President Obama's Deficit

[American Patriot]

Obama talked. He talked for an hour.

Basically, in a nut shell he said;

A) We are going to tax everyone especially the rich.
B) We aren't cutting stuff on his watch.


The Republicans are talking now.

I think we need to kick Obama out of office. I think we need to cut a whole LOT of stuff that ISN'T Military Defense....

If the Left would just shut down the money going to places like PBS to even make a bloody peace offering, it would be something.

But they have no intention of "compromising".

They never have had such an intention.

This country is going right down the tubes and Obama is driving the shit train.

[American Patriot]

Holy shit BORROWING 45 BILLION dollars a DAY.

I did some fast (perhaps somewhat inaccurate) calculations here just now.

In my entire LIFE TIME, I've probably made just over one million dollars. I WISH I had most of that right now.

Of that.... a huge percentage of it went back to the government in the form of income taxes, Social Security, Medicare and who knows what else, and State Taxes to Michigan, Oklahoma, Virginia, DC, Colorado and the respective counties in each of those states I lived in at the time (except DC).

So - raising five children, buying a house and in my life three (count them, three EVER) new cars (An Aries K car, and two Jeeps) I've been a productive person. I've been on food stamps twice in my life. Both times in the military because my military pay wasn't enough to keep me above the poverty level and I had to feed my kids. Neither time was I on food stamps more than a couple of months but we were. We didn't want to be on them, and they made it VERY difficult for us to get food stamps anyway. It was more hassle than it was worth (and a neighbor, whom I will not name, who is not the same color as me merely signs a piece of paper.... amazing).

I used my VA benefits to go to college. So I used stuff I was promised as part of my contract.

I know a dozen (or MORE) people who were in the military and are "disabled" - who've never been in combat, never go shot at, never got a bloody splinter in their friggin' hands working too hard (all things that DID happen to me) who get anywhere from 50% or MORE disability from the US government.

I've never in my life NOT paid my taxes.

I've never in my life CHEATED the government out of something.

I've never in my LIFE tried to claim something that wasn't mine.

And yet, I am going to get hurt by Obama's politics.

[American Patriot]

Obama’s budget speech has partisan tone

Mark Wilson/ GETTY IMAGES - President Obama speaks about fiscal policy at George Washington University on April 13.





By Perry Bacon Jr., Wednesday, April 13, 3:25 PM


It was billed as President Obama’s big speech on reducing the federal budget deficit. But the Wednesday afternoon address sounded at times like the speech he did not give when he launched his reelection campaign last week.




Video

Video: Full Speech | President Obama laid out his plans to cut the deficit by $4 trillion over 12 years on Wednesday, saying that it was necessary to use a scalpel instead of a machete to cut costs and that both parties need to come together to do so by the end of June.

Video

Video: The Fast Fix | How did our national debt get so big, and what will President Obama say about it in his speech?

More on this Story

• In speech, Obama strikes partisan tone
• Obama unveils plans for $4 trillion in cuts
• Lawmakers react to Obama’s speech
• Klein: Breaking down the budget plan

View all Items in this Story

Obama’s debt speech
Read the transcript



After months of carefully negotiating with congressional Republicans, often annoying his liberal base along the way, Obama repeatedly attacked the budget released by the House GOP last week in a sharp, partisan tone he has largely avoided since November’s elections.
He argued the difference between the Republican budget and his own vision was not just about policy but a larger philosophical gulf.
In the speech, he used as many words to attack the GOP proposal as to lay out his own.
“A 70 percent cut in clean energy, a 25 percent cut in education, a 30 percent cut in transportation, cuts in college Pell Grants that will grow to more than $1,000 per year,” Obama said. “That’s the proposal. These aren’t the kinds of cuts you make when you’re trying to get rid of some waste or find extra savings in the budget. These aren’t the kind of cuts that the fiscal commission proposed. These are the kinds of cuts that tell us we can’t afford the America that I believe in and, I think, you believe in.”
Without detailing his exact view of how he would change Medicare, he cast the GOP proposal to convert the program into one in which people get vouchers to buy insurance as a plan that would “end Medicare as we know it.”
“Their vision is less about reducing the deficit than it is about changing the basic social compact in America,” Obama said. He added: “There’s nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires. And I don’t think there’s anything courageous about asking for sacrifice from those who can least afford it and don’t have any clout on Capitol Hill.”
The speech was a marked contrast to the “above the fray” approach Obama has taken in the past several months, particularly last week as he seemed to blame Democrats and Republicans equally for the near government shutdown. And it illustrated the major divide between the parties as they to seek to reform entitlements.
Obama not only attacked the GOP proposal but also noted that it was supported by “several of their party’s presidential candidates.” (Actually, most of the potential 2012 GOP candidates have offered measured remarks on the plan, praising the House Republicans for releasing it without declaring support.)

Even as he savaged the GOP proposal, Obama was less than specific about his own. He did not say exactly how he would reform how corporations are taxed, what he would do to achieve a simpler tax system or which defense programs he would cut. On Social Security, he not only didn’t announce a proposal but would not say whether one was likely to be included in the final legislation.
And Obama, who rarely personally interjected himself into the negotiations on the federal budget over the past two weeks, seems prepared to play a similar role on the deficit: He announced that a group of 16 members of Congress and Vice President Biden would negotiate over the legislation, allowing the president to remain out of the day-to-day politicking on the issue.
While attacking GOP ideas, Obama said he wanted to get a deficit reduction plan signed by June, which would be unusually fast considering Congress’s normal place in approving legislation.
But his speech seemed to offer limited room for compromise. He repeatedly called for increasing taxes for people who make more than $250,000 a year to help balance the budget, an idea strongly opposed by many congressional Republicans. He signaled strong opposition to how House Republicans would reform Medicare.
“I believe it paints a vision of our future that is deeply pessimistic,” he said of the GOP plan. “It’s a vision that says if our roads crumble and our bridges collapse, we can’t afford to fix them. If there are bright young Americans who have the drive and the will but not the money to go to college, we can’t afford to send them. ”

baconp@washpost.com

[American Patriot]

April 13, 2011 - Washington, D.C.

...without even looking at a poll, my finely honed political instincts tell me that almost nobody believes they should be paying higher taxes.”

event details

Obama delivers speech on the national debt

View event on POTUS Tracker »
Location: George Washington University
Issue : Government and Politics

Obama delivers speech on the national debt


Speech Transcript

OBAMA: It is wonderful to be back at G.W. I want you to know that one of the reasons that I worked so hard with Democrats and Republicans to keep the government open was so that I could show up here today.
(LAUGHTER)
I want to make sure that all of you had one more excuse to skip class.
(LAUGHTER)
You're welcome.
(LAUGHTER)
I want to give a special thanks to Steven Knapp, the president of G.W. I just saw him. Where is he?
There he is, right here.
(APPLAUSE)
I want to -- we've got a lot of distinguished guests here. A couple of people I want to acknowledge.
First of all, my outstanding vice president, Joe Biden, is here.
(APPLAUSE)
Our secretary of the treasury, Tim Geithner, is in the house.
(APPLAUSE)
Jack Lew, the director of the Office of Management and Budget.
(APPLAUSE)
Gene Sperling, chair of the National Economic Council, is here.
(APPLAUSE)
Members of our bipartisan fiscal commission are here, including the two outstanding chairs -- Erskine Bowles and Alan Simpson are here.
(APPLAUSE)
And we have a umber of members of Congress here today. I'm grateful for all of you taking the time to attend.
What we've been debating here in Washington over the last few weeks will affect the lives of the students here and families all across America in potentially profound ways.
This debate over budgets and deficits is about more than just numbers on a page, it's about more than just cutting and spending. It's about the kind of future that we want.
OBAMA: It's about the kind of country that we believe in. And that's what I want to spend some time talking about today.
From our first days as a nation, we have put our faith in free markets and free enterprise as the engine of America's wealth and prosperity. And more than citizens of any other country, we are rugged individualists, a self-reliant people with a healthy skepticism of too much government.
But there has always been another thread running through our history: a belief that we're all connected and that there are some things we can only do together, as a nation.
We believe, in the words of the first Republican president, Abraham Lincoln, that through government, we should do together what we cannot do as well for ourselves.
And so we've built a strong military to keep us secure, and public schools and universities to educate our citizens. We've laid down railroads and highways to facilitate travel and commerce.
OBAMA: We've supported the work of scientists and researchers whose discoveries have saved lives, unleashed repeated technological revolutions, and led to countless new jobs and entire new industries.
Each of us has benefited from these investments, and we're a more prosperous country as a result.
Now, part of this American belief that we're all connected also expresses itself in a conviction that each one of us deserves some basic measure of security and dignity.
We recognize that, no matter how responsibly we live our lives, hard times or bad luck, a crippling illness or a layoff may strike any one of us. "There but for the grace of God go I," we say to ourselves.
And so we contribute to programs like Medicare and Social Security, which guarantee us health care and a measure of basic income after a lifetime of hard work; unemployment insurance, which protects us against unexpected job loss; and Medicaid, which provides care for millions of seniors in nursing homes, poor children, those with disabilities.
OBAMA: We're a better country because of these commitments.
I'll go further: We would not be a great country without those commitments.
And for much of the last century, our nation found a way to afford these investments and priorities with the taxes paid by its citizens. As a country that values fairness, wealthier individuals have traditionally borne a greater share of this burden than the middle class or those less fortunate; everybody pays, but the wealthier have borne a little more.
This is not because we begrudge those who've done well. We rightly celebrate their success.
Instead, it's a basic reflection of our belief that those who benefited most from our way of life can afford to give back a little -- a little bit more.
OBAMA: Moreover, this belief hasn't hindered the success of those at the top of the income scale. They continue to do better and better with each passing year.
Now, at certain times -- particularly during war or recession -- our nation has had to borrow money to pay for some of our priorities. And as most families understand, a little credit card debt isn't going to hurt, if it's temporary.
But as far back as the 1980s, America started amassing debt at more alarming levels, and our leaders began to realize that a larger challenge was on the horizon.
They knew that eventually, the baby boom generation would retire, which meant a much bigger portion of our citizens would be relying on programs like Medicare, Social Security and possibly Medicaid.
Like parents with young children who know they have to start saving for the college years, America had to start borrowing less and saving more to prepare for the retirement of an entire generation.
To meet this challenge, our leaders came together three times during the 1990s to reduce our nation's deficit -- three times. They forged historic agreements that required tough decisions made by the first President Bush, then made by President Clinton, by Democratic Congresses and by a Republican Congress.
All three agreements asked for shared responsibility and shared sacrifice, but they largely protected the middle class, they largely protected our commitments to seniors, they protected our key investments in our future.
As a result of these bipartisan efforts, America's finances were in great shape by the year 2000. We went from deficit to surplus. America was actually on track to becoming completely debt-free, and we were prepared for the retirement of the baby boomers.
But after Democrats and Republicans committed to fiscal discipline during the 1990s, we lost our way in the decade that followed. We increased spending dramatically for two wars and an expensive prescription drug program, but we didn't pay for any of this new spending.
OBAMA: Instead we made the problem worse with trillions of dollars in unpaid-for tax cuts; tax cuts that went to every millionaire and billionaire in the country; tax cuts that will force us to borrow an average of $500 billion every year over the next decade.
To give you an idea of how much damage this caused to our nation's checkbook, consider this.
In the last decade, if we had simply found a way to pay for the tax cuts and the prescription drug benefit, our deficit would currently be at low historical levels in the coming years.
But that's not what happened. And so, by the time I took office, we once again found ourselves deeply in debt and unprepared for a baby boom retirement that is now starting to take place.
When I took office, our projected deficit annually was more than $1 trillion. On top of that, we faced a terrible financial crisis and a recession that, like most recessions, led us to temporarily borrow even more.
In this case, we took a series of emergency steps that saved millions of jobs, kept credit flowing, and provided working families extra money in their pocket. It was absolutely the right thing to do, but these steps were expensive and added to our deficits in the short term.
So that's how our fiscal challenge was created. That's how we got here. And now that our economic recovery is gaining strength, Democrats and Republicans must come together and restore the fiscal responsibility that served us so well in the 1990s.
We have to live within our means. We have to reduce our deficit. And we have to get back on a path that will allow us to pay down our debt.
OBAMA: And we have to do it in a way that protects the recovery, protects the investments we need to grow, creates jobs, and helps us win the future.
Now, before I get into how we can achieve this goal, some of you, particularly the younger people here -- you don't qualify, Joe...
(LAUGHTER)
... some of you might be wondering, "Why is this so important? Why does this matter to me?"
Well, here's why.
Even after our economy recovers, our government will still be on track to spend more money than it takes in throughout this decade and beyond. That means we'll have to keep borrowing more from countries like China.
That means more of your tax dollars each year will go towards paying off the interest on all of the loans that we keep taking out. By the end of this decade, the interest that we owe on our debt could rise to nearly $1 trillion. Think about that. That's the interest, just the interest payments.
Then, as the baby boomers start to retire in greater numbers and health care costs continue to rise, the situation will get even worse.
By 2025, the amount of taxes we currently pay will only be enough to finance our health care programs, Medicare and Medicaid, Social Security, and the interest we owe on our debt. That's it. Every other national priority -- education, transportation, even our national security -- will have to be paid for with borrowed money.
Now, ultimately all this rising debt will cost us jobs and damage our economy. It will prevent us from making the investments we need to win the future.
OBAMA: We won't be able to afford good schools, new research, or the repair of roads; all the things that create new jobs and businesses here in America.
Businesses will be less likely to invest and open shop in a country that seems unwilling or unable to balance its books. And if our creditors start worrying that we may be unable to pay back our debts, that could drive up interest rates for everybody who borrows money, making it harder for businesses to expand and hire or families to take out a mortgage.
Here's the good news: That doesn't have to be our future; that doesn't have to be the country that we leave our children.
We can solve this problem. We came together as Democrats and Republicans to meet this challenge before; we can do it again. But that starts by being honest about what's causing our deficit.
You see, most Americans tend to dislike government spending in the abstract, but like the stuff that it buys.
Most of us, regardless of party affiliation, believe that we should have a strong military and a strong defense. Most Americans believe we should invest in education and medical research. Most Americans think we should protect commitments like Social Security and Medicare.
And without even looking at a poll, my finely honed political instincts tell me that almost nobody believes they should be paying higher taxes.
(LAUGHTER)
So because all this spending is popular with both Republicans and Democrats alike, and because nobody wants to pay higher taxes, politicians are often eager to feed the impression that solving the problem is just a matter of eliminating waste and abuse.
OBAMA: You'll hear that phrase a lot: "We just need to eliminate waste and abuse."
The implication is that tackling the deficit issue won't require tough choices.
Or politicians suggest that we can somehow close our entire deficit by eliminating things like foreign aid, even though foreign aid makes up about 1 percent of our entire federal budget.
So here's the truth.
Around two-thirds of our budget -- two-thirds -- is spent on Medicare, Medicaid, Social Security and national security -- two- thirds.
Programs like unemployment insurance, student loans, veterans' benefits and tax credits for working families take up another 20 percent.
What's left, after interest on the debt, is just 12 percent for everything else. That's 12 percent for all of our national priorities: education, clean energy, medical research, transportation, our national parks, food safety, keeping our air and water clean. You name it, all of that accounts for 12 percent of our budget.
Now, up 'til now, the debate here in Washington -- the cuts proposed by a lot of folks in Washington have focused almost exclusively on that 12 percent.
OBAMA: But cuts to that 12 percent alone won't solve the problem. So any serious plan to tackle our deficit will require us to put everything on the table and take on excess spending wherever it exists in the budget.
A serious plan doesn't require us to balance our budget overnight. In fact, economists think that with the economy just starting to grow again we need a phased-in approach. But it does require tough decisions and support from our leaders in both parties now. Above all, it will require us to choose a vision of the America we want to see five years, 10 years, 20 years down the road.
Now, to their credit, one vision has been presented and championed by Republicans in the House of Representatives and embraced by several of their party's presidential candidates. It's a plan that aims to reduce our deficit by $4 trillion over the next 10 years, and one that addresses the challenge of Medicare and Medicaid in the years after that.
Those are both worthy goals. They're worthy goals for us to achieve.
But the way this plan achieves those goals would lead to a fundamentally different America than the one we've known, certainly in my lifetime. In fact, I think it would be fundamentally different than what we've known throughout our history.
A 70 percent cut in clean energy, a 25 percent cut in education, a 30 percent cut in transportation, cuts in college Pell Grants that will grow to more than $1,000 per year.
OBAMA: That's the proposal.
These aren't the kind of cuts you make when you're trying to get rid of some waste or find extra savings in the budget. These aren't the kind of cuts that the fiscal commission proposed.
These are the kind of cuts that tell us we can't afford the America that I believe in and I think you believe in.
I believe it paints a vision of our future that is deeply pessimistic. It's a vision that says if our roads crumble and our bridges collapse, we can't afford to fix them; if there are bright young Americans who have the drive and the will but not the money to go to college, we can't afford to send them.
Go to China and you'll see businesses opening research labs and solar facilities.
South Korean children are outpacing our kids in math and science. They're scrambling to figure out how they put more money into education.
Brazil is investing billions in new infrastructure and can run half their cars not on high-priced gasoline, but on biofuels.
And yet, we are presented with a vision that says the American people, the United States of America, the greatest nation on Earth, can't afford any of this.
It's a vision that says America can't afford to keep the promise we've made to care for our seniors. It says that 10 years from now, if you're a 65-year-old who's eligible for Medicare, you should have to pay nearly $6,400 more than you would today.
It says, instead of guaranteed health care, you will get a voucher. And if that voucher isn't worth enough to buy the insurance that's available in the open marketplace, well, tough luck; you're on your own.
Put simply, it ends Medicare as we know it.
It's a vision that says up to 50 million Americans have to lose their health insurance in order for us to reduce the deficit.
OBAMA: Who are these 50 million Americans?
Many are somebody's grandparents, maybe one of yours, who wouldn't be able afford nursing home care without Medicaid.
Many are poor children. Some are middle-class families who have children with autism or Down's syndrome. Some are these kids with disabilities are -- the disabilities are so severe that they require 24-hour care.
These are the Americans we'd be telling to fend for themselves.
And, worst of all, this is a vision that says even though Americans can't afford to invest in education at current levels or clean energy, even though we can't afford to maintain our commitment on Medicare and Medicaid, we can somehow afford more than $1 trillion in new tax breaks for the wealthy.
Think about that.
In the last decade, the average income of the bottom 90 percent of all working Americans actually declined. Meanwhile, the top 1 percent saw their income rise by an average of more than a quarter of a million dollars each. That's who needs to pay less taxes?
They want to give people like me a $200,000 tax cut that's paid for by asking 33 seniors to each pay $6,000 more in health costs.
That's not right, and that's not going to happen as long as I'm president.
(APPLAUSE)
This vision is less about reducing the deficit than it is about changing the basic social compact in America. Ronald Reagan's own budget director said there's nothing serious or courageous about this plan.
OBAMA: There's nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires. And I don't think there's anything courageous about asking for sacrifice from those who can least afford it and don't have any clout on Capitol Hill. That's not a vision of the America I know.
The America I know is generous and compassionate. It's a land of opportunity and optimism. Yes, we take responsibility for ourselves, but we also take responsibility for each other, for the country we want and the future that we share.
We're a nation that built a railroad across a continent and brought light to communities shrouded in darkness. We sent a generation to college on the G.I. Bill and we saved millions of seniors from poverty with Social Security and Medicare.
We have led the world in scientific research and technological breakthroughs that have transformed millions of lives.
That's who we are. This is the America that I know.
We don't have to choose between a future of spiraling debt and one where we forfeit our investment in our people and our country.
To meet our fiscal challenge, we will need to make reforms, we will all need to make sacrifices. But we do not have to sacrifice the America we believe in. And as long as I'm president, we won't.
So today I'm proposing a more balanced approach to achieve $4 trillion in deficit reduction over 12 years. It's an approach that borrows from the recommendations of the bipartisan fiscal commission that I appointed last year, and it builds on the roughly $1 trillion in deficit reduction I already proposed in my 2012 budget.
OBAMA: It's an approach that puts every kind of spending on the table, but one that protects the middle class, our promise to seniors and our investments in the future.
The first step in our approach is to keep annual domestic spending low by building on the savings that both parties agreed to last week. That step alone will save us about $750 billion over 12 years.
We will make the tough cuts necessary to achieve these savings, including in programs that I deeply care about. But I will not sacrifice the core investments that we need to grow and create jobs. We will invest in medical research. We will invest in clean energy technology. We will invest in new roads and airports and broadband access. We will invest in education. We will invest in job training. We will do what we need to do to compete, and we will win the future.
The second step in our approach is to find additional savings in our defense budget.
Now, as commander in chief, I have no greater responsibility than protecting our national security, and I will never accept cuts that compromise our ability to defend our homeland or America's interests around the world.
But as the chairman of the Joint Chiefs, Admiral Mullen, has said, the greatest long-term threat to America's national security is America's debt.
OBAMA: So just as we must find more savings in domestic programs, we must do the same in defense. And we can do that while still keeping ourselves safe.
Over the last two years, Secretary Bob Gates has courageously taken on wasteful spending, saving $400 billion in current and future spending. I believe we can do that again.
We need to not only eliminate waste and improve efficiency and effectiveness, but we're going to have to conduct a fundamental review of America's missions, capabilities, and our role in a changing world.
I intend to work with Secretary Gates and the Joint Chiefs on this review, and I will make specific decisions about spending after it's complete.
The third step in our approach is to further reduce health care spending in our budget. Now, here the difference with the House Republican plan could not be clearer.
Their plan essentially lowers the government's health care bills by asking seniors and poor families to pay them instead. Our approach lowers the government's health care bills by reducing the cost of health care itself.
Already, the reforms we passed in the health care law will reduce our deficit by $1 trillion. My approach would build on those -- these reforms.
We will reduce wasteful subsidies and erroneous payments. We will cut spending on prescription drugs by using Medicare's purchasing power to drive greater efficiency and speed generic brands of medicine onto the market. We will work with governors of both parties to demand more efficiency and accountability from Medicaid.
We will change the way we pay for health care: not by the procedure or the number of days spent in a hospital, but with new incentives for doctors and hospitals to prevent injuries and improve results.
And we will slow the growth of Medicare costs by strengthening an independent commission of doctors, nurses, medical experts and consumers who will look at all the evidence and recommend the best ways to reduce unnecessary spending while protecting access to the services that seniors need.
Now, we believe the reforms we've proposed to strengthen Medicare and Medicaid will enable us to keep these commitments to our citizens while saving us $500 billion by 2023, and an additional $1 trillion in the decade after that.
OBAMA: But if we're wrong, and Medicare costs rise faster than we expect, then this approach will give the independent commission the authority to make additional savings by further improving Medicare.
But let me be absolutely clear: I will preserve these health care programs as a promise we make to each other in this society. I will not allow Medicare to become a voucher program that leaves seniors at the mercy of the insurance industry, with a shrinking benefit to pay for rising costs. I will not tell families with children who have disabilities that they have to fend for themselves.
We will reform these programs, but we will not abandon the fundamental commitment this country has kept for generations.
That includes, by the way, our commitment to Social Security. While Social Security is not the cause of our deficit, it faces real long-term challenges in a country that's growing older.
As I said in the State of the Union, both parties should work together now to strengthen Social Security for future generations. But we have to do it without putting at risk current retirees or the most vulnerable or people with disabilities, without slashing benefits for future generations and without subjecting Americans' guaranteed retirement income to the whims of the stock market. And it can be done.
The fourth step in our approach is to reduce spending in the tax code, so-called tax expenditures.
In December, I agreed to extend the tax cuts for the wealthiest Americans because it was the only way I could prevent a tax hike on middle-class Americans.
OBAMA: But we cannot afford $1 trillion worth of tax cuts for every millionaire and billionaire in our society. We can't afford it. And I refuse to renew them again.
Beyond that, the tax code is also loaded up with spending on things like itemized deductions. And while I agree with the goals of many of these deductions, from homeownership to charitable giving, we can't ignore the fact that they provide millionaires an average tax break of $75,000 but do nothing for the typical middle-class family that doesn't itemize.
So my budget calls for limiting itemized deductions for the wealthiest 2 percent of Americans, a reform that would reduce the deficit by $320 billion over 10 years.
But to reduce the deficit, I believe we should go further. And that's why I'm calling on Congress to reform our individual tax code so that it is fair and simple, so that the amount of taxes you pay isn't determined by what kind of accountant you can afford.
I believe reform should protect the middle class, promote economic growth, and build on the fiscal commission's model of reducing tax expenditures so that there is enough savings to both lower rates and lower the deficit. And as I called for in the State of the Union, we should reform our corporate tax code as well, to make our businesses and our economy more competitive.
So this is my approach to reduce the deficit by $4 trillion over the next 12 years.
OBAMA: It's an approach that achieves about $2 trillion in spending cuts across the budget. It will lower our interest payments on the debt by $1 trillion. It calls for tax reform to cut about $1 trillion in tax expenditures -- spending in the tax code. And it achieves these goals while protecting the middle class, protecting our commitment to seniors and protecting our investments in the future.
Now, in the coming years, if the recovery speeds up and our economy grows faster than our current projections, we can make even greater progress than I've pledged here.
But just to hold Washington and to hold me accountable and make sure that the debt burden continues to decline, my plan includes a debt failsafe.
If, by 2014, our debt is not projected to fall as a share of the economy, if we haven't hit our targets, if Congress has failed to act, then my plan will require us to come together and make up the additional savings with more spending cuts and more spending reductions in the tax code.
And that should be an incentive for us to act boldly now, instead of kicking our problems further down the road.
So this is our vision for America, this is my vision for America, a vision where we live within our means while still investing in our future, where everyone makes sacrifices but no one bears all the burden, where we provide a basic measure of security for our citizens and we provide rising opportunity for our children.
There will be those who vigorously disagree with my approach. I can guarantee that as well.
(LAUGHTER)
Some will argue we should not even consider -- ever, ever -- raising taxes, even if only on the wealthiest Americans.
OBAMA: It's just an article of faith to them.
I say that at a time when the tax burden on the wealthy is at its lowest level in half a century, the most fortunate among us can afford to pay a little more.
I don't need another tax cut. Warren Buffett doesn't need another tax cut. Not if we have to pay for it by making seniors pay more for Medicare or by cutting kids from Head Start or by taking away college scholarships that I wouldn't be here without, and that some of you wouldn't be here without.
And here's the thing: I believe that most wealthy Americans would agree with me. They want to give back to their country, a country that's done so much for them. It's just Washington hasn't asked them to.
Others will say that we shouldn't even talk about cutting spending until the economy is fully recovered. These are mostly folks in my party.
I'm sympathetic to this view, which is one of the reasons I supported the payroll tax cuts we passed in December. It's also why we have to use a scalpel and not a machete to reduce the deficit, so that we can keep making the investments that create jobs.
But doing nothing on the deficit is just not an option. Our debt has grown so large that we could do real damage to the economy if we don't begin a process now to get our fiscal house in order.
Finally, there are those who believe we shouldn't make any reforms to Medicare, Medicaid or Social Security out of fear that any talk of change to these programs will immediately usher in the sort of radical steps that House Republicans have proposed. And I understand those fears.
OBAMA: But I guarantee that if we don't make any changes at all, we won't be able to keep our commitment to a retiring generation that will live longer and will face higher health care costs than those who came before.
Indeed, to those in my own party, I say that if we truly believe in a progressive vision of our society, we have an obligation to prove that we can afford our commitments.
If we believe that government can make a difference in people's lives, we have the obligation to prove that it works, by making government smarter and leaner and more effective.
Of course, there are those who simply say there's no way we can come together at all and agree on a solution to this challenge. They'll say the politics of this city are just too broken, the choices are just too hard, the parties are just too far apart.
And after a few years on this job I have some sympathy for this view.
(LAUGHTER)
But I also know that we've come together before and met big challenges.
Ronald Reagan and Tip O'Neill came together to save Social Security for future generations.
The first President Bush and a Democratic Congress came together to reduce the deficit.
President Clinton and a Republican Congress battled each other ferociously -- disagreed on just about everything -- but they still found a way to balance the budget.
OBAMA: And in the last few months, both parties have come together to pass historic tax relief and spending cuts. And I know there are Republicans and Democrats in Congress who want to see a balanced approach to deficit reduction.
And even those Republicans I disagree with most strongly I believe are sincere about wanting to do right by their country. We may disagree on our visions, but I -- I -- I truly believe they want to do the right thing.
So I believe we can and must come together again.
This morning, I met with Democratic and Republican leaders in Congress to discuss the approach that I laid out today. And in early May, the vice president will begin regular meetings with leaders in both parties with the aim of reaching a final agreement on a plan to reduce the deficit and get it done by the end of June.
I don't expect the details in any final agreement to look exactly like the approach I laid out today. This is a democracy; that's not how things work. I'm eager to hear other ideas from all ends of the political spectrum.
And though I'm sure the criticism of what I've said here today will be fierce in some quarters and my critique of the House Republican approach has been strong, Americans deserve and will demand that we all make an effort to bridge our differences and find common ground.
This larger debate that we're having -- this larger debate about the size and the role of government -- it has been with us since our founding days. And during moments of great challenge and change, like the one that we're living through now, the debate gets sharper and it gets more vigorous. That's not a bad thing. In fact, it's a good thing.
OBAMA: As a country that prizes both our individual freedom and our obligations to one another, this is one of the most important debates that we can have.
But no matter what we argue, no matter where we stand, we've always held certain beliefs as Americans.
We believe that in order to preserve our own freedoms and pursue our own happiness, we can't just think about ourselves. We have to think about the country that made these liberties possible. We have to think about our fellow citizens with whom we share a community. And we have to think about what's required to preserve the American dream for future generations.
This sense of responsibility -- to each other and to our country -- this isn't a partisan feeling. This isn't a Democratic or a Republican idea. It's patriotism.
The other day I received a letter from a man in Florida. He started off by telling me he didn't vote for me and he hasn't always agreed with me. But even though he's worried about our economy and the state of our politics, here's what he said.
He said, "I still believe. I believe in that great country that my grandfather told me about. I believe that somewhere lost in this quagmire of petty bickering on every news station, the American dream is still alive."
"We need to use our dollars here rebuilding, refurbishing and restoring all that our ancestors struggled to create and maintain. We as a people must do this together, no matter the color of the state one comes from or the side of the aisle one might sit on."
I still believe -- I still believe as well. And I know that if we can come together and uphold our responsibilities to one another and to this larger enterprise that is America, we will keep the dream of our founding alive in our time, and we will pass it on to our children, we will pass on to our children a country that we believe in.
Thank you, God bless you, and may God bless the United States of America.
(APPLAUSE)
Thank you.
(APPLAUSE)
END .ETX
Apr 13, 2011 14:40 ET .EOF  

[American Patriot]

April 13, 2011, 4:01 PM ET Romney: Obama Speech ‘Too Little, Too Late’


By Patrick O'Connor

Former Massachusetts Gov. Mitt Romney was the first Republican presidential hopeful out of the gate with a response to President Barack Obama’s speech on the deficit, calling it “too little, too late.”

“Instead of supporting spending cuts that lead to real deficit reduction and true reform of Medicare, Medicaid, and Social Security, the President dug deep into his liberal playbook for ‘solutions’ highlighted by higher taxes,” Mr. Romney said in a statement. “With over 20 million people who are unemployed or who have stopped looking for work, the last thing we should be doing is raising taxes on job-creators, entrepreneurs, and small business owners across America.”

[American Patriot]

Obama tax hikes a "nonstarter," Sen. John Cornyn says



By

Todd J. Gillman/Reporter

tgillman@dallasnews.com | Bio
2:24 PM on Wed., Apr. 13, 2011 | Permalink


Sen. John Cornyn, R-Texas, called President Obama's call to boost taxes by $1 trillion over the next 12 years a "nonstarter," even as a component of a broader approach to debt-reduction.
"I'm against tax increases," Cornyn told Texas reporters moments after the president's speech, echoing the GOP mantra that the nation's debt problem stems from spending too much, not from a lack of taxes. "I agree with his fiscal commission report that we need a flatter, more broadly-based tax. But the president's not just talking about that, at least as I heard him. He's talking about basically revisiting the deal that he cut in December which I thought had resolved this issue for two years. He wants to reopen this negotiation.
"He frankly ... come up with what I consider to be a nonstarter in terms of raising taxes, particularly at a time of a fragile economic recovery."
Even so, Cornyn lauded Obama for "coming to the table" with ideas on debt reduction, albeit belatedly, and as a response to the House GOP plan.
"I would say, Mr. President, it's about time. It's about time you join with us in solving some of the nation's biggest problems," he said.
Senator Kay Bailey Hutchison (R-Texas) today released the following statement in reaction to the President Obama's speech on deficit reduction:
Sen. Kay Bailey Hutchison, R-Texas, issued a statement criticizing Obama along the same lines.
"The president's so-called plan for reducing deficits and bringing down the debt does not add up. We cannot tax our way out of debt, and raising taxes will not curtail our deficit spending. ... It is unconscionable to punish American families, small businesses, and farms through higher taxes when reckless government spending is the cause of our fiscal crisis."

[American Patriot]

Breaking News
Loretta Sanchez Defends Obama Attack on GOP Budget Plan

By R. Scott Moxley, Wed., Apr. 13 2011 @ 12:31PM

Categories: Breaking News, Elections, Moxley, Politics




0digg

Obama finally gets Sanchez backing

​Appearing this afternoon on MSNBC, Orange County Congresswoman Loretta Sanchez defended President Barack Obama's morning speech declaring that he will not allow Republicans to continue to force the poor and middle class to pay for massive tax cuts for the rich.

In response to a question by TV host Martin Bashir, Sanchez said she was happy that Obama wants to raise taxes on the richest Americans and plans to look for ways to cut the bloated defense budget without sacrificing national security.


"It's very important for us to get more revenue into the government," said Sanchez, who blamed President George W. Bush for creating massive federal debt by reducing taxes on millionaires.


Bashir also asked Orange County's lone Democrat in Congress if she was worried about the electoral consequences of advocating tax increases? No, she replied with a smile.


In the 2010 election, Republicans nationwide targeted Sanchez--first elected to Congress 15 years ago--for defeat, but failed when challenger Van Tran found himself trounced on election night.


Sanchez vocally supported Hillary Clinton over Obama in the last presidential election


--R. Scott Moxley / OC Weekly

[vector7]

Obama: ‘We Would Not Be a Great Country’ Without Gov’t Entitlements

Wednesday, April 13, 2011

By Fred Lucas Washington (CNSNews.com) – In his major fiscal address today, which called for tax increases, military budget cuts, and entitlement reforms, President Barack Obama said government entitlements make America great.

“‘There but for the grace of God go I,’ we say to ourselves, and so we contribute to programs like Medicare and Social Security, which guarantee us health care and a measure of basic income after a lifetime of hard work; unemployment insurance, which protects us against unexpected job loss; and Medicaid, which provides care for millions of seniors in nursing homes, poor children, and those with disabilities,” Obama said. “We are a better country because of these commitments. I’ll go further – we would not be a great country without those commitments.”

In his speech at George Washington University, which was broadcast nationwide, Obama announced a four-step plan to cut $4 trillion over 12 years, and harshly criticized a plan by House Budget Committee Chairman Paul Ryan (R-Wisc.) released last week that calls for $6 trillion in deficit reduction over 10 years and entitlement reform.

Attending the speech were Vice President Joe Biden, Treasury Secretary Timothy Geithner, White House Office of Management and Budget Director Jack Lew and the co-chairs of Obama’s bipartisan debt commission, former Clinton Chief of Staff Erskine Bowles and former Wyoming Republican Senator Alan Simpson.

Obama called for bipartisan cooperation to solve the nation’s exploding debt and deficit problem, but used uncompromising rhetoric about raising taxes on high-income earners.

“In December, I agreed to extend the tax cuts for the wealthiest Americans because it was the only way I could prevent a tax hike on middle-class Americans,” Obama told a crowd of about 200 at the university. “But we cannot afford $1-trillion worth of tax cuts for every millionaire and billionaire in our society. And I refuse to renew them again.”

Obama referred to getting rid of the Bush tax cuts and eliminating certain tax deductions as a plan to “reduce spending in the tax code.”

“Most wealthy Americans would agree with me,” Obama said. “They want to give back to the country that’s done so much for them.”

The Ryan plan, The Path to Prosperity, would keep the current tax rates from the Bush era tax cuts of 2001 and 2003 in place. However, Obama accused Ryan of supporting tax breaks for the wealthy.

“Worst of all, this is a vision that says even though America can’t afford to invest in education or clean energy, even though we can’t afford to care for seniors and poor children, we can somehow afford more than $1 trillion in new tax breaks for the wealthy,” Obama said. “The fact is, their vision is less about reducing the deficit than it is about changing the basic social compact in America.”

Obama – who some Democrats have criticized for compromising with Republicans in December on extending the Bush tax rates for another two years and for cutting another deal with Republicans last week to avoid a government shutdown – warned members of his party that budget cuts and entitlement reforms are necessary for a “progressive vision.”

“Indeed, to those in my own party, I say that if we truly believe in a progressive vision of our society, we have the obligation to prove that we can afford our commitments,” said Obama. “If we believe that government can make a difference in people’s lives, we have the obligation to prove that it works – by making government smarter, leaner and more effective.”

Beyond ditching the Bush tax rates in 2013, Obama also wants to eliminate certain tax deductions for high-income earners: households earning $250,000 or more and single filers earning $200,000 or more.

“The tax code is also loaded up with spending on things like itemized deductions,” Obama said. “While I agree with the goals of many of these deductions, like homeownership or charitable giving, we cannot ignore the fact that they provide millionaires an average tax break of $75,000 while doing nothing for the typical middle-class family that doesn’t itemize.”

“My budget calls for limiting itemized deductions for the wealthiest 2 percent of Americans, a reform that would reduce the deficit by $320 billion over 10 years,” Obama said. “But to reduce the deficit, I believe we should go further. That’s why I’m calling on Congress to reform our individual tax code so that it is fair and simple, so that the amount of taxes you pay isn’t determined by what kind of accountant you can afford.”

Tax increases were only one item in Obama’s four-step plan.

The president first said he would keep annual domestic spending low, but did not provide details, only saying he would not cut “investments,” i.e, federal spending, in medical research and clean energy.

Another step involves reducing military spending.

“We need to not only eliminate waste and improve efficiency and effectiveness, but conduct a fundamental review of America’s missions, capabilities, and our role in a changing world,” Obama said. “I intend to work with Secretary Gates and the Joint Chiefs on this review, and I will make specific decisions about spending after it’s complete.”

The other step is to continue to reduce health care spending, which includes addressing entitlement spending.

We will work with governors of both parties to demand more efficiency and accountability from Medicaid,” Obama said. “…We will slow the growth of Medicare costs by strengthening an independent commission of doctors, nurses, medical experts and consumers who will look at all the evidence and recommend the best ways to reduce unnecessary spending while protecting access to the services seniors need.”

He further attacked the Ryan plan for its proposed reforms of Medicare and Medicaid.

“But let me be absolutely clear,” said Obama. “I will preserve these health care programs as a promise we make to each other in this society. I will not allow Medicare to become a voucher program that leaves seniors at the mercy of the insurance industry.”

[American Patriot]

Obama is insane.

[samizdat]

A comparison prepared by the CBO shows that the omnibus spending bill, advertised as containing some $38.5 billion in cuts, will only reduce federal outlays by $352 million below 2010 spending rates. The nonpartisan budget agency also projects that total outlays are actually some $3.3 billion more than in 2010, if emergency spending is included in the total.

[vector7]

Was listening to Savage on the way home about this subject; it was blistering!!!


Here's the broadcast.

[vector7]

The Real Housewives of Wall Street

Why is the Federal Reserve forking over $220 million in bailout money to the wives of two Morgan Stanley bigwigs?

By Matt Taibbi
April 12, 2011 9:55 AM ET



America has two national budgets, one official, one unofficial. The official budget is public record and hotly debated: Money comes in as taxes and goes out as jet fighters, DEA agents, wheat subsidies and Medicare, plus pensions and bennies for that great untamed socialist menace called a unionized public-sector workforce that Republicans are always complaining about. According to popular legend, we're broke and in so much debt that 40 years from now our granddaughters will still be hooking on weekends to pay the medical bills of this year's retirees from the IRS, the SEC and the Department of Energy. Why Isn't Wall Street in Jail?

Most Americans know about that budget. What they don't know is that there is another budget of roughly equal heft, traditionally maintained in complete secrecy. After the financial crash of 2008, it grew to monstrous dimensions, as the government attempted to unfreeze the credit markets by handing out trillions to banks and hedge funds. And thanks to a whole galaxy of obscure, acronym-laden bailout programs, it eventually rivaled the "official" budget in size — a huge roaring river of cash flowing out of the Federal Reserve to destinations neither chosen by the president nor reviewed by Congress, but instead handed out by fiat by unelected Fed officials using a seemingly nonsensical and apparently unknowable methodology.

This article appears in the April 28, 2011 issue of Rolling Stone. The issue will be available on newsstands and in the online archive April 15.

Now, following an act of Congress that has forced the Fed to open its books from the bailout era, this unofficial budget is for the first time becoming at least partially a matter of public record. Staffers in the Senate and the House, whose queries about Fed spending have been rebuffed for nearly a century, are now poring over 21,000 transactions and discovering a host of outrages and lunacies in the "other" budget.

It is as though someone sat down and made a list of every individual on earth who actually did not need emergency financial assistance from the United States government, and then handed them the keys to the public treasure. The Fed sent billions in bailout aid to banks in places like Mexico, Bahrain and Bavaria, billions more to a spate of Japanese car companies, more than $2 trillion in loans each to Citigroup and Morgan Stanley, and billions more to a string of lesser millionaires and billionaires with Cayman Islands addresses. "Our jaws are literally dropping as we're reading this," says Warren Gunnels, an aide to Sen. Bernie Sanders of Vermont. "Every one of these transactions is outrageous."

Wall Street's Big Win
But if you want to get a true sense of what the "shadow budget" is all about, all you have to do is look closely at the taxpayer money handed over to a single company that goes by a seemingly innocuous name: Waterfall TALF Opportunity. At first glance, Waterfall's haul doesn't seem all that huge — just nine loans totaling some $220 million, made through a Fed bailout program. That doesn't seem like a whole lot, considering that Goldman Sachs alone received roughly $800 billion in loans from the Fed. But upon closer inspection, Waterfall TALF Opportunity boasts a couple of interesting names among its chief investors: Christy Mack and Susan Karches.

Christy is the wife of John Mack, the chairman of Morgan Stanley. Susan is the widow of Peter Karches, a close friend of the Macks who served as president of Morgan Stanley's investment-banking division. Neither woman appears to have any serious history in business, apart from a few philanthropic experiences. Yet the Federal Reserve handed them both low-interest loans of nearly a quarter of a billion dollars through a complicated bailout program that virtually guaranteed them millions in risk-free income.

RS Politics Daily: Political news and commentary from Rolling Stone writers and editors

The technical name of the program that Mack and Karches took advantage of is TALF, short for Term Asset-Backed Securities Loan Facility. But the federal aid they received actually falls under a broader category of bailout initiatives, designed and perfected by Federal Reserve chief Ben Bernanke and Treasury Secretary Timothy Geithner, called "giving already stinking rich people gobs of money for no fucking reason at all." If you want to learn how the shadow budget works, follow along. This is what welfare for the rich looks like.

In August 2009, John Mack, at the time still the CEO of Morgan Stanley, made an interesting life decision. Despite the fact that he was earning the comparatively low salary of just $800,000, and had refused to give himself a bonus in the midst of the financial crisis, Mack decided to buy himself a gorgeous piece of property — a 107-year-old limestone carriage house on the Upper East Side of New York, complete with an indoor 12-car garage, that had just been sold by the prestigious Mellon family for $13.5 million.

Either Mack had plenty of cash on hand to close the deal, or he got some help from his wife, Christy, who apparently bought the house with him.

The Macks make for an interesting couple. John, a Lebanese-American nicknamed "Mack the Knife" for his legendary passion for firing people, has one of the most recognizable faces on Wall Street, physically resembling a crumpled, half-burned baked potato with a pair of overturned furry horseshoes for eyebrows. Christy is thin, blond and rich — a sort of still-awake Sunny von Bulow with hobbies. Her major philanthropic passion is endowments for alternative medicine, and she has attained the level of master at Reiki, the Japanese practice of "palm healing." The only other notable fact on her public résumé is that her sister was married to Charlie Rose.

It's hard to imagine a pair of people you would less want to hand a giant welfare check to — yet that's exactly what the Fed did. Just two months before the Macks bought their fancy carriage house in Manhattan, Christy and her pal Susan launched their investment initiative called Waterfall TALF.

Neither seems to have any experience whatsoever in finance, beyond Susan's penchant for dabbling in thoroughbred racehorses. But with an upfront investment of $15 million, they quickly received $220 million in cash from the Fed, most of which they used to purchase student loans and commercial mortgages. The loans were set up so that Christy and Susan would keep 100 percent of any gains on the deals, while the Fed and the Treasury (read: the taxpayer) would eat 90 percent of the losses. Given out as part of a bailout program ostensibly designed to help ordinary people by kick-starting consumer lending, the deals were a classic heads-I-win, tails-you-lose investment.

So how did the government come to address a financial crisis caused by the collapse of a residential-mortgage bubble by giving the wives of a couple of Morgan Stanley bigwigs free money to make essentially risk-free investments in student loans and commercial real estate? The answer is: by degrees. The history of the bailout era reads like one of those awful stories about what happens when a long-dormant criminal compulsion goes unchecked. The Peeping Tom next door stares through a few bathroom windows, doesn't get caught, and decides to break in and steal a pair of panties. Next thing you know, he's upgraded to homemade dungeons, tri-state serial rampages and throwing cheerleaders into a panel truck.

It was the same with the bailouts. They started out small, with the government throwing a few hundred billion in public money to prop up genuinely insolvent firms like Bear Stearns and AIG. Then came TARP and a few other programs that were designed to stave off bank failures and dispose of the toxic mortgage-backed securities that were a root cause of the financial crisis. But before long, the Fed began buying up every distressed investment on Wall Street, even those that were in no danger of widespread defaults: commercial real estate loans, credit- card loans, auto loans, student loans, even loans backed by the Small Business Administration. What started off as a targeted effort to stop the bleeding in a few specific trouble spots became a gigantic feeding frenzy. It was "free money for shit," says Barry Ritholtz, author of Bailout Nation. "It turned into 'Give us your crap that you can't get rid of otherwise.' "

The impetus for this sudden manic expansion of the bailouts was a masterful bluff by Wall Street executives. Once the money started flowing from the Federal Reserve, the executives began moaning to their buddies at the Fed, claiming that they were suddenly afraid of investing in anything — student loans, car notes, you name it — unless their profits were guaranteed by the state. "You ever watch soccer, where the guy rolls six times to get a yellow card?" says William Black, a former federal bank regulator who teaches economics and law at the University of Missouri. "That's what this is. If you have power and connections, they will give you a freebie deal — if you're good at whining."

This is where TALF fits into the bailout picture. Created just after Barack Obama's election in November 2008, the program's ostensible justification was to spur more consumer lending, which had dried up in the midst of the financial crisis. But instead of lending directly to car buyers and credit-card holders and students — that would have been socialism! — the Fed handed out a trillion dollars to banks and hedge funds, almost interest-free. In other words, the government lent taxpayer money to the same assholes who caused the crisis, so that they could then lend that money back out on the market virtually risk-free, at an enormous profit.

Cue your Billy Mays voice, because wait, there's more! A key aspect of TALF is that the Fed doles out the money through what are known as non-recourse loans. Essentially, this means that if you don't pay the Fed back, it's no big deal. The mechanism works like this: Hedge Fund Goon borrows, say, $100 million from the Fed to buy crappy loans, which are then transferred to the Fed as collateral. If Hedge Fund Goon decides not to repay that $100 million, the Fed simply keeps its pile of crappy securities and calls everything even.

This is the deal of a lifetime. Think about it: You borrow millions, buy a bunch of crap securities and stash them on the Fed's books. If the securities lose money, you leave them on the Fed's lap and the public eats the loss. But if they make money, you take them back, cash them in and repay the funds you borrowed from the Fed. "Remember that crazy guy in the commercials who ran around covered in dollar bills shouting, 'The government is giving out free money!' " says Black. "As crazy as he was, this is making it real."

This whole setup — in which millionaires and billionaires gambled on mountains of dangerous securities, with taxpayers providing the stake and assuming almost all of the risk — is the reason that it's insanely premature for Wall Street to claim that the bailouts have actually made money for the government. We simply can't make that determination until the final bill comes in on all the dicey securities we financed during the bailout feeding frenzy.

In the case of Waterfall TALF Opportunity, here's what we know: The company was founded in June 2009 with $14.87 million of investment capital, money that likely came from Christy Mack and Susan Karches. The two Wall Street wives then used the $220 million they got from the Fed to buy up a bunch of securities, including a large pool of commercial mortgages managed by Credit Suisse, a company John Mack once headed.

Those securities were valued at $253.6 million, though the Fed refuses to explain how it arrived at that estimate. And here's the kicker: Of the $220 million the two wives got from the Fed, roughly $150 million had not been paid back as of last fall — meaning that you and I are still on the hook for most of whatever the Wall Street spouses bought on their government-funded shopping spree.

The public has no way of knowing how much Christy Mack and Susan Karches earned on these transactions, because the Fed has repeatedly declined to provide any information about how it priced the individual securities bought as part of programs like TALF. In the Waterfall deal, for instance, we know the Fed pledged some $14 million against a block of securities called "Credit Suisse Commercial Mortgage Trust Series 2007-C2" — but that data is meaningless without knowing how many units were bought. It's like saying the Fed gave Waterfall $14 million to buy cars.

Did Waterfall pay $5,000 per car, or $500,000? We have no idea. "There's no way of validating or invalidating the Fed's process in TALF without this pricing information," says Gary Aguirre, a former SEC official who was fired years ago after he tried to interview John Mack in an insider-trading case.

In early April, in an attempt to learn exactly how much Mack and Karches made on the TALF deals, Sen. Chuck Grassley of Iowa wrote a letter to Waterfall asking 21 detailed questions about the transactions. In addition, Sen. Sanders has personally asked Fed chief Bernanke to provide more complete information on the TALF loans given not only to Christy Mack but to gazillionaires like former Miami Dolphins owner H. Wayne Huizenga and hedge-fund shark John Paulson. But Bernanke bluntly refused to provide the information — and the Fed has similarly stonewalled other oversight agencies, including the General Accounting Office and TARP's special inspector general.

Christy Mack and Susan Karches did not respond to requests for comments for this story. But even without more information about the loans they got from the Fed, we know that TALF wasn't the only risk-free money being handed over to Wall Street. During the financial crisis, the Fed routinely made billions of dollars in "emergency" loans to big banks at near-zero interest. Many of the banks then turned around and used the money to buy Treasury bonds at higher interest rates — essentially loaning the money back to the government at an inflated rate. "People talk about how these were loans that were paid back," says a congressional aide who has studied the transactions. "But when the state is lending money at zero percent and the banks are turning around and lending that money back to the state at three percent, how is that different from just handing rich people money?"

Those kinds of deals were the essence of the bailout — and the vast mountains of near-zero government cash turned companies facing bankruptcy into monstrous profit machines. In 2008 and 2009, while Christy Mack was busy getting her little TALF loans for $220 million, her husband's bank hauled in $2 trillion in emergency Fed loans. During the same period, Goldman borrowed nearly $800 billion. Shortly afterward, the two banks reported a combined annual profit of $14.5 billion.

As crazy as it is to lend to banks at near zero percent and borrow back from them at three percent, one could at least argue that the policy may have aided American companies by providing banks more cash to lend. But how do you explain the host of other bailout transactions now being examined by Congress? Like the Fed's massive purchases of securities in foreign automakers, including BMW, Volkswagen, Honda, Mitsubishi and Nissan? Or the nearly $5 billion in cheap credit the Fed extended to Toyota and Mitsubishi? Sure, those companies have factories and dealerships in the U.S. — but does it really make sense to give them free cash at the same time taxpayers were being asked to bail out Chrysler and GM? Seems a little crazy to fund the competition of the very automakers you're trying to rescue.

And then there are the bailout deals that make no sense at all. Republicans go mad over spending on health care and school for Mexican illegals. So why aren't they flipping out over the $9.6 billion in loans the Fed made to the Central Bank of Mexico? How do we explain the $2.2 billion in loans that went to the Korea Development Bank, the biggest state bank of South Korea, whose sole purpose is to promote development in South Korea?

And at a time when America is borrowing from the Middle East at interest rates of three percent, why did the Fed extend $35 billion in loans to the Arab Banking Corporation of Bahrain at interest rates as low as one quarter of one point?

Even more disturbing, the major stakeholder in the Bahrain bank is none other than the Central Bank of Libya, which owns 59 percent of the operation. In fact, the Bahrain bank just received a special exemption from the U.S. Treasury to prevent its assets from being frozen in accord with economic sanctions. That's right: Muammar Qaddafi received more than 70 loans from the Federal Reserve, along with the Real Housewives of Wall Street.

Perhaps the most irritating facet of all of these transactions is the fact that hundreds of millions of Fed dollars were given out to hedge funds and other investors with addresses in the Cayman Islands. Many of those addresses belong to companies with American affiliations — including prominent Wall Street names like Pimco, Blackstone and . . . Christy Mack. Yes, even Waterfall TALF Opportunity is an offshore company. It's one thing for the federal government to look the other way when Wall Street hotshots evade U.S. taxes by registering their investment companies in the Cayman Islands. But subsidizing tax evasion? Giving it a federal bailout? What the fuck?

As America girds itself for another round of lunatic political infighting over which barely-respirating social program or urgently necessary federal agency must have their budgets permanently sacrificed to the cause of billionaires being able to keep their third boats in the water, it's important to point out just how scarce money isn't in certain corners of the public-spending universe. In the coming months, when you watch Republican congressional stooges play out the desperate comedy of solving America's deficit problems by making fewer photocopies of proposed bills, or by taking an ax to budgetary shrubberies like NPR or the SEC, remember Christy Mack and her fancy new carriage house. There is no belt-tightening on the other side of the tracks. Just a free lunch that never ends.

[vector7]

Republicans Will Be to Blame if US Defaults: Geithner


Published: Thursday, 14 Apr 2011 | 1:42 PM ET

By: Reuters

Treasury Secretary Timothy Geithner on Thursday told Republican lawmakers that they would shoulder the blame if the country got too close to defaulting on its debt and roiled markets worldwide by not approving a debt limit increase.

AP Timothy Geithner

In yet another warning about the perils of not allowing the U.S. to borrow more to fund spending already approved by Congress, Geithner said it would be deeply irresponsible for lawmakers to use debt limit negotiations for political gains.

Congress must agree to raise the $14.3 trillion debt ceiling or the legal amount that the country can borrow. But Republicans have said they are unwilling to do so without reforms on government spending and have threatened to take negotiations to the deadline.
"(Lawmakers) will say there's leverage in it, we can advance it. But that would be deeply irresponsible and they will own the risk," Geithner said.
"It won't happen in the end, but if they take it too close to the edge, they will own responsibility for that miscalculation," he said.

Treasury has forecast that the limit will be reached by May 16. After that point, Treasury can take emergency measures to avoid hitting the debt ceiling. But those actions will only give the United States about a two-month window before Treasury is unable to issue debt to fund government operations.

Geithner said lawmakers "understand that you can't take any risk the world starts to think the United States won't meet its obligations."

"There's no conceivable way that this city, this government can court that basic risk," he said.

[vector7]

Geithner: 'Congress Will Raise the Debt Ceiling'

Published April 17, 2011
| FoxNews.com


Reuters
Treasury Secretary Tim Geithner testifies at a House Ways and Means Committee hearing on Capitol Hill Feb. 15.

Treasury Secretary Tim Geithner suggested Sunday that Republicans and Democrats alike have assured the president they will vote to raise the debt limit, even as some lawmakers threaten to leverage the looming vote to extract spending cuts.

Geithner, speaking on NBC's "Meet the Press," said "responsible" lawmakers understand how "catastrophic" it would be to balk on that vote. The United States government could hit its $14.3 trillion debt ceiling as early as next month.

"Congress is going to have to raise the debt limit. They understand that," Geithner said. "The leadership understand that you can't play around with this."

He said congressional leaders expressed that point in a meeting with President Obama last week. He said the administration wants to figure out a long-term deficit reduction plan while Congress takes up the debate over the debt limit, but that if the government hits that ceiling before a deal is reached, the ceiling will have to be raised regardless.

"Congress will raise the debt ceiling," he said, in a separate interview on ABC's "This Week."

Geithner said repeatedly that lawmakers who want to take the country to the "brink" will bear the responsibility for the risk that creates.

He suggested that merely flirting with that edge would create a problem.

But he said if Congress ultimately rejects an increase in the debt limit, it would trigger a crisis that makes that 2008 meltdown look tame. Geithner reiterated warnings that such a vote would force the government to halt benefits payments to seniors and veterans and would risk the government defaulting on its interest.

Though Geithner said he's confident Congress will vote "yes" on the increase, a number of lawmakers continue to threaten to withhold their vote if they don't see progress on a deficit-reduction deal.

Sen. Tom Coburn, R-Okla,, said on "Fox News Sunday" that he needs to have "absolute certainty" a deficit reduction plan includes "critical changes."

"Unless we do that, there's no way I'll support it," Coburn said on the debt ceiling increase. "We're going to have a debt crisis, either with this or soon thereafter, if we don't come together."

Rep. Paul Ryan, R-Wis., the author of the Republicans' 2012 budget proposal, also said on CBS' "Face the Nation" that Congress won't "just simply raise the debt limit" without attached spending cuts.

Rep. Chris Van Hollen, D-Md., though, said Congress should not "monkey around with the full faith and credit of the United States."

"Linking the two and saying you're only going to vote for the debt ceiling if something particular happens on deficit reduction I think is playing Russian roulette with, like, the fully loaded revolver," he said on "Fox News Sunday."

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Panic selling of the U.S. dollar now underway as debt system implodes

April 28, 2011 – 4:50 pm

To most Americans it’s unthinkable that the U.S. dollar could someday be relegated to second-class status as a currency, but what they may not realize is that the transition is already underway.

Reports this week marked the dollar’s continued slide – it reached a 16-month low against the euro and slid to a historic low against the Swiss franc on Tuesday – while at the same time predicting something we’ve been telling you for years now, namely that the dollar is on its way out as the world’s reserve currency.

Impossible, you say? Think again. Signs of the dollar’s imminent collapse are everywhere.

Look at the economic and investment juggernaut that is China. Beijing’s economy has been growing in leaps and bounds and as such used to be the largest holder of U.S. dollars, because, as the world’s reserve currency, our dollar was the most stable. But China’s place was recently overtaken by our more traditional Asian ally, Japan, as Beijing has begun instead to divest itself of the dollar.

The U.S. was once known as the world’s richest nation, but these days we have the dubious distinction of being the largest debtor in the history of the world. China, meanwhile, has become our largest creditor.

So, what does all that mean in real terms? Well, it means that as more countries and investors flee the dollar, the faster it will begin to devalue.

We’re already seeing the effects of that in higher energy prices – oil is priced in dollars, after all, and when it falls, it takes more of them to buy the oil.

[vector7]

Dollar Skids to New Three-Year Lows

• Comments (80)

By JAVIER DAVID

NEW YORK—Investors wasted no time in sending the dollar to new three-year lows after the Federal Reserve gave them little reason to support it.

Weak U.S. growth and unemployment data quickened the dollar's fall. Initial employment claims jumped back above the 400,000 level in the latest week. Meanwhile, gross domestic product data showed that economic growth slowed sharply in the first quarter, led by surging food and energy costs that sent a key gauge of inflation, the personal consumption expenditures (PCE) price index, soaring to its highest level in nearly three years.

Late Thursday, the euro was at $1.4821 from $1.4794 late Wednesday. The dollar traded at ¥81.54 from ¥82.04, while the euro was at ¥120.85 from ¥121.37. The U.K. pound bought $1.6640 from $1.6636. The dollar fetched 0.8733 Swiss franc from 0.8738 franc, plunging to a new record low.

The ICE Dollar Index, which tracks the U.S. dollar against a trade-weighted basket of currencies, was at 73.12 from 73.519, its lowest level since July 2008.

The Australian dollar, helped by rising interest-rate expectations and surging oil, rose to a new 29-year high at $1.0920 from $1.0872 late Wednesday.

The Federal Open Market Committee's decision Wednesday to maintain its bias toward cheap credit loomed larger than ever for the beleaguered U.S. currency. At a time when traders are nervous about global inflation and rewarding the currencies of countries that raise interest rates, the dollar has lacked any yield advantage.

In a much-anticipated news conference, Fed Chairman Ben Bernanke tracked the FOMC statement and did little to deter dollar bears, who have profited from anti-dollar bets for months and appear willing to continue the rout.

"The FOMC statement, forecast changes and press conference all added up to a continuation of the dual-mandate mantra" of maximizing employment and maintaining stable prices, said Ken Dickson, investment director of currency at U.K.-based Standard Life Investments, which manages $250 billion in assets.

"Under this approach, easier monetary conditions will continue near term and the current weaker dollar trend looks likely to extend further," Mr. Dickson added, given the landscape of weak employment and sluggish growth.

The immediate beneficiaries of the Fed's easy money predilection have been the surging euro and pound. Both the euro zone and the U.K. are on a path toward tighter monetary policy, which has pushed both of their currencies to their highest levels against the dollar since late 2009.


Bloomberg News


Javier David explains why the U.S. dollar is getting crushed again today, pushing the Euro to $1.48, and how the Federal Reserve is factoring into the greenback's decline.

The yen strengthened broadly after the Bank of Japan kept both its policy rate and size of its Asset Purchase Program (APP) unchanged. This encouraged some investors that had expected more liquidity—which would weaken the currency—to unwind some of those positions.

But more liquidity is the last thing the dollar needs. The Fed's controversial asset purchases have helped bid up risk-related assets like stocks, but surging gold and a relentlessly strong Swiss franc indicate some investors are still nervous about global risks.

Meanwhile, the disappointing U.S. jobless and growth figures are raising eyebrows. The Fed is due to end its quantitative easing program at the end of June. While market watchers aren't entirely sure of what will come next, weakening data may spur talk of a new round of easing, which would likely trigger a new round of dollar weakness.

Ronald S. Temple, a portfolio manager at Lazard Asset Management, said the Fed should preserve the option of easing anew to ward off more weakness in the economy. "We are moving from a secular era of adding to leverage to a secular era of deleveraging, and the Fed needs to have those tools at its disposal," he said.

[American Patriot]

Wow. this is really looking stupid for America, Obama, and those of us who are hoping to retire and actually use the money we've saved huh?

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Obama rewards big bundlers with jobs, commissions, stimulus money, government contracts, and more

By Fred Schulte [3], John Aloysius Farrell [4] and Jeremy Borden [5]

June 15, 2011 Telecom executive Donald H. Gips raised a big bundle of cash to help finance his friend Barack Obama’s run for the presidency.
Gips, a vice president of Colorado-based Level 3 Communications LLC, delivered more than $500,000 in contributions for the Obama war chest, while two fellow senior company executives collected at least $150,000 more.

After the election, Gips was put in charge of hiring in the Obama White House, helping to place loyalists and fundraisers in many key positions. Then in mid-2009, the new president named him ambassador to South Africa. Level 3 Communications, in which Gips retained stock, meanwhile received millions of dollars of government stimulus contracts for broadband projects in six states—though Gips said he was "completely unaware" of the stimulus money.

More than two years after President Obama took office vowing to banish “special interests” from his administration, nearly 200 of his biggest donors have landed plum government jobs and advisory posts, won federal contracts worth millions of dollars for their business interests or attended numerous elite White House meetings and social events, an investigation by iWatch News has found.

These “bundlers” raised at least $50,000 and sometimes more than $500,000 in campaign donations for Obama’s campaign. Many of those in the “Class of 2008” are now being asked to bundle contributions for Obama’s re-election, an effort that could cost $1 billion.

As a candidate, Obama spoke passionately about diminishing the clout of moneyed interests and making the White House more accessible to everyday Americans. In kicking off his presidential run on Feb. 10, 2007, he blasted “the cynics, the lobbyists, the special interests,” who he said had “turned our government into a game only they can afford to play.”
“They write the checks and you get stuck with the bill, they get the access while you get to write a letter, they think they own this government, but we’re here today to take it back,” he said.

But just like other presidential aspirants, Obama relied heavily on mega-donors to propel his campaign across the finish line and many fundraisers have shared in the spoils of victory. Some took jobs in pivotal federal agencies such as the Department of Justice, Department of Energy and the Federal Communications Commission, while others have served on influential advisory commissions and boards that meet periodically to help formulate policy. Two dozen have been appointed ambassadors to foreign countries.

The White House said its appointees were highly qualified. “In filling these posts, the administration looks for the most qualified candidates who represent Americans from all walks of life,” White House spokesman Eric Schultz said. “Being a donor does not get you a job in this administration, nor does it preclude you from getting one.”

The iWatch News investigation found:

• Overall, 184 of 556, or about one-third, of Obama bundlers or their spouses joined the administration in some role. But the percentages are much higher for the big-dollar bundlers. Nearly 80 percent of those who collected more than $500,000 for Obama took “key administration posts,” as defined by the White House. More than half the ambassador nominees who were bundlers raised more than half a million.

• The big bundlers had broad access to the White House for meetings with top administration officials and glitzy social events. In all, campaign bundlers and their family members account for more than 3,000 White House meetings and visits. Half of them raised $200,000 or more.

• Some Obama bundlers have ties to companies that stand to gain financially from the president’s policy agenda, particularly in clean energy and telecommunications, and some already have done so. Level 3 Communications, for instance, snared $13.8 million in stimulus money. At least 18 other bundlers have ties to businesses poised to profit from government spending to promote clean energy, telecommunications and other key administration priorities.

Some bundlers trade on their campaign largesse for Obama to further career aspirations or business plans. Others, already successful, simply enjoy the exclusive stature bestowed by ties to the White House. Lena L. Kennedy, for instance, papers her Southern California consulting website [6] with photographs of herself with Obama. She put out a press release announcing a June 13 fundraiser featuring Michelle Obama in Los Angeles; ticket prices ran from $1,000 to $10,000, the latter “allowing a photo opportunity and private time with the First Lady.” She declined to comment for this article.

“Some people just crave attention and some people just like getting the notoriety or attention of being a big player,” said Thomas M. McInerney [7], a San Francisco lawyer who bundled at least $100,000 for Obama. He said he didn’t ask for or get anything in return, though he knew others who did. “There was so much money this time, and there were so many people involved in raising the money, the number of people looking for something was exponentially more.”

Rewarding the donors

While the Obama administration tightened restrictions on hiring lobbyists, the deference it has shown major donors contradicts its claims to have changed business as usual in Washington, critics said.

Others said Obama strains credulity in claiming to bring reform to Washington while carrying on the patronage practices of past administrations. They added that many big donors aren’t shy about asking for specific favors, which gives candidates of both parties little choice but to keep patronage alive.

“Any president who says he’s going to change this is either hopelessly naïve or polishing the reality to promise something other than can be delivered,” said Paul Light [8], a New York University professor and expert on presidential transitions. “At best it’s naïve and a little bit of a shell game.”

Many of the Obama bundlers said they did not seek or expect anything for themselves.

“I just want to see somebody do a good job,” said Stewart Bainum, a Chevy Chase, Md., hotel chain CEO who with his wife, Sandy, raised $500,000 for Obama in 2008. He is listed in White House logs as a guest at a St. Patrick’s Day party last year. “The dividend is decent government and a strong leader with values similar to your own,” Bainum said.

Sacramento jeweler Jon Merksamer, a first-time bundler who collected more than $200,000 for the Obama campaign, said some fundraisers are “people with various political agendas,” and “having access to power is part of their agenda. That was never part of mine.” Some bundlers “make it clear what they are looking for,” said Merksamer.

Chicago CPA Harvey S. Wineberg [9], who raised at least $100,000 and is Obama’s personal accountant, said his fundraising had “nothing to do” with his appointment to the President’s Advisory Council on Financial Capability in December 2010. Wineberg said he called a White House staffer, who he declined to name, to ask about serving on the council. “I thought I’d be good,” he said. He has since resigned.

Bundling is controversial because it permits campaigns to skirt individual contribution limits of $2,500 in federal elections. Bundlers pool donations from fundraising networks and as a result “play an enormous role in determining the success of political campaigns,” according to Public Citizen. The group has tracked bundlers on a website www.whitehouseforsale.org [10] in the belief that they are “apt to receive preferential treatment if their candidate wins.”

Under pressure from watchdog groups, Obama disclosed the names of hundreds of bundlers during the 2008 campaign, listing them by ranges starting with at least $50,000, then $100,000, $200,000 and more than $500,000. The campaign identified the bundlers by name, state of residence, and in some cases, their employers.

When the new administration set up shop in the White House on Jan. 20, 2009, the money raisers quickly followed.

White House visitor logs show about 800 bundler visits during the formative early months of the administration, and overall the top-tier bundlers tended to show up far more often than those at the bottom rung.

Bundlers have been guests at concerts, state dinners and informal parties, such as the first family’s Super Bowl parties, or in a few cases to bowling outings and other special events to which they brought along spouses and family members.

Some are longtime friends of the first family, such as Chicagoans Cindy Moelis and her husband Robert Rivkin, who as a couple bundled at least $200,000. Obama appointed Moelis in April 2009 to direct the Presidential Commission on White House Fellows. Her husband was appointed general counsel of the Department of Transportation and special adviser to Transportation Secretary Ray LaHood. Rivkin once served as general counsel to the Chicago Transit Authority. The couple and their children were among the guests at the Obamas’ 101-guest Super Bowl party in early February 2010.

Moelis told iWatch News that she and her husband were “highly qualified” for their jobs and that they “took pay cuts and made considerable sacrifice” to enter public service. “We truly believe in it,” she said.

While open government advocates have criticized the White House visitors’ logs [11] for leaving out the names of many people who enter the complex, as well as the reasons for the visits, the logs consistently list bundler visits.

The bundlers often arrived to see David C. Jacobson, then a special assistant for presidential personnel in the White House. The Chicago lawyer, himself an Obama bundler, served as the 2008 campaign deputy finance director. Jacobson, who departed in September 2009 to become ambassador to Canada, scheduled about 90 meetings with bundlers, according to an iWatch News analysis. Two-thirds of them had each raised at least $200,000.

Gips, who served as White House director of presidential personnel before taking the post in South Africa, saw more than a dozen bundlers. Other inner-circle White House officials, such as presidential adviser Valerie Jarrett, also a bundler, met with more than 50 bundlers, mostly the heavy hitters.

Obama met with at least two dozen bundlers either privately or with another person, according to the visitor logs.

Getting a position

Ambassadorships have been the classic payoff for big bundlers. But it’s not just the posts in foreign capitals that are attractive. Light, the NYU expert on presidential transitions, said that in recent years many have sought jobs with deep reach into the federal bureaucracy — and found a receptive ear in the White House.

“When they get a resume from a bundler, that is a real signal of seriousness,” Light said. “It’s also a thinly veiled quid pro quo,” and it “goes without saying they will get considered.”

Bringing in a lot of cash to the campaign, Light added, “seems to be well established as a signaling device for getting into key jobs running the government. It’s become more significant and nobody seems to have much outrage about it.”

Public Citizen in 2008 found that George W. Bush had appointed about 200 bundlers to administration posts over his eight years in office. That is roughly the same number Obama has appointed in little more than two years, the iWatch News analysis showed.

Some bundlers said in interviews that they called the White House to ask for a position, while others said they were called and asked to serve.

Ted Hosp [12], an Alabama lawyer who delivered more than $200,000 for Obama, said he had no expectation of a job when he signed on to the campaign finance committee. But he did ask to be considered and said he met with then-White House Counsel Gregory Craig, also a bundler, to discuss a position at the Justice Department. “I was interested in exploring [a job],” Hosp said. “I would have been interested in helping him [Obama] if the right opportunity arose.”

The cluster of appointments among top bundlers suggests that the size of the donation may have been a factor at least in getting a foot in the door.

Less than one in five at the $50,000 level got an administration position.

Half of $200,000 bundlers were picked for some post; 80 percent of the $500,000 bundlers were appointed. (Some have since left the administration while others remain in their posts.)

Michael Caplin, a Virginia consultant who assists nonprofit businesses, raised $200,000 for Obama and was appointed to the Commission on Presidential Scholars, a board that selects and honors promising high school students. He said he was contacted by a White House staffer asking him if he wanted to serve, though he saw plenty of other big donors angling for jobs and positions.

“Clearly if someone raised a million dollars for your campaign, you tend to get a phone call returned,” Caplin said. But he also believes that many big donors who took positions were well qualified. “If that person is truly excellent, but also raised money for your campaign, should that disallow you to serve? … I didn’t feel like they were putting coin collectors in charge of Homeland Security. I haven’t seen one appointment yet where I thought, ‘Man this is embarrassing.’”

Seeding the departments with bundlers

The appointment of George Washington University law professor Spencer Overton illustrates how the administration has quietly rewarded many top fundraisers.

Overton wrote [13] in 2003 that the influence big donors wield in elections means that an “overwhelming majority of citizens are effectively excluded from an important stage of the political process.” Yet Overton bundled at least $500,000 for Obama. He was named to the Obama transition team and in February 2009 was appointed principal deputy attorney general in the Department of Justice’s Office of Legal Policy. The office helps select nominees for federal judgeships and acts as the Justice Department’s “think tank” by helping “to shape the terms of national debate on a wide range of forthcoming legal policy questions,” according to its website [14].

Overton visited the White House more than 80 times from January 2009 through the end of last year for events ranging from small meetings with high-level staffers to social and entertainment events, sometimes with his wife, records show. Overton resigned the $180,000-a-year job in July 2010. He declined to comment.

Overton is one of seven campaign bundlers who took jobs at Justice, including Attorney General Eric Holder, who was a $50,000 bundler.

Two others are Thomas J. Perrelli, a Harvard law school chum of Obama’s who holds the No. 3 policy job there, and Karol Mason, a bond lawyer from Georgia formerly with the politically active law firm of Alston and Bird. She is a deputy associate attorney general. Asked about the number of bundlers at Justice, spokesman Matt Miller said, “I don’t think we have any comment on that.”

At the Department of Energy, four bundlers who together raised a minimum of $1.6 million have held staff jobs or advisory posts.

Steven J. Spinner, a Silicon Valley entrepreneur and venture capital adviser, took over responsibility at Energy for parceling out more than $100 billion worth of stimulus grants and other energy-related loans. Spinner also has been a frequent White House guest, listed more than 40 times for events ranging from bowling to holiday receptions. The White House logs don’t give an explanation for most of the visits.

Several other bundlers appointed to federal government jobs also have been frequent White House visitors.

In March 2009, Obama appointed $500,000 bundler and law school pal Julius Genachowski to chair the FCC, an independent agency. He served as chief counsel at the FCC in the 1990s. Two other bundlers at the FCC are chief of staff Edward Lazarus, a former federal prosecutor, and William T. Lake, chief of the media bureau.

FCC chair Genachowski has turned up so often at 1600 Pennsylvania Avenue that Republicans in Congress in March demanded an accounting of who he has met with and what was discussed.

White House logs list Genachowski and his wife, filmmaker Rachel Goslins, whom Obama appointed in August 2009 to serve as executive director of the President’s Committee on Arts and Humanities, for more than 100 visits from early 2009 through March of this year.
Bundlers get coveted ambassadorships

Some of the biggest fundraisers end up serving in foreign capitals. Obama made a nod to this long practice in a pre-inauguration news conference, saying, “It would be disingenuous for me to suggest that there are not going to be some excellent public servants but who haven’t come through the ranks of the civil service.”

About a third of Obama's ambassadors have been political appointments as opposed to career foreign service officers—about the same as recent presidents. However, Obama has nominated 24 bundlers to ambassadorships to date. Of those, 14 each raised at least a half million dollars. Six others raised $200,000 or more. Jacobson, now the ambassador to Canada, is the only one listed at the $50,000 minimum and he played a pivotal finance role in the campaign.

The Obama record has disappointed the American Foreign Service Association, which believes these appointments should go mostly to career diplomats. The organization cites [15] the 1980 Foreign Service Act, which states that appointees should have a “useful knowledge of the language … and understanding of the history, the culture, the economic and political institutions and the interests of that country.”

How many political appointees fit the bill is debatable. Gips, for instance, testified during his Senate confirmation hearing of his extensive private sector and government experience. He said [16] he had “visited South Africa over a decade ago,” adding, “I fell in love with its people, its story, and its beauty.”

The 1980 federal law also states that political contributions “should not be a factor” in picking ambassadors, though presidents of both parties have all but ignored that.

Passing over career diplomats in favor of mega-donors amounts to “selling ambassadorships,” said Susan Johnson [17], president of the American Foreign Service Association. She said it runs contrary to the law and is unethical, yet, “That hasn’t stopped anybody.”

Thomas Pickering [18], who served as ambassador to Russia and several other countries during a diplomatic career spanning four decades, said turning to bundlers adds a “new dimension” to what he termed “buying offices” through aggressive fundraising. “An individual can multiply their chances by going out and soliciting

a lot of contributions other than just their own,” said Pickering, who chairs the American Academy of Diplomacy.

The White House pointed out that some ambassadorships went to non-civil service people who did not bundle for Obama but were uniquely qualified for the posts. One example is former Utah Gov. Jon Huntsman, a Republican.
Gips evolution from telecom exec to ambassador

Few stories illustrate how friendship, fundraising, business and politics can intertwine at the White House more vividly than that of Gips, Obama’s choice for ambassador to South Africa.

In 1998, Gips left government work, where he had supervised wireless spectrum issues for the FCC and served as Vice President Al Gore's chief domestic policy adviser. He joined a budding telecom company — Level 3 Communications in Colorado — which has obtained more than $100 million in federal contracts over the past decade.

At a 2004 fundraiser, he met Obama, who was then running in Illinois for the U.S. Senate. The two grew close — Obama asked Gips to help edit his campaign book, The Audacity of Hope — and Obama acknowledged his friend’s counsel in the book.

Gips collected more than $500,000 for Obama. James Crowe, chairman of the Level 3 board, was an Obama bundler, too, raising at least $100,000. So was the firm’s vice chairman, Charles Miller III, who bundled more than $50,000.

At the White House, Gips was a powerful force to decide who got coveted jobs. Obama appointed Level 3 executive Crowe in October 2010 to chair the presidential advisory committee on telecommunications and wireless issues.

And Level 3 was awarded some $13.8 million in federal stimulus contracts, to extend broadband connections in rural areas of states where it had networks.

In an email sent to iWatch News through the White House, Gips said that he had not been involved in “any matter involving Level 3” since joining the administration. Gips also said he didn’t know the company had received stimulus contracts and played no role in Crowe’s selection to the telecommunications panel.

The i Watch News investigation confirmed that at least 18 other bundlers have ties to businesses poised to profit from the president’s political agenda, through stimulus money, government contracts, or other spending to promote clean energy technology or green development.

Oklahoma billionaire investor George Kaiser is one. A longtime Democratic donor, he is a big financial backer of a company that in March of 2009 won a $535 million loan guarantee [19] from DOE for a solar plant in Silicon Valley. He had multiple visits to the White House in the months before he was awarded the contract. Kaiser has not responded to interview requests from iWatch News.

Steven Westly, a green energy entrepreneur who raised at least $500,000 for Obama, has seen four companies in his venture firm’s portfolio receive more than a half billion dollars in loans, grants or stimulus money from the Obama Energy Department, iWatch News and ABC reported [20] in March.
Bundlers win commission posts across government

Some bundlers limit their role in the administration to serving on commissions to support their pet causes and hobnob with celebrities.
Obama has appointed 22 bundlers to the President’s Committee on Arts and the Humanities or to the board of the John F. Kennedy Center for the Performing Arts.

Four of the nine members of the U.S. Holocaust Memorial Council appointed by Obama in September 2010 were bundlers, including its chairman Tom Bernstein. He is a New York City developer and sports entrepreneur who raised at least $200,000 for the Obama presidential campaign.

This is Bernstein’s second appointment to the Holocaust Memorial Council. Bush appointed him to the same board in 2002 after Bernstein raised at least $100,000 for the 2000 Bush campaign. A former Yale classmate of Bush and fellow owner of the Texas Rangers baseball team, Bernstein switched allegiances to bundle for the Obama campaign.

Others have served on advisory groups which make recommendations to the president on critical matters ranging from the economic stimulus to policies to spur job growth.

Hyatt hotels heiress Penny Pritzker, Wall Street titan Robert Wolf and financier Mark Gallogly, for instance, all served on the President’s Economic Recovery Advisory Commission. Though the commission was headed by former Federal Reserve chairman Paul Volcker, Pritzker at least twice emerged from the White House and faced media cameras on days the commission met.

In late February, in creating a new commission [21] to take on the task of creating jobs, Obama again appointed the three businesspeople. Transcripts of the recovery board meetings show that commission members are free to press for an agenda that could significantly benefit their business interests.

Pritzker, one of America’s richest women and a key fundraiser and adviser in the early days of the Obama campaign, has logged more than 50 visits to the White House, either alone or with family members. Obama also appointed Pritzker to the Kennedy Center board and her husband, Chicago ophthalmologist Bryan Traubert, to the President’s Commission on White House Fellowships.

Pritzker suggested she had clout in a May 2009 CNBC television interview [22] on the White House lawn, saying: “I have no trouble having a spirited dialogue with the president, and that’s something that we do on a regular basis.”

When the reporter asked, “Do you get anywhere?” Pritzker replied: “Absolutely. The president is extremely open to hearing what people on his economic board have to say. And I think it’s absolutely informing some of his decisions.”

Schultz, the White House spokesman, said the administration recruited job candidates from all walks of life. “The people mentioned in this article have sterling academic credentials, years of public service and private sector experience that make them eminently qualified for the positions to which they were appointed.”

The bundling merry-go-round is cranking up for its second act: Obama’s re-election campaign.

Bainum, the Maryland businessman, said he expects it to be rougher going than in 2008. The campaign will be more expensive, and top bundlers are being asked to bring in $350,000 for the president’s
campaign and another $350,000 for the DNC.

“These amounts seem to go up every year faster than rate of inflation,” he said. “I haven’t tested the waters yet.”

With an eye toward the re-election campaign, the White House peppered the guest list for the June 7 state dinner honoring German Chancellor Angela Merkel with bundlers. Among the 200 guests at the Rose Garden event were a dozen bundlers, most with their spouses, including the Bainums.

[vector7]

Obama’s Economists: ‘Stimulus’ Has Cost $278,000 per Job

The stimulus is now causing the economy to shed jobs.

12:07 PM, Jul 3, 2011 • By JEFFREY H. ANDERSON

When the Obama administration releases a report on the Friday before a long weekend, it’s clearly not trying to draw attention to the report’s contents. Sure enough, the “Seventh Quarterly Report” on the economic impact of the “stimulus,” released on Friday, July 1, provides further evidence that President Obama’s economic “stimulus” did very little, if anything, to stimulate the economy, and a whole lot to stimulate the debt.



The report was written by the White House’s Council of Economic Advisors, a group of three economists who were all handpicked by Obama, and it chronicles the alleged success of the “stimulus” in adding or saving jobs.

The council reports that, using “mainstream estimates of economic multipliers for the effects of fiscal stimulus” (which it describes as a “natural way to estimate the effects of” the legislation), the “stimulus” has added or saved just under 2.4 million jobs — whether private or public — at a cost (to date) of $666 billion. That’s a cost to taxpayers of $278,000 per job.

In other words, the government could simply have cut a $100,000 check to everyone whose employment was allegedly made possible by the “stimulus,” and taxpayers would have come out $427 billion ahead.

Furthermore, the council reports that, as of two quarters ago, the “stimulus” had added or saved just under 2.7 million jobs — or 288,000 more than it has now. In other words, over the past six months, the economy would have added or saved more jobs without the “stimulus” than it has with it. In comparison to how things would otherwise have been, the “stimulus” has been working in reverse over the past six months, causing the economy to shed jobs.

Again, this is the verdict of Obama’s own Council of Economic Advisors, which is about as much of a home-field ruling as anyone could ever ask for.

In truth, it’s quite possible that by borrowing an amount greater than the regular defense budget or the annual cost of Medicare, and then spending it mostly on Democratic constituencies rather than in a manner genuinely designed to stimulate the economy, Obama’s “stimulus” has actually undermined the economy’s recovery — while leaving us (thus far) $666 billion deeper in debt.

The actual employment numbers from the administration’s own Bureau of Labor Statistics show that the unemployment rate was 7.3 percent when the “stimulus” was being debated. It has since risen to 9.1 percent.

Meanwhile, the national debt at the end of 2008, when Obama was poised to take office, was $9.986 trillion (see Table S-9). It’s now $14.467 trillion — and counting.

All sides agree on these incriminating numbers — and now they also appear to agree on this important point: The economy would now be generating job growth at a faster rate if the Democrats hadn’t passed the “stimulus.”

[Phil Fiord]

More on the debt debate. It is a pretty decent analysis, actually.

http://www.zerohedge.com/article/t-m...cking-timebomb

Open the site for the full article analysis on Scribt.

Here is a sampling.

Ever since the famous Stanley Druckenmiller Op Ed published in early May, which called for an outright default of the US, saying it would not be the end of the world, and in fact the US would emerge stronger as a result of finally taking the first steps to getting its fiscal house in order, there has been a visible shift regarding the US debt ceiling discussion, with republicans (so far) digging in and refusing to budge on the issue. After all, on the surface Druckenmiller is absolutely correct: with interest rates near record lows for the past 3 years, interest payments would be manageable for a long time even if general rates were to surge due to the Treasury's fixing of low cash coupons over the past 3-4 years, amounting to about 20-30% of all annual tax receipts. There is however one very big problem with this argument, one which we pointed out back in April 2010 when we said that "What people don't realize is that...unless the UST can roll its debt not on a monthly but now weekly basis in greater and greater amounts, the interest rate doesn't matter. All it takes is one semi-failed auction and it's game over as hundreds of billions in bills become payable." Enter the always forgotten maturing debt argument. And as a just released presentation by the Bipartisan Policy Center titled "Debt Limit Analysis" reminds us, aside from the actual deficit funding math, which is that in August there is a $134.3 billion cash shortfall that has to be funded with debt, there is a far greater risk. Or, put numerically, 467.4 billion far greater risks. This is the amount of debt that matures through August 31, and has to be rolled over or the US is bankrupt... in every sense of the word. Once again, America's politicians and media get broadsided by the definition of gross versus net. Because, in reality, the inability to issue more debt post August 3 means a halt to all new debt issuance. Which, unfortunately because it means Geithner's scaremongering is actually correct, would imply the end for the debt ponzi.



Below is the maturity schedule in August from the BPC:

And their commentary, which recaps what we said 14 months ago:

• Treasury must “roll over” almost $500 b in debt that matures during August 2011
  
  • New debt is issued and the proceeds are used to repay the maturing debt plus interest due
  • Treasury will require market access throughout August to avoid defaulting on maturing debt
• About $380 b in short-term T-Bills maturing, plus $90 b in long-term securities
  
  • Quarterly refunding auction on August 15

And that's not it. On a Net basis, there is in addition another $134.3 billion in deficit that must be satisfied somehow. Alas, after August 3rd it will become impossible to plunder savings accounts going forward which means a game over in the kick the can down the road game:



Breaking down the spending side:

The BPC's observations on what happens on August 4 absent a deal are rather spot on:

• If the debt ceiling is not raised by August 2, all three ratings agencies will put the United States on watch for a downgrade, at a minimum. Fitch (6/8/11):
  
  • “If the debt ceiling is not raised by the [X Date] and timely and full payment of its obligations, including Treasuries, is not secure, the U.S. sovereign rating will be placed on Rating Watch Negative.”
• An actual downgrade would cause major losses among holders
• Even without downgrade, it is likely that rates would increase, perhaps significantly
  
  • Less likely, but possible, that Treasury would lose market access during such an unprecedented event and default

As a reminder we are now 32 days away from D-Day, and about 60 days from the need to fund half a trillion, all of it with new gross debt issuance.
To date, there has been no progress in D.C. at all. Will there be progress in the next 4 weeks? They better, or as demonstrated, the extend and pretend game, contrary to the well-meaning intentions of the likes of Drucknemiller, is about to come to a very violent end.