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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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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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ARABIC MEDIA: Secret $8 billion deal between Obama and the Muslim Brotherhood

Summary:
• SECRET agreement between the Obama administration and the Muslim Brotherhood (not the Egyptian government) to give 40% of the Sinai and the annexation of that part of Egyptian territory in Gaza. The objective is to facilitate the conclusion of a comprehensive peace agreement between Israel and the Palestinians
• This agreement was signed by Khairat el Shater (number 2 of the Brotherhood) by Morsi and the Supreme Guide FM. (FM stands for Muslim Brotherhood)
• A sum of U.S. $ 8 billion was paid in exchange for FM.
• The document was seized by the army following the deposition of Morsi. This is the army that has leaked the news.
• An investigation is ongoing Morsi and El Shater. An arrest warrant was filed against the Guide to FM and other members of his office.
• FM signatories to the agreement are liable to the death penalty for treason.
• The Obama administration would try to reach an agreement with el Sissi (chairman of the Supreme Council of the Armed Forces): recognition of the legitimacy of the “coup” in exchange for his silence about the secret agreement. But el Sissi would be more interested in the conviction of FM and discredit their organization which is Egypt’s main source of danger.
• The Republican members of Congress are seriously looking into the case. If proven, the process of Obama impeachment could be triggered.

Source and Video: Here

Obama Suspends the Law

Like King James II, the president decides not to enforce laws he doesn’t like. That’s an abuse of power.

By MICHAEL W. MCCONNELL

President Obama’s decision last week to suspend the employer mandate of the Affordable Care Act may be welcome relief to businesses affected by this provision, but it raises grave concerns about his understanding of the role of the executive in our system of government.

Article II, Section 3, of the Constitution states that the president “shall take Care that the Laws be faithfully executed.” This is a duty, not a discretionary power. While the president does have substantial discretion about how to enforce a law, he has no discretion about whether to do so.

This matter—the limits of executive power—has deep historical roots. During the period of royal absolutism, English monarchs asserted a right to dispense with parliamentary statutes they disliked. King James II’s use of the prerogative was a key grievance that lead to the Glorious Revolution of 1688. The very first provision of the English Bill of Rights of 1689—the most important precursor to the U.S. Constitution—declared that “the pretended power of suspending of laws, or the execution of laws, by regal authority, without consent of parliament, is illegal.”

To make sure that American presidents could not resurrect a similar prerogative, the Framers of the Constitution made the faithful enforcement of the law a constitutional duty.

The Justice Department’s Office of Legal Counsel, which advises the president on legal and constitutional issues, has repeatedly opined that the president may decline to enforce laws he believes are unconstitutional. But these opinions have always insisted that the president has no authority, as one such memo put it in 1990, to “refuse to enforce a statute he opposes for policy reasons.”

Attorneys general under Presidents Carter, Reagan, both Bushes and Clinton all agreed on this point. With the exception of Richard Nixon, whose refusals to spend money appropriated by Congress were struck down by the courts, no prior president has claimed the power to negate a law that is concededly constitutional.

In 1998, the Supreme Court struck down a congressional grant of line-item veto authority to the president to cancel spending items in appropriations. The reason? The only constitutional power the president has to suspend or repeal statutes is to veto a bill or propose new legislation. Writing for the court in Clinton v. City of New York, Justice John Paul Stevens noted: “There is no provision in the Constitution that authorizes the president to enact, to amend, or to repeal statutes.”

The employer mandate in the Affordable Care Act contains no provision allowing the president to suspend, delay or repeal it. Section 1513(d) states in no uncertain terms that “The amendments made by this section shall apply to months beginning after December 31, 2013.” Imagine the outcry if Mitt Romney had been elected president and simply refused to enforce the whole of ObamaCare.

This is not the first time Mr. Obama has suspended the operation of statutes by executive decree, but it is the most barefaced. In June of last year, for example, the administration stopped initiating deportation proceedings against some 800,000 illegal immigrants who came to the U.S. before age 16, lived here at least five years, and met a variety of other criteria. This was after Congress refused to enact the Dream Act, which would have allowed these individuals to stay in accordance with these conditions. Earlier in 2012, the president effectively replaced congressional requirements governing state compliance under the No Child Left Behind Act with new ones crafted by his administration.

The president defended his suspension of the immigration laws as an exercise of prosecutorial discretion. He defended his amending of No Child Left Behind as an exercise of authority in the statute to waive certain requirements. The administration has yet to offer a legal justification for last week’s suspension of the employer mandate.

Republican opponents of ObamaCare might say that the suspension of the employer mandate is such good policy that there’s no need to worry about constitutionality. But if the president can dispense with laws, and parts of laws, when he disagrees with them, the implications for constitutional government are dire.

Democrats too may acquiesce in Mr. Obama’s action, as they have his other aggressive assertions of executive power. Yet what will they say when a Republican president decides that the tax rate on capital gains is a drag on economic growth and instructs the IRS not to enforce it?

And what of immigration reform? Why bother debating the details of a compromise if future presidents will feel free to disregard those parts of the statute that they don’t like?

The courts cannot be counted on to intervene in cases like this. As the Supreme Court recently held in Hollingsworth v. Perry, the same-sex marriage case involving California’s Proposition 8, private citizens do not have standing in court to challenge the executive’s refusal to enforce laws, unless they have a personal stake in the matter. If a president declines to enforce tax laws, immigration laws, or restrictions on spending—to name a few plausible examples—it is very likely that no one will have standing to sue.

Of all the stretches of executive power Americans have seen in the past few years, the president’s unilateral suspension of statutes may have the most disturbing long-term effects. As the Supreme Court said long ago (Kendall v. United States, 1838), allowing the president to refuse to enforce statutes passed by Congress “would be clothing the president with a power to control the legislation of congress, and paralyze the administration of justice.”

Mr. McConnell, a former judge on the U.S. Court of Appeals for the Tenth Circuit, is a professor of law and director of the Constitutional Law Center at Stanford Law School and a senior fellow at the Hoover Institution.

A version of this article appeared July 9, 2013, on page A13 in the U.S. edition of The Wall Street Journal, with the headline: Obama Suspends the Law.

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Will Obama Take Your 401(K) Retirement Funds?

By Paul Walter
May 20, 2013
NewsWithViews.com

For almost a year we’ve seen bold headlines that Barack Obama is in the process of taking 401(k)’s, ostensibly to pay down the national debt (created by politicians we elect to office). The same flavor of borrowing against federal employee retirement funds until Congress can borrow more money:

Government reaches debt limit, borrows against federal pension funds

“In a letter to congressional leaders Monday, Treasury Secretary Timothy Geithner said he is suspending new investments in both the Civil Service Retirement and Disability Fund (CSRDF) and the Thrift Savings Plan G Fund, which is invested in federal securities. In addition, the department will redeem some of the investments held by the CSRDF, Geithner wrote.

“Federal retirees and employees will be unaffected by these actions,” Geithner said. By law, both funds must be made whole once lawmakers agree to increase the debt limit.

“The Federal Retirement Thrift Investment Board also Monday stressed that TSP investors will not be harmed. Under a 1987 law, the government is required to repay suspended G Fund investments, including interest, once the debt ceiling is raised and the government can resume borrowing. The board will keep track of what Treasury owes and how much interest the G Fund would have accumulated had the investments not been suspended. “You have an IOU from the federal government for the G Fund,” board chairman Andrew Saul said. “It’s not going to affect them [TSP investors], period.”

It’s easy for Treasury Secretary Geithner to reassure federal employees filching their life long “nest egg” funds is backed by a worthless IOU since it’s not his retirement.

This is known as robbing Peter to pay Paul. Instead of reducing the size of government by eliminating unconstitutional cabinets and agencies, Congress simply borrows more debt from foreign governments. Repayment of those civil service retirement funds is paid with debt. Can you describe anything more irresponsible than that? Try this one: The US Government spends $435,841,200 per hour

Art. II, Sec. II of the U.S. Constitution does not authorize the president to spend or borrow one penny of the people’s money. He can use the ‘bully pulpit’ with his party to move the idea along. But, any such change in existing laws would have to come from Congress. Does that mean Obama won’t try? Nothing is out of the realm of possibility when it comes to the current occupant of the White House.

As the dollar continues to lose its purchasing power, many seniors are finding their 401(k) accounts are not going to get them through through their golden years:

401 K’s are a disaster

“According to the Center for Retirement Research at Boston College, the median household retirement account balance in 2010 for workers between the ages of 55-64 was just $120,000. For people expecting to retire at around age 65, and to live for another 15 years or more, this will provide for only a trivial supplement to Social Security benefits. And that’s for people who actually have a retirement account of some kind. A third of households do not. For these people, their sole retirement income, aside from potential aid from friends and family, comes from Social Security, for which the current average monthly benefit is $1,230.”

Both the White House and the Congress send up ‘trial balloons’ periodically to see how the American people will react to something being bandied about back rooms in the halls of Congress or the Oval Office that directly affect our lives. If the initial response isn’t the desired one, input from think tanks and special interest groups help shape new proposals:

Obama Begins Push for New National Retirement System

“A recent hearing sponsored by the Treasury and Labor Departments marked the beginning of the Obama Administration’s effort to nationalize the nation’s pension system and to eliminate private retirement accounts including IRA’s and 401k plans, NSC is warning.

“The hearing, held in the Labor Department’s main auditorium, was monitored by NSC staff and featured a line up of left-wing activists including one representative of the AFL-CIO who advocated for more government regulation over private retirement accounts and even the establishment of government-sponsored annuities that would take the place of 401k plans.

“This hearing was set up to explore why Americans are not saving as much for their retirement as they could,” explains National Seniors Council National Director Robert Crone, “However, it is clear that this is the first step towards a government takeover. It feels just like the beginning of the debate over health care and we all know how that ended up.”

“A representative of the liberal Pension Rights Center, Rebecca Davis, testified that the government needs to get involved because 401k plans and IRAs are unfair to poor people. She demanded the Obama administration set up a “government-sponsored program administered by the PBGC (the governments’ Pension Benefit Guarantee Corporation).” She proclaimed that even “private annuities are problematic.”

“Such “reforms” would effectively end private retirement accounts in America, Crone warns. “These people want the government to require that ultimately all Americans buy these government annuities instead of saving or investing on their own. The Government could then take these trillions of dollars and redistribute it through this new national retirement system.”

Should Americans be concerned about such a move? Very. Congress has created a ‘national’ debt of close to $17 trillion dollars. Unpaid mandates that have to be paid down the road on social security, Medicare and the ‘prescription drug liability’ program total $123.9 trillion dollars. Your share of that debt is a whopping $1.9 million dollars over your lifetime.

Most people have a difficult time wrapping their head around such astronomical numbers. There isn’t any real money to pay those obligations, so where will the money come from? As quoted above: “.. once the debt ceiling is raised and the government can resume borrowing.” What better place to begin borrowing than private pension funds using state of the art accounting methods that endanger everyone’s retirement funds. Nationalize the nation’s pension system and you’ve got the goose that will lay golden eggs…..for about ten days of spending. Then what?

Americans were far better off before government stepped in to “help” them with saving for retirement because anytime the government says “we’re here to help you,” that’s the time to grab your money and run the opposite direction.

The first steps towards nationalizing your retirement are underway. Every “national” program administered by the federal government is a monumental financial disaster. The numbers don’t lie, but politicians do.

We are all victims of the inept, morally irresponsible actions of one Congress after another for decades, yet, we keep reelecting them expecting different results. If you don’t think allowing the federal government to take over the only thing you will have when you finally retire is a good idea, now is the time to let those who represent you in Congress know how you feel. Before they scoop up your life’s savings backed by an IOU. They will owe you all right and it won’t even buy a cup of coffee.

To summarize it all for you.

Lets say you spend 20 plus years in the military and retire at 38 or 40. You receive your pension from the service. Still at a young age you decide to work for government or a private corporation for another 20 years or so. That will entitle you for another retirement pension. Then at age 65 you qualify for Social Security. Politicians call that triple dipping. The time is coming (sooner than you think) you will only be allowed to keep one, all in the name of saving the economy. All a big lie of course, because they created the conditions in the first place. (Called Theses, Syntheses, and Antitheses. Create the problem, offer the solution and walla, you have the desired outcome). Why are they doing this you ask? Simple! Wealth means freedom and independence. A person that’s financially well off can not be controlled, a poor one can. Poor people will do whatever they’re told and look to government for sustenance. That’s Communism. Everybody looks to mother government to take care of them. What the communists (aka: RINO’s, Liberals or Democrats) fear the most is individuals who don’t need the government and can think and care for themselves. I believe the backlash is coming and they are counting on the loyalty of the police to protect the crooks from the angry public demanding justice.

© 2013 Paul Walter – All Rights Reserved

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