Sunday, May 30, 2010

Hugh Hewitt

Posted by: Hugh Hewitt at 8:41 AM

The price tag of the "fix" is $20 billion a year --which will no doubt grow in future years, so the cost of Obamcare is already $200 billion out of whack over ten years despite all the claims made when the bill was jammed through the House.

But that is not all. There's another $2.4 billion per year for hospitals in the new bill --another $24 billion to be added to the tab for Obamacare.

All of this was known --and denied by Obamacare boosters-- at the time of the jam down. And this is just the first wave of the costs of reality catching up with the rhetoric of "bending the cost curve" nonsense that was on the lips of every Obamacare proponent.

Goodbye, Employer-Sponsored Insurance

Companies are discovering that it's cheaper to pay fines to the government than to cover workers.

Millions of American workers could discover that they no longer have employer-provided health insurance as ObamaCare is phased in. That's because employers are quickly discovering that it may be cheaper to pay fines to the government than to insure workers.

AT&T, Caterpillar, John Deere and Verizon have all made internal calculations, according the House Energy and Commerce Committee, to determine how much could be saved by a) dropping their employer-provided insurance, b) paying a fine of $2,000 per employee, and c) leaving their employees with the option of buying highly-subsidized insurance in the newly created health-insurance exchange.

AT&T, for example, paid $2.4 billion last year to cover medical costs for its 283,000 active employees. If the company dropped its health plan and paid an annual penalty for each uninsured worker, the fines would total almost $600 million. But that would leave AT&T with a tidy profit of $1.8 billion.

Economists say employee benefits ultimately substitute for cash wages, which means that AT&T employees would get higher take-home pay. But considering that they will be required by federal law to buy their own insurance in an exchange, will they be net winners or losers? That depends on their incomes.

A Congressional Budget Office (CBO) analysis of the House version of ObamaCare, which is close to what actually passed in March, assumed a $15,000 premium for family coverage in 2016. Yet the only subsidy available for employer-provided coverage is the same one as under current law: the ability to pay with pretax dollars. For a $30,000-a-year worker paying no federal income tax, the only tax subsidy is the payroll tax avoided on the employer's premiums. That subsidy is only worth about $2,811 a year.

If this same worker goes to the health-insurance exchange, however, the federal government will pay almost all the premiums, plus reimburse the employee for most out-of-pocket costs. All told, the CBO estimates the total subsidy would be about $19,400—almost $17,000 more than the subsidy for employer-provided insurance.

In general, anyone with a family income of $80,000 or less will get a bigger subsidy in the exchange than the tax subsidy available at work.

But will the insurance in the exchange be as good? In Massachusetts, people who get subsidized insurance from an exchange are in health plans that pay providers Medicaid rates plus 10%. That's less than what Medicare pays, and a lot less than the rates paid by private plans. Since the state did nothing to expand the number of doctors as it cut its uninsured rate in half, people in plans with low reimbursement rates are being pushed to the rear of the waiting lines.

The Massachusetts experience will only be amplified in other parts of the country. The CBO estimates there will be 32 million newly insured under ObamaCare. Studies by think tanks like Rand and the Urban Institute show that insured people consume twice as much health care as the uninsured. So all other things being equal, 32 million people will suddenly be doubling their use of health-care resources. In a state such as Texas, where one out of every four working age adults is currently uninsured, the rationing problem will be monumental.

Even if health plans in the exchange are identical to health plans at work, the subsidies available can only be described as bizarre. In general, the more you make, the greater the subsidy at work and the lower the subsidy in the exchange. People earning more than $100,000 get no subsidy in the exchange. But employer premiums avoid federal and state income taxes as well as payroll taxes, which means government is paying almost half the cost of the insurance. That implies that the best way to maximize employee subsidies is to completely reorganize the economic structure of firms.

Take a hotel with maids, waitresses, busboys and custodians all earning $10 or $15 an hour. These employees can qualify for completely free Medicaid coverage or highly subsidized insurance in the exchange.

So the ideal arrangement is for the hotel to fire the lower-paid employees—simply cutting their plans is not an option since federal law requires nondiscrimination in offering health benefits—and contract for their labor from firms that employ them but pay fines instead of providing health insurance. The hotel could then provide health insurance for all the remaining, higher-paid employees.

Ultimately, we could see a complete restructuring of American industry, with firms dissolving and emerging based on government subsidies.

A much better approach was proposed by Sen. John McCain in the last presidential election. The principle behind that plan is enshrined in the legislation sponsored by Sens. Tom Coburn (R., Okla.) and Richard Burr (R., N.C.), and Reps. Paul Ryan (R., Wis.) and Devin Nunes (R., Calif). This approach would replace the current subsidies with a system that gives every family, regardless of income, the same number of dollars of tax relief for health insurance.

Under this approach, all insurance would be subsidized the same way, regardless of where it is purchased. All taxpayers would be subsidized the same way, regardless of how they obtain their insurance. Unlike the president's scheme, it makes sense both in terms of equity and economics.

Mr. Goodman is the president and CEO of the National Center for Policy Analysis.

Congressional Dems push 'doc fix' - Jennifer Haberkorn -

Congressional Dems push 'doc fix' - Jennifer Haberkorn -

Friday, May 28, 2010

Glenn Beck Show - May 28, 2010

Founders' Friday - Black American Founders
Glenn Beck Show - May 28, 2010
Founding Father's Friday continues with the founders you've never heard talked about before: America's black founding fathers. That's right, they weren't all rich white guys who wanted slavery. These men played a HUGE role in the founding of our country and the fight for independence. Why are these amazing patriots being erased from our history books? It's time to set the record straight. NOTE: There is a special after this show which is a question and answer segment.
Part 1

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Q & A After the show

Racists pass strict illegal immigration bill - in Massachusetts?

May 28, 2010
Rick Moran
They must be racists. The bill is pretty tough on illegals:
With one lawmaker citing President Lincoln's respect for the rule of law, the Massachusetts Senate passed a far-reaching crackdown this afternoon on illegal immigrants and those who would hire them, going further, senators said, than any immigration bill proposed over the past five years.

In a surprising turn of events, the legislation replaced a narrower bill that was passed Wednesday over the objections of Republicans.

The measure, which passed on a 28-10 vote as an amendment to the budget, would bar the state from doing business with any company found to break federal laws barring illegal immigrant hiring. It would also toughen penalties for creating or using fake identification documents, and explicitly deny in-state college tuition for illegal immigrants.

The amendment would also require the state's public health insurance program to verify residency through the Department of Homeland Security, and would require the state to give legal residents priority for subsidized housing.

The amendment will now be part of negotiations with the House as part of the entire state budget.

Supporters, especially Republicans, struck patriotic notes and spoke of the sanctity of the law as they spoke on the Senate floor.

"It was President Lincoln -- and I'm going to paraphrase here -- who suggested that respect for the law should be preached from every pulpit taught by every mother to every child," said Senator Bruce Tarr, a Gloucester Republican.

Oh - wait a minute. This is Massachusetts so never mind. It's only lawmakers giving the people what they want when it comes to cracking down on illegal immigration.

Not like Arizona. Nope.

Spain Loses AAA Rating at Fitch Amid Deficit Crisis

By Esteban Duarte and Charles Penty

May 28 (Bloomberg) -- Spain lost its AAA credit grade at Fitch Ratings as it struggles to cut debt amid a fiscal crisis that prompted the European Union to forge an almost $1 trillion bailout package for the region’s weakest economies.

The ratings company cut the grade one step to AA+ and assigned it a “stable” outlook, according to a statement from London today. Spain has held the top rating at Fitch since 2003. Standard & Poor’s lowered Spain’s ratings to AA on April 28.

U.S. stocks extended losses after Fitch’s announcement, with the Standard & Poor’s 500 Index sliding 1.3 percent to 1,089.21 at 12:39 p.m. in New York. The euro weakened 0.5 percent to $1.2303.

“The process of adjustment to a lower level of private sector and external indebtedness will materially reduce the rate of growth of the Spanish economy over the medium- term,” Brian Coulton, Fitch’s head of Europe, Middle East and Africa sovereign ratings in London, said in the statement.

Spain’s parliament yesterday approved the country’s deepest budget cuts in 30 years by a single vote, casting doubt on the future of the government as Prime Minister Jose Luis Rodriguez Zapatero seeks to garner support for his 2011 budget. Spain has the third-largest budget deficit in the euro region.

“The Spanish government had been in denial from 2008 to early 2010 about the magnitude of the crisis so now you have consequences,” said Raphael Gallardo, who helps manage 500 billion euros ($615 billion) as chief economist at Axa Investment Managers in Paris. “Now with the acceleration of austerity measures, like the shocking cut to civil servant wages, they finally got real and measured the severity of the crisis.”

Charles Krauthammer

Who Is Really To Blame For This Blowout? - IBD -

Hillary Clinton: 'The rich are not paying their fair share'


Secretary of State Hillary Clinton made a rare foray into domestic politics today, offering her view that — given America's high unemployment — wealthy Americans don't pay enough taxes.

"The rich are not paying their fair share in any nation that is facing the kind of employment issues [America currently does] — whether it's individual, corporate or whatever [form of] taxation forms," Clinton told an audience at the Brookings Institution, where she was discussing the Administration's new National Security Strategy.

Clinton said the comment was her personal opinion alone. "I'm not speaking for the administration, so I'll preface that with a very clear caveat," she said.

Clinton went on to cite Brazil as a model.

"Brazil has the highest tax-to-GDP rate in the Western Hemisphere and guess what — they're growing like crazy," Clinton said. "And the rich are getting richer, but they're pulling people out of poverty."

Both Clinton and Obama campaigned for president on promises to allow the Bush tax cuts for wealthy Americans expire this year, a plan that is now part of Obama's budget. The move will effectively raise taxes sharply on people earning more than $250,000.

The Administration's new formal strategy document makes the case that domestic economic strength is crucial to influence abroad.

From Gene Schwimmer

But, as with any "fact" a Clinton or an Obama apparatchik cites, you need to look it up for yourself. Which I did. Brazil's GDP grew 2.0% in the last quarter. The average rates for 2007, 2008 and 2009 were 1.61%, 0.39% and 0.96%, respectively.

For those who may be wondering, our own GDP growth in the last quarter was 3.00%. But I digress. The point is: Either (1) Hillary didn't know Brazil's actual growth rate; (2) she did know, but lied about it or (3) she knew and considers 3.00% GDP growth "growing like crazy."

Glenn Beck Show - May 27, 2010

Propaganda in America
Glenn Beck Show - May 27, 2010
Americans don't want a fundamental transformation...and the administration knows it. But radical progressives do, so now they have to change public opinion. And if you think that's a crazy concept, you don't know Cass Sunstein. Tonight, Glenn shows us the propaganda machines of the Woodrow Wilson and FDR administrations and, more importantly, the similar machine being built today, with Cass Sunstein leading the charge.
Part 1

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Thursday, May 27, 2010

Glenn Beck Show - May 26, 2010

Frankendodd's Financial Reform
Glenn Beck Show - May 26, 2010
We've got another major reform about to get jammed down our throats! It's the financial reform bill, because those greedy Wall Street fat cats need to be stopped. And this will stop them, because Barney Frank is putting the final touches on this bill. Last time they did this was with health care and you know what happened...or do you? Tonight, some of the surprises that came with the health care bill that you may STILL not know about...and if you think the health care bill was bad, it's nothing compared to what's coming in the financial bill.
Part 1

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H.R. 4173

"An Act to provide for financial regulatory reform, to protect consumers and investors, to enhance Federal understanding of insurance issues, to regulate the over-the-counter derivatives markets, and for other purposes."

Here is a list of the studies in the financial reform bill passed in the Senate. This will fix everything.

Sec. 413. GAO study and report on accredited investors.
Sec. 414. GAO study on self-regulatory organization for private funds.
Sec. 415. Commission study and report on short selling.
Sec. 526. GAO study of nonadmitted insurance market.
Sec. 603. Moratorium and study on treatment of credit card banks, industrial
loan companies, and certain other companies under the Bank
Holding Company Act of 1956.
Sec. 750. Study on oversight of carbon markets.
Sec. 913. Study and rulemaking regarding obligations of brokers, dealers, and investment
Sec. 916. Study regarding financial literacy among investors.
Sec. 917. Study regarding mutual fund advertising.
Sec. 919. Study on conflicts of interest.
Sec. 919A. Study on improved investor access to information on investment advisers
and broker-dealers.
Sec. 919B. Study on financial planners and the use of financial designations.
Sec. 939A. Securities and Exchange Commission study on strengthening credit
rating agency independence.
Sec. 939B. Government Accountability Office study on alternative business models.
Sec. 939C. Government Accountability Office study on the creation of an independent
professional analyst organization.
Sec. 939D. Initial credit rating assignments.
Sec. 976. Government Accountability Office study of increased disclosure to investors.
Sec. 977. Government Accountability Office study on the municipal securities
Sec. 978. Study of funding for Government Accounting Standards Board.
Sec. 989. Government Accountability Office study on proprietary trading.
Sec. 1072. GAO study on the effectiveness and impact of various appraisal methods.
Sec. 1078. Department of the Treasury study on ending the conservatorship of
Fannie Mae, Freddie Mac, and reforming the housing finance

Dodd's do-nothing financial 'reform'

Posted: 11:46 PM, May 20, 2010
Mark A. Calabria

Wall Street is heaving a quiet sigh of relief: All Washington is going to give us for "financial reform" in the wake of the collapse of 2008 is a law based on Sen. Chris Dodd's bill.

That thin semblance of reform will let Congress and the Obama administration claim they brought Wall Street to heel. But by dodging all the hard issues, this "reform" makes it likely that the next crisis will put the last one to shame.

Start with ending "too big to fail": Despite Dodd's floor statements (and improvements made at the request of Sen. Richard Shelby, the top Republican on Dodd's committee), the bill actually further enshrines the special and privileged status of our largest financial institutions. It squashes whatever hope there was of bringing back market discipline to our largest financial institutions -- and guarantees ever-increasing concentration in our financial markets.

Going forward, we are left with relying on only the discretionary wisdom of the same regulators who were asleep at the wheel last time. And though that crisis cost millions their jobs, the Dodd bill won't see even one incompetent bureaucrat lose his.

Yes, the Dodd bill eliminates the Office of Thrift Supervision -- but it guarantees that all OTS employees will have jobs at the new bank regulator. How exactly is moving around boxes on the organizational chart going to prevent the next financial crisis? (Ironically, OTS was itself created in the "crackdown" after another Washington-sparked meltdown, the savings-and-loan crisis of the late '80s.)

Indeed, the real theme of the Dodd bill is: Give the bureaucrats more power and discretion, without any accountability. Its main achievement is to set up a new agency that will largely determine who, what and how it will regulate.

But the bill itself doesn't touch even blatant problems.

For example, with almost universal recognition that banks lacked sufficient capital going into the financial crisis, it should be a "no-brainer" to fix our flawed regulation of bank capital -- in other words, to prevent banks from borrowing 40 times as much as their assets, as Lehman Bros. was doing shortly before its collapse.

Sorry, no: The Dodd bill simply proposes that its new "council of regulators" may recommend that the Federal Reserve impose more stringent standards. Yes, that's may. The bill doesn't even require regulators to change the current levels or framework for bank capital.

Even where Dodd claims to be the toughest, on issues of consumer protection, he simply punts to the regulators and the trial bar. That is, he orders bureaucrats to do better -- and makes it easier for lawyers to sue.

The bill doesn't even eliminate zero-down mortages -- or any of the irresponsible lending products that plainly contributed to the crisis. Indeed, Dodd twice fought off floor amendments to require modest down payments.

Perhaps most insulting is Dodd's pretense that ordering up a "study" should count as addressing an issue. By my count, the bill requires the Government Accountability Office or the financial regulators to conduct no less than 28 separate studies.

What's Dodd's solution to the failings of the credit-rating agencies? A study.

His answer to the crisis in the auction-rate-securities and municipal-debt markets? A study. What to do about proprietary trading? A study. How about the flawed home-appraisal process that contributed to inflated housing prices? You got it, another study.

The worst of all; How do we protect the taxpayer from further losses from Fannie and Freddie? One more study, of course -- although Dodd has assured us that this one will be a "tough study."

Our system of financial regulation is an embarrassing mess. But rather than restructure it, the Senate bill doubles down on the flaws and weakness of that mess.

It would be nice, just once, to see Congress make some hard choices and legislate -- especially when the longterm health of America's financial system is at issue.

Mark A. Calabria is director of financial- regulation studies at the Cato Institute.

Wednesday, May 26, 2010

What's really behind SEIU's Bank of America protests?

By Nina Easton

(FORTUNE) -- Every journalist loves a peaceful protest-whether it makes news, shakes up a political season, or holds out the possibility of altering history. Then there are the ones that show up on your curb--literally.

Last Sunday, on a peaceful, sun-crisp afternoon, our toddler finally napping upstairs, my front yard exploded with 500 screaming, placard-waving strangers on a mission to intimidate my neighbor, Greg Baer. Baer is deputy general counsel for corporate law at Bank of America (BAC, Fortune 500), a senior executive based in Washington, D.C. And that -- in the minds of the organizers at the politically influential Service Employees International Union and a Chicago outfit called National Political Action -- makes his family fair game.

Waving signs denouncing bank "greed," hordes of invaders poured out of 14 school buses, up Baer's steps, and onto his front porch. As bullhorns rattled with stories of debtor calls and foreclosed homes, Baer's teenage son Jack -- alone in the house -- locked himself in the bathroom. "When are they going to leave?" Jack pleaded when I called to check on him.

Baer, on his way home from a Little League game, parked his car around the corner, called the police, and made a quick calculation to leave his younger son behind while he tried to rescue his increasingly distressed teen. He made his way through a din of barked demands and insults from the activists who proudly "outed" him, and slipped through his front door.

"Excuse me," Baer told his accusers, "I need to get into the house. I have a child who is alone in there and frightened."

When is a protest not a protest?

Now this event would accurately be called a "protest" if it were taking place at, say, a bank or the U.S. Capitol. But when hundreds of loud and angry strangers are descending on your family, your children, and your home, a more apt description of this assemblage would be "mob." Intimidation was the whole point of this exercise, and it worked-even on the police. A trio of officers who belatedly answered our calls confessed a fear that arrests might "incite" these trespassers.

What's interesting is that SEIU, the nation's second largest union, craves respectability. Just-retired president Andy Stern is an Obama friend and regular White House visitor. He sits on the President's Fiscal Responsibility Commission. He hobnobs with those greedy Wall Street CEOs -- executives much higher-ranking than my neighbor Baer -- at Davos. His union spent $70 million getting Democrats elected in 2008.

In the business community, though, SEIU has a reputation for strong-arm tactics against management, prompting some companies to file suit.

Now those strong-arm tactics, stirred by supposedly free-floating (as opposed to organized) populist rage, have come to the neighborhood curb. Last year it was AIG executives -- with protestors met by security guard outside. Now it's any executive -- and they're on the front stoop. After Baer's house, the 14 buses left to descend on the nearby residence of Peter Scher, a government relations executive at JPMorgan Chase (JPM, Fortune 500).

Targeting homes and families seems to put SEIU in the ranks of (now jailed) radical animal-rights activists and the Kansas anti-gay fundamentalists harassing the grieving parents of a dead 20-year-old soldier at his funeral (the Supreme Court has agreed to weigh in on the latter). But that's not a conversation that SEIU officials want to have.

When I asked Stephen Lerner, SEIU's point-person on Wall Street reform, about these tactics, he accused me of getting "emotional." Lerner was more comfortable sticking to his talking points: "Millions of people are losing their homes, and they have gone to the banks, which are turning a deaf ear."

Okay, fine, then why not continue SEIU protests at bank offices and shareholder meetings-as the union has been doing for more than a year? Lerner insists, "People in powerful corporations seem to think they can insulate themselves from the damage they are doing."

Other reasons why SEIU might protest

Bank of America officials dispute Lerner's assertion about the "damage they are doing," citing the success of workout programs to help distressed homeowners, praise received from community groups, the bank's support of financial reform legislation, and the little-noticed fact that Bank of America exited the subprime lending business in 2001.

SEIU has said it wants to organize bank tellers and call centers -- and its critics point out that a great way to worsen employee morale, thereby making workers more susceptible to union calls, is to batter a bank's image through protest. (SEIU officials say their anti-Wall Street campaign has nothing to do with their organizing efforts.) Complicating this picture is the fact that BofA is the union's lender of choice -- and SEIU, suffering financially, owes the bank nearly $4 million in interest and fees. Bank of America declined comment on the loans.

But SEIU's intentions, and BofA's lender record, are ripe subjects to debate in Congress, on air, at shareholder hearings. Not in Greg Baer's front yard.

Why the media wasn't invited

Sunday's onslaught wasn't designed for mainstream media consumption. There were no reporters from organizations like the Washington Post, no local camera crews who might have aired criticism of this private-home invasion. With the media covering the conservative Tea Party protesters, the behavior of individual activists has drawn withering scrutiny.

Instead, a friendly Huffington Post blogger showed up, narrowcasting coverage to the union's leftist base. The rest of the message these protesters brought was personal-aimed at frightening Baer and his family, not influencing a broader public.

Of course, HuffPost readers responding to the coverage assumed that Baer was an evil former Bush official. He's not. A lifelong Democrat, Baer worked for the Clinton Treasury Department, and his wife, Shirley Sagawa, author of the book The American Way to Change and a former adviser to Hillary Clinton, is a prominent national service advocate.

In the 1990s, the Baers' former bosses, Bill and Hillary Clinton, denounced the "politics of personal destruction." Today politicians and their voters of all stripes grieve the ugly bitterness that permeates our policy debates. Now, with populist rage providing a useful cover, it appears we've crossed into a new era: The politics of personal intimidation.

Media Matters and SEIU hit job on Nina Easton debunked | The Daily Caller - Breaking News, Opinion, Research, and Entertainment

Media Matters and SEIU hit job on Nina Easton debunked | The Daily Caller - Breaking News, Opinion, Research, and Entertainment

Some Docs From The Committee On The Budget





FREEZE GOVERNMENT PAY (saves $2 billion in 2011 and $30 billion by 2020)

REDUCE GOVERNMENT EMPLOYMENT TO PRE-‘STIMULUS’ LEVELS (saves $3.5 billion in 2011 and $35 billion over 10 years)

CUT AND CAP DISCRETIONARY SPENDING (saves up to $925 billion over 10 years)

CANCEL REMAINING ‘STIMULUS’ FUNDS (saves $266 billion in combined mandatory and discretionary spending over 10 years)

CANCEL UNUSED TARP FUNDS (prevents $396 billion in new disbursements; saves $16 billion from 2011 through 2020)

'Jobs' bill deals with leftover costs from Obamacare | Washington Examiner

'Jobs' bill deals with leftover costs from Obamacare | Washington Examiner

Tuesday, May 25, 2010

Obama’s border Kabuki: Don’t believe the hype
By Michelle Malkin • May 25, 2010 03:34 PM

The most glaring sign that President Obama’s announcement of border funding and National Guard troops is one big, phony charade? He apparently didn’t even bother to let the governor of besieged Arizona, Gov. Jan Brewer, know about it. Via Yahoo News:

The Obama administration plans to announce Tuesday that it will send as many as 1,200 National Guard troops to the U.S.-Mexico border to improve border security, an Arizona congresswoman said.

Democratic Rep. Gabrielle Giffords also said in a statement released Tuesday that President Barack Obama will request $500 million in funding for border security.

Part of Giffords’ district borders Mexico.

Arizona Gov. Jan Brewer’s spokesman said the governor hadn’t been told of the move prior to her office being contacted by The Associated Press and had no immediate comment.

I called out the Bush administration and Republicans countless times when they used border security as a campaign ploy and performed Get Tough Theater only to flake out on systemic immigration enforcement reform.

This is no different. Both political parties in Washington reek on the issue.

The only thing worse than open-borders Obama exploiting our illegal immigration woes is open-borders Johnny-come-lately John McCain continuing to do the same.

Until politicians with proven integrity and commitment to securing this country against invasion step into the leadership vacuum, Arizona’s DIY policy on border security is the only trustworthy one:

Do It Yourself.

"Little-Noticed" is the New "Unexpected"

From Legal Insurrection

"Unexpected" has become the term of choice for the mainstream media to excuse the Obama administration's economic failures.

Yesterday I read an article in The NY Times about something unexpected in Obamacare, and one term jumped out at me (emphasis mine):
About one-third of employers subject to major requirements of the new health care law may face tax penalties because they offer health insurance that could be considered unaffordable to some employees, a new study says.... It suggests that a little-noticed provision of the law could affect far more employers than Congress had assumed.
That term, "little-noticed," sure sounded familiar. It seems that we hear that term a lot.

I didn't intend on this post being so long, but the examples are so numerous:
  • "Tucked inside the huge health reform bill signed into law last week were many surprising and little-noticed provisions that will affect consumers in ways large and small."

  • "Deep within the massive health-care overhaul legislation, a few little-noticed provisions have quietly reignited one of the bitterest debates in medicine: how to balance the right of doctors, nurses and other workers to refuse to provide services on moral or religious grounds with the right of patients to get care."

  • "A little-noticed provision of the health legislation has rescued federal support for a controversial form of sex education: teaching youths to remain virgins until marriage."

  • "A little-noticed provision in the health reform bill will shed significant light on the payments drug and device companies make to doctors and teaching hospitals in California and the rest of the nation."

  • "A little-noticed provision in the new health care law may not only dramatically increase paperwork for small businesses, but also put them at a disadvantage against their larger competitors."

  • "In the manager's amendment Senate Leader Harry Reid added to the Senate health care bill, HR 3590, a little noticed provision allowed $7 billion in funding for Community Health Centers buried deep in Section 10503 of the 383-page amendment."

  • "Effective for plan years beginning after Sept. 23, 2010, health plans that cover dependent children must continue to cover adult kids until they turn age 26. This little-noticed new requirement is a sure way to increase health insurance costs, which is exactly what Obama-care was supposed to prevent."

  • "The Obama administration is trying to encourage people to buy annuities to ensure that they don't outlive their savings. But a little-noticed provision of the new health care reform law will slap a 3.8% tax on payouts from annuities purchased by high-income earners outside their workplace."

  • "A little noticed provision added over the weekend to the Senate health bill earmarked $500 million this year for a "cures acceleration program."

  • "Little-noticed (well, except by me) is the fact that Congress has repealed the anti-trust exemption for health insurance and that the reform plan sets up the basics of a federal infrastructure for insurance regulation. The federal government doesn’t just drop by and visit, they move in. Memo to state insurance regulators: the feds are outside, and they have a HUGE moving van.

  • "[Jeff] Masters, who lives in Fort Lauderdale, is part of a growing number of Americans who are members of faith-based ``health sharing ministries'' where members directly pay for each others' medical bills. Members also pray for each other, and a ``get well'' card from a stranger isn't uncommon. National healthcare reform will force millions of Americans to buy insurance or face fines, but a little-noticed provision excludes people like Masters who belong to such groups."

  • "As well as these and other major job-killing provisions, two little-noticed tax changes would also affect employment."

  • "Drug and device companies will soon have to report payments to physicians in a national database, thanks to a little noted section of the health care reform bill called the Physician Payments Sunshine Act."

  • "The new law also takes steps to keep doctors' doors open for Medicare patients. Physicians will get bonus payments for primary care, a little-noticed strategy to promote access for seniors."

  • "A little-noticed provision of the new health care reform law requires employers to provide new mothers with “reasonable break time” to express breast milk for nursing children who are up to 12 months old. "

  • "A little noticed national calorie labeling rule tucked into the legislation assures that within a couple of years, everyone who walks into a chain restaurant will see calories counts displayed alongside the price of a meal."

  • All U.S. Hospitals Must Publicize “Standard Charges” - Hidden among the amendments to a section of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (the “Health Reform Legislation”), is the following little-noticed provision ...."

  • "UV or not UV? A little-noticed provision in the new healthcare package adds a 10% levy to the cost of tanning sessions."

  • "A little-noticed provision in the House-passed health-care plan would strip billions of dollars out of privately run Medicare plans that emphasize wellness and are increasingly popular among retirees in Ohio and nationally."

  • "The health care reform legislation President Obama signed into law last week takes a little-noticed but precedent-setting swipe at executive pay excess."
If there was anything else that was little-noticed, let me know.

Of course, not all of these things were little-noticed to those of us who followed the health care legislation, but some were true after-the-fact revelations.

The big picture items -- massive spending, phony CBO scoring, government intrusion further into our lives, and the likely destruction of the best health care system in the world -- were well-noticed.

Private pay shrinks to historic lows as gov't payouts rise

By Dennis Cauchon, USA TODAY

Paychecks from private business shrank to their smallest share of personal income in U.S. history during the first quarter of this year, a USA TODAY analysis of government data finds.

At the same time, government-provided benefits — from Social Security, unemployment insurance, food stamps and other programs — rose to a record high during the first three months of 2010.

Those records reflect a long-term trend accelerated by the recession and the federal stimulus program to counteract the downturn. The result is a major shift in the source of personal income from private wages to government programs.

The trend is not sustainable, says University of Michigan economist Donald Grimes. Reason: The federal government depends on private wages to generate income taxes to pay for its ever-more-expensive programs. Government-generated income is taxed at lower rates or not at all, he says. "This is really important," Grimes says.

The recession has erased 8 million private jobs. Even before the downturn, private wages were eroding because of the substitution of health and pension benefits for taxable salaries.

The Bureau of Economic Analysis reports that individuals received income from all sources — wages, investments, food stamps, etc. — at a $12.2 trillion annual rate in the first quarter.

Key shifts in income this year:

• Private wages. A record-low 41.9% of the nation's personal income came from private wages and salaries in the first quarter, down from 44.6% when the recession began in December 2007.

Government benefits. Individuals got 17.9% of their income from government programs in the first quarter, up from 14.2% when the recession started. Programs for the elderly, the poor and the unemployed all grew in cost and importance. An additional 9.8% of personal income was paid as wages to government employees.

The shift in income shows that the federal government's stimulus efforts have been effective, says Paul Van de Water, an economist at the liberal Center on Budget and Policy Priorities.

"It's the system working as it should," Van de Water says. Government is stimulating growth and helping people in need, he says. As the economy recovers, private wages will rebound, he says.

Economist Veronique de Rugy of the free-market Mercatus Center at George Mason University says the riots in Greece over cutting benefits to close a huge budget deficit are a warning about unsustainable income programs.

Economist David Henderson of the conservative Hoover Institution says a shift from private wages to government benefits saps the economy of dynamism. "People are paid for being rather than for producing," he says.

Al Franken Doesn't Even Know What's In A Bill He Introduced

Posted at 1:33 PM on May 20, 2010 by Bob Collins
Filed under: Politics

Sen. Al Franken introduced a bill today designed to protect gay and lesbian students from bullying at school.

There was a moment in his conversation with MPR's Cathy Wurzer this morning that caught some attention.

After Franken described the case of Alex Merritt, the Anoka-Hennepin student who was allegedly bullied by two teachers, Wurzer asked Franken to define what constitutes harrassment.

"I think that harassment and bullying is one of these things where you know when you see it," the senator replied. And that might be true, but the law usually requires a definition.

So Wurzer asked how it's defined in Franken's bill.

"I don't believe we have language in it to define bullying, but maybe I do. I'm not sure about that aspect of the bill."

Listen at the 3:00 minute mark to hear how he doesn't even know what may or may not be in the bill that he introduced.

Financial Reform Bill Is A ‘Disaster’: Sen. Gregg - CNBC

Financial Reform Bill Is A ‘Disaster’: Sen. Gregg - CNBC

Monday, May 24, 2010

SEIU, HuffPo and Media Matters: Is an Unholy Alliance About to Unravel?

SEIU, HuffPo and Media Matters: Is an Unholy Alliance About to Unravel?

Sugarcoating Socialism the French Way

Sugarcoating Socialism the French Way

Europeans Fear Crisis Threatens Liberal Benefits

"[Government employees] sit there for years drinking coffee and chatting on the telephone and then retire at 50 with nice fat pensions. As for us, the way things are going we'll have to work until we're 70." 25-year-old Greek.

"It's going to go belly-up because no one will be around to fill the pension coffers. It's not just me; this country has no future." 52-year-old Italian.

"The only thing we're told is that we will have to pay for the others." 18-year-old Frenchman.

"It will be a mess. We'll have to work harder and longer in our jobs." French waiter.

Source: Steven Erlanger, The New York Times.

Source: The New York Times. HT: AoSHQ.

Hoven's Index for May 24, 2010

Percentage of French workers who work past age 50: 50%

Workers per retiree in Europe in 1950: 7

By 2050: 1.3

"Public social expenditures" in the EU in 2005 as percent of GDP: 21%

In France: 31%

In the US: 15.9%

Source: The New York Times.

America's new culture war: Free enterprise vs. government control

By Arthur C. Brooks
Sunday, May 23, 2010

America faces a new culture war.

This is not the culture war of the 1990s. It is not a fight over guns, gays or abortion. Those old battles have been eclipsed by a new struggle between two competing visions of the country's future. In one, America will continue to be an exceptional nation organized around the principles of free enterprise -- limited government, a reliance on entrepreneurship and rewards determined by market forces. In the other, America will move toward European-style statism grounded in expanding bureaucracies, a managed economy and large-scale income redistribution. These visions are not reconcilable. We must choose.

It is not at all clear which side will prevail. The forces of big government are entrenched and enjoy the full arsenal of the administration's money and influence. Our leaders in Washington, aided by the unprecedented economic crisis of recent years and the panic it induced, have seized the moment to introduce breathtaking expansions of state power in huge swaths of the economy, from the health-care takeover to the financial regulatory bill that the Senate approved Thursday. If these forces continue to prevail, America will cease to be a free enterprise nation.

I call this a culture war because free enterprise has been integral to American culture from the beginning, and it still lies at the core of our history and character. "A wise and frugal government," Thomas Jefferson declared in his first inaugural address in 1801, "which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government." He later warned: "To take from one, because it is thought that his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to every one of a free exercise of his industry and the fruits acquired by it." In other words, beware government's economic control, and woe betide the redistributors.

Now, as then, entrepreneurship can flourish only in a culture where individuals are willing to innovate and exert leadership; where people enjoy the rewards and face the consequences of their decisions; and where we can gamble the security of the status quo for a chance of future success.

Yet, in his commencement address at Arizona State University on May 13, 2009, President Obama warned against precisely such impulses: "You're taught to chase after all the usual brass rings; you try to be on this "who's who" list or that Top 100 list; you chase after the big money and you figure out how big your corner office is; you worry about whether you have a fancy enough title or a fancy enough car. That's the message that's sent each and every day, or has been in our culture for far too long -- that through material possessions, through a ruthless competition pursued only on your own behalf -- that's how you will measure success." Such ambition, he cautioned, "may lead you to compromise your values and your principles."

I appreciate the sentiment that money does not buy happiness. But for the president of the United States to actively warn young adults away from economic ambition is remarkable. And he makes clear that he seeks to change our culture.

The irony is that, by wide margins, Americans support free enterprise. A Gallup poll in January found that 86 percent of Americans have a positive image of "free enterprise," with only 10 percent viewing it negatively. Similarly, in March 2009, the Pew Research Center asked individuals from a broad range of demographic groups: "Generally, do you think people are better off in a free-market economy, even though there may be severe ups and downs from time to time, or don't you think so?" Almost 70 percent of respondents agreed that they are better off in a free-market economy, while only 20 percent disagreed.

In fact, no matter how the issue is posed, not more than 30 percent of Americans say they believe we would fare better without free markets at the core of our system. When it comes to support for free enterprise, we are essentially a 70-30 nation.

So here's a puzzle: If we love free enterprise so much, why are the 30 percent who want to change that culture in charge?

It's not simply because of the election of Obama. As much as Republicans may dislike hearing it, statism had effectively taken hold in Washington long before that.

The George W. Bush administration began the huge Wall Street and Detroit bailouts, and for years before the economic crisis, the GOP talked about free enterprise while simultaneously expanding the government with borrowed money and increasing the percentage of citizens with no income tax liability. The 30 percent coalition did not start governing this country with the advent of Obama, Nancy Pelosi and Harry Reid. It has been in charge for years.

But the real tipping point was the financial crisis, which began in 2008. The meltdown presented a golden opportunity for the 30 percent coalition to attack free enterprise openly and remake America in its own image.

And it seized that opportunity. While Republicans had no convincing explanation for the crisis, seemed responsible for it and had no obvious plans to fix it, the statists offered a full and compelling narrative. Ordinary Americans were not to blame for the financial collapse, nor was government. The real culprits were Wall Street and the Bush administration, which had gutted the regulatory system that was supposed to keep banks in line.

The solution was obvious: Vote for a new order to expand the powers of government to rein in the dangerous excesses of capitalism.

It was a convincing story. For a lot of panicky Americans, the prospect of a paternalistic government rescuing the nation from crisis seemed appealing as stock markets and home prices spiraled downward. According to this narrative, government was at fault in just one way: It wasn't big enough. If only there had been more regulators watching the banks more closely, the case went, the economy wouldn't have collapsed.

Yet in truth, it was government housing policy that was at the root of the crisis. Moreover, the financial sector -- where the crisis began and where it has had the most serious impact -- is already one of the most regulated parts of our economy. The chaos happened despite an extensive, intrusive regulatory framework, not because such a framework didn't exist.

More government -- including a super-empowered Federal Reserve, a consumer protection watchdog and greater state powers to wind down financial firms and police market risks -- does not mean we will be safe. On the contrary, such changes would give us a false sense of security, especially when Washington, a primary culprit in the crisis, is creating and implementing the new rules.

The statist narrative also held that only massive deficit spending could restore economic growth. "If nothing is done, this recession could linger for years," Obama warned a few days before taking office. "Only government can provide the short-term boost necessary to lift us from a recession this deep and severe. Only government can break the cycle that is crippling our economy."

This proposition is as expensive as it is false. Recessions can and do end without the kind of stimulus we experienced, and attempts to shore up the economy with huge public spending often do little to improve matters and instead chain future generations with debt. In fact, all the evidence so far tells us that the current $787 billion stimulus package has overpromised and underdelivered, especially when it comes to creating jobs.

If we reject the administration's narrative, the 70-30 nation will remain strong. If we accept it, and base our nation's policies on it, we will be well on our way to a European-style social democracy. Punitive taxes and regulations will make it harder to be an entrepreneur, and the rewards of success will be expropriated for the sake of greater income equality.

The new statism in America, made possible by years of drift and accelerated by the panic over the economic crisis, threatens to make us permanently poorer. But that is not the greatest danger. The real risk is that in the new culture war, we will forsake the third unalienable right set out in our Declaration of Independence: the pursuit of happiness.

Free enterprise brings happiness; redistribution does not. The reason is that only free enterprise brings earned success.

Earned success involves the ability to create value honestly -- not by inheriting a fortune, not by picking up a welfare check. It doesn't mean making money in and of itself. Earned success is the creation of value in our lives or in the lives of others. Earned success is the stuff of entrepreneurs who seek value through innovation, hard work and passion. Earned success is what parents feel when their children do wonderful things, what social innovators feel when they change lives, what artists feel when they create something of beauty.

Money is not the same as earned success but is rather a symbol, important not for what it can buy but for what it says about how people are contributing and what kind of difference they are making. Money corresponds to happiness only through earned success.

Not surprisingly, unearned money -- while it may help alleviate suffering -- carries with it no personal satisfaction. Studies of lottery winners, for instance, show that after a brief period of increased happiness, their moods darken as they no longer derive the same enjoyment from the simple pleasures in life, and as the glow of buying things wears off.

The same results emerge with other kinds of unearned income -- welfare payments, for example. According to the University of Michigan's 2001 Panel Study of Income Dynamics, going on the welfare rolls increases by 16 percent the likelihood of a person saying that she or he has felt inconsolably sad over the past month. Of course, the misery of welfare recipients probably goes well beyond the check itself. Nonetheless, studies show that recipients are far unhappier than equally poor people who do not receive such government benefits.

Benjamin Franklin (a pretty rich man for his time) grasped the truth about money's inability by itself to deliver satisfaction. "Money never made a man happy yet, nor will it," he declared. "The more a man has, the more he wants. Instead of filling a vacuum, it makes one."

If unearned money does not bring happiness, redistributing money by force won't make for a happier America -- and the redistributionists' theory of a better society through income equality falls apart.

The goal of our system should be to give all Americans the greatest opportunities possible to succeed based on their work and merit. And that's exactly what the free enterprise system does: It makes earned success possible for the most people. This is the liberty that enables the true pursuit of happiness.

To win the culture war, those of us in the 70 percent majority must reclaim -- and proclaim -- the morality of our worldview.

Unfortunately, we often fail to do this. Instead, we sound unabashedly materialistic. We talk about growth rates, inflation and investment, while the 30 percent coalition walks off with the claims to happiness and fairness. (According to Obama, for example, we need to restore "fairness" to our tax code by increasing taxes on the wealthy and exempting more people at the bottom from paying anything.)

The irony is that it is the 30 percent coalition, not the 70 percent majority, that is fundamentally materialistic. What do they consider the greatest problem of poor people in America? Insufficient income. What would be evidence of a fairer society? Greater income equality. For the leaders of the 30 percent coalition, money does buy happiness -- as long as it is spread evenly. That is why redistribution of income is a fundamental goal and why free enterprise, which rewards some people and penalizes others, cannot be trusted.

The 70 percent majority, meanwhile, believes that ingenuity and hard work should be rewarded. We admire creative entrepreneurs and disdain rule-making bureaucrats. We know that income inequality by itself is not what makes people unhappy, and that only earned success can make them happy.

We must do more to show that while we use the language of commerce and business, we believe in human flourishing and contentment. We must articulate moral principles that set forth our fundamental values, and we must be prepared to defend them.

This defense is already underway, in a disorganized, grass-roots, American kind of way. Protests against the new statism have flared around the nation for more than a year. And while some have tried to dismiss the "tea party" demonstrations and the town hall protests of last summer as the work of extremists, ignorant backwoodsmen or agents of the health-care industry, these movements reveal much about the culture war that is underway.

Just compare the protests in America with those in Europe. Here, we see tea partiers demonstrating against the government's encroachment on the free enterprise system and protesting the fact that the state is spending too much money bailing out too many people. Why are people protesting in Greece? Because they want the government to give them even more. They are angry because their government -- in the face of its worst economic and perhaps existential crisis in decades -- won't pay the lavish pensions to which they feel entitled. There's no better example of the cultural difference between America and Europe today, yet it is toward European-style social democracy that the 30 percent coalition wants to move us.

Fortunately, it is hard to dismiss the voice of the voters in some of our most recent electoral contests. Scott Brown won the late Ted Kennedy's Senate seat from Massachusetts in January by declaring himself not an apparatchik Republican but a moral enthusiast for markets. "What made America great?" he asked. "Free markets, free enterprise, manufacturing, job creation. That's how we're gonna do it, not by enlarging government." His cultural pitch for free enterprise hit just the right chord, even in liberal Massachusetts. It struck at the heart of the 30 percent coalition's agenda for America.

Brown's victory -- and Rand Paul's triumph in Kentucky's Republican Senate primary last week, for that matter -- are but warning shots in the burgeoning culture war. The most intense battles are still ahead.

To win, the 70 percent majority must come together around core principles: that the purpose of free enterprise is human flourishing, not materialism; that we stand for equality of opportunity, not equality of income; that we seek to stimulate true prosperity rather than simply treat poverty; and that we believe in principle over power.

This final idea is particularly challenging. In Washington, a lot of people think they know how to win. They say what is needed are telegenic candidates, dirty tricks and lots of campaign money. To them, thinking long-term means thinking all the way to 2012. In other words, they talk only of tactics, parties and power.

They are wrong. What matters most to Americans is the commitment to principle, not the exercise of power. The electorate did not repudiate free enterprise in 2008; it simply punished an unprincipled Republican Party.

But political turmoil can lead to renewal, and the challenges of this new culture war can help us mobilize and reassert our principles. The 2008 election was perhaps exactly what America needed. Today there is a very real threat that the 30 percent coalition may transform our great nation forever. I hope this threat will clear our thinking enough to bring forth leaders -- regardless of political party -- with our principles at heart and the ideas to match. If free enterprise triumphs over the quest for political power, America will be the stronger for it.

Arthur C. Brooks is the president of the American Enterprise Institute and the author of "The Battle: How the Fight Between Free Enterprise and Big Government Will Shape America's Future." He will be online on Monday, May 24, at 11:00 a.m. EST to chat. Submit your questions before or during the discussion.

From the archives: For recent Outlook coverage of the "tea party" movement, see Richard Viguerie's "Tips for a proper tea party" (May 2) and Dan Quayle's "Why the tea party shouldn't go Perot" (April 4).

Dennis Prager

Dennis Prager Answers Some Questions At The University of Denver


Richard Shelby - Alabama
May 20, 2010
Washington, D.C. -

Prior to the vote on final passage of Senate Democrats’ financial reform bill, U.S. Senator Richard Shelby (R-Ala.), ranking Republican on the Banking, Housing, and Urban Affairs Committee, delivered closing remarks detailing his reasons for opposing the legislation. The full text of Shelby’s speech, as prepared and included in the record, is as follows:

"Mr. President, we are nearing the end of the Senate’s consideration of an historic piece of legislation. In response to the most significant financial crisis this country has seen in a generation, we have been engaged in a debate about the future of our financial system.

Nearly two years ago, our economy came to a grinding halt. Credit markets shut down, business activity seized up, and world trade virtually collapsed. Millions of Americans lost their jobs and their homes, and they saw trillions in savings wiped out.

Mr. President, as a witness to the near collapse of our financial system and the economic devastation it has wrought, I am fully aware of the fundamental importance of the legislative effort we are soon to complete.

Because the financial system serves as the heart of our economy, this legislation will have a profound effect on the economic future of this country. The decisions we have made will have an impact on the lives of Americans for decades to come. Furthermore, the impact of this legislation will extend far beyond our shores.

For these reasons, we must get this right.

In the end, we will be judged by whether we have created a more stable, durable, and competitive financial system. That judgment will not be rendered by self-congratulatory press releases, but rather by the marketplace. And, the marketplace does not give credit for good intentions.

So, knowing that millions of Americans suffered greatly because of the financial crisis and that generations of future Americans are relying upon us to get this right, how did we go about proceeding?

Did we conduct a thorough review of every facet of the crisis? Did we look at the structure of our markets, examine the role of the regulators, and determine how the existing regulations drove certain market actions?

Did we investigate the GSE’s, examine their capital and leverage, address the inherent weaknesses in their dual and conflicting objectives of maximizing returns for private owners while serving a public housing mission?

Did we explain Bear Stearns and the causes of its collapse, along with the SEC regulatory program entrusted with its oversight? Did we collect and analyze data regarding the areas hardest hit by foreclosures?

Did we determine whether there were any specific loan types, however characterized, that led to the foreclosures? Did we take time to learn lessons from the debacle of the AIG Financial Products division, or securities lending operations, or of overheated tri-party repo activity?

Did we analyze how maturity transformation allowed the shadow banking system to, in effect, create money out of AAA rated securities? Did we analyze how activities in the shadow banking system led to an increased concentration of inherently runable activities?

Did we analyze liquidity buffers at broker dealers?

Did we wait for the Financial Crisis Inquiry Commission – a creation of Congress – to deliver lessons that it learned about the financial crisis, so as to inform our deliberations?

Mr. President, the answer to all of these questions is: No. In my view, this represents a fundamental failure of this body to do its own due diligence before we even attempt such a significant undertaking. Millions of people lost their jobs, their homes, and trillions of dollars in wealth.

The American people expect more, and certainly deserved more from us.

Nonetheless, Mr. President, it certainly didn’t take much investigation to know that at the heart of the crisis were massive failures in our mortgage underwriting and securitization system. Therefore, the most incredulous shortcoming of this bill is the lack of any serious attention being paid to the Government Sponsored Enterprises, Fannie Mae and Freddie Mac.

Yesterday, one of my colleagues on the other side of the aisle said that we are not dealing with the GSEs in this bill because it’s ‘too hard.’ I have to say, Mr. President, we certainly have come a long way – in the wrong direction.

There was a time, not too long ago, when we did things because they ARE hard and because they are worth doing. What a difference a few decades makes.

Mr. President, it is simply a failure of will that nothing is being done to reform the GSEs, or, at the very least, cap the allowable losses. This bill has twelve titles, totaling well over 1500 pages. It has been amended dozens of times.

Yet, the bill does nothing to affect the ongoing, unlimited bailouts of Fannie Mae and Freddie Mac that, to date, have cost the American taxpayer $146 billion – one of the largest bailouts in history.

Our distinguished Chairman, the Senator from Connecticut has expressed his outrage on a number of occasions that consumers paid around $40 billion in overdraft fees in 2009. The GSEs have now cost American taxpayers over three-and-a-half times that amount – and counting. To quote my old friend, and former Majority Leader, Bob Dole: ‘where’s the outrage?’

Perhaps what is most disappointing about the lack of attention to Fannie and Freddie is the fact that there is no end in sight. Losses continue to mount and taxpayer exposure is unlimited. For example, in a recent SEC filing, Fannie Mae reported a need for another $8.5 billion from taxpayers.

Hard-working Americans in Alabama and throughout the Nation will be asked to pony up again and again until we do something to stop it. When will it stop? According to my Democrat friends, not yet. The best they can do for the American people in this bill is a study! That, Mr. President, is simply incredible.

The GSEs should have been our primary focus. Instead, they were ignored and further enabled by the Administration when they raised the cap on losses in December of last year.

In an attempt to do something, Senators McCain, Gregg and I, joined by several of our Republican colleagues, introduced an amendment that would have ended these bailouts. However, just as they prevented action to rein in Fannie and Freddie in the past, Democrats once again embraced the status quo and blocked the road to GSE reform.

Once our amendment failed, several of my Republican colleagues and I, led by Senator Crapo, decided that if we could not end these unlimited bailouts, we would try to cap the losses and provide for a true accounting of the costs. Our amendment would have capped these bailouts at $400 billion.

Yet, even at nearly a half of a trillion dollars, the Democrats could not bring themselves to stop the hemorrhaging at Fannie and Freddie.

How much will the GSEs have to lose before my Democrat friends will say enough? Will a half trillion dollars be enough? Will Democrats allow reform of Fannie and Freddie before it costs the taxpayers $1 trillion? How much is too much?

Mr. President, the supporters of this bill have argued that it will stabilize our financial sector. I am not sure, however, it can stabilize anything when it does nothing to address the two largest destabilizing forces of the crisis, Fannie Mae and Freddie Mac.

The fact that it is costing taxpayers nearly seven billion dollars every month should be enough to convince anyone that something needs to be done, and done now. Unfortunately, the Democrats, led by the President, are telling the American people that they are going to have to pony up and wait – again.

Mr. President, the failure to address the GSEs is the most glaring omission in this legislation. There are, however, many things that are in this bill that raise similar concerns for the future of our economy.

A major component of the bill deals with the creation of a massive new consumer bureaucracy, along with a separate Title 12 which is a liberal activist’s dream come true. Provisions in this title will compel financial institutions to provide free services to selected community groups.

This is the exact same model that led us to the crisis in the first place, except for one distinct difference. The government bailout is built in from the beginning through the use of taxpayer guarantees.

Mr. President, the American people are being misled.

The authors of this bill are telling them that this legislation has been drafted to address the recent financial crisis and that it will ‘tame’ Wall Street. I am afraid that they are going to be disappointed.

By the Democrats’ own admission, the most important facet of this legislation is the creation of a massive new consumer bureaucracy. It has been described by my Democrat friends as the ‘third rail’ of this bill.

During our negotiations on the consumer bureaucracy, my Democrat friends were not focused on the mortgage market. Their sights were set on the rest of the economy.

Mr. President, make no mistake, behind the veil of anti-Wall Street rhetoric is an unrelenting desire to manage every facet of commerce under the guise of consumer protection.

They may be interested in protecting consumers, but they are more interested in managing them. All one has to do is read the academic writings of the authors of this new bureaucracy and it becomes very clear what their goals are.

The Democrats’ new bureaucracy is an enormous reach across virtually every segment of our economy and a massive expansion of government influence in our daily financial lives.

Mr. President, the people of America have been clear. They do not want a massively intrusive, continuously growing, and overly expansive government. They do not want a continuation of our unsustainable government promises, government spending, government deficits, and government debt.

They saw what happened to Greece when it over-promised and overspent. And Americans do not want to leave a European fiscal legacy to their children.

Yet, this bill does not listen to the American people. It promises massive government over-reach into even routine daily financial transactions of ordinary Americans and businesses, large and small.

Why does the federal government need information on ‘pertinent characteristics’ – whatever that might mean – of persons covered by the new consumer bureaucracy?

This new consumer bureaucracy will become massive, populated with thousands of bureaucrats who will create, within the new bureau, what Administration officials have referred to as a correct ‘culture’ of consumerism.

The new consumer protection bureaucracy is funded by more than half-a-billion dollars per year, funded through an Argentina-style raid on our central bank.

Of course, this opens the door for unlimited federal taxpayer funds for community organizers and groups like ACORN.

Mr. President, I favor consumer protection. This new bureau, however, promises to be more abusive than protective. And by abuse, I mean that the bureau will lower the living standards of Americans.

This new consumer bureaucracy is intended by its architects in the Treasury to begin the process of financial regulation with the intent of changing the behaviors of the American people.

Mr. President, I have faith in the American people and their ability to make good choices. Granted, we do not always choose well. But, I believe that a poor choice freely made is far superior to a good choice made for me.

I am afraid that the architects of this bill do not share this sentiment. Nor do they share my faith in the American people.

They view us as victims in need of their guidance. They view us as ‘fallible’ and in need of a government bureaucrat to protect us from ourselves. It is a bit ironic, however, that the sponsors of this new bureaucracy seem to believe that regulators do not share the same fallibility of ordinary Americans. Tell that to the hundreds of Bernie Madoff victims.

Mr. President, this is the world view that is driving this bill and it should concern every American. It seems, increasingly, that the view of Democrats toward virtually all of American business is a cynical view that Americans are out to take advantage of one another. I do not share that view either.

My presumption is that Americans are honest and hard working, and history has shown that to be true.

Mr. President, this bill promises to slow economic growth and kill jobs because it will place onerous regulatory burdens on businesses large and small.

It will stifle innovation in consumer financial products and reduce small business activity. It will lead to reduced consumer credit and higher costs for available credit.

Less credit at a higher price will dampen the very small-business engines of job creation so desperately needed right now, when unemployment hovers near double digits nationally and is at 11% in my home state of Alabama.

I cannot support legislation that threatens business conditions and the potential for job creation, especially at a time when we are crawling out of a severe recession.

Aside from onerous new consumer regulations, another avenue through which this bill will slow economic activity is in the treatment of derivatives.

This bill will chase risky financial trades overseas and further into the unregulated shadow banking system, thereby magnifying, not reducing, unmonitored systemic risks.

This bill demonstrates an imprudent disregard for the economic effects of a severely misguided approach to derivatives. Given the treatment of derivatives in this bill, end users – everyone from candy bar makers to beer brewers – who rely on these financial instruments to manage their risks will face massive increases in costs.

Because risk management will now be significantly more expensive, we can expect lower business investment which, again, means fewer jobs.

Why are we increasing costs to ordinary end users of derivatives, such as your home heating provider or makers of candy bars?

There seems to be an irrational desire to make all financial products of certain types ‘standard’, whether that can or should be done. Once again, the attitude seems to be: we are government and we know best.

That attitude will almost surely lead to massive concentrations of risks in central derivatives clearinghouses. It will also, ironically, chase derivatives activities overseas and into the unregulated shadow banking system.

Mr. President, who will back up those clearinghouses at the end of the day should market stresses prove to be severe? The Federal government and the Federal Reserve will back them up, promising even more bailouts in the future – this time for clearinghouses.

The approach to hedge fund oversight in this bill is symptomatic of an overall careless approach to assigning regulatory responsibility. Hedge funds have not been identified as a cause of the financial crisis, but hedge funds have been identified as a potential source of systemic risk.

However, rather than subjecting hedge funds to a systemic risk oversight regime, hedge fund advisors will be subject to a registration regime and the investor-protection oriented requirements that go along with it.

On its face, registration sounds reasonable.

The SEC, however, is not a systemic risk regulator, and when it tried to be one through the Consolidated Supervised Entity program, it failed. Yet, now, we are doubling down on the SEC, the very agency that failed us to begin with.

An unfortunate consequence of the treatment of hedge funds in the bill is that investors will likely treat SEC registration as an SEC seal of approval. Fraudulent hedge fund advisors will be virtually invited to use registration as a marketing tool.

Investor protection is an important job for the SEC, but its resources are not endless, and the SEC has been notoriously unable to inspect advisors on a regular basis.

Limited SEC resources should not be diverted from regulated public investment companies, such as mutual funds, to the monitoring of hedge fund advisors, as the reported bill proposes to do.

If the SEC is spending its resources in this manner, it will not be long before investors that do not meet the accredited investor threshold start demanding to be allowed to invest in hedge funds.

It will be hard to counter the argument that they should have access to such investments when the SEC is on the case.

Mr. President, there are dozens of problems with the Lincoln-Dodd over-the-counter (OTC) derivatives title, which I would be more than happy to document. In the interest of brevity, however, I will point out just a few of the most egregious examples:

The Lincoln-Dodd derivatives title does not provide regulators with access to the information they need to do their job.

The title is unworkable. In a six-month marathon rule-making session, regulators are to make massive changes in a huge market without the usual notice-and-comment that allows for broad public input.

Neither the SEC nor the CFTC has the staff that it needs to write the rules, let alone implement them. Companies, including Main Street businesses, all across the United States will also face operational, legal, and financial challenges as they strive to come into compliance with record keeping, reporting, capital, margin, clearing, and business conduct requirements.

Key provisions in the Lincoln-Dodd derivatives title directly contradict key provisions in other titles and current law. Section 716, for example, would preclude a clearinghouse – even one that does not clear swaps – from receiving access to the discount window. This is directly contrary to Title 8, which empowers the Federal Reserve to grant discount window access to clearinghouses.

The proposed regulatory framework in the Lincoln-Dodd derivatives title poses new risks to the system. For-profit clearinghouses will have an incentive to clear as many swaps as possible.

If they do not properly assess and collect margin for risks associated with these products or do not have sufficient operational capacity, an unanticipated event in the market could topple a clearinghouse and send shock waves throughout the rest of the system.

The Lincoln-Dodd derivatives title will benefit big dealers who can shift their swaps business overseas over small dealers who cannot.

The so-called end user exemption contained in the Lincoln-Dodd derivatives title is illusory. Main Street businesses will not be able to continue hedging their business risks as they now do.

Many end users will find themselves subject to clearing mandates, bank-like capital requirements, and extensive dealer-like business conduct requirements. As a result, Main Street businesses will face higher costs that will ultimately be borne by consumers.

Consumers will be paying more for everything from electricity to candy bars. The Lincoln-Dodd derivatives title will work as an anti-stimulus plan that will pull resources out of the economy, hurt growth, and slow job creation. The derivatives title has real world consequences that cannot be wished away with a few technical fixes at the margins.

Mr. President, those are but a few of nearly one hundred flaws in the derivatives title. Yet, there is another title – Title 8 – which has received less attention than derivatives, but is equally troublesome.

Title 8 would give a stability Council broad power to identify financial market utilities, payment, clearing, or settlement activities that it deems to be now, or likely to become, systemically important. Those entities and activities would then be subject to risk regulation by the Federal Reserve Board of Governors.

This title is another example of an inappropriate delegation of Congressional responsibility to decide who should be regulated and by which regulator. The extent of delegation is left uncomfortably open, as it depends on open-ended language in which key terms are undefined.

The definition of ‘payment, clearing, and settlement activities,’ for example, include any ‘activity carried out by 1 or more financial institutions to facilitate the completion of financial transactions.’ With definitions like this one guiding the Council, it could decide to assign any aspect of the financial market to the Fed.

Lack of regulatory accountability contributed to the recent financial crisis. Title 8 exacerbates the problem by allowing the Council to bring the Fed into significant sectors of the financial system as a back-up regulator. If a problem arises, both the Fed and the relevant supervisory agency will have someone else to blame. And both will be able to blame Congress for its careless delegation of its own responsibilities.

Yet another troublesome title is Title 9, which could appropriately be labeled the ‘Grab-Bag’ title, since it is a grab-bag of items on the years-old wish lists of special-interest groups.

These items are not designed to respond to problems identified in the last crisis or likely in any crisis, and have not been considered in hearings.

The grab bag includes puzzling items, like a provision that would create a redundant office at the SEC and another provision that requires disclosure of the ratio of the median employee’s compensation to the chief executive officer's compensation.

It looks to me like the way is being paved to achieve so-called ‘social justice’ in income distribution. This is another disturbing example of the government getting its nose under the private sector’s tent.

The grab bag also includes anti-investor provisions. The proxy access provision, for example, enables special interest groups to push their agendas at the expense of the rest of the shareholders.

It also includes a surprising self-funding provision that will give the SEC complete control over the size and allocation of its budget. Let me repeat that, Mr. President, the Democrats are going to give the SEC virtual budget autonomy from Congressional oversight after the SEC dropped the ball in the Madoff and Stanford frauds, and in the wake of the SEC's pornography scandal.

When the ‘grab bag’ title does attempt to address issues related to the crisis, it takes the wrong approach.

With respect to credit rating agencies, for example, the effort to pull ratings out of the statutes and regulations is lost in a complicated new regulatory framework that only the big credit rating agencies will be able to navigate. This will stifle competition – the very thing we need to be encouraging. The failure of the ratings agencies was central to the crisis and this bill represents half-measures at best.

The heightened liability standards, corporate governance requirements, and qualification standards for credit rating analysts will lull investors into greater apathy and discourage competition.

With respect to securitization, rather than focus on the root cause of the housing bubble by establishing clear, tough, and fair underwriting standards, this title imposes a five percent risk-retention requirement across-the-board for securitizations.

In combination with changes in accounting and bank capital rules, a risk retention requirement could force an entire securitization to be retained on a bank’s balance sheet for accounting and capital purposes. Securitization activity would then become economically unviable.

This approach to securitization is a risky gamble to take at a time when our securitization markets are just starting to recover and show some signs of life.

The whistleblower provisions are well-intentioned attempts to address the SEC's failure during the Madoff scandal.

However, the guaranteed massive minimum payouts and limited SEC flexibility ensure that a line of claimants will form at the SEC's door hoping for some of the hundreds of millions in the whistleblower pot. The SEC will spend limited resources sorting through these claims that would have been better spent bringing enforcement cases.

Title 9 devotes 250 pages to provisions that either have nothing to do with the crisis or purport to provide solutions that will not actually solve problems but, rather, promise to give rise to many new problems.

Mr. President, this bill has been largely outsourced to Treasury officials and to regulators who have written key provisions to bolster their own power and authority.

This bill reflects a series of deals made, not by lobbyists, but by the executive branch along with the existing financial regulators who failed to do their jobs during the last crisis.

In negotiating key features of the bill, delays were the norm as responses to my offers or inquiries had to pass through a long and winding road of approval from Treasury, the Fed, the FDIC and on and on.

Unfortunately, we have outsourced the writing of this legislation to the Fed, Treasury, OCC, SEC, CFTC, among other government bureaucracies.

Let me give you an example, Mr. President. Consider the derivatives title in the bill. This title was largely authored by the CFTC. We see this manifested in numerous provisions that give the CFTC broad new authority, sometimes to the exclusion of other regulators.

The CFTC used this bill as an opportunity to grab jurisdiction from the SEC, which was purposely excluded from the negotiating room during critical meetings.

As a result, the derivatives title gives the CFTC regulatory authority over a wide swath of Wall Street and Main Street companies.

The CFTC, in addition to its traditional role of overseeing the commodity futures markets, will be charged with protecting retail investors, assessing systemic risk, imposing capital requirements on manufacturing companies, regulating banks, and assessing the regulatory capability of the Securities and Exchange Commission.

This is the sort of result you get when you hand the legislative pen to the regulators.

My Democrat colleagues like to talk about the influence of Wall Street lobbyists, but the real influence in this process has been exerted by the bureaucracies. Mr. President, I thought that one of the main objectives of this legislation was to plug regulatory gaps and streamline our financial regulatory structure?

We still have the Fed; the FDIC; the SEC; the CFTC; and the OCC. We have also added some new letters to the alphabet soup, as with the CFPB and the OFR.

We have also seen a complete about face with respect to the Federal Reserve.

The process seemed to have begun with a commitment to rein in their bailout powers and take away their consumer protection authority, given the Fed’s failures.

By contrast, this legislation actually expands the Fed’s powers.

Mr. President, Americans see developments in Europe, where a monetary union faces a severe test and market participants are running away from the debts of profligate governments. Americans are increasingly worried that the out-of-control spending here in the U.S. and the massive expansion of government will very soon test American fiscal viability.

An appropriate response would be to rein in the costs and breadth of runaway government spending and bureaucratic expansion. The wrong response would be the financial regulation bill before us.

Mr. President, from legislative process to the final bill language, this bill is flawed. This bill promises more government, more costs, slower economic growth, and fewer jobs. It threatens privacy rights and fails to address crucial elements of the recent crisis. I urge my colleagues to oppose final passage of this bill."