts to empower families to keep their homes through bankruptcy. But Sen. Richard Durbin (Ill.), the upper-chamber’s second ranking Democrat, also gave the banks three months to comply with his ultimatum — a span over which roughly 1 million new homeowners are projected to enter foreclosure.

Congress and White House officials have created a series of programs designed to entice mortgage lenders and servicers to modify troubled loans voluntarily, but those efforts haven’t kept pace with an ever-rising number of foreclosures, which have already topped 1.5 million since January. The issue has plagued lawmakers, who have spent hundreds of billions of dollars propping up the nation’s banks, but have provided little in direct help for families caught in the swirl of the housing crisis, which was at the root of the current recession.

Illustration by: Matt Mahurin

Durbin is the sponsor of legislation to alter the bankruptcy code to allow judges to trim, or “cramdown,” the terms of primary mortgages to keep people in their homes — an option current law doesn’t permit. The Senate killed the proposal earlier in the year, but it could resurface if foreclosures continue to rise and the banks continue their reluctance to cut mortgage rates on their own. Durbin, for his part, thinks the bankruptcy change can’t come soon enough.

“The voluntary efforts by some banks to slow the foreclosure crisis and stabilize America’s housing market have not worked,” Durbin said during a housing forum at the Center for American Progress Action Fund. “Whether the bankers and mortgage servicers are failing because of intransigence or incompetence doesn’t matter … They have to do much better.”

At the center of the Obama administration’s efforts is the Home Affordable Modification Program, which allocates $75 billion to encourage banks to make mortgage loans more affordable. White House officials estimate the initiative will prevent between 3 million and 4 million foreclosures in the next few years. Yet only 200,000 modifications have been accepted under the program, according to the Treasury Department, and most of those are temporary, three-month trial arrangements.

Last Tuesday, the Obama administration called executives from the nation’s top servicers to the White House, urging them to commit to a goal of 500,000 modifications by the start of November. If the banks haven’t made “real progress” toward that target, Durbin warned Monday, he’ll begin whipping support for “further legislative solutions,” including the controversial proposal to reform the bankruptcy code, and another to require third-party arbitration between borrowers and lenders.

“I want to put the banks and mortgage servicers on notice today,” said Durbin, who sent letters Monday to each of the 34 banks that have already signed on to participate in the administration’s modification program.

The comments arrive just days after another powerful Democrat, House Financial Services Committee Chairman Barney Frank (D-Mass.), issued a similar threat to revisit cramdown. The statements are evidence of a growing impatience among some lawmakers with the banking industry’s efforts to stabilize the still-volatile housing market.

Credit Suisse has estimated that Durbin’s bill would prevent roughly 20 percent of all foreclosures — not because one-fifth of struggling homeowners would pursue loan modifications in bankruptcy court, but because the very threat of bankruptcy would prod banks to volunteer the more affordable modification terms required to keep families in their homes.

“If that is at the end of the road as a possibility,” Durbin said, “I think it’s an incentive for action.”

Standing in his way have been the powerful finance industry and its many supporters on Capitol Hill, who argue that mortgage contracts are sanctuaries not to be meddled with. Empower judges to alter mortgages, they say, and the increased risk to the banks will be passed along to all borrowers in the form of higher rates.

Another barrier to bankruptcy reform has been the Obama administration, which abandoned its previously enthusiastic support for cramdown earlier this year. Although the House passed its version of the bill in March, the absence of White House backing led to the Senate defeat of Durbin’s cramdown bill in April. More recently, White House officials told Congress that they have all the tools they need to tackle the foreclosure problem.

Durbin on Monday said he hasn’t been in direct touch with Obama about the issue, but has been in contact with others at the White House, including Treasury Secretary Timothy Geithner.

Meanwhile, nationwide foreclosures are on pace to top 3 million this year, up from 2.3 million in 2008, according to RealtyTrac, an online foreclosure database. In June alone, foreclosures topped 336,000, up roughly 15,000 from May, RealtyTrac found. At that rate, the number of new foreclosures surfacing by Durbin’s November ultimatum will approach 1 million. Or more. Fueled by rising unemployment trends and another wave of looming mortgage resets — this one revolving around the so-called option adjustable rate mortgages — experts warn that the numbers will only get worse.

“It’s a problem that’s not going to get any better anytime soon,” Martin J. Gruenberg, vice chairman of the Federal Deposit Insurance Corporation, said during Monday’s housing forum.

Much of the problem revolves around the complex web of disconnected interests associated with mortgage finance. Lenders and investors, for example, have different motivations than borrowers, who have different motivations than the servicers who purchase the rights to manage the loans.

David Wecker, an investor with Illinois-based Magnetar Capital, said Monday that the “misalignment” between those interests has led servicers to pursue foreclosures even when they harmed both investors and homeowners. Wecker encouraged a bolder system of enticing loan modifications. The instability that results from frequent foreclosures, he argued, is “not good for any market participant.”

Policymakers will soon have a new tool at their disposal: On Tuesday, the Treasury is set to release servicer-specific modification data — information that should lend a better picture of whether the reluctance to modify loans is a problem isolated to just a few companies, or whether the problem stems from some more fundamental flaw in its design.

Durbin, meanwhile, says he’s not trying to rescue every borrower in the country, but simply to stabilize the housing market that’s been the cause of the recession.

“I’m a realist,” said the Illinois Democrat. “I know we can’t save every soul. But it’s going to take more than the power of prayer to take us through this crisis.”

Attorney General Eric Holder and President Barack Obama (AP Photo)

A series of letters between Sen. Richard Durbin (D-Ill.) and the Bush administration’s Department of Justice shed light on a reportedly impending Justice Department investigation that would mark the Obama administration’s first clear break from its predecessor’s policy of refusing to prosecute the torture and abuse of terror suspects.

Newsweek and The New York Times have recently reported, based on anonymous sources, that Attorney General Eric Holder is considering an investigation of the most serious cases of alleged abuses of terror suspect detainees by CIA interrogators who went “well beyond” the extreme methods authorized by the Justice Department. Although some human rights advocates have criticized the idea of investigating low-level CIA functionaries rather than the policymakers who made the rules and set the stage for abuse, the inquiry being contemplated would likely begin as a re-investigation of cases dropped by the Bush administration, and could well lead to prosecutions of those higher up the chain of command.

Illustration by: Matt Mahurin

Based on previous reports, the cases Holder would be likely to consider include, for example, the death of an Afghan detainee stripped naked, dragged and chained to a concrete floor by CIA operatives in a secret prison north of Kabul known as the “salt pit”; the prisoner was left there overnight and froze to death. Another concerns the death of Manadel al-Jamadi, an Iraqi insurgent who died just hours after being captured and beaten by Navy SEALs, then hung from his wrists at the Abu Ghraib prison. And then there’s the killing of Iraqi Maj. Gen. Abed Hamed Mowhoush, stuffed into a sleeping bag and clubbed to death.

Holder has reportedly indicated an interest in re-investigating these and other extreme cases of abuse, identified in a classified 2004 CIA inspector general report. Although that report has not been made public (it’s the subject of litigation between the ACLU and the Justice Department), previous communications from the Justice Department to members of Congress indicate that the inspector general referred about two dozen abuse cases to the Justice Department between 2001 and 2007.  The Justice Department “declined” to prosecute all but two under Bush. U.S. Attorney Paul McNulty, who headed many of these investigations in the Eastern District of Virginia, was subsequently promoted by President George W. Bush to the position of deputy attorney general in 2005.

Brian Benczkowski, then principal deputy assistant attorney general, explained the Justice Department’s refusals to prosecute in a letter to Sen. Richard Durbin (D-Ill.) in February 2008: “All of the declinations [to prosecute] resulted from insufficient evidence to warrant criminal prosecution for one or more of the following reasons:  insufficient evidence of criminal conduct, insufficient evidence of the subject’s involvement, insufficient evidence of criminal intent, and low probability of conviction.”

The letter was part of an ongoing dialogue between Durbin and the Justice Department dating back to 2005, when Durbin started asking then-Attorney General Alberto Gonzales about the status of the abuse referrals from the CIA and Defense Department. In a series of letters, Department of Justice officials repeatedly told Durbin and Sen. Patrick Leahy (D-Vt.) that the cases referred to them simply didn’t warrant prosecution, always for the same list of reasons.

Having read the inspector general report himself, Attorney General Eric Holder now appears to believe that his predecessors weren’t doing a very objective assessment, considering the brutality of the facts, like leaving a naked man to die in the cold or beating a man to death — which far exceeded even the Justice Department’s permissive guidelines.

The previous administration may have been reluctant to prosecute because its officials were the ones who approved of the techniques. And even if some interrogators went beyond what was specifically approved, as a recently released Office of Legal Counsel memo suggested, prosecutors might have believed it would still be too difficult to prove that CIA personnel intended to violate the law, rather than simply intending to carry out an authorized brutal interrogation, albeit with a bit more zeal than was allowed.

For Holder to appoint a prosecutor — either from inside or outside the Justice Department — to re-investigate these cases may seem like a narrow investigation to those who have been pushing for a broader inquiry. Indeed, last week Human Rights Watch wrote to Holder applauding the idea of a criminal investigation, but adding:

We would urge you, in defining the scope of such an investigation, to ensure that it reaches the officials most responsible for serious abuses. In particular, we would encourage you not to limit the investigation to low-level personnel who may have employed unauthorized interrogation techniques, but rather to look to the senior officials who planned, authorized, and facilitated the use of abusive methods that were in violation of US and international law. Any investigation that failed to reach those at the center of the policy, while pinning responsibility on line officers, would lack credibility both domestically and internationally.

As Geneve Mantri, government relations director for terrorism and counterterrorism and human rights at Amnesty International USA said last week about a Holder investigation: “If this does happen and they [the Justice Department] said ‘there was a great program, we’re just going to go after those who went beyond it’, we’ll be left in a bad situation, with learning nothing. We’ll be left trying to scramble to push for a truth commission, which will then be harder. And without a commission I don’t think we’re going to find out that much.”

On the other hand, a Holder investigation would be the first sign that the Obama Justice Department may break from its predecessor on the matter of investigating incidents torture and abuse — an acknowledgment that it can’t in good conscience only look forward without at least taking a second look at what’s already been done.

“We always were concerned that part of the reason these investigations didn’t go anywhere is because they involved techniques that were authorized,” said a staffer to a member of the Senate Judiciary Committee who did not want to be named. “I don’t buy that they’re just going to go after the low level people. There’s at least a chance that if these investigations move forward, they’ll go up the chain. If it involved techniques that were authorized that are illegal, you’d go to the person who had command responsibility for that.”

An honest and thorough investigation of the 22 cases the justice department previously refused to prosecute could well lead to an inquiry into the acts of more senior Bush administraiton officials who were giving the interrogators orders. And who knows how far up the chain of command that investigation might reach.

This article has been updated for clarity.

Sen. Richard Durbin (D-Ill.) (WDCpix)

Roughly three months after Senate lawmakers killed legislation empowering homeowners to escape foreclosure through bankruptcy, some upper-chamber Democrats are looking to revive the corpse. They hope to pressure the White House into spending valuable political capital on a cause fallen by the wayside.

Up to now, policymakers have relied on programs that subsidize lenders and mortgage servicers who volunteer to alter loans to keep homeowners afloat. Yet those voluntary modifications lag far behind the rising tide of foreclosures. Indeed, only 160,000 homes have been propped up this year under the largest such program — a figure dwarfed by the more than 1.5 million foreclosure filings since January. With unemployment on the rise, the gap is only projected to expand. The dark trends have slowly prodded lawmakers to return to mortgage bankruptcy reform as the possible missing link to addressing the foreclosure crisis — the stick to accompany the financial carrots that have thus far failed to stabilize the housing market.

Illustration by: Matt Mahurin

“After two years of efforts that rely on banks to volunteer to rework mortgages, it is time to admit that the programs that have been put in place thus far to ease the crisis are clearly not working,” Sen. Richard Durbin (D-Ill.), sponsor of the Senate’s bankruptcy reform bill, said Thursday during a foreclosure hearing in the Senate Judiciary Subcommittee on Administrative Oversight and the Courts. “With a simple change to the bankruptcy code … over 1.8 million families could save their homes in this country between now and the end of 2012, if the Senate could only muster the courage to help them.”

Under Durbin’s proposal, bankruptcy judges could reduce, or “cramdown,” the terms of mortgages, including interest rates and principal balances, to make the loans more affordable for struggling homeowners — a power judges have over loans for vacation homes, jewelry and other material assets, but not over primary mortgages.

Yet Durbin represents a somewhat lonely crowd. Not only is the bankruptcy-reform proposal anathema to Republicans, but the Obama administration, once a cheerleader for the change, has abandoned the legislation altogether. Without the active backing of the White House, a cramdown bill that passed the House in March was shot down in the Senate less than two months later. Still, Durbin has vowed to bring it back to the Senate floor this year. But, faced with a crowded legislative calendar, including sweeping health care and climate change reform, he’s running out of opportunities.

That erosion of White House backing, according to housing and consumer advocates, spells bad news for the nation’s homeowners, who are drowning in debt in larger and larger numbers. Indeed, more than 1.5 million homes have filed for foreclosure this year, according to RealtyTrac, an online foreclosure database. The figure represents a 15 percent jump from 2008. And the numbers are rising. In May, roughly 321,000 foreclosures were filed nationwide, RealtyTrac found. In June, the figure was more than 336,000.

The difficulty in addressing the housing crisis can be attributed largely to the shifting causes of mortgage defaults. What began as a problem limited largely to homeowners with risky, variable-rate, low-equity loans, has evolved to plague even those borrowers who took out more stable, fixed-rate mortgages with significant down payments. Rising unemployment has only exacerbated the trouble.

To tackle the crisis, the Obama administration in February rolled out its Making Home Affordable Program, which supplied $75 billion to entice servicers to tamp down mortgage payments to 31 percent of monthly income for homeowners struggling to stay afloat. The White House said at the time that the program would help between 3 million and 4 million families stay in their homes.

Yet, last week, White House officials told a Senate panel that just 325,000 modifications have yet been offered under the program. Of those offers, 160,000 are in a three-month trial modification stage — modifications that will become permanant if the homeowners can meet the new payment terms over that span.

Not only are those number insufficient to address the rising tide of foreclosures, Adam Levitin, housing expert at the Georgetown University Law Center, told lawmakers Thursday, but of the mortgage modifications that are being made, almost none involve reducing the principal balance of the loan. With the housing market falling — precipitously in some regions — even homeowners who can afford to pay their mortgages will begin to walk away if they aren’t building equity, Levitin warned.

“None of the current loan modification or refinancing efforts attempt to deal with the negative equity problem in a way that offers a long-term solution,” Levitin said.

There remains some disagreement among finance experts over why lenders and servicers have been so reluctant to modify loans, even when foreclosures are often the more expensive option. One theory posits that the servicers will be paid more from foreclosures, even if the owners of the loans will lose out.

“As long as servicers profit because homeowners are in default, they’re not going to volunteer to take a hit,” Alys Cohen, an attorney with the National Consumer Law Center, testified Thursday.

But that confusion, according to cramdown supporters, is just another reason to pass the bill. “Whatever the factors may be that are inhibiting voluntary and government-subsidized loan modifications, they are immaterial if a mortgage loan can be modified in bankruptcy,” said Levitin.

Standing in the way of the legislation are not only the banks but the banks’ supporters on Capitol Hill. Conservatives argue that empowering judges to modify mortgages would make banks more reluctant to lend money, thus exacerbating the credit freeze.

Encapsulating the GOP argument, Sen. Jeff Sessions (Ala.), senior Republican on the Judiciary subpanel, warned Thursday that the cramdown bill would raise rates on everyone. A contract’s a contract, Sessions said, and homeowners who agreed to the terms of a mortgage loan should be held accountable for the payments. “There’s no free lunch here,” he said.

Not that Washington policymakers are unaware that the voluntary efforts aren’t working as planned. The Obama administration this month has already sent letters to servicers urging increased participation in the voluntary modification program.

In another concessionary move, the Treasury this month expanded a program allowing homeowners with mortgages backed by Freddie or Fannie to refinance those loans if the outstanding balance doesn’t exceed 125 percent of the home’s appraised value. Originally, the value cap for such refinancings was set at 105 percent. The change was made in recognition of the increasing number of homeowners who are underwater as home values have plummetted. Indeed, Levitin estimates that 30 percent of all families who bought homes in the last five years currently owe more than their homes are worth.

Lawmakers and advocates alike are warning that, unless Congress steps in to address the housing crisis — which, after all, was the root of the economic downturn — the result will be a spiral of foreclosures leading to more foreclosures, and a prolonging of the larger recession.

“If we fail to act,” said Sen. Sheldon Whitehouse (D-R.I.), chairman of the courts subpanel, “I fear that we put ourselves at risk: that a vicious cycle of foreclosures, falling home values, and declining tax revenues will keep us in recession for years to come.”