Ebola Czar :: President Obama Already Has An Ebola Czar. Where Is She?

By Mollie Hemingway

October 14, 2014

As the Ebola situation in West Africa continues to deteriorate, some U.S. officials are claiming that they would have been able to better deal with the public health threat if only they had more money.

Dr. Francis Collins, who heads the National Institutes of Health (NIH), told The Huffington Post, “Frankly, if we had not gone through our 10-year slide in research support, we probably would have had a vaccine in time for this that would’ve gone through clinical trials and would have been ready.” Hillary Clinton also claimed that funding restrictions were to blame for inability to combat Ebola.

Conservative critics have pointed out that the federal government has spent billions upon billions of dollars on unnecessary programs promoting a political agenda rather than targeting those funds to the fight against health threats.

Other limited government types point to the Progressive utopian foolishness seen in opposing political factions, both sides of which seem to agree humanity could somehow escape calamity if only we had a properly functioning government. People who don’t want an all-powerful government shouldn’t blame it for not having competence when crisis strikes.

What’s particularly interesting about this discussion, then, is that nobody has even discussed the fact that the federal government not ten years ago created and funded a brand new office in the Health and Human Services Department specifically to coordinate preparation for and response to public health threats like Ebola. The woman who heads that office, and reports directly to the HHS secretary, has been mysteriously invisible from the public handling of this threat. And she’s still on the job even though three years ago she was embroiled in a huge scandal of funneling a major stream of funding to a company with ties to a Democratic donor—and away from a company that was developing a treatment now being used on Ebola patients.

Before the media swallow implausible claims of funding problems, perhaps they could be more skeptical of the idea that government is responsible for solving all of humanity’s problems. Barring that, perhaps the media could at least look at the roles that waste, fraud, mismanagement, and general incompetence play in the repeated failures to solve the problems the feds unrealistically claim they will address. In a world where a $12.5 billion slush fund at the Centers for Disease Control and Prevention is used to fight the privatization of liquor stores, perhaps we should complain more about mission creep and Progressive faith in the habitually unrealized magic of increased government funding.

Lay of the Land

Collins’ NIH is part of the Health and Human Services Department. Real spending at that agency has increased nine-fold since 1970 and now tops $900 billion. Oh, if we could all endure such “funding slides,” eh?

Whether or not Dr. Collins’ effort to get more funding for NIH will be successful—if the past is prologue, we’ll throw more money at him—the fact is that Congress passed legislation with billions of dollars in funding specifically to coordinate preparation for public health threats like Ebola not 10 years ago. And yet the results of such funding have been hard to evaluate.

See, in 2004, Congress passed The Project Bioshield Act. The text of that legislation authorized up to $5,593,000,000 in new spending by NIH for the purpose of purchasing vaccines that would be used in the event of a bioterrorist attack. A major part of the plan was to allow stockpiling and distribution of vaccines.

Just two years later, Congress passed the Pandemic and All-Hazards Preparedness Act, which created a new assistant secretary for preparedness and response to oversee medical efforts and called for a National Health Security Strategy. The Act established Biomedical Advanced Research and Development Authority as the focal point within HHS for medical efforts to protect the American civilian population against naturally occurring threats to public health. It specifically says this authority was established to give “an integrated, systematic approach to the development and purchase of the necessary vaccines, drugs, therapies, and diagnostic tools for public health medical emergencies.”

Last year, Congress passed the Pandemic and All-Hazards Preparedness Reauthorization Act of 2013 which keep the programs in effect for another five years.

If you look at any of the information about these pieces of legislation or the office and authorities that were created, this brand new expansion of the federal government was sold to us specifically as a means to fight public health threats like Ebola. That was the entire point of why the office and authorities were created.

In fact, when Sen. Bob Casey was asked if he agreed the U.S. needed an Ebola czar, which some legislators are demanding, he responded: “I don’t, because under the bill we have such a person in HHS already.”

The Invisible Dr. Lurie

So, we have an office for public health threat preparedness and response. And one of HHS’ eight assistant secretaries is the assistant secretary for preparedness and response, whose job it is to “lead the nation in preventing, responding to and recovering from the adverse health effects of public health emergencies and disasters, ranging from hurricanes to bioterrorism.”

In the video below, the woman who heads that office, Dr. Nicole Lurie, explains that the responsibilities of her office are “to help our country prepare for, respond to and recover from public health threats.” She says her major priority is to help the country prepare for emergencies and to “have the countermeasures—the medicines or vaccines that people might need to use in a public health emergency. So a large part of my office also is responsible for developing those countermeasures.”

Or, as National Journal rather glowingly puts it, “Lurie’s job is to plan for the unthinkable. A global flu pandemic? She has a plan. A bioterror attack? She’s on it. Massive earthquake? Yep. Her responsibilities as assistant secretary span public health, global health, and homeland security.” A profile of Lurie quoted her as saying, “I have responsibility for getting the nation prepared for public health emergencies—whether naturally occurring disasters or man-made, as well as for helping it respond and recover. It’s a pretty significant undertaking.” Still another refers to her as “the highest-ranking federal official in charge of preparing the nation to face such health crises as earthquakes, hurricanes, terrorist attacks, and pandemic influenza.”

Now, you might be wondering why the person in charge of all this is a name you’re not familiar with. Apart from a discussion of Casey’s comments on how we don’t need an Ebola czar because we already have one, a Google News search for Lurie’s name at the time of writing brings up nothing in the last hour, the last 24 hours, not even the last week! You have to get back to mid-September for a few brief mentions of her name in minor publications. Not a single one of those links is confidence building.

So why has the top official for public health threats been sidelined in the midst of the Ebola crisis? Only the not-known-for-transparency Obama administration knows for sure. But maybe taxpayers and voters should force Congress to do a better job with its oversight rather than get away with the far easier passing of legislation that grants additional funds before finding out what we got for all that money we allocated to this task over the last decade. And then maybe taxpayers should begin to puzzle out whether their really bad return on tax investment dollars is related to some sort of inherent problem with the administrative state.

The Ron Perelman Scandal

There are a few interesting things about the scandal Lurie was embroiled in years ago. You can—and should—read all about it in the Los Angeles Times‘ excellent front-page expose from November 2011, headlined: “Cost, need questioned in $433-million smallpox drug deal: A company controlled by a longtime political donor gets a no-bid contract to supply an experimental remedy for a threat that may not exist.” This Forbes piece is also interesting.

The donor is billionaire Ron Perelman, who was controlling shareholder of Siga. He’s a huge Democratic donor but he also gets Republicans to play for his team, of course. Siga was under scrutiny even back in October 2010 when The Huffington Post reported that it had named labor leader Andy Stern to its board and “compensated him with stock options that would become dramatically more valuable if the company managed to win the contract it sought with HHS—an agency where Stern has deep connections, having helped lead the year-plus fight for health care reform as then head of the Service Employees International Union.”

The award was controversial from almost every angle—including disputes about need, efficacy, and extremely high costs. There were also complaints about awarding a company of its size and structure a small business award as well as the negotiations involved in granting the award. It was so controversial that even Democrats in tight election races were calling for investigations.

Last month, Siga filed for bankruptcy after it was found liable for breaching a licensing contract. The drug it’s been trying to develop, which was projected to have limited utility, has not really panned out—yet the feds have continued to give valuable funds to the company even though the law would permit them to recoup some of their costs or to simply stop any further funding.

The Los Angeles Times revealed that, during the fight over the grant, Lurie wrote to Siga’s chief executive, Dr. Eric A. Rose, to tell him that someone new would be taking over the negotiations with the company. She wrote, “I trust this will be satisfactory to you.” Later she denied that she’d had any contact with Rose regarding the contract, saying such contact would have been inappropriate.

The company that most fought the peculiar sole-source contract award to Siga was Chimerix, which argued that its drug had far more promise than Siga’s. And, in fact, Chimerix’s Brincidofovir is an antiviral medication being developed for treatment of smallpox but also Ebola and adenovirus. In animal trials, it’s shown some success against adenoviruses, smallpox, and herpes—and preliminary tests show some promise against Ebola. On Oct. 6, the FDA authorized its use for some Ebola patients.

It was given to Ebola patient Thomas Eric Duncan, who died, and Ashoka Mukpo, who doctors said had improved. Mukpo even tweeted that he was on the road to recovery.

Back to that Budget

Consider again how The Huffington Post parroted Collins’ claims:

Money, or rather the lack of it, is a big part of the problem. NIH’s purchasing power is down 23 percent from what it was a decade ago, and its budget has remained almost static. In fiscal year 2004, the agency’s budget was $28.03 billion. In FY 2013, it was $29.31 billion—barely a change, even before adjusting for inflation.

Of course, between the fiscal years 2000 and 2004, NIH’s budget jumped a whopping 58 percent. HHS’s 70,000 workers will spend a total of $958 billion this year, or about $7,789 for every U.S. household. A 2012 report on federal spending including the following nuggets about how NIH spends its supposedly tight funds:

• a $702,558 grant for the study of the impact of televisions and gas generators on villages in Vietnam.
• $175,587 to the University of Kentucky to study the impact of cocaine on the sex drive of Japanese quail.
• $55,382 to study hookah smoking in Jordan.
• $592,527 to study why chimpanzees throw objects.

Last year there were news reports about a $509,840 grant from NIH to pay for a study that will send text messages in “gay lingo” to meth-heads. There are many other shake-your-head examples of misguided spending that are easy to find.

And we’re not even getting into the problems at the CDC or the confusing mixed messages on Ebola from the administration. CDC director Tom Frieden noted: more here

Indeed. The Progressive belief that a powerful government can stop all calamity is misguided. In the last 10 years we passed multiple pieces of legislation to create funding streams, offices, and management authorities precisely for this moment. That we have nothing to show for it is not good reason to put even more faith in government without learning anything from our repeated mistakes. Responding to the missing Ebola Czar and her office’s corruption by throwing still more money, more management changes, and more bureaucratic complexity in her general direction is madness.

The Money World Is Losing Faith In The Illusion Of Control

by Howard Kunstler via Kunstler.com,

The rot moves from the margins to the center, but the disease moves from the center to the margins. That is what has happened in the realm of money in recent weeks due to the sustained mispricing of the cost of credit by central banks, led by the US Federal Reserve. Along the way, that outfit has managed to misprice just about everything else  — stocks, houses, exotic securities, food commodities, precious metals, fine art. Oil is mispriced as well, on the low side, since oil production only gets more expensive and complex these days while it depends more on mispriced borrowed money. That situation will be corrected by scarcity, as oil companies discover that real capital is unavailable. And then the oil will become scarce. The “capital” circulating around the globe now is a squishy, gelatinous substance called “liquidity.” All it does is gum up markets. But eventually things do get unstuck.

Meanwhile, the rot of epic mispricing expresses itself in collapsing currencies and the economies they are supposed to represent: India, Turkey, Argentina, Hungary so far. Italy, Spain, and Greece would be in that club if they had currencies of their own. For now, they just do without driving their cars and burn furniture to stay warm this winter. Automobile use in Italy is back to 1970s levels of annual miles-driven. That’s quite a drop.

Before too long, the people will be out in the streets engaging with the riot police, as in Ukraine. This is long overdue, of course, and probably cannot be explained rationally since extreme changes in public sentiment are subject to murmurations, the same unseen forces that direct flocks of birds and schools of fish that all at once suddenly turn in a new direction without any detectable communication.

Who can otherwise explain the amazing placidity of the sore beset American public, beyond the standard trope about bread, circuses, and superbowls? Last night they were insulted with TV commercials hawking Maserati cars. Behold, you miserable nation of overfed SNAP card swipers, the fruits of wealth and celebrity! Savor your unworthiness while you await the imminent spectacles of the Sochi Olympics and Oscar Night! Things at the margins may yet interrupt the trance at the center. My guess is that true wickedness brews unseen in the hidden, unregulated markets of currency and interest rate swaps.

The big banks are so deep in this derivative ca-ca that eyeballs are turning brown in the upper level executive suites. Notable bankers are even jumping out of windows, hanging themselves in back rooms, and blowing their brains out in roadside ditches. Is it not strange that there are no reports on the contents of their suicide notes, if they troubled to leave one? (And is it not unlikely that they would all exit the scene without a word of explanation?) One of these, William Broeksmit, a risk manager for Deutsche Bank, was reportedly engaged in “unwinding positions” for that that outfit, which holds over $70 trillion in swap paper. For scale, compare that number with Germany’s gross domestic product of about $3.4 trillion and you could get a glimmer of the mischief in motion out there. Did poor Mr. Broeksmit despair of his task?

Physicist Stephen Hawking declared last week that black holes are not exactly what people thought they were. Stuff does leak back out of them. This will soon be proven in the unwinding derivatives trades when most of the putative wealth associated with swaps and such disappears across the event horizon of bad faith, and little dribbles of their prior existence leak back out in bankruptcy proceedings and political upheaval.

The event horizon of bad faith is the exact point where the credulous folk of this modern age, from high to low, discover that their central banks only pretend to be regulating agencies, that they ride a juggernaut of which nobody is really in control. The illusion of control has been the governing myth since the Lehman moment in 2008. We needed desperately to believe that the authorities had our backs. They don’t even have their own fronts.

Is the money world at that threshold right now? One thing seems clear: nobody is able to turn back the plummeting currencies. They go where they will and their failures must be infectious as the greater engine of world trade seizes up. Who will write the letters of credit that make international commerce possible? Who will trust whom? When do people seriously start to starve and reach for the pitchforks? When does the action move from Kiev to London, New York, Frankfurt, and Paris?

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The Country Is Over

Monty Pelerin April 5, 2013

Data are hard to deal with when your vision is on the wrong side of it. Those wanting to claim there is a recovery underway are having just this problem. These people either have no understanding of economics or they believe falsely that they can inflate “animal spirits” with their hyped reports and that will initiate a recovery.

There will not be an economic recovery given the economic policies of this country. A recovery is not unlikely, I would argue it is closer to impossible if not impossible. The reasons for this position are not complicated. In short, the nation has become an out-of-control welfare state that is rapidly destroying the incentives to work or create jobs. Government policies appear designed toward this end. One doesn’t need a high IQ or  an advanced degree in economics to understand the problems.

There are innumerable factors responsible for the decline of the US. Only three important ones will convey why the economy is dying:

1. The rule of law and property rights are under attack.

What do you really own? The depositors in Cyprus believed they owned what was in their bank accounts. They found out otherwise. Bondholders of General Motors believed they were protected by bankruptcy laws when GM was bankrupted by the government. They found out otherwise. Do you own your pension plans and IRAs. Well you always believed you did except now there is talk about confiscating a portion or all of these funds.

How much of your income do you own? For those doing well, let’s say 60%. But that portion is under attack with the “need” for higher taxes and “fair share” gobbledegook. What about Social Security? Although the government sold it as a retirement policy and told you it is yours, the government says in fine print it is not. That is their excuse for not treating it as a liability on their balance sheet.

The fact is that the rules are being changed at will by the side who has lots of guns. The number of rules and laws that have been changed or ignored in the past several years makes one wonder what laws will remain. We are  approaching the point where there are no rules which means there can be no society. Without cooperation, markets will cease to function efficiently or perhaps at all. Millions of people will starve to death under such conditions.

2. Obamacare has raised costs

The costs associated with Obamacare are still not known or calculable. The rules are still being written. Already there are thousands of pages. Even though we passed it as Speaker Pelosi suggested as a means to find out what was in it, we still don’t know as the rules are still being made up.

For sure the program is driving up the costs of medical care and driving down the quality. That is exactly the opposite of what was promised. Business firms face great uncertainty as to what this mandate will do to their costs and operating procedures. Obamacare is rising the cost of employees. When you penalize something, you get less of it. That is a prime reason why there is no employment recovery in this country.

Employers have frozen their hiring until clarity develops. The development of clarity is no assurance that they will change their behavior. If the costs are too high (and they appear to be for many smaller businesses who create the most jobs), then hiring will not return.

The effect on hiring is only one negative. Full-time workers are being made part-time in order that they be exempted from the Obamacare mandate. These steps are not something business wants to do, it is something they must do in order to survive.

3. Government policies have made the dole more lucrative than work

As we make it easier to get unemployment benefits for longer time periods, more people take advantage of the system. So too with food stamps and disability. All programs are at or near record levels in what is supposed to be four years into an economic recovery. For many, the benefits of becoming a government dependent exceed what they can earn. One study reported that a family of four, collecting all the benefits for which they were entitled, would have to earn $65,000 per annum to have the same after-tax purchasing power.

If you are a product of the government schools and are legal to work (i.e., have skills enough that you are affordable at the minimum wage or higher), at what point do you realize that there is no need to go through the hassle of actual work. You can live pretty well by staying home and taking advantage of the entitlements available to you. That is exactly what a larger and larger percentage of the population are realizing. In many cases, it is economically irrational to work.

This behavior creates a social pathology that only worsens over time. Kids learn from their parents that work is not necessary and the many ways to game the system. In this regard, look for this problem to become worse over time unless these programs are cut back.

There Can Be No Recovery

Despite all you hear coming from the government’s media megaphone, there is no economic recovery underway, nor can there be one. The policies in place ensure that one will not happen. Economics is not a top-down science as Keynesians and politicians want you to believe. You can throw as many Fed dollars into the system or devise innumerable government stimulus programs. These are all top-down. Economics is a bottom-up process that starts with individual decisions and behavior. Individuals respond to available choices and incentives. They act in their own self-interest not in the manner in which some government planner wants them to act. Top-down programs do not affect the incentives of the individual decision-makers.

We raise the costs on those who work (higher taxes) and the businessmen who provide the jobs. One of the basic laws of human nature is that when you penalize something or make it less pleasant, people will want less of it. It is not a mystery why business is not hiring and the number of workers is declining. The return to both is declining as a result of government policies.

We raise the rewards for not working. Another basic law of human behavior is that when you increase rewards for a particular kind of behavior, you will get more of it. It is not a mystery why more people are choosing the dole than ever before. Government has encouraged them to do by providing higher rewards.

Add in the regime uncertainty associated with unstable or unpredictable laws and regulations and you have the perfect storm. There is no incentive to hire. Business hunkers down not knowing what is coming their way next. They understand they are targets of this Administration. It is unlikely that there will be any improvement on this fron while Obama remains in office. This behavior has nothing to do with politics. Even businesses headed by Democrats are behaving in this fashion. It is self-interest as in the desire to survive that motivates this behavior.

Why The Economy is Dying

As government grows the private sector shrinks. As the private sector shrinks there are fewer goods and services produced (government produces no goods and few services). I believe it was Dick Armey who described this situation with the wagon analogy: there are more people riding in the wagon and fewer pulling the wagon. As the wagon becomes heavier, the remaining pullers must work harder to move it.

The pullers must support the riders. Government does not support the riders or anyone else for that matter. Whatever government has it has taken from the pullers. Whatever it doles out it must get from taxes, borrowing or printing new money. Regardless of which means it uses, it is all coming from the pullers. They pay the borrowing back. They have less as a result of higher taxes. They are made poorer by the rising prices from the printing of money.

As the burdens increase on the pullers and the benefits increase for the riders, more pullers decide to ride. The truly creative and talented can always make enough money to continue to work rather than ride. However, when their efforts can be expended in other countries that penalize them less, at some point they no longer pull the wagon. They leave the country to climes where they are treated better.

Each increase in government spending means requires more money from the private sector. That means greater distortions in the incentive-disincentive calculus that produces fewer people pulling the wagon. Now fewer people must support more non-producers. Every time someone gets in the wagon, the burden on the productive sector increases. More must be extracted from a smaller group to serve the increasing riders.

That is what is happening in this country. If it is not reversed, the economy will stagnate and eventually implode. This conclusion is dependent upon nothing more than simple arithmetic. How bad is the imbalance today? Tyler Durden provides some information (my emboldening in red added):

The punchline: 110 million privately employed workers; 88 million welfare recipients and government workers and rising rapidly.

And since nothing has changed in the past two years, and in fact the situation has gotten progressively (pardon the pun) worse, here is our conclusion on this topic from two years ago:

We have been writing for over a year, how the very top of America’s social order steals from the middle class each and every day. Now we finally know that the very bottom of the entitlement food chain also makes out like a bandit compared to that idiot American who actually works and pays their taxes. One can only also hope that in addition to seeing their disposable income be eaten away by a kleptocratic entitlement state, that the disappearing middle class is also selling off its weaponry. Because if it isn’t, and if it finally decides it has had enough, the outcome will not be surprising at all: it will be the same old that has occurred in virtually every revolution in the history of the world to date.

But for now, just stick head in sand, and pretend all is good. Self-deception is now the only thing left for the entire insolvent entitlement-addicted world.

Is The Decline Inevitable?

Of course not. As Lawrence of Arabia stated: “Nothing is written.”

The Economic Solution

The solution to solving the problem is quite simple for an economist. Merely reverse the process. Make it attractive for people to jump out of the wagon and begin pulling. For businesses, make it attractive for them to hire. Make it unattractive to be on the dole. Reverse the growth of government and you increase the size of the private sector. More capital is made available for productive activities rather than being squandered by government. Talent stops leaving the country when they are treated more favorably here, whether this be via lower taxes or less onerous regulatory burdens. Then, get government out of the way and let markets solve the problem.

The Political Barrier

For the political class, the solution borders on the impossible. Politicians have bribed the citizenry with goodies for votes. They have sold the notion that government is responsible for all good things. The economic solution runs counter to everything that politicians have peddled. Further it reduces their power and ability to retain office, at least in a manner in which they are accustomed. It shrinks their perquisites. It shrinks their vote-buying ability. In short, it is virtually impossible for them to go along with such a solution.

What politicians thrive on is what created the current problems. Reversing this behavior is alien to them. They would not know how to behave under such conditions. Yet the economic solution is the only solution!

Do I expect politicians to change and save the country? No! Is it possible they could? Probably not, but “nothing is written.”

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The President’s Legal Authority at the Debt Limit

By Andrew Kloster

Some time between the middle and the end of October, the federal government will reach a hard limit on the amount of debt it can issue, and its ability to finance governmental operations will be affected. Confusion about the debt limit abounds, and this Issue Brief will address some common questions.

What Is the Debt Limit?

The United States debt limit, or debt ceiling, is the statutorily defined amount of debt the U.S. Treasury can issue, either by borrowing from the public or issuing an intragovernmental receipt to special accounts, such as the Social Security or Medicare trust funds.[1]

The Treasury Department has to have liquidity, or cash on hand, to disburse the funds necessary to meet its contractual obligations. The federal government maintains this liquidity by managing governmental receipts (such as income tax payments) and selling debt (such as Treasury bonds).

Will a Government Shutdown Occur If the Debt Limit Is Not Raised?

The debt limit is often confused with the expiration of appropriations bills. Reaching the debt limit is distinct from a government shutdown. A government shutdown occurs when appropriations authorization expires: Unless there is a law saying that money may be spent on a project, money may not be spent on that project.[2] A debate over an appropriations bill is a debate over whether to fund a specific government function. When the government shutdown began, only certain statutorily defined “essential” government functions have continued to operate.[3]

The debate over the debt limit, however, is a debate over how to finance governmental operations—reaching the debt limit would not force a government shutdown. Currently, the debt limit is $16.699 trillion.[4] The federal government reached this limit on May 19, 2013, and Treasury has since used statutorily allowed “extraordinary measures” to avoid issuing additional debt and still have the cash on hand to finance day-to-day operations. When the Treasury exhausts these extraordinary measures, the federal government will continue operating. However, the President might decide that federal employees, for example, will not necessarily be issued checks available to cash immediately.

Even without the ability to issue additional debt, the government will continue to accrue legal obligations; it will simply not be able to immediately liquidate (pay cash for) those obligations.[5]

What Happens to the U.S. Debt If We Reach the Debt Limit?

It is impossible to tell what would happen if the debt limit is not raised.[6] If Congress and the President are unable to reach an agreement on raising the debt ceiling, markets and credit rating agencies might interpret this negatively as unwillingness of the U.S. government to honor its obligation. If the President chooses to default on all obligations rather than a few (discussed below), this could exacerbate the problem. Market perception of U.S. sovereign debt directly affects bond yields (interest rate paid) on U.S. debt, so decisions the President makes can actually save or cost the government money in the long term.

The Prompt Payment Act[7] provides that the “temporary unavailability of funds to make a timely payment” does not excuse delayed payment and that the government is responsible for paying interest charges on such delayed payments. Over time, these interest penalties capitalize, so the federal government ends up paying compound interest. Depending on how the President manages payments, statutory interest payments may be greater or smaller.

What Would the President Prioritize?

While there have been proposals to cabin the authority of the executive to prioritize payments,[8] as it stands there is no statute governing how to manage government finances past the debt limit. Since governmental obligations would exceed receipts, exceeding the debt limit logically implies that at least some obligations would be delayed. These obligations would thus, by definition, be in default. There is no general “governmental default” past the debt limit; default would occur with respect to specific obligations that the President chooses not to prioritize.

There are constitutional backstops on the President’s otherwise plenary authority to prioritize payments.[9] Of these, the most important is that the President may not prioritize payment in violation of the Due Process Clause of the Fifteenth Amendment. He may not, for example, choose to pay the salaries of federal employees of one race before paying the salaries of federal employees of another race. Subject to this limitation, the President’s prioritization choices are essentially unbounded.

The President could, of course, play a game of political brinksmanship and fail to pay any obligations until the debt ceiling is raised. He could argue that all obligations are on an equal footing and that prioritizing payments violates some principle of fairness. Former Treasury Secretary Timothy Geithner made statements about the political unworkability of prioritization in the past,[10] but to date, Treasury has not disavowed its legal authority in this area. Failing to prioritize debt obligations would have far-reaching consequences, however, including potentially increasing the cost of servicing the debt long after the debt limit crisis ends.

Further, to the extent that this situation would involve having cash on hand and failing to pay some receipts, this option implicates the Congressional Budget and Impoundment Act of 1974, which prevents the President from deferring any “budget authority.” This phrase is defined to include “borrowing authority, which means authority granted to a federal entity to borrow and obligate and expend the borrowed funds.”[11] Holding cash until such time that the Treasury can meet all of its payments necessarily includes deferring expenditures of borrowed funds until such time as the debt ceiling is raised, which would implicate these statutory limitations.[12]

The President could also choose to continue payments for “essential” services analogous to those defined in the appropriations context.[13] There is no statutory requirement for this decision, but the idea that there are “core” functions of the federal government that ought to remain liquid is easily understandable. Meeting debt obligations and paying military personnel might be prioritized at the expense of other obligations, such as issuing certain grants and loans to private-sector firms and to state and local governments, for example. So-called mandatory spending, such as Social Security payments, do continue during a government shutdown, but they need not be prioritized at the debt limit.[14]

The President could also pick and choose among programs he likes and those he does not like. He might direct Treasury to pay Department of Defense employees before Department of Education employees, or vice versa. Whatever decision he makes would be essentially unchallengable in court.

Ultimately, however the President chooses to manage payments, delays will accumulate and worsen until either spending is cut or the debt ceiling is raised.

Broad Authority

In brief, the President has broad authority to manage government payments to avoid defaulting on federal obligations. He can choose which payments to make and in which order, and these choices will impact the effects on the average U.S. taxpayer and the economy.

—Andrew Kloster is a Legal Fellow in the Edwin Meese III Center for Legal and Judicial Studies at The Heritage Foundation.

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Sense Of Unease Growing Around The World As U.S. Government Looks Befuddled

10/05/13

By STEVEN R. HURST

– An unmistakable sense of unease has been growing in capitals around the world as the U.S. government from afar looks increasingly befuddled — shirking from a military confrontation in Syria, stymied at home by a gridlocked Congress and in danger of defaulting on sovereign debt, which could plunge the world’s financial system into chaos.

While each of the factors may be unrelated to the direct exercise of U.S. foreign policy, taken together they give some allies the sense that Washington is not as firm as it used to be in its resolve and its financial capacity, providing an opening for China or Russia to fill the void, an Asian foreign minister told a group of journalists in New York this week.

Concerns will only deepen now that President Barack Obama canceled travel this weekend to the Asia Pacific Economic Cooperation Forum in Bali and the East Asia Summit in Brunei. He pulled out of the gatherings to stay home to deal with the government shutdown and looming fears that Congress will block an increase in U.S. borrowing power, a move that could lead to a U.S. default.

The U.S. is still a pillar of defense for places in Asia like Taiwan and South Korea, providing a vital security umbrella against China. It also still has strong allies in the Middle East, including Israel and the Gulf Arab states arrayed against al-Qaida and Iran.

But in interviews with academics, government leaders and diplomats, faith that the U.S. will always be there is fraying more than a little.

“The paralysis of the American government, where a rump in Congress is holding the whole place to ransom, doesn’t really jibe with the notion of the United States as a global leader,” said Michael McKinley, an expert on global relations at the Australian National University.

The political turbulence in Washington and potential economic bombshells still to come over the U.S. government shutdown and a possible debt default this month have sent shivers through Europe. The head of the European Central Bank, Mario Draghi, worried about the continent’s rebound from the 2008 economic downturn.

“We view this recovery as weak, as fragile, as uneven,” Draghi said at a news conference.

Germany’s influential newspaper Sueddeutsche Zeitung bemoaned the U.S. political chaos.

“At the moment, Washington is fighting over the budget and nobody knows if the country will still be solvent in three weeks. What is clear, though, is that America is already politically bankrupt,” it said.

Obama finds himself at the nexus of a government in chaos at home and a wave of foreign policy challenges.

He has been battered by the upheaval in the Middle East from the Arab Spring revolts after managing to extricate the U.S. from its long, brutal and largely failed attempt to establish democracy in Iraq. He is also drawing down U.S. forces from a more than decade-long war in Afghanistan with no real victory in sight. He leads a country whose people have no interest in taking any more military action abroad.

As Europe worries about economics, Asian allies watch in some confusion about what the U.S. is up to with its promise to rebalance military forces and diplomacy in the face of an increasingly robust China.

Global concerns about U.S. policy came to a head with Obama’s handling of the civil war in Syria and the alleged use of chemical weapons by the regime of President Bashar Assad. But, in fact, the worries go far deeper.

“I think there are a lot of broader concerns about the United States. They aren’t triggered simply by Syria. The reaction the United States had from the start to events in Egypt created a great deal of concern among the Gulf and the Arab states,” said Anthony Cordesman, a military affairs specialist at the Center for International Studies.

Kings and princes throughout the Persian Gulf were deeply unsettled when Washington turned its back on Egypt’s long-time dictator and U.S. ally Hosni Mubarak during the 2011 uprising in the largest Arab country.

Now, Arab allies in the Gulf voice dismay over the rapid policy redirection from Obama over Syria, where rebel factions have critical money and weapons channels from Saudi Arabia, Qatar and other Gulf states. It has stirred a rare public dispute with Washington, whose differences with Gulf allies are often worked out behind closed doors. Last month, Saudi Foreign Minister Saud al-Faisal warned that the renewed emphasis on diplomacy with Assad would allow the Syrian president to “impose more killing.”

After saying Assad must be removed from power and then threatening military strikes over the regime’s alleged chemical weapons attack, the U.S. is now working with Russia and the U.N. to collect and destroy Damascus’ chemical weapons stockpile. That assures Assad will remain in power for now and perhaps the long term.

Danny Yatom, a former director of Israel’s Mossad intelligence service, said the U.S. handling of the Syrian crisis and its decision not to attack after declaring red lines on chemical weapons has hurt Washington’s credibility.

“I think in the eyes of the Syrians and the Iranians, and the rivals of the United States, it was a signal of weakness, and credibility was deteriorated,” he said.

The Syrian rebels, who were promised U.S. arms, say they feel deserted by the Americans, adding that they have lost faith and respect for Obama.

The White House contends that its threat of a military strike against Assad was what caused the regime to change course and agree to plan reached by Moscow and Washington to hand its chemical weapons over to international inspectors for destruction. That’s a far better outcome than resorting to military action, Obama administration officials insist.

Gulf rulers also have grown suddenly uneasy over the U.S. outreach to their regional rival Iran.

Bahrain Foreign Minister Sheik Khalid bin Ahmed Al Khalifa said Gulf states “must be in the picture” on any attempts by the U.S. and Iran to open sustained dialogue or reach settlement over Tehran’s nuclear program. He was quoted Tuesday by the London-based Al Hayat newspaper as saying Secretary of State John Kerry has promised to consult with his Gulf “friends” on any significant policy shifts over Iran — a message that suggested Gulf states are worried about being left on the sidelines in potentially history-shaping developments in their region.

In response to the new U.S. opening to Iran to deal with its suspected nuclear weapons program, Israeli Prime Minister Benjamin Netanyahu told the U.N. General Assembly that his country remained ready to act alone to prevent Tehran from building a bomb. He indicated a willingness to allow some time for further diplomacy but not much. And he excoriated new Iranian President Hassan Rouhani as a “wolf in sheep’s clothing.”

Kerry defended the engagement effort, saying the U.S. would not be played for “suckers” by Iran. Tehran insists its nuclear program is for peaceful energy production, while the U.S. and other countries suspect it is aimed at achieving atomic weapons capability.

McKinley, the Australian expert, said Syria and the U.S. budget crisis have shaken Australians’ faith in their alliance with Washington.

“It means that those who rely on the alliance as the cornerstone of all Australian foreign policy and particularly security policy are less certain — it’s created an element of uncertainty in their calculations,” he said.

Running against the tide of concern, leaders in the Philippines are banking on its most important ally to protect it from China’s assertive claims in the South China Sea. Defense Secretary Voltaire Gazmin said Manila still views the U.S. as a dependable ally despite the many challenges it is facing.

“We should understand that all nations face some kind of problems, but in terms of our relationship with the United States, she continues to be there when we need her,” Gazmin said.

“There’s no change in our feelings,” he said. “Our strategic relationship with the U.S. continues to be healthy. They remain a reliable ally.”

But as Cordesman said, “The rhetoric of diplomacy is just wonderful but it almost never describes the reality.”

That reality worldwide, he said, “is a real concern about where is the U.S. going. There is a question of trust. And I think there is an increasing feeling that the United States is pulling back, and its internal politics are more isolationist so that they can’t necessarily trust what U.S. officials say, even if the officials mean it.”

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EDITOR’S NOTE — Steven R. Hurst, The Associated Press’ international political writer in Washington, has covered foreign affairs for 35 years, including extended assignments in Russia and the Middle East.

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AP writers Brian Murphy in Dubai, United Arab Emirates, Robert H. Reid in Berlin, Hrvoje Hranjski in Manila, Gregory Katz in London, Josef Federman in Jerusalem, Rod McGuirk in Canberra, Australia, and Sarah DiLorenzo and David McHugh in Paris contributed to this report.

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Cartoon of the Day: “Well, here we go again!”

A Small President on the World Stage

At the U.N., leaders hope for a return of American greatness.

The world misses the old America, the one before the crash—the crashes—of the past dozen years.

By PEGGY NOONAN

That is the takeaway from conversations the past week in New York, where world leaders gathered for the annual U.N. General Assembly session. Our friends, and we have many, speak almost poignantly of the dynamism, excellence, exuberance and leadership of the nation they had, for so many years, judged themselves against, been inspired by, attempted to emulate, resented.

As for those who are not America’s friends, some seem still confused, even concussed, by the new power shift. What is their exact place in it? Will it last? Will America come roaring back? Can she? Does she have the political will, the human capital, the old capability?

It is a world in a new kind of flux, one that doesn’t know what to make of America anymore. In part because of our president.

“We want American leadership,” said a member of a diplomatic delegation of a major U.S. ally. He said it softly, as if confiding he missed an old friend.

“In the past we have seen some America overreach,” said the prime minister of a Western democracy, in a conversation. “Now I think we are seeing America underreach.” He was referring not only to foreign policy but to economic policies, to the limits America has imposed on itself. He missed its old economic dynamism, its crazy, pioneering spirit toward wealth creation—the old belief that every American could invent something, get it to market, make a bundle, rise.

The prime minister spoke of a great anxiety and his particular hope. The anxiety: “The biggest risk is not political but social. Wealthy societies with people who think wealth is a given, a birthright—they do not understand that we are in the fight of our lives with countries and nations set on displacing us. Wealth is earned. It is far from being a given. It cannot be taken for granted. The recession reminded us how quickly circumstances can change.” His hope? That the things that made America a giant—”so much entrepreneurialism and vision”—will, in time, fully re-emerge and jolt the country from the doldrums.

The second takeaway of the week has to do with a continued decline in admiration for the American president. Barack Obama‘s reputation among his fellow international players has deflated, his stature almost collapsed. In diplomatic circles, attitudes toward his leadership have been declining for some time, but this week you could hear the disappointment, and something more dangerous: the sense that he is no longer, perhaps, all that relevant. Part of this is due, obviously, to his handling of the Syria crisis. If you draw a line and it is crossed and then you dodge, deflect, disappear and call it diplomacy, the world will notice, and not think better of you. Some of it is connected to the historical moment America is in.

But some of it, surely, is just five years of Mr. Obama. World leaders do not understand what his higher strategic aims are, have doubts about his seriousness and judgment, and read him as unsure and covering up his unsureness with ringing words.

A scorching assessment of the president as foreign-policy actor came from a former senior U.S. diplomat, a low-key and sophisticated man who spent the week at many U.N.-related functions. “World leaders are very negative about Obama,” he said. They are “disappointed, feeling he’s not really in charge. . . . The Western Europeans don’t pay that much attention to him anymore.”

The diplomat was one of more than a dozen U.S. foreign-policy hands who met this week with the new president of Iran, Hasan Rouhani. What did he think of the American president? “He didn’t mention Obama, not once,” said the former envoy, who added: “We have to accept the fact that the president is rather insignificant at the moment, and rely on our diplomats.” John Kerry, he said, is doing a good job.

Had he ever seen an American president treated as if he were so insignificant? “I really never have. It’s unusual.” What does he make of the president’s strategy: “He doesn’t know what to do so he stays out of it [and] hopes for the best.” The diplomat added: “Slim hope.”

This reminded me of a talk a few weeks ago, with another veteran diplomat who often confers with leaders with whom Mr. Obama meets. I had asked: When Obama enters a room with other leaders, is there a sense that America has entered the room? I mentioned de Gaulle—when he was there, France was there. When Reagan came into a room, people stood: America just walked in. Does Mr. Obama bring that kind of mystique?

“No,” he said. “It’s not like that.”

When the president spoke to the General Assembly, his speech was dignified and had, at certain points, a certain sternness of tone. But after a while, as he spoke, it took on the flavor of re-enactment. He had impressed these men and women once. In the cutaways on C-Span, some delegates in attendance seemed distracted, not alert, not sitting as if they were witnessing something important. One delegate seemed to be scrolling down on a BlackBerry, one rifled through notes. Two officials seated behind the president as he spoke seemed engaged in humorous banter. At the end, the applause was polite, appropriate and brief.

The president spoke of Iran and nuclear weapons—”we should be able to achieve a resolution” of the question. “We are encouraged” by signs of a more moderate course. “I am directing John Kerry to pursue this effort.”

But his spokesmen had suggested the possibility of a brief meeting or handshake between Messrs. Obama and Rouhani. When that didn’t happen there was a sense the American president had been snubbed. For all the world to see.

Which, if you are an American, is embarrassing.

While Mr. Rouhani could not meet with the American president, he did make time for journalists, diplomats and businessmen brought together by the Asia Society and the Council on Foreign Relations. Early Thursday evening in a hotel ballroom, Mr. Rouhani spoke about U.S.-Iranian relations.

He appears to be intelligent, smooth, and he said all the right things—”moderation and wisdom” will guide his government, “global challenges require collective responses.” He will likely prove a tough negotiator, perhaps a particularly wily one. He is eloquent when speaking of the “haunted” nature of some of his countrymen’s memories when they consider the past 60 years of U.S.-Iranian relations.

Well, we have that in common.

He seemed to use his eloquence to bring a certain freshness, and therefore force, to perceived grievances. That’s one negotiating tactic. He added that we must “rise above petty politics,” and focus on our nations’ common interests and concerns. He called it “counterproductive” to view Iran as a threat; this charge is whipped up by “alarmists.” He vowed again that Iran will not develop a nuclear bomb, saying this would be “contrary to Islamic norms.”

I wondered, as he spoke, how he sized up our president. In roughly 90 minutes of a speech followed by questions, he didn’t say, and nobody thought to ask him.

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How The Corrupt Establishment Is Selling Moral Bankruptcy To America

August 13, 2013 by Brandon Smith

Morality is a highly misunderstood component of human nature. Some people believe they can create moral guidelines from thin air based on their personal biases and prejudices. Some people believe that morality comes from the force of bureaucracy and government law. Still, others believe that there is no such thing; that morality is a facade created by men in order to better grease the wheels of society.

All of these world views discount the powerful scientific and psychological evidence surrounding Natural Law — the laws that human beings form internally due to inherent conscience, regardless of environmental circumstances. When a person finally grasps inborn morality, the whole of the world comes into focus. The reality is that we are not born “good” or “evil.” Rather, we are all born with the capacity for good AND evil, and this internal battle stays with us until the end of our days.

Every waking moment we are given a choice, a test of our free will, to be ruled by desire and fear, or to do what we know at our very core is right. When a man silences his inner voice, the results can be terrible for him and those around him. When an entire culture silences its inner voice, the results can be catastrophic. Such a shift in the moral compass of a society rarely takes place in a vacuum. There is always a false shepherd, a corrupt leadership that seeks to rule. Rulership, though, is difficult in the face of an awake population that respects integrity and honor. Therefore criminals must follow these specific steps in order to take power:

Pretend To Be Righteous: They must first sell the public on the idea that they hold the exact same values of natural law as everyone else. The public must at first believe that the criminal leaders are pure in their motives and have the best interests of the nation at heart, even if they secretly do not.

Pretend To Be Patriotic: Despots often proclaim an untarnished love of their homeland and the values that it was founded upon. However, what they really seek is to become a living symbol of the homeland. They insist first that they are the embodiment of the national legacy, and then they attempt to change that national legacy entirely. A corrupt government uses the ideals of a society to acquire a foothold, and when they have gained sufficient control, they dictate to that society a new set of ideals that are totally contrary to the original.

Offer To “Fix” The Economy: Tyrants do not like it when the citizens under them are self sufficient or economically independent. They will use whatever methods are at their disposal including subversive legislation, fiat currency creation, corporate monopoly and even engineered financial collapse in order to remove the public’s ability to function autonomously. They will begin this process under the guise that the current less-controlled and less-centralized system is “not safe enough,” and that they have a better way to ensure prosperity.

Offer To Lend A Hand: Once the population has been removed from its own survival imperative and is for the most part helpless, the criminal leadership moves in and offers to “help” using taxation and money creation, slowly siphoning the wealth from the middle class and raising prices through inflation. Eventually, everyone will be “equal”; equally poor that is. In the end, the whole nation will see the rulership as indispensable, for without them, the economy would no longer exist and tragedy would ensue.

Create External Fear: Once in place, the criminal leadership then conjures an enemy for the people, or multiple enemies for the people. The goal here is to create a catalyst for mass fear. When the majority of people are afraid of an external threat, they will embrace the establishment as a vital safeguard. When a society becomes convinced that it cannot take care of itself economically, little coaxing is required to convince them that they are also not competent enough to take care of their own defense. At this point, the establishment has free reign to dissolve long cherished freedoms while the masses are distracted by a mysterious threat hiding somewhere over the horizon.

Create Internal Fear: They move the threat from over the horizon, right to the public’s front door, or even within their own home. The enemy is no longer a foreigner. Now, the enemy is the average looking guy two houses over, or an outspoken friend, or even a dissenting family member. The enemy is all around them, according to the establishment. The public is sold on the idea that the sacrifice needed in order to combat such a pervasive “threat” is necessarily high.

Sell The People On The Virtues Of Moral Relativism: Now that the populace is willing to forgo certain liberties for the sake of security, they have been softened up enough for reprogramming to begin. The establishment will tell the people that the principles they used to hold so dear are actually weaknesses that make them vulnerable to the enemy. In order to defeat an enemy so monstrous, they claim, we must become monstrous ourselves. We must be willing to do ANYTHING, no matter how vile or contrary to natural law, in order to win.

Honesty must be replaced with deceit. Dissent must be replaced with silence. Peace must be replaced with violence. The independent should be treated with suspicion. The outspoken treated with contempt. Women and children are no longer people to be protected, but targets to be eliminated. The innocent dead become collateral damage. The innocent living become informants to be tortured and exploited. Good men are labeled cowards because they refuse to “do what needs to be done,” while evil men are labeled heroes for having the “strength of will” to abandon their conscience.

Thus, the criminal leadership makes once honorable citizens accomplices in the crime. The more disgusting the crime, the more apt the people will be to defend it and the system in general, simply because they have been inducted into the dark ceremony of moral ambiguity.

The actions of the state become the actions of all society. A single minded collectivist culture is born, one in which every person is a small piece of the greater machine. And, that which the machine is guilty of, every man is guilty of. Therefore, it becomes the ultimate and absurd purpose of each person within the system to DENY the crime, deny the guilt, and make certain that the machine continues to function for generations to come.

Though we have already passed though most of the above stages, Americans are still not yet quite indoctrinated into the realm of moral relativism. This is, though, swiftly changing.

The Current Sales Pitch

Just take a look at the attitude of the Barack Obama Administration and the mainstream media towards Edward Snowden and his recent asylum approved by Russia.

The White House, rather than admitting wrongdoing in its support for the NSA’s mass surveillance of American citizens without warrant, or even attempting to deny the existence of the PRISM program, is now instead trying to promote NSA spying as essential to our well being, and wag a shaming finger at Snowden and the Russian government for damaging their domestic spy network. Obama lamented on Russia’s stance, stating that their thinking is “backwards.”

Did I miss something here? I’m no fan of the Russian oligarchy, but shouldn’t Obama and most of the NSA (let alone every other Federal alphabet agency) be sitting in a dark hole somewhere awaiting trial for violating the Constitution on almost every level? Yet, we are instead supposed to despise Snowden for exposing the crime they committed and distrust any country that happens to give him shelter?

Due to public outcry, Obama has attempted to pacify critics by announcing plans to make NSA mass surveillance “more transparent”. First, I would like to point out that he did not offer to end NSA spying on Americans without warrant, which is what a President with any ounce of integrity would have done. Second, Obama’s calls for more transparency have come at the exact same time as the NSA announces its plans to remove 90 percent of its systems administrators to make sure another “Snowden incident” does not occur.

Does this sound like an agency that plans on becoming “more transparent”?

Second, would Obama have called for ANY transparency over the NSA whatsoever if Snowden had never come forward? Of course not! The exposure of the crime has led to lies and empty placation, nothing more.

In the meantime, numerous other political miscreants have hit the media trail, campaigning for the NSA as well as other surveillance methods, bellowing to the rafters over the absolute necessity of domestic spy programs. Fifteen years ago, the government would have tried to sweep all of this under the rug. Today, they want to acclimate us to the inevitability of the crime, stating that we had better get used to it.

Their position? That Snowden’s whistleblowing put America at risk. My questions is, how? How did Snowden’s exposure of an unConstitutional and at bottom illegal surveillance program used against hundreds of millions of innocent Americans do our country harm? Is it the position of the White House that the truth is dangerous, and deceit is safety?

I suspect this is the case considering the recent treatment of military whistleblower Bradley Manning, who has been accused by some to have “aided Al Qaeda’s recruiting efforts” through his actions.

How did Manning do this? By releasing information, including battlefield videos, that were hidden from the public containing proof of U.S. war crimes in Iraq and Afghanistan.

Perhaps I’m just a traditionalist and not hip to modern diplomatic strategy, but I would think that if you don’t want to be blamed for war crimes, then you probably shouldn’t commit war crimes. And, if you don’t want the enemy to gain new recruits, you should probably avoid killing innocent civilians and pissing off their families. Just a thought.

So, just to keep track, U.S. government commits war crimes, but is the good guy. Bradley Manning exposes war crimes, and is the bad guy. Moral relativism at its finest. Moving on…

The shift towards moral bankruptcy is being implemented in the financial world as well. Investors, hedge funds, and major banks now surge into the stock market every time the private Federal Reserve hints that it may continue fiat stimulus. When bad news hits the mainstream feeds, people playing the Dow casino actually cheer with glee, exactly because bad economic news means more QE from the Fed. They know that the Fed is artificially propping up the markets. The Fed openly admits that it does this. And they know that our fiscal system is hanging by a thin thread. And you know what, very few of them care.

The Fed created the collapse with easy money and manipulated interest rates, and now, some people cheer them as the heroes of the U.S. financial structure.

The American narrative is quickly changing. There has long been criminality and degeneracy within our government and the corporate cartels surrounding it, but I believe what we are witnessing today is the final step in the metamorphosis that is totalitarianism. The last stage accelerates when the average citizen is not just complicit in the deeds of devils, but when he becomes a devil himself. When Americans froth and stomp in excitement for the carnival of death, and treat the truth as poison, then the transformation will be complete.

-Brandon Smith

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