Category Archives: Pork

Surprise! Debt-ceiling deal gives Obama a blank check: Loophole will allow government to spend WITHOUT LIMIT until February

By David Martosko

It’s the ultimate sweetheart deal for a free-spending federal government: Wednesday night’s debt deal didn’t actually raise the limit on America’s credit card, but instead removed it entirely until February 7, 2014.

Whether through legislative sleight-of-hand or something less sinister, the law of the land now permits the U.S. to run up new debts for 16 weeks without consequences, and forbids the Treasury Department from enforcing the debt limit that ordinarily keeps spending from spiraling out of control.

Some observers noted on Wednesday that when Congress burned the midnight oil to debate a deal that would save the U.S. from crashing through its existing $16.7 trillion debt ceiling and risking a credit default, there was no debate over exactly how far to raise it.

House and Senate negotiators only discussed how long the agreement would last.

The result has left the Treasury free to accumulate as much debt as it needs to until the deal expires, The Daily Caller noted on Thursday.

The Bipartisan Policy Center estimated that if the government had extended its debt ceiling in this fashion through the end of 2014, as one Republican proposal suggested, the federal government’s debt would have ballooned by $1.1 trillion.

At that rate, the national debt will likely grow by at least $282.5 billion on its own by the time Feb. 7 rolls around, bringing the total close to an even $17 trillion.

But there’s no guarantee it won’t grow even faster, especially if the legislative initiatives President Obama outlined Thursday morning were to cross the finish line by year’s end, as he demanded in his first public remarks since signing the debt-limit hike law shortly after midnight.

Obama said he wants Congress to give him a new budget deal, a 5-year farm bill and a comprehensive reform of America’s immigration laws, all before New Year’s Day.

Any one of those three could be a colossal budget-buster. Under ordinary circumstances, a hard-and-fast debt limit might serve as a check against runaway spending; but with no ceiling, Democrats could raid the Treasury to give the president what he wants, without fear of practical roadblocks getting in the way.

Republicans, too, could take advantage of the spending loophole. Senate Minority Leader Mitch McConnell demonstrated on Wednesday that he’s willing to accept expensive pot-sweeteners in exchange for a tidy solution to a messy problem.

When Obama signed the debt-bailout package into law, it included more than $2 billion in new spending for a dam project in McConnell’s home state of Kentucky, answering for some the thorny question of why the Senate’s top Republican would be so eager to make Democrats look good by negotiating a deal when tea party conservatives in the House were refusing to do so.

According to the conservative Heritage Foundation, Obama and Congress have already used the trick of ‘suspending’ the debt ceiling for a fixed period of time once before – running from February to May of this year.

That deal added $300 billion to the national debt in 102 days. The deal that went into effect Thursday covers 114 days.

The only requirement for that earlier agreement was that the Democrat-led Senate produce a formal budget for the first time since President Obama took office, which it did.

‘No savings were accomplished,’ says Heritage.

‘Suspending the debt is less transparent to the American people,’ the group explains, adding that ‘a calendar date is not nearly as scary to constituents as a figure in the trillions of dollars.’

The coming battles over a year-long federal budget, including Democrats’ demands for new taxes and an expected Republican push for spending cuts, could actually reduce deficit spending; but with no credit limit holding them back, lawmakers could see a perfect storm for committing to hundreds of billions in new earmarked projects calculated to please constituents back home.

The farm bill, too, is likely to rack up record spending on programs like food stamps, which fall under the Department of Agriculture’s budget: The Obama administration has already doubled the number of Americans receiving these entitlements since January 2009.

But immigration could require the biggest blank check of all.

While Obama and congressional liberals want to put 11 million illegal aliens on a path to citizenship, conservatives have consistently argued that the nation’s borders must first be secured. That, Democrats have countered, is simply too expensive to contemplate since it would likely involve building thousands of miles of new high-tech fences and staffing the Mexican border with thousands of guards whose salaries no one has contemplated yet.

Capitol Hill sources tell MailOnline that without a fixed debt ceiling over their heads, everyone in Congress might suddenly find it workable to give both parties what they want.

‘I can’t speak for the whole Republican caucus, of course,’ said a policy staffer to a conservative GOP House member, ‘but some of us want a border fence badly enough that we’ll look the other way if it adds a few hundred billion to the national debt.’

‘And once that’s in place, the biggest impediment to a citizenship path disappears.’

Since President Obama took office, new deficit spending has added about $43,000 to the national debt for every household in America.

That reflects a 60 per cent increase in the debt from where it sat on his first Inauguration Day, at $10.3 trillion.

At current rates of growth, Obama will leave office with national debts twice the size of those accumulated by all the previous U.S. presidents combined.

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Leaked Emails: Boehner Worked With Reid to Save Lawmaker Subsidies

Tuesday, 01 Oct 2013 12:23 PM
By Sandy Fitzgerald

House Speaker John Boehner Monday called on colleagues to ban an exemption lawmakers and staff receive for health insurance, but he and his aides had worked for months with Democratic leaders to save the subsidies, leaked documents and emails show.

The documents were provided to Politico, which revealed Tuesday morning that Boehner and aides were working closely with Democratic rivals to protect the payments.

Roll Call had earlier reported that Democrats were mulling divulging the private communications between Boehner Chief of Staff Mike Sommers and Reid Chief of Staff David Krone as proof that Boehner was trying to protect the payments.

The revelations are sure to cause more friction between Boehner and more conservative members of the House of Representatives, who have been pressing for all Obamacare exemptions for Congress to be scrapped.

The documents show Boehner and his aides discussed the matter with the offices of Senate Majority Leader Harry Reid, House Minority Whip Steny Hoyer, and others. Further, the documents show that Senate Minority Leader Mitch McConnell knew of the discussions.

A possible legislative solution was drafted, the documents show, and they continued to push for a solution from the Office of Personnel Management (OPM).

Further, Boehner and Reid asked for a meeting with President Barack Obama to lobby him for help, the documents show. The meeting never happened, but a senior Boehner aide was able to speak to White House Chief of Staff Denis McDonough about the Speaker’s wish to retain the employer subsidy.

Obamacare requires lawmakers and staff to join insurance exchanges, and the debate over whether they should continue collecting the employer contribution from the federal government has been the source of many heated discussions.

The OPM ruled that lawmakers and their staff could not receive employer payments once they went into the subsidies. The office reversed its decision, saying the employer payments could continue.

But Boehner put the issue into the government shutdown debate, attaching an amendment ending the subsidies to a House GOP funding bill.

Boehner spokesman Michael Steel told Politico the White House should solve the problem, and that “we always made it clear that House would not pass any legislative fix.”

He said Boehner was aware that Reid and the White House had been discussing the issue and that the speaker’s “fix is repealing Obamacare.”

Boehner’s office said the leak shows how concerned Democrats are.

“Any emails from Mr. Sommers will reflect the Speaker’s position: he voted against ObamaCare, and he wants to repeal Obamacare,” Steel said. “If the Senate Democrats and the White House want to make a ‘fix’ to the law, it would be their fix. The Speaker’s ‘fix’ is repeal. This is just a desperate act by Harry Reid’s staff to protect their own subsidy.”

Reid communications director Adam Jentleson, meanwhile, said his boss worked closely with Boehner and was grateful for his help.

Roll Call reported the communications could back up Democrats’ claims that Boehner’s decision to add an amendment revoking the contributions was a shot at vulnerable Senate Democrats up for reelection in 2014, such as Kay Hagan of North Carolina or Mark Pryor of Arkansas.

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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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Tax writers promise 50 years of secrecy for senators’ suggestions

By Bernie Becker

The Senate’s top tax writers have promised their colleagues 50 years worth of secrecy in exchange for suggestions on what deductions and credits to preserve in tax reform.

Senate Finance Committee Chairman Max Baucus (D-Mont.) and the panel’s top Republican, Sen. Orrin Hatch (Utah), assured lawmakers that any submission they receive will be kept under lock and key by the committee and the National Archives until the end of 2064.

Deeming the submissions confidential, the Senate’s top tax writers have said only certain staff members — 10 in all — will get direct access to a senator’s written suggestions. Each submission will also be given its own ID number and be kept on password-protected servers, with printed versions kept in locked safes.

The promise of confidentiality was revealed just two days before the deadline for senators to participate in the Finance Committee’s “blank slate” process, which puts the onus on lawmakers to argue for what credits and deductions should be kept in a streamlined tax code.

A Finance Committee aide said Baucus and Hatch were trying to prove to colleagues that they were making secrecy a priority. Officials on the panel circulated the news to senators in a memo that was dated last Friday.

“The letter was done at the request of offices to provide some assurance that the committee would not make their submissions public,” the aide said. “Sens. Baucus and Hatch are going out of their way to assure their colleagues they will keep the submissions in confidence.”

Keeping the submissions confidential for a half century, the aide added, was “standard operating procedure for sensitive materials, including investigation materials.”

The lengths Baucus and Hatch have gone to reassure their colleagues underscores the importance the tax writers are placing on the blank-slate plan, and it shows they are working hard to ensure that all 100 senators engage in the process.

Baucus told The Hill he fully expects more senators to participate in writing because of the secrecy guarantee.

“Several senators have said to me how important that is to them,” Baucus said. “It’s quite significant.”

It also illustrates the enormous pressure being brought to bear by K Street lobbyists, who are working furiously to protect their clients and the tax provisions that benefit them.

The move raises the stakes for Baucus and Hatch, who stand to lose credibility if the submissions start to leak out despite their vow to keep them in the vault.

Baucus announced this week that the Finance panel would mark up a tax reform bill this fall, after he has a chance during the August recess to consider his colleagues’ submissions. He suggested that the senators who take part in the blank-slate process would have greater influence.

From the start of the process, senators have expressed concerns that Baucus and Hatch wouldn’t be able to keep their proposals private. Given the enormous amount of money on the line — more than $1 trillion a year in tax expenditures are up for possible elimination — blowback from interest groups and businesses could easily derail the process.

The blank slate, some senators argue, forces them to choose sides on tax breaks that can have fervent backers back home and make them appear to be favoring special interests.

Hatch stressed that he still expects a fair number of GOP senators to give him oral suggestions, and Sen. Richard Burr (R-N.C.) told The Hill that he thought all Republicans would decide against putting ideas down on paper.

“We’re getting a lot of input regardless,” Hatch said. “All I want is input. I don’t care how they do it, whether it’s in writing or whether it’s personally.”

Under the confidential procedures set by the Finance panel, other committee staffers will only be allowed to handle senators’ suggestions if supervised by at least of the 10 authorized staffers.

Both the Democratic and Republican sides will receive a copy of a submission, and authorized staffers are supposed to log when copies of those proposals are made, who made them and how many.

The submissions can be released publicly, the memo says, if they’re scrubbed of any way of identifying the senator behind them.

But the confidentiality agreement might not be enough to get some senators off the sidelines.

Many have questioned whether it makes sense to move forward on the blank-slate approach when Democrats and Republicans have yet to resolve their long-standing differences about revenue.

While Republicans want the additional revenue from a simplified code to be used solely for lowering tax rates, Democrats want some of the windfall to go toward paying down the deficit.

Sen. Ben Cardin (D-Md.) stressed that he didn’t think any leaks would come out of the committee, even as he said he didn’t think it would have much impact on what senators actually write.

“If anything comes out, it’s certainly not going to be attributable to the leadership of the committee or the staff,” Cardin said. “It’ll be some other way it comes out, which is always possible.”

Still, Sen. John Thune (R-S.D.), who said that all Republicans were meeting one-on-one with Hatch, added that the two top tax writers were taking a chance.

“I think that, unfortunately for them, people around here tend to believe that anything in Washington — there are no secrets,” Thune said. “But they’re doing their best.”

“That should be somewhat reassuring,” Thune added. “I think people will feel a little bit more freedom.”

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Tim Geithner Has Allowed Zombie Money To Drive The Markets, And This Poses Gargantuan Risk

by Raúl Ilargi Meijer

On January 25, Timothy Geithner will step down as US Treasury Secretary. A lot of people will say and write a lot of things about him at that point, and it sounds like a good idea to be ahead of the game and provide some perspective.

There are voices claiming (there will be many more, promise) that Geithner pulled us out of the recession and the crisis, and saved the economy. That seems presumptuous. It may just as well be true that Geithner has fooled us into thinking that. Just because the stock markets are pulling through so far doesn’t mean, let alone prove, that the economy has recovered or been saved. You would need something better, more substantial than that. While acknowledging that relatively strong stock market numbers are at least in potential a great way indeed to fool people about the economy.

And going forward we can wax nostalgically about everything Tim has done, and about where the economy is now compared to 4 years ago, but when all else is said and done, there is still just one question that counts: what happened to the debt? What has Geithner done when it comes to debt? As long as you don’t know what happened to the debt, you won’t know the true state of the economy.

Well, Americans still have higher personal debt levels than they ever had before (in fact, the best anti-gun law would be to ban paying for them with credit) and government debt has grown exponentially. Those things at least we know to an extent; when it comes to bank debt, we don’t know much of anything. Tim has made sure of that. He’s handed trillions of dollars in our money to Wall Street and we haven’t received anything in return. Well, yes, we have the semblance of a somewhat stable stock market, but is that worth all that extra debt? Moreover, we still don’t know what happened to the debt that caused the crisis in the first place, because Tim made sure it has been kept hidden from view. And how’s that a good thing again?

Look, you can save banks that are in deep debt trouble, and perhaps that’s not necessarily such a bad thing, since letting them fail outright would have been a risky proposition. But you can’t make the choice to save banks and not at the same time restructure those debts and expose and prosecute the bankers who put their firms into a situation that necessitated saving them in the first place, and were paid big bonuses for doing it. That is not alright by any stretch of the imagination, either ethically or economically. Because the money used to save them comes from outside of the financial system; it comes from the taxes that everybody pays. And that means it has to be accounted for. But it never was.

The only reason the policy – if you can call it that – of handing banks trillions in cheap credit appears to work is because its consequences cannot be felt immediately, but are pushed forward into the future. That doesn’t absolve us from having to ask what happened to the debt, though, but we still have no answer to that question, and Tim Geithner carries a substantial part of the blame for that.

If you’re interested only in yourself, and you’re just looking to make a quick buck, sure, things may look good. And if you think you can best achieve your goals by things staying the same, by keeping the system going as it is, yeah, you’re likely to think that Tim Geithner has done a swell job, because from that point of view he has saved you.

But if you care about anything that goes beyond just today, and beyond the few square miles that make up your world, if you care about your family, your friends, your kids and their future, Tim Geithner is not your man. He set up the system so it would continue to provide fast money for the horses with blinders, but he’s done it with money that everyone else is on the hook for. Just not today, not right away.

And that plays perfectly to our proverbial human short – term – attention span: Hey, look at the markets, they’re doing fine. We’re in recovery. We left the crisis behind. We made it.

But what’s that bulge under the carpet there in the corner? Is that perhaps what happened to the debt? We tell ourselves we love our children. That what we need to do is put aside money for their education. That what they need for their futures is money. And that’s it. It’s not about the world we leave for them. It’s not about the debt we leave for them. But it should be. The education we buy for our kids today will mean very little if and when they will be forced to pay back all our debts. We should face up to the responsibility for it ourselves. We don’t. We prefer the cloud cuckoo land illusion that Tim Geithner has spun before our eyes. We prefer to let our kids deal with reality.

The main problem from a purely technical point of view with the way Geithner has gone about business is that it’s to a large extent zombie money that drives markets today, money that would not have existed if debts had been properly restructured. If anytime in the future, either driven by markets or governments, banks are forced to restructure their debt after all, this poses a gargantuan risk to both the financial system and the overall economy. And we’ll have Geithner to thank for that. Not only him, there’s Ben Bernanke, Alan Greenspan, Hank Paulson and many more. Still, Geithner has had the option and the power to do the right thing, for four long years, and declined.

Obama said this about Tim Geithner recently: “When the history books are written, Tim Geithner is going to go down as one of our finest Secretaries of the Treasury…” And that the “unofficial” saying at the Treasury is “no peacocks, no jerks, no whiners” and “Few embody that ideal better than Tim Geithner.”.

That says much more about Obama than it does about Geithner. The reality is that Obama will go down as one of the worst American presidents in history. Because four more years of the above will sink the US economy to levels not even imagined today, and Obama will be seen as an accomplice if not the main perpetrator of a whole series of – financial – crimes against the people. The president that brought the country to its knees.

That is inevitable precisely because Geithner and Obama have done nothing at all for four years to restructure bank debt. All they’ve done in that time is keep the existing financial system, which was then and is now as bankrupt as any industry has ever been, standing upright. Or more correctly: appear to be standing upright. What the president and his Treasurer have done is feed zombies. With – future – human flesh. With the future prospects of our children. Obama has said that what Wall Street did was unethical but not illegal, but that is up to the courts to decide, not the president, and not Congress.

If you leave the decision making in a time of crisis to those who stand to profit most from keeping things as they are, it would perhaps be foolish to expect them to not try and do just that. Thing is, they can do so only by throwing others under the bus. And since this crisis is the biggest, the most widespread and the worst we’ve ever seen, it means just about everyone else will end up under that bus. Even the majority of those who think they would be better off keeping the system going: be careful what you wish for.

Timothy Geithner is a Robert Rubin protégé. Under Bill Clinton, then Treasury Secretary and Citigroup made man Rubin, assisted by Greenspan and Larry Summers, set the terms for US government (non) policy for derivatives that stands to this day.

Geithner certainly never touched it after he and Summers took over the Obama finance team. And now he will be succeeded by Jack Lew, who was director of the White House Office of Management and Budget when Rubin and Summers were there. Lew isn’t just a revolving door man, he does you one better: he went from K Street lobbyist to Citigroup director to the White House, rinse and repeat, pocketing a million dollar bonus from Citi three months after it received billions in taxpayer bailouts.

Once again, if we let them, it would perhaps be foolish to expect them to not try and do these things. Jack Lew’s nomination tells us all we need to know about Barack Obama’s intentions. Which are to let the bankers and their shareholders continue to hide their debts, and continue to use the zombie money they thus seem to have to make leveraged wagers whose profits they can pocket and whose losses they can pass on to you.

And you can continue to play the game as well as long as it lasts. So you can, if you’re lucky, hold on to your job and your home and use your money to pay for your children’s education. If you do, it might be a good idea to take a look at what it is they learn. Make sure they’re never tempted to look under the carpet. Or they may turn against you.

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