Facts don’t support hype of Obama’s failed health care law

Obama's press conference: On second thought...(Reuters)

President Barack Obama told voters repeatedly during the health care debate that the overhaul legislation would bring down fast-rising health care costs and save them money. Now, he’s hemming and hawing on that.

So far, the law he signed earlier this year hasn’t had the desired effect. An analysis from Medicare’s Office of the Actuary this week said that the nation’s health care tab will go up — not down — through 2019 as a result of Obama’s sweeping law, though the increase is modest.

Obama offered some caveats when asked in his news conference Friday about the apparent discrepancy between what he promised and what’s actually happening so far. On several other topics, too, his rhetoric fell short of a full accounting.

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EDITOR’S NOTE — An occasional look at assertions by public officials and how well they adhere to the facts

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A look at some of the claims at his news conference and how they compare with the facts:

OBAMA: Said he never expected to extend insurance coverage to an additional 31 million people “for free.” He added that “we’ve made huge progress” if medical inflation could be brought down to the level of overall inflation, or somewhere slightly above that.

THE FACTS: Those claims may be supported in the fine print of the plan he pitched to Congress and a skeptical public months ago. But they were rarely heard back then. “My proposal would bring down the cost of health care for millions — families, businesses and the federal government,” he declared in March.

Last August he predicted: “The American people are going to be glad that we acted to change an unsustainable system so that more people have coverage, we’re bending the cost curve, and we’re getting insurance reforms.”

On Friday, he conceded: “Bending the cost curve on health care is hard to do.” The goal: “Slowly bring down those costs.”

The White House contends that although health care costs will rise when most of the changes take hold in 2014 and coverage is extended to the uninsured, costs will go down over the longer term as controls kick in.

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OBAMA: “We took every idea out there about how to reduce or at least slow the costs of health care over time.”

THE FACTS: One idea that most experts believe would do the most to control health costs — directly taxing health benefits — was missing in Obama’s plan. Opposition from unions and others was too great, and Obama himself had campaigned against the idea.

Some of the major cost controllers that did make it into the law — including a tax on high-value insurance plans — don’t start until 2018. That tax was watered down and delayed, and other cost-control approaches also softened after opposition from hospitals and other interest groups.

Health spending already accounts for about 17 percent of the economy and is projected to grow to nearly 20 percent in 2019.

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OBAMA: “So these policies of cutting taxes for the wealthiest Americans, of stripping away regulations that protect consumers, running up a record surplus to a record deficit — those policies finally culminated in the worst financial crisis we’ve had since the Great Depression.”

THE FACTS: The president probably meant the broader economic crisis and not the meltdown of the financial industry when he talked about the “financial crisis.” True enough, George W. Bush entered office with a $236 billion budget surplus in 2001, and in January 2009, before Obama was sworn into office, the Congressional Budget Office projected the deficit for the fiscal year 2009 to be $1.2 trillion.

But the surpluses the government foresaw in 2001 were based on a bubble economy that was bound to burst. And the deficit Obama inherited was only partly from Bush’s fiscal policies.

Mostly it was a result of a recession that sapped tax revenues, increased the costs of safety net programs and demanded more government spending to stimulate the economy. As recently as 2007, the budget deficit was just $161.5 billion. The current annual deficit is now an estimated $1.5 trillion.

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OBAMA: Asked how he can lecture Afghan President Hamid Karzai about corruption when it’s fueled in part by U.S. aid dollars, Obama said: “I’ve said to my national security team … Let’s be consistent in terms of how we operate across agencies. Let’s make sure that our efforts there are not seen as somehow giving a wink and a nod to corruption.”

THE FACTS: While acknowledging the situation is messy, Obama seemed to minimize it.

“Are there going to be occasions where we look and see that some of our folks on the ground have made compromises with people who are known to have engaged in corruption?” he asked. “You know, we’re reviewing all that constantly and there may be occasions where that happens.”

The United States spends more than $100 billion annually in Afghanistan, the world’s second-poorest nation and one of the most corrupt. U.S. officials acknowledge that a significant percentage of the U.S. bankroll enriches shady characters even as it may finance worthy projects, or is stolen outright.

The CIA has paid Afghan warlords and power brokers for years, relying on them as informants and as leverage in the country’s internal ethnic and tribal squabbles. Intelligence officials say payouts are cheap insurance, but development officials and diplomats say the money supports a culture of bribery.

Obama pledged to keep up pressure on Karzai. The Afghan leader recently intervened to free a presidential aide arrested on suspicion of soliciting a bribe. U.S. investigators played a central role in fingering the aide.

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Associated Press writers Jim Kuhnhenn and Anne Gearan contributed to this report.

Copyright © 2010 The Associated Press

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Obama’s plan: Spend money, blame Republicans

Obama promotes jobs, blames GOP for all problems (Reuters)

A combative President Barack Obama rolled out a long-term jobs program Monday that would exceed $50 billion to rebuild roads, railways and runways, and coupled it with a blunt campaign-season assault on Republicans for causing Americans’ hard economic times.

GOP leaders instantly assailed Obama’s proposal as an ineffective one that would simply raise already excessive federal spending. Many congressional Democrats are also likely to be reluctant to boost expenditures and increase federal deficits just weeks before elections that will determine control of Congress.

Jim Manley, spokesman for Senate Majority Leader Harry Reid of Nevada, cautioned, “If we are going to get anything done, Republican cooperation, which has been all but non-existent recently, will be necessary.”

That left the plan with low, if not impossible, odds of becoming law this year. When Congress returns from summer recess in mid-September, it is likely to remain in session for only a few weeks before lawmakers return home to campaign for re-election.

Administration officials said that even if Congress quickly approved the program, it would not produce jobs until sometime next year. That means the proposal’s only pre-election impact may be a political one as the White House tries to demonstrate to voters that it is working to boost the economy and create jobs.

At a Labor Day speech in Milwaukee, Obama said Republicans are betting that between now and the Nov. 2 elections, Americans will forget the Republican economic policies that led to the recession. He said Republicans have opposed virtually everything he has done to help the economy, and have proposed solutions that have only made the problem worse.

“That philosophy didn’t work out so well for middle-class families all across America,” Obama told a cheering crowd at a labor gathering. “It didn’t work out so well for our country. All it did was rack up record deficits and result in the worst economic crisis since the Great Depression.”

He said Repubicans have consistently opposed his economic proposals and seem to be running on a slogan of “No, we can’t,” playing off his 2008 presidential campaign mantra of “Yes we can.”

“If I said fish live in the sea, they’d say no,” Obama said.

Republicans made clear that Obama should not expect any help from them.

Senate Republican Leader Mitch McConnell of Kentucky said the plan “should be met with justifiable skepticism.” He said it would raise taxes while Americans are “still looking for the ‘shovel-ready’ jobs they were promised more than a year ago” in the $814 billion economic stimulus measure.

The House Republican leader, John Boehner of Ohio, added “We don’t need more government ‘stimulus’ spending. We need to end Washington Democrats’ out-of-control spending spree, stop their tax hikes, and create jobs by eliminating the job-killing uncertainty that is hampering our small businesses.”

Administration officials are hunting broadly for ways to revive the economy. But they are likely to drop a separate proposal to renew a law exempting companies from paying Social Security taxes on any unemployed workers they hire, according to a White House official who spoke on condition of anonymity because the decision was not final.

Casual in brown slacks and open-collar white shirt with rolled-up sleeves, Obama took a populist tack in his speech, mixing attacks on Republicans with praise for working-class and middle-class Americans.

He said he’d “keep fighting, every single day, every single hour, every single minute to turn this economy around.” He said interest groups he has battled “talk about me like a dog.”

He also acknowledged that the past eight months of modest private-sector job growth hasn’t been enough to bring down the unemployment rate. He said economic problems facing families today are “more serious than ever,” and seemed to ask the audience in Milwaukee — and voters nationwide — for patience.

“Now here’s the honest truth, the plain truth. There’s no silver bullet, there’s no quick fix to these problems,” he said, adding that it will take time to “reverse the damage of a decade worth of policies” that caused the recession.

Administration officials said the transportation plan’s initial $50 billion would be the beginning of a six-year program of transportation improvements, but they did not give an overall figure. The proposal has a longer-range focus than last year’s economic stimulus bill, which was more targeted on immediate job creation.

The plan calls for rebuilding 150,000 miles of roads; building and maintaining 4,000 miles of rail lines and 150 miles of airport runways, and installing a new air navigation system to reduce travel times and delays.

Obama also called for a permanent funding mechanism, an infrastructure bank, to focus on paying for national and regional infrastructure projects. Officials provided few details of how the bank would work.

Obama said the proposal would be fully paid for. In an earlier briefing for reporters, administration officials said Obama would pay for the program by asking lawmakers to close tax breaks for oil and gas companies and multinational corporations.

The infrastructure spending is part of a package of economic proposals to be announced this week by Obama, who is feeling heat from fellow Democrats and a jittery public to show that he is focused on pumping life into the economic recovery and shrinking an unemployment rate long stuck near 10 percent.

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Associated Press writer Julie Pace in Washington contributed to this report.

Copyright © 2010 The Associated Press

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Congressmen probed in pay-for-votes scheme

House investigators have recommended that three lawmakers be further investigated to determine whether political contributions were improperly linked to votes on the huge financial overhaul bill.

The independent House Office of Congressional Ethics recommended that the member-run House ethics committee pursue potential rules violations by Republicans John Campbell of California and Tom Price of Georgia and Democrat Joseph Crowley of New York.

The ethics office recommended no further investigation of five other lawmakers in the same probe: Democratic Reps. Earl Pomeroy of North Dakota and Mel Watt of North Carolina, and Republicans Jeb Hensarling of Texas, Chris Lee of New York, and Frank Lucas of Oklahoma.

All offices of the lawmakers had received letters from the OCE by Tuesday and made the conclusions public.

President Barack Obama signed the financial overhaul bill into law July 21. It aims to restrain Wall Street excesses with the most sweeping overhaul of financial rules since the Great Depression, clamping down on lending practices and expanding consumer protections to address failures that precipitated the 2008 meltdown that knocked the economy to its knees.

The Democrats — Crowley, Pomeroy and Watt — voted for the final bill. The Republicans — Campbell, Price, Hensarling, Lee and Lucas — voted against it.

Campbell said he was “perplexed by OCE’s decision, as they have presented no evidence that would suggest wrongdoing. As one of Congress’s most outspoken critics of the earmark system and the waste and corruption it engenders, I have worked to make Congress more transparent and accountable to the American taxpayer. Any suggestion to the contrary is baseless and unfounded.”

Price said it was “truly a mystery” that his case was referred for further investigation, “there being no evidence of any wrongdoing or any inconsistency in my policy position.”

“As a member of Congress, I have always complied with the letter and the spirit of the law,” Price added. “To suggest otherwise is unfounded and untrue. In addition, my voting record and opposition to a culture of taxpayer-funded bailouts has been and always will be unshakable.”

Crowley’s office said in a statement that he “has always complied with the letter and spirit of all rules regarding fundraising and standards of conduct.”

All three lawmakers referred for further investigation had fundraisers last December, around the time of crucial House votes.

Price had two fundraisers, including a breakfast on Dec. 2 and a luncheon Dec. 10 billed as a financial services event. A special guest was Rep. Spencer Bachus of Alabama, the ranking Republican on the House Financial Services Committee.

Crowley had a cocktail reception Dec. 10.

Campbell had fundraisers Dec. 8 and Dec. 9.

Campbell and Price consistently opposed the regulation legislation. Crowley, after attending his fundraiser, returned to the House and voted against Democratic amendments aimed at toughening some financial regulations.

In each case he joined more than 100 Democrats, including fellow New Yorkers, to vote against the proposed changes.

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Associated Press writer Jim Kuhnhenn contributed to this report.

Copyright © 2010 The Associated Press

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Obama’s plan: Bash Bush

George W. Bush

President Barack Obama rallied support for his embattled Democrats on Monday, charging that Republicans had no ideas different from those pursued by his predecessor, George W. Bush.

At a fund-raising lunch for the Democratic National Committee, Obama tried to energize Democrats who are likely to lose seats in both chambers of the U.S. Congress in the November 2 elections.

U.S. voters will elect all 435 members of the House of Representatives and fill 37 of the 100 seats in the Senate.

Obama said that after losing control of Congress in 2006 and the White House in 2008, Republicans did not engage in new thinking but stuck to the same policies that led the United States into the worst recession since the Great Depression.

“It’s not like they engaged in some heavy reflection. They have not come up with a single, solitary new idea to address the challenges of the American people. They don’t have a single idea that is different from George Bush’s,” he said.

Republicans, he said, are betting that Americans had forgotten recent history.

Obama has frequently said he inherited major economic challenges from the previous administration but has not often referred to President Bush directly.

Obama raised about $500,000 from more than 200 party loyalists at the event.

The election is seen as a referendum on Obama’s performance on the economy, particularly unemployment.

Democrats hope to limit Republican gains in November by attacking their policies. A battle is brewing over tax cuts proposed by Bush and enacted by Congress in 2001 and 2003 which expire at year’s end.

Obama, who wants to extend the tax cuts only for families making less than $250,000 a year, said Republicans would extend them to wealthy Americans who do not need them.

He was particularly biting in his criticism of Republican opposition to a $30 billion plan to increase loans to small businesses. Republicans say they do not want to add to the budget deficit and would like to see budget reductions to offset the cost of the plan.

“Day after day they keep stalling this bill and stonewalling this bill and opposing this bill. Why? Pure politics. They’re more interested in the next election than the next generation,” Obama said.

Copyright © 2010 Reuters

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Harry Reid’s uncertain future

Senate Majority Leader Harry Reid (AP)

Senate Democratic leader Harry Reid’s chances for six more years in Washington may be like tossing dice in a casino, even if he has made headway against Republican challenger Sharron Angle in a state with the nation’s highest rate of joblessness.

The four-term Reid holds a slight lead over Angle in the latest polling, thanks in part to her unsteady performance since winning the June primary and to Democratic ads portraying her as an extremist. Video of Angle scurrying away from reporters has mixed with television commercials of older voters upset about her call to phase out Social Security and Medicare.

But an internal memo obtained by The Associated Press says Reid has a “a serious problem” with voters frustrated with the economy and “receives a great deal of blame.” The July 15 memo is based on polling research conducted for Patriot Majority, a union-funded group that is running TV ads against Angle.

The race is wide open, the memo concludes, despite Reid’s improved standing and voters’ alarm over some of Angle’s positions.

“An even playing field is an improvement for Reid, as earlier surveys indicated a much more difficult path to re-election,” the memo says. The winner in November will be the candidate “who makes the more persuasive case that he, or she, is more dependable and can be counted on to deliver for Nevada in these tough economic times.”

When asked about his standing in the race, Reid on Saturday said he didn’t pay attention to fluctuating polls and only cared about the outcome on election day.

“The No. 1 problem we have in Nevada is jobs,” he said.

Nevada’s unemployment rate of 14.2 percent is the highest on record in the once-booming Silver State and well above the national average of 9.5 percent. A record number of home foreclosures also has rocked the state, as has a decline in tourism — the life blood of Nevada’s economy — during the worst recession since the Great Depression.

Voters fault the party in power for the stubborn economic downturn. In Nevada, that’s President Barack Obama, who won the state two years ago, and the Democrats who control Congress, led by Senate Majority Leader Reid.

Republican Woody Stroupe, 72, a Las Vegas retiree, says Reid and Democrats in Washington are failing to deal with runaway deficits and illegal immigration. He wants a conservative in the Senate who will support lower taxes.

Reid “is the most powerful man in the Senate. Look at the results,” Stroupe said, citing the sour economy.

Reid is struggling to find a convincing message on the economy, particularly one that will resonate with independents and moderates who probably will decide the race. “We have a lot of work ahead of us,” he told supporters this month.

Reid has made a massive development on the Las Vegas strip a foundation block of his re-election drive. One of the senator’s early campaign ads featured an endorsement from MGM Mirage CEO Jim Murren, who credits Reid with using his clout to save the CityCenter project when its financing nearly collapsed during the recession. Reid “called every CEO of every bank that I know,” Murren says.

But Angle has said she wouldn’t have picked up the phone because private projects must succeed on their own. That reflects her general position that government should cut regulation and keep its distance from business, and she say’s Reid’s actions for CityCenter might have cost other casinos business.

Angle is trying to recover from a rocky, sometimes embarrassing stretch in which she’s attempted to transform her mom-and-pop primary campaign into a multimillion-dollar general election operation. She’s hired big-name consultants and startled Reid’s campaign by raising more than he did between April and June, $2.6 million to $2.4 million. Reid still holds a commanding financial edge overall — $9 million to her $1.8 million in cash on hand.

Among some of the images in news reports and Democratic ads that Nevadans have seen of Angle in recent weeks:

  • Angle saying, “I’m not in the business of creating jobs.” She later explained that private businesses create jobs and government is responsible for nurturing an environment for companies to grow.
  • Angle saying she would not have pressured banks to save a major Las Vegas construction project.
  • Angle backtracking after referring to a $20 billion victims’ compensation fund for the Gulf oil spill as a “slush fund.” On a Nevada campaign stop this month, Obama ridiculed her, saying “she favors an approach that’s even more extreme than the Republicans we’ve got in Washington.”

“Sharron’s first six weeks have been atrocious. I think she would admit to that,” said Danny Tarkanian, a Republican who sought the GOP Senate nomination. But “we are still a long way from the election. There is a lot of time.”

To Las Vegas resident Bob Harrington, 63, a Democrat who owns a direct-mail franchise, Angle is “frightening.”

“She’s just so extreme. If she was in Afghanistan, she’d be a leader of the Taliban. She wants to go back to the 14th century,” says Harrington, who plans to vote for Reid because “he brings home the bacon.”

Her decision after winning the nomination to limit interviews to mostly conservative media outlets — many outside the state — has opened her to criticism that she fears scrutiny and is unprepared for Washington.

Even some supporters are anxious for Angle to retool her strategy to make her more visible in Nevada, where the former Reno legislator remains little known in the populous Las Vegas region.

“We are the ones that need to hear from her,” said Debbie Landis, a prominent tea party organizer in Nevada. “No amount of adoring fans in New Hampshire will get her elected.”

Angle has reshaped her message in hopes of appealing to a broader audience, though she says her positions have not changed.

She no longer talks about phasing out Social Security and Medicare; she says they should be “personalized.” She launched a new website that recast or deleted many of her earlier positions, such as eliminating the federal Education Department and using Yucca Mountain as a site to reprocess spent nuclear fuel, a widely unpopular idea in the state.

Reid’s campaign later posted the website’s original language, which set off a brief legal spat.

Copyright © 2010 The Associated Press

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Political spin clouds economic realities

Democrats Christopher Dodd and Barney Frank (Reuters)

Midterm politics are distorting economic decision-making as leaders of both parties spin rival views of the road ahead, offering visions based on questionable economics.

The resulting political angst is leaving a mark on major legislation. A far-reaching financial overhaul bill signed by President Barack Obama on Wednesday reflects voter anger over bankers, bailouts and bonuses. A measure extending unemployment insurance, soon to be on Obama’s desk, was scaled back from an earlier, far more ambitious Democratic stimulus plan.

Angling for advantage, Democrats look to troubles before Obama took office. “It’s a choice between the policies that got us in this mess in the first place and the policies that are getting us out of this mess,” asserts Obama.

Republicans seek an edge by looking ahead. “More government, fewer jobs: This isn’t the picture of recovery; it’s the epitome of failure,” says House Republican Leader John Boehner of Ohio.

Both sides are exaggerating, say economists and political analysts. And things will only get messier as November’s congressional elections draw closer. Politicians of all stripes are under heavy pressure from polls that show increasing voter worry about alarmingly high unemployment, growing government debt and rising skepticism over Obama’s ability to help the economy.

By contrast, 64 percent of economists surveyed in a Wall Street Journal-NBC News poll said the economy would get better over the next 12 months — compared with just 33 percent among the general public who said they believed that.

“The election is certainly coloring the decision-making process in Washington, as one would expect,” said Mark Zandi, chief economist at Moody’s Analytics.

Zandi, who has advised both Republican and Democratic lawmakers, said the political gamesmanship comes as the economy remains “in a precarious situation” despite earlier signs of a rebound.

Fed Chairman Ben Bernanke reinforced this view, telling Congress on Wednesday the economy is “unusually uncertain.” But he did not forecast that it would fall back into recession.

In office 18 months, Obama is still running against the policies of George W. Bush and cites “nearly a decade of not paying for key policies and programs” such as the wars in Iraq and Afghanistan, big tax cuts and a costly Medicare prescription drug program.

Bush came to office with a $236 billion budget surplus in 2001, says Obama. “The day I took office, eight years later, America faced a record $1.3 trillion deficit.”

But blaming the country’s economic woes on Bush tax cuts and spending is a stretch.

It ignores the fact that as recently as 2007, the budget deficit was just $162 billion — long after Bush’s tax cuts of 2001 and 2003 kicked in and spending on the two wars and on the Medicare program were in place.

Furthermore, the projected surplus reflected a continuation of the bubble economy of the late 1990s, when the stock market was soaring, high-tech businesses were on a roll and corporate profits were surging. Those surpluses would have evaporated no matter who became president in 2001.

The rise in the annual deficit from $162 billion in 2007 to over $1 trillion now is largely due to collapsing tax revenues from the recession that began in December 2007, and stimulus and bailout spending by both Bush and Obama, said Brian Riedl, a budget analyst at the Heritage Foundation.

The Bush tax cuts and other policies are “a convenient scapegoat for past and future budget woes,” he said, but can’t be blamed for today’s trillion-dollar deficits — or future ones.

“Over the next 10 years, virtually 100 percent of the rising deficits” will be driven by “entitlement” programs such as Social Security, Medicare and Medicaid and interest payments on the $13.2 trillion national debt, Riedl said.

Most economists — as well as Obama — seem to agree.

For their part, Republicans paint a grim picture of Obama’s stewardship, claiming his $862 billion 2009 stimulus package failed to produce many new jobs — with over 14.7 million Americans out of work and the jobless rate stuck for months near 10 percent.

But economists generally agree that the Obama stimulus measures, plus bank and auto company bailouts begun under Bush, did keep the economy from plunging into another Great Depression and have recently contributed, at the least, to modest job growth.

“Even GOP economists acknowledge that without the big fiscal stimulus and two years of near-zero interest rates, we wouldn’t have moved from losing half a million jobs a month to a small gain,” said Rob Shapiro, a former economic adviser to President Bill Clinton and now chairman of Sonecon, a consulting firm.

“The Republicans are simply making a political case. The economy is slow, which is true. They’re blaming the stimulus, which is false. But their success in doing that has constrained Democrats as well,” Shapiro said.

As a result, talking about budget restraint is clearly the order of the day — even though Obama himself and many economists warn some additional government spending is needed to keep the economy from slipping back into recession.

This stimulus downshift can clearly be seen in the legislation to renew the extension of unemployment compensation for up to 99 weeks for more than 2.5 million out-of-work Americans whose unemployment benefits have expired.

The roughly $34 billion cost of the plan will be paid for by new borrowing. Until this week, Republicans had blocked the bill for months, arguing that the expense shouldn’t be used to increase the $13.2 trillion national debt.

And even though Senate Democratic leaders were finally able to eke out a victory this week, they had to scale back their proposal from an original plan for a $120 billion package that included various other new stimulus items, including aid to cash-strapped states.

Copyright © 2010 The Associated Press

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Obama signs Wall Street reform bill

(AFP)

President Barack Obama signed into law on Wednesday the most comprehensive financial regulatory overhaul since the Great Depression, vowing to stop risky behavior on Wall Street that imperiled the U.S. economy.

Influential business groups lined up to criticize the new law, underscoring Obama’s uneasy relationship with America’s business community. Some on Wall Street, however, welcomed the clarity offered by the law after months of wrangling in Congress over what should be in the legislation.

The law, which got final approval from the Senate last week, targets the kind of Wall Street risk-taking that helped trigger a global financial meltdown in 2007-2009 and also aims to strengthen consumer protections.

Obama, facing voter unrest over Wall Street bailouts that have failed to spark a strong Main Street job recovery, pledged taxpayers would never again have to pump billions of dollars into failing firms to protect the economy.

“Because of this law, the American people will never again be asked to foot the bill for Wall Street’s mistakes,” Obama said at a signing ceremony attended by some Wall Street bankers, business leaders and lawmakers.

“There will be no more taxpayer-funded bailouts. Period.”

With Republicans poised to make gains in the November congressional elections, Obama’s Democrats are eager to show voters that they have taken steps to tame an industry that dragged the economy into its deepest recession in 70 years.

Obama and Democrats have yet to gain political traction from the legislative victory, with Americans still anxious about a 9.5 percent jobless rate and ballooning deficits.

The financial regulatory reforms were a major achievement for Obama and his ambitious domestic agenda. Earlier this year he signed into law sweeping reforms of the United States’ $2.5 trillion healthcare system.

The financial reforms won Democrats few friends on Wall Street. Wealthy donors have started to steer more campaign contributions to Republicans, who voted overwhelmingly against the reforms.

“UNSCRUPULOUS LENDERS”

Obama had harsh words for “unscrupulous” lenders and others he said had taken risks that endangered the economy. He said the new law was aimed at curbing abuses and excesses on Wall Street and stopping taxpayer bailouts of failing companies.

The law would provide certainty “to everybody from bankers to farmers to business owners. And unless your business model depends on cutting corners or bilking your customers, you have nothing to fear from this reform,” Obama said.

The U.S. Chamber of Commerce, an influential business group that often criticizes Obama’s economic policies, said it would have the opposite effect.

“Such a broad, sweeping bill epitomizes a law with unintended consequences that creates more uncertainty for American businesses,” said Thomas J. Donohue, president and CEO of the Chamber.

The American Bankers Association expressed disappointment with the legislation, saying it “contains a tsunami of new rules and restrictions for traditional banks that had nothing to do with causing the financial crisis in the first place.”

Much of its impact will depend on how it is put into practice. Bart Chilton, a commissioner with the U.S. Commodity Futures Trading Commission, said the law boosts transparency and gives regulators better tools to regulate markets, but many questions remained to be answered.

“This is a wide-ranging bill with many facets, hundreds where regulators still need to put some more meat on the bones. How we do that, and when we do that, are questions that will really tell if this legislation meets the expectations of its supporters,” he said.

“FAKE CONTROVERSY”

Ruth Porat, chief financial officer of financial giant Morgan Stanley, which on Wednesday reported higher-than-expected second quarter profits, said the company was pleased to see the bill signed as it put “some clarity around the issues.”

The legislation targets potentially lucrative trading in risky over-the-counter derivatives and aims to force banks to end trading for their own profits.

It creates a Bureau of Consumer Financial Protection to regulate products ranging from credit cards to mortgages. The administration considered this one of the most critical parts of the bill but banks fought it bitterly.

Obama received repeated ovations during his speech and one round of applause was reserved for his praise of three Republican lawmakers who broke ranks with their party to vote for the legislation.

The White House said Citigroup Inc’s CEO Vikram Pandit; Bob Diamond, president of Barclays Plc; and Gerald Hassell, president of Bank of New York Mellon, attended the bill-signing.

JPMorgan Chase & Co Chief Executive Jamie Dimon was one of the few major bank heads not invited, a spokeswoman for the second-largest U.S. bank said.

Dimon once enjoyed a close relationship with Obama, but he later emerged as a vocal critic of the efforts to reform the U.S. banking industry.

The White House dismissed as a “fake controversy” media reports on the failure to invite business leaders like Dimon.

“The CEOs who opposed reform never expected to be invited to the bill signing and not a single one has complained to the Administration,” White House spokesman Jen Psaki said.

Copyright © 2010 Reuters

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Obama to sign historic financial overhaul bill

(AFP)

President Barack Obama claims a moment of history Wednesday as he signs into law the most sweeping finance reform since the 1930s Great Depression.

The legislation, which some Republicans have already pledged to repeal if they regain power in Washington, will fundamentally overhaul the US government’s regulation of Wall Street and create a political legacy for Obama.

Obama says the bill will cut down on a culture of greedy risk-taking and “shadowy deals” that triggered the worst financial crisis in generations.

His opponents though argue that the legislation punishes the whole banking industry for the sins of the few, and is another example of government intervention in the economy that will choke growth.

The administration touts the new law as an example for the rest of the world, as top global economies seek to flush out the causes of the crisis, from which they are now only slowly emerging.

“We reaffirmed our commitment to fiscal responsibility and reform,” Obama said on Tuesday after White House talks with British Prime Minister David Cameron.

He called the bill “the toughest financial reforms since the aftermath of the Great Depression” and said it was part of a global effort to rebuild confidence since the economic crisis that erupted in 2008.

Obama was due to sign the financial reform legislation at the Ronald Reagan Building in Washington, and in the process bolster his claims as a significant reformer, following his health care reform law passed this year.

However, despite passing more significant legislation than any Democratic president in decades, Obama has yet to enjoy much of a political boost from fulfilling campaign promises.

His approval ratings are now between the mid 40s and 50 percent in most polls — dangerous territory for a first-term president facing mid-term congressional elections in November in which Democrats fear heavy losses.

Many analysts put Obama’s political woes down to the economy, and the slowing rebound — with unemployment still at 9.5 percent, as many Americans feel pessimistic about their futures.

The financial reform bill may eventually become popular with everyday Americans, but much of it, like the health care bill, is so complicated that it will not come into force for months.

For instance, it will be up to 12 months before a new Consumer Financial Protection Bureau is set up to protect American consumers from hidden fees, and deceptive lending practices when they get a new mortgage or credit card.

Similarly, it will take up to 18 months to set up new regulations to stop banks from engaging in impermissible proprietary trading and investment in hedge funds — a new system known as the Volcker rule after former Federal Reserve chief Paul Volcker.

The legislation also closes loopholes in regulations and requires greater transparency and accountability for hedge funds, mortgage brokers and payday lenders, and arcane financial instruments called derivatives.

Just three Republicans — Olympia Snowe and Susan Collins of Maine and Scott Brown of Massachusetts — backed the bill in the Senate, where it squeaked through last week after passing the House of Representatives in June.

The measure has drawn praise but also skepticism from economists and analysts.

The bill “addresses a number of key weaknesses in the US financial regulatory structure that led to the financial meltdown in 2008 and early 2009,” said Brian Bethune at IHS Global Insight.

But Diane Swonk at Mesirow Financial warned that much of the impact is not known.

“We will have more regulators overseeing — but not necessarily averting — risk, and with a bill so large and undefined, we are likely to get more, in terms of unintended than intended consequences, going forward,” she said.

The law is likely to generate much debate ahead of congressional elections in November as Republicans call for its reversal.

House Republican leader John Boehner said recently the law “ought to be repealed” and replaced with “common-sense things that we should do to plug the holes in the regulatory system.”

Copyright © 2010 Agence France Presse

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Sessions predicts GOP takeover of House

Pete Sessions

A top Republican lawmaker on Sunday predicted his party would win back the House of Representatives from Democrats in the November mid-term elections, as both parties previewed the arguments they will deploy in the battle for control of Congress.

Republican Representative Pete Sessions said his party would win “slightly over” 40 House seats, which would give them a slim majority in the chamber and, with it, the ability to derail President Barack Obama’s agenda.

“I think our candidates are going to take us from good to great to victory,” said Sessions, who oversees his party’s electoral efforts in the House.

His Democratic counterpart, Representative Chris Van Hollen, said his party would retain control of the House despite threatening poll numbers and the impact of the sluggish U.S. economy.

“We know it’s going to be a tough election,” Van Hollen said on NBC’s “Meet the Press.”

All 435 House seats and 36 of 100 Senate seats are at stake in November. Analysts say Republicans could win back the House and possibly the Senate.

Vice President Joe Biden said Democrats would retain control of both chambers.

“I don’t think the losses are going to be bad at all. I think we’re going to shock the heck out of everybody,” he said on ABC’s “This Week.”

Republican Senator John Cornyn predicted gains for his party in the Senate but stopped short of saying they would pick up the 10 seats needed to win control.

“If the election were held today, it would be a pretty good election,” said Cornyn, who oversees the party’s electoral prospects in the Senate.

Republicans said the November 2 vote would serve as an important check on Obama if the party won back Congress, while Democrats sought to tie Republicans to former President George W. Bush, who most polls show is even less popular than Obama.

“They want to go back to the same (Bush) agenda that got us into this mess,” Van Hollen said.

Obama and his fellow Democrats argue that they have had a productive year and a half in Congress, having passed the greatest expansion of health care since the 1960s and the broadest rewrite of Wall Street rules since the 1930s.

Democrats passed an $862 billion stimulus package that the non-partisan Congressional Budget Office says has blunted the impact of the worst recession since the Great Depression. Republicans, however, argue that it has saddled the nation with an unsustainable debt.

A MID-COURSE CORRECTION?

Republicans said they will use anxiety over the economy and rising government debt and voters’ skepticism of the stimulus and healthcare efforts against Democrats in the coming months.

“They’ve seen big government on full display here for a year and a half. They are appalled. They would like for it to stop, and the best way for it to stop is to have a mid-course correction,” said Senate Republican leader Mitch McConnell.

“What we’re trying to do is to make the president a born-again moderate,” he said on CNN.

Democrats said they would try to frame the election as a choice between the two parties rather than a referendum on Democrats, arguing that Republicans would try to scale back or privatize popular entitlement programs and extend tax cuts for the rich.

“If the check and balance is to be with Big Oil, Big Insurance and Wall Street against the average individual, then that’s where the Republican Party is at,” said Democratic Senator Bob Menendez.

Copyright © 2010 Reuters

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The Democratic Party must Die.

It must die, so it can be reborn and transformed.

1931 – The Democratic Party retakes control of the House, ushering in social programs such as Social Security, Medicare, Medicaid, school lunch programs, and shortening the Great Depression of 1929. They lose control in 1995 to Newt Gingrich and Tom DeLay.

2004 – The Democratic Party has 72,000,000 registered and self-identified members, by far the largest party in America.

COINCIDENCE? I think NOT!

I am not a member of any organized political party. I am a Democrat.
— Wil Rogers

“You know, to listen to Senator Lieberman, Senator Kerry, Representative Gephardt, I’m anti-Israel, I’m anti-trade, I’m anti-Medicare and I’m anti-Social Security. I wonder how I ended up in the Democratic Party. I’m not a new entrant to the Democratic Party. I’ve been here a long time.”
— Howard Dean

FROM THE CHURCH OF INEFFABLE STUPIDITY:

1860 was a strange year. Southern states were aching for war and separation, in order to maintain the profits earned from a slave labor force of almost 4,000,000 blacks, men and women who were made slaves solely on the basis of their skin color. Northern states sought compromise, peace and free growth to the west. With the passage of the the Fugitive Slave Law and the Kansas-Nebraska Act, antislavery Democrats found themselves effectively pushed out of the South.  Many of them supported the election of some Illinois upstart named Abraham Lincoln. The Pro-Slavery Democrats (mainly in the South) increased their push for independence and continued slavery.

The South’s thirst for war won out, and by 1865 hundreds of thousands of Americans lay dead or maimed. As with every other war, too many soldiers died, and not enough of the politicians who led them to war in the first place.

After that most uncivil war, Democrats again found themselves split in two, this time with a pro business faction (Grover Cleveland) vs. the farmer branch (William Jennings Bryant). This schism continued in one form or another for decades to come.

By the time that civil rights became reality, and not just a cute theory, many conservative southern Democrats had switched parties, while african-americans left the GOP in droves.  While most Democrats still supported social programs, all was not well in the party.

By 1990, the modern GOP had become more conservative, more militaristic, and almost all white. The Democrats, taking careful aim with a 12 gauge shotgun at their own feet,  found a new way to lose, and learned to become even more disorganized. The Democratic Leadership Council, created in 1985 by Governors Chuck Robb, Bruce Babbitt and Lawton Chiles, along with Senator Sam Nunn and Representative Dick Gephardt, was the Democrats’ answer to Nixon, Reagan, and most of all, Walter Mondale and Hubert Humphrey. America was a center right country, the theory went, and by golly, the Democrats were going to grab some of that center.

To be sure, the election of Bill Clinton was in part due to the DLC, and a more centrist message, but along the way, people began to be disenchanted by the swing to the right. Even though they had far smaller numbers across the country, in 1995, Newt’s army marched in and wrestled control of the House for the first time since 1931. They proceeded to attack the president in every way possible, eventually seeking his impeachment. (Note for November: Congresscritter Issa has promised a repeat performance aimed at Obama should the GOP take control of the house).

Whether it was losing the house, a growingly corporate controlled MSM, the relentless attacks by the GOP,  or the growth of the DLC, something strange happened to the Democratic Party. While it is impossible to pin down its roots or the reasons, the Party lost its soul.  Too many Democrats remained quiet, even timid, while the GOP performed its dance of a thousand cuts upon President Clinton. Whatever the cause, that new-found spinelessness within its elected leaders became contagious, even as the party membership grew ever larger outside of the Bloatway. Whatever the reasons, with the growth of the DLC, the Party began actively courting corporations, the military industrial complex, and Wall Street.  Grover Cleveland would have been proud. Money flowed in, and morals, ethics, empathym and support for social justice evaporated.

Then came the election (?) of George W. Bush, and with it, the first true portrait of what the Democrats had become. Clear evidence of voter fraud, voter suppression, and worse became too obvious to ignore. That new face of the Democrats was best portrayed by the glum, expressionless face of Al Gore, as Congressman after congressman begged and pleaded for just one Democratic Senator to stand up and demand that something be done. All it would have taken was one Democratic senator. Just one.  But it was not to be, and with that craven, bold, strong display of hiding behind one’s skirts, the Democrats ushered in 8 years of neocon rule.

Ask any sitting Democratic senator why they refused to support a peak into voter suppression, voter fraud, and more, and if you ever get a responsive answer, please call me. Collect.

And with the coronation of George the Wth, the neocon war plans were put into gear, even before 9/11. Despite our war preparations, we suffered yet another attack on our soil.  Without diving into conspiracy theory land, suffice it to say that the warnings about an upcoming attack were many, warnings were numerous and specific, and the numbers of dead utterly unnecessary. Rather than taking names and firing people for incompetence, W PROMOTED the person most responsible to deal with national security threats to the nation. The follow up investigation by the 9/11 commission was a farce, the depths of which we have yet to discover.

Even though most informed experts knew that Iraq had nothing to do the 9/11 attacks, Iraq suddenly became everyone’s talking point. Afghanistan, the country that permitted to be used as a safe haven by Al Qaida, was invaded by a minimal force, with minimal support, and minimal effort. Our troops were stretched so thin, that we risked suffering massacres of our troops the likes of which no American has witnessed since WWII in the early Pacific theater. When we had bin Laden pinned down, rather than redoubling our efforts and increasing our support for our troops, the Bush team simply let him escape. Rumors abound that Cheney/Bush correctly thought that Americans would be very supportive of a country’s current leadership if we remained at war. Well, they got two terms, and we have a constant state of war, without any end in sight.

And again, we must ask. WHERE WERE THE DEMOCRATS? Where were the hard questions on Afghanistan, logistics, support, fraud, and the lack of a plan with a clear start and clearer finishing line?  Silent. Spineless. Reprehensible. Embarrassing.  That is the only way to describe the behavior of our Party in 2002-2005.

Contrary to how the MSM repeatedly portrayed the impact of 9/11, those attacks actually changed nothing. Rather, our 4000 deaths served only to highlight just how far the Democratic Party had fallen from grace and from a position of responsibility. If that minority party thought that putting its tail between its legs worked out well . . . .  Sigh.

The Quagmire known as IraqNam

In the smoky aftermath of the attack, the CIA used its vast resources to create an NIE on Iraq. A National Intelligence Estimate is no mere term paper. It uses all the resources available to it to provide as accurate a picture as possible about the nation, tribe, region that is the subject of the study.  The NIE is then given to house and senate leaders, the White House, even some military, so informed debate can take place.

By all knowledgable accounts, the original Iraq NIE was thorough, accurate and far reaching. It dealt with issues like Yellowcake, alleged Al Qaida meetings, the reality of air power and its threat to the US, nuclear weapons programs, economic issues, social issues (including the Kurdish situation), and much more. There was one problem with this NIE:  NOT ONE DEMOCRATIC LEADER BOTHERED TO READ IT. Had the Democrats done so, some experts posit that the Iraqi invasion and resulting Trillion dollar occupation would have never happened.  Laziness? Willful ignorance? Lack of responsibility? How about illiteracy? Perhaps the CIA used too many big words, words that were beyond the Democratic senators and congresscritters to comprehend. Seeing how Congress actually spent time on the renaming of a fried potato side dish to “Freedom Fries,” perhaps the illiteracy concept begs for more research.

By the time that Dick the Cheney managed to kowtow and bludgeon the CIA intosubmission, starting with stovepiping bad data, to ordering the CIA to lie to congress,the USS America was ready to sail off to a war of choice, with the fool support of most sitting Democrats. Any sign of weakness was immediately labeled “weak on terror,”  or “unpatriotic,” or my personal favorite, “unAmerican.”  Eventually, the Democrats did move in unison, if you call hiding in the shadows, avoiding hard questions, and shirking their constitutional duty moving in unison.

Ours was supposed to be a nation of checks and balances. That was no longer the case in 2002. The GOP marched in lockstep with a neocon, blood-thirsty White House, while the minority party became famous by collectively removing their pants, squatting and asking, “What color?” No hard questions were asked, either about IraqNam, or even Afghanistan. Rumsfeld’s odd behavior and misuse of resources was ignored, and worst of all, there was no adult supervision of the messes we were about to get into.

Solely due to the Democrats’ absence, we wasted a Trillion dollars, the lives of 4,000 brave troops, and irreparably damaged the minds and bodies of over 150,000 other troops. The damage done to the people of Afghanistan and Iraq won’t be mentioned by America’s brave journalists. They will leave that to foreign correspondents, so that information can safely and comfortably be ignored by America.  Today’s Republicans are little more than bloodthirsty, immoral, corporate toadies, who still support our occupation of Iraq and Afghanistan, so America could never expect a realistic policy move from them. But the Democrats! Where the HELL were they when we needed them to stand up to this incredible march to war?

In other foreign policy, every Bush misstep was consciously ignored by the Democrats. It was though as someone had sewn their lips and eyes shut. If they tried to speak up, they would be accused of treason by the GOP. Case in point? Think back Dick Durbin’s brave effort to raise the issue of torture.

Chew on that for a second. America tortures its prisoners. What the HELL happened to our country where such a statement could be made without complaint? What the HELL happened to us, where Durbin’s complaint about torture  eventually resulted in a forced apology? BY DURBIN! Where the HELL were the Democrats at that time?  It turns out that some of them were calling Durbin, demanding that he apologize.

Illegal renditions by the CIA became the norm, not the exception. Torture at Abu Grhaib, Gitmo, and secret black ops centers in Poland and elsewhere suddenly became acceptable. Sending prisoners to other nations for them to torture became policy. And throughout this all, the Democrats remained silent.

PATRIOT ACT

The first CIA NIE was not the only thing ignored by the Democrats. In the aftermath of 9/11, the rallying cry was to do something, anything, in the name of protecting our nation. Our so-called independent MSM, pushed, prodded, bribed, and bullied by an out of control White House, became cheerleaders in this process. The result? A concoction of unAmerican rules and regulations we know as the Patriot Act. Somehow, General John Ashcroft managed to put together a reprehensible attack on the Constitution in an unbelievable amount of time, especially by Washington standards. Some of the provisions made it illegal for you to even tell your lawyers that you were under investigation. Others forced librarians to spy on book readers. (That’s not surprising, given the GOP’s apparent hatred of the educated and literate.)

What was surprising, or perhaps not, was that NO DEMOCRAT BOTHERED TO READ THE ACT BEFORE VOTING FOR ITS PASSAGE.  Those few that did read it tried to raise the alarm. They were greeted with insults and attacks. By other democrats.

Let’s not even talk about how the Democrats behaved when the Act came up for renewal and extension.

It gets worse.

WARRANTLESS SURVEILLANCE

If there was any issue that most Americans used to agree on, it was the right of privacy. We did not want Big Brother spying on our calls, our e-mails, or our intertube searched. At the forefront of this right to privacy was the Democratic Party of old, the one that stood up for the little guy.

Unfortunately, that flavor of Democratic Party no longer exists, except in the celluloid world of Frank Capra. To see how the new and improved Democrats act, just look to how Jane Harmon reacted to warrantless surveillance. Instead of supporting our constitutional rights, elected Democrats fell over themselves in their rush to support these illegal actions.

– – – –

Despite the Democrats studiously ignoring these heinous actions, the real America found the misbehavior of the GOP not to its liking. By 2006, Americans unceremoniously tossed out the GOP majorities in both houses, and installed new and improved Democrats. Or so we thought.

New and improved? Can you spell DINO?

From 2006 through 2008, was there any investigation into the  tens, even hundreds of billions in fraud committed by GOP cronies in Iraq? Nope. What of the political prosecutions by US Attorneys against Democratic leaders? Nowhere to be seen. The return of missing constitutional rights? Left out. And the utter erosion of the separation of Church and State? Not in this lifetime.

To sum up the behavior of Democrats, with large majorities in both branches of congress, only one word suffices: SPINELESS.

It was as though the Democrats forgot how to lead, how to run congress, how to legislate and how to investigate. For two years, Democratic leaders would have nothing to do with any of those duties or responsibilities. Perhaps that is why America was still so ready for Change in the 2008 election. A doddering, ancient, fumbling GOPer, along with his shrill Baby, shrill running mate, vs. a one term african american senator from Illinois. America, or most of it, threw away the innate racism that continues to plague our country, and elected a man of color to the highest office in the nation. Change indeed.

You would think that the strong majorities in both houses would rejoice, celebrate, and get to work, reversing two decades of damage done by Republican rule. And you would be wrong. If there is one word that would best describe the behavior of Democrats within the Bloatway since the election of Barack Obama,again  only one word fits: SPINELESS.

Sure, there are exceptions, with great effort by the Speaker, a few select senators, and a handful of congresscritters, but over all, the Democrats continued to act as though it was they who were the minority party in congress. While the President has worked hard to push his agenda through, all too often Congress seems to be looking the other way.

Take Health Care. Take Ben Nelson. Please, take Ben Nelson. And send Senator Landrieu along with him. It was not Republicans who stopped true health care reform. It was Democrats.

Take Iraq. Gitmo. Afghanistan. Banking Reform. Energy programs. Cap and trade. Jobless benefits. Reinvestment in America. Stimulus packages. Banking reform. Medicare for all. Banking reform.

Did I mention Banking Reform?

All too often our elected Democrats still appear to do the GOP’s bidding. A core group of people continue to vote against the best interests of their constituents, while they go out of their way to protect corporations, banks, and worse.

To sum up, November’s election is ours to lose. Unless and until more Democrats start doing the right thing, Americans will vote them out. It is not that they favor the GOP. To the contrary, the GOP rates even lower than congressional democrats. But, when the Democrats in office do nothing to fix our many problems, they clearly have earned the right to lose. And lose they will. Perhaps then, we can shake up the party and bring it back to its roots. Social justice, civil and constitutional rights, and fair economic and taxing policies – this is what made America great. This is what will make America great once again.

So, given a 15% unemployment figure across the country, corruption and fraud in both theaters of war, wasting a trillion in the middle east, what are our Democrats talking about?  DEFICIT REDUCTION.

I am not holding my breath.

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