July 31, 2009

House Passes Far-Reaching Food Safety Bill

House Passes Food Safety Bill on Second Try

July 31, 2009

Consumer Affairs - The House of Representatives voted 283-142 to pass the Food Safety Enhancement Act of 2009 (aka H.R. 2749), designed to improve the Food & Drug Administration's (FDA) ability to police food suppliers and processors for signs of foodborne illnesses and unsafe practices.

The bill was originally introduced on June 29, but failed on a vote of 280-150 as the rules required a two-thirds majority for passage. The bill was reintroduced today only requiring a simple majority to pass the chamber. 229 Democrats and 54 Republicans voted to pass the bill that House Speaker Nancy Pelosi called "strong legislation that will protect lives and prevent illness..."

Under the terms of the legislation, the FDA's proposed powers include creating a registry of food producers and importers that would be updated regularly, the ability to quarantine potentially unsafe food products from entering particular geographic areas, and levying a fee of $500 on food facilities to fund the new oversight and investigation procedures.

The bill was the subject of contentious debate in the House. Opponents painted the bill as a move by the government to tell farmers how to conduct their business, and that the $500 fees--originally set at $1,000, but later reduced--were still too onerous for small farmers...

House Passes Far-Reaching Food Safety Bill

July 31, 2009

Associated Press – The House has passed a far-reaching food safety bill requiring more government inspections and imposing new penalties on those who violate the law, reacting strongly to an outbreak of salmonella in peanuts that killed at least nine people.

The legislation would require greater oversight of food manufacturers and give the Food and Drug Administration new authority to order recalls. It also would require the FDA to develop a system for better tracing food-borne illnesses. Food companies would be required to create detailed food safety plans.

Farm-state members had argued that the bill would be too invasive on farms and had pushed colleagues to vote against it as it was considered under a special procedure that requires a two-thirds vote. It was rejected Wednesday by a few votes.

Democrats scrambled to put the legislation back on the House floor Thursday under a rule that required a simple majority to pass. The vote was 283-142...

A similar bill sponsored by Sen. Richard Durbin, D-Ill., has not yet seen action in the Senate.

The legislation gained new momentum in the wake of one of the largest product recalls in U.S. history, stemming from salmonella in peanuts that killed nine people, sickened hundreds of others and was linked to shoddy practices at a peanut company in Georgia. Other recent outbreaks include contaminated spinach in 2006 and salmonella in peppers last year. The government estimates that 76 million people each year are sickened by food-borne illness, hundreds of thousands are hospitalized and around 5,000 die...

The FDA regulates most foods, though as many as 15 federal agencies have a hand in food safety. The Agriculture Department inspects meats, poultry and some eggs.

The bill, which has support from the food industry as well as a wide range of consumer groups, would give the agency the authority to order recalls if a company fails to act on its own, and would increase the frequency of inspections to high-risk food processing facilities. It would charge food processors an annual $500 fee to help defray the cost of increased enforcement.

Sponsors tweaked the legislation in recent days to appease the farm-state members who objected to it. Last-minute changes included modifying the way a trace-back system would work, clarifying that some hard-to-trace products, such as grains, would not be tracked to individual farms. It also lessened paperwork for some farms and clarified that some smaller operations would not have to register with the FDA or pay fees.

Those changes appeased most farm-state Democrats, but many Republicans still voted against it, saying it would be invasive to farmers and not do enough to improve food safety. Oklahoma Rep. Frank Lucas, the top Republican on the House Agriculture Committee, led the charge against the legislation.

HR 2749 - aka "FDA Sheriff" Bill

July 6, 2009

Farm to Consumer - Passage of the FSEA into law would amend the Federal Food, Drug and Cosmetic Act (FFDCA). The bill proposes a substantial increase in power and resources for the Food and Drug Administration (FDA) and would significantly diminish existing judicial restraints on actions taken by the agency.

Although the bill includes some provisions that could improve the mainstream food system, many of these are vaguely worded and do not clearly define the scope of the agency’s power, creating the potential for inappropriate application and enforcement.

Small farms and local artisanal producers are part of the solution to the food safety problem in this country; the bill would impose on them a one-size-fits-all regulatory scheme and would disproportionately impact their operations for the worse.

This grab of power by the FDA will allow the following: WARRANTLESS SEARCHES, EXPENSIVE FOOD TRACING SYSTEMS, $100,000 PENALTIES, FARM REGISTRATION FEEs, GARDEN REGULATIONS

Billions of People Expected to Die Under Current Codex Alimentarius Guidelines

July 21, 2009

NaturalNews - In 1995, the FDA issued a policy statement saying that international standards such as Codex Alimentarius would supersede U.S. laws governing all food. Under the Central American Free Trade Agreement, which is illegal under current U.S. law but is legal under international law, the U.S. is required to conform to Codex as it stands on December 31, 2009.

According to the projections of the World Health Organization (WHO) and the Food and Agriculture Organization (FAO), a minimum of 3 billion people will die from the Codex mandated vitamin and mineral guideline alone. As the clock ticks toward this irrevocable December 31, 2009 deadline for full implementation of Codex Alimentarius, the Natural Solutions Foundation (NSF) and its medical director, Dr. Rima Laibow, are feverishly working to change Codex guidelines. They need your help.

Codex is the enemy of everyone except those who will profit from it, according to Dr. Laibow. She points to its association with those who committed crimes during the Nazi regime. At the end of World War II, the Nuremberg tribunal judged Nazis who had committed horrendous crimes against humanity and sentenced them to prison terms. One of those found guilty was the president of the megalithic corporation I.G. Farben, Hermann Schmitz. His company was the largest chemical manufacturing enterprise in the world, and had extraordinary political and economic power and influence with the Hitlerian Nazi state. Farben produced the gas used in the Nazi gas chambers, and the steal for the railroads built to transport people to their deaths.

While serving his prison term, Schmitz looked for an alternative to brute force for controlling people and realized that people could be controlled through their food supply. When he got out of prison, he went to his friends at the United Nations (UN) and laid out a plan to take over the control of food worldwide. A trade commission called Codex Alimentarius (Latin for food code) was re-created under the guise of it being a consumer protection commission. But Codex was never in the business of protecting people. It has always been about money and profits at the expense of people.

In 1962, the timetable was set for Codex to be fully implemented on a global level by December 31, 2009. Under Codex, committees were established to create guidelines on such topics as fish and fisheries, fats and oils, fruits and vegetables, ground nuts, nutrition, food for specialized uses, and vitamins and minerals. There were 27 committees in all, creating a huge bureaucracy. Under Codex there are over 4,000 guidelines and regulations on everything that can be put into your mouth with the exception of pharmaceuticals which are not regulated by Codex...

Codex is an industry dominated regulation setting organization, and as such has no legal standing. Participation in Codex is said to be voluntary. But Codex has risen to the level of de facto legal standing because Codex is administered by the WHO and FAO. They fund it and run it at the request of the UN. Since the WHO and FAO are supposed to be about health, there is conflict of interest. The committees of Codex work up guidelines, rules and regulations, and present them to a Codex commission for ratification. Once they are ratified and approved by consensus, they become mandatory for any country that is a member of the WHO.

Codex was accepted when the WTO was formed in 1994 as a means of harmonizing food standards globally for easy trade between countries. As a result, countries must harmonize with Codex if they want to have any standing in a trade dispute. When disputes arise and countries are pulled in to WTO, the one that is Codex compliant automatically wins, regardless of the merits of its case.

Dr. Gregory Damato, Ph.D., writing for Natural News, has characterized Codex as "population control for money." He sees Codex as run by the U.S. and controlled by the big pharmaceutical corporations and the likes of Monsanto with the purpose of reducing the population of the world to a level considered sustainable by those promulgating the New World Order. This would mean a reduction of approximately 93 percent of the current world population.

Once Codex standards are adopted there will be no turning back. When Codex compliance is instigated in any area, as long as the country remains a member of the WTO, those standards cannot be repealed, or altered in any way...

RFID, GPS Technology and Electronic Surveillance

School Installs CCTV Cameras in Pupil Toilets

July 22, 2009

London Times - A head teacher has defended using CCTV to monitor the lavatories at his junior school. Len Holman, the head of Angel Road Junior School in Norwich, said that pupils had requested the cameras, which cover the sink area, to protect the newly refurbished toilet blocks from vandalism.

Shami Chakrabarti, the director of the human rights organisation Liberty, said that the measure would serve only to prepare children for a lifetime of intrusive surveillance.

The cameras were installed at the request of the pupils’ school council, Mr Holman said.
“There were some isolated incidents of vandalism, occurring mainly because pupils of course can’t be monitored by adults in toilet areas. “The pupils saw that there was available space on the security system operating in the school and asked whether TV cameras could be installed to prevent further vandalism.”
Ms Chakrabarti told the BBC’s Today programme on Radio 4 that the state of privacy in Britain had reached a new low “if we now believe that the only way to teach 7 to 11-year-olds to respect property, to behave well, is to put closed-circuit television in the toilets.”
She added: “In other words, to teach them ‘behave well for fear of being caught’ and to prepare them for a lifetime of pretty intrusive surveillance.” It emerged yesterday that a school in South London has installed CCTV in classrooms to avoid disputes between teachers and pupils and to prevent theft. The films will also be used in teacher training.

Stockwell Park High School is being rebuilt and as part of the overhaul a hi-tech surveillance system has been put in place. There are cameras in 28 classrooms as well as corridors and stairwells, and there are 40 more outside. Mike Rush, the deputy head teacher, said that he envisaged the number of cameras doubling when the rest of the building was complete.

Maryland Transit Administration Considers Train, Bus Surveillance

July 20, 2009

Baltimore Sun - The Maryland Transit Administration is considering installing audio surveillance equipment on its buses and trains to record conversations of passengers and employees, according to a letter sent by the MTA's top official to the state Attorney General's Office.

The letter, reported by the Maryland Politics Watch blog, seeks legal guidance on whether installing such equipment would violate Maryland's anti-wiretapping law. In his letter, MTA Administrator Paul J. Wiedefeld notes that the MTA already uses video cameras for security aboard its vehicles.
"As part of MTA's ongoing efforts to deter criminal activity and mitigate other dangerous situations on board its vehicles, Agency management has considered adding audio recording equipment to the video recording technology now in use throughout its fleet," Wiedefeld wrote.
According to the administrator, the MTA staff decided the idea raised legal issues and decided to send a letter seeking an opinion from the attorney general on whether such electronic eavesdropping would be legal and, if so, under which circumstances.

The MTA asked the attorney general to clarify whether the Maryland's Wiretapping and Electronic Surveillance Act would require the MTA to obtain the consent of passengers before recording their conversations. If consent is required, the MTA asked whether posting a sign informing riders they were under audio surveillance would be sufficient notice.

The idea drew a negative reaction from the Sen. Brian E. Frosh, chairman of the Senate Judicial Proceedings, who predicted the policy would almost certainly result in some legislator introducing a bill to prohibit such surveillance.
"Do we really need to stoop that low in order to keep order?" Frosh said. "It's that '1984' question ultimately: Do you want government delving that closely into everybody's personal life to maintain our safety."
A spokeswoman for the MTA did not have an immediate response.

Big Brother Flies into Valley with 'Crime-Fighting' Eyes

July 9, 2009

Antelope Valley Press (Palmdale, California) - In what they say is the first step toward a new era in law enforcement techniques, city officials are testing a small airplane mounting a high-tech surveillance camera to help fight crime.

The aerial surveillance system features high-definition video recording technology that is capable of viewing people or objects several miles away and whose images can later be magnified to identify the individuals, officials said.
"You never know when you are being watched or followed. It would be stupid to commit a crime. You see it with such detail," said Mayor R. Rex Parris, who took a ride last week in a camera-equipped airplane with pilot Dick Rutan. "I have every hope that Lancaster will be the first city to deploy it. I've never been so excited about anything."
Such surveillance technology is used by the military, NASA and a limited number of other federal agencies, but Lancaster would be the first entity in the United States to use it for general public safety, officials said.

Parris asked Rutan, a Mojave Air and Space Port commissioner who is famous for piloting the Voyager aircraft around the world nonstop and unrefueled in 1986, for assistance in developing the concept of placing an "eye in the sky" over Lancaster.

At first, Rutan looked into deploying the camera on an unmanned aircraft to patrol the city's skies, but that proved to be too expensive and faced too many difficulties with Federal Aviation Administration regulations. Using a conventional small plane "solves all kinds of problems," Rutan said. "It's a lot cheaper to have a pilot on board than a drone."

For the first demonstration flight last week, the camera was mounted on a Cessna Caravan, but Rutan is researching smaller general aviation aircraft for the aerial platform. The camera is an example of technology developed for and used by the military making a transition to civilian applications, Rutan said.
"I'm pretty impressed with the quality of the imagery you're able to get, day and night," he said. "I think it would be a terrific tool for law enforcement."

"I'm really excited to be part of it," Rutan said.
During the demonstration flight, the system was used to observe a car accident, a city announcement said. The camera detected the collision due to the heat produced by the vehicles, and within seconds focused on the area and provided a clear picture of all vehicles and people in the area.

The mayor said he can't predict how long it will take to make the "eye in the sky" operational. City officials said in the announcement that the trial flight exceeded their expectations, but called it just the first step in the process.
"This demonstration is a major milestone in a project that will improve the quality of life in the Antelope Valley," City Manager Mark Bozigian said in the announcement. "To put it simply, it works. The next step is to make it operational, which includes financial considerations."

California City May Install License Plate Cameras

July 11, 2009

San Francisco Chronicle - Welcome to Tiburon... Click... Your presence has been noted.

The posh and picturesque town that juts into San Francisco Bay is poised to do something unprecedented: use cameras to record the license plate number of every vehicle that crosses city limits.

Some residents describe the plan as a commonsense way to thwart thieves, most of whom come from out of town. Others see an electronic border gate and worry that the project will only reinforce Tiburon’s image of exclusivity and snootiness.
“I personally don’t see too much harm in it, because I have nothing to hide,” commodities broker Paul Lambert, 64, said after a trip to Boardwalk Market in downtown Tiburon on a recent afternoon.

“Yet,” he said, “it still has the taint of Big Brother.”

Japanese Workers Have Daily Smile Scans

July 6, 2009

Telegraph - Japanese railway workers face enforced "smile scans" every morning in a bid to boost their customer services, it has been claimed. More than 500 staff at Keihin Electric Express Railway are expected to be subjected to daily face scans by "smile police" bosses.

The "smile scan" software, developed by the Japanese company Omron, produces a sweeping analysis of a smile based on facial characteristics, from lip curves and eye movements to wrinkles.

For those with a below-par grin, one of an array of smile-boosting messages will pop up on the computer screen ranging from "you still look too serious" to "lift up your mouth corners," according to the Mainichi Daily News.

A growing number of service industries are reportedly using the new Omron Smile Scan system for "smile training" among its staff.

Workers at Keihin Electric Express Railway will receive a printout of their daily smile, which they will be expected to keep with then throughout the day to inspire them to smile at all times, the report added.

Bank Failures in the U.S.

How the Old BankUnited Fell Apart

July 13, 2009

Miami Herald - It took 25 years for BankUnited Financial Corp. to blossom into Florida's largest homegrown financial institution. But it took just one type of loan to sink its Coral Gables-based bank and trigger its May seizure by federal regulators: the payment option adjustable rate mortgage, or option ARM...

lfred R. Camner, the founder and biggest shareholder as well the chairman and chief executive until October 2008, led the bank in an ambitious foray into option ARMs -- a product many consider the riskiest mortgage ever created...

Option ARMs, now discredited, give borrowers choices each month: Make a full payment of principal and interest, something in between, or a minimum payment that results in negative amortization, meaning the loan balance actually grows each month instead of shrinking.

It was just the sort of easy credit that speculators flocked to, fueling the rise in home prices between 2003 and 2006. Borrowers figured on making minimal installments for a little while and reselling a home at a quick profit or refinancing to avoid onerous terms that kicked in later...

Regulators Shut Down Five More Banks, Bringing U.S. Total for 2009 to 57

July 17, 2009

AP - ...Friday's move brings the number of bank closings in California this year to eight. With First Piedmont, 15 Georgia banks have failed since the beginning of 2008, more than in any other state. Most of the failures have involved banks in the Atlanta area, where the collapse of the real estate market brought economic dislocation. Until Friday, however, no federally insured bank had been closed in South Dakota since 1992, when First Federal Savings Bank of South Dakota, based in Rapid City, was shut down during the savings and loan crisis.

The 57 bank failures nationwide this year compare with 25 last year and three in 2007.
The FDIC estimates that the cost to the deposit insurance fund from the failure of Temecula will be $391 million and $579 million for Vineyard Bank. For First Piedmont Bank, the cost is put at $29 million. The cost to the fund from BankFirst's failure is estimated at $91 million.

As the economy has soured -- with unemployment rising, home prices tumbling and loan defaults soaring -- bank failures have cascaded and sapped billions out of the deposit insurance fund. It now stands at its lowest level since 1993, $13 billion as of the first quarter.

While losses on home mortgages may be leveling off, delinquencies on commercial real estate loans remain a hot spot of potential trouble, FDIC officials say. If the recession deepens, defaults on the high-risk loans could spike. Many regional banks hold large numbers of them.

The Treasury Department has launched a program in which financial firms will buy as much as $40 billion worth of banks' soured, mortgage-linked investments. That amount is far below the potential $1 trillion in assets that the government originally hoped to take off the banks' books through the program and another that would have targeted bad loans.
The problem assets helped spark the financial crisis as they lost value and banks became unable to sell them. They have been weighing down banks' balance sheets -- one reason the industry has had trouble providing the credit necessary to support an economic recovery.

The number of banks on the FDIC's list of problem institutions leaped to 305 in the first quarter -- the highest number since 1994 during the savings and loan crisis -- from 252 in the fourth quarter. The FDIC expects U.S. bank failures to cost the insurance fund around $70 billion through 2013.

The May closing of struggling Florida thrift BankUnited FSB is expected to cost the insurance fund $4.9 billion, the second-largest hit since the financial crisis began. The costliest was the July 2008 seizure of big California lender IndyMac Bank, on which the insurance fund is estimated to have lost $10.7 billion.

The largest U.S. bank failure ever also came last year: Seattle-based thrift Washington Mutual Inc. fell in September, with about $307 billion in assets. It was acquired by JPMorgan Chase & Co. for $1.9 billion in a deal brokered by the FDIC.

FDIC Insurance Fund: It Doesn’t Actually Exist

Originally Published on September 12, 2008

Seeking Alpha - When FDIC head Shelia Bair says her agency might have to bolster the FDIC's insurance fund with Treasury borrowings to pay for the new spate of bank failures, a lot of us, this 40-year banking veteran included, assumed there's an actual FDIC fund in need of bolstering.

We were wrong.

As a former FDIC chairman, Bill Isaac, points out here, the FDIC Insurance Fund is an accounting fiction. It takes in premiums from banks, then turns those premiums over to the Treasury, which adds the money to the government's general coffers for "spending . . . on missiles, school lunches, water projects, and the like."

The insurance premiums aren't really premiums at all, therefore. They're a tax by another name. Actually, it's worse than that. The FDIC, persisting in the myth that its fund really is an insurance pool, now proposes to raise the "premiums" it charges banks to make up for the "fund's" coming shortfall.

The financially weakest banks will be hit with the biggest tax hikes. Which makes absolutely no sense.

You don't need me to tell you the banking industry is on the ropes. The last thing it needs (or the economy needs, for that matter) is an expense hike that will inhibit banks' ability to rebuild capital, extend new loans, or both.

If the FDIC wants to raise its bank tax once the industry has recovered, I suppose that's fine. But to raise taxes on the industry now is perhaps the dumbest thing the agency can possibly do.

At the margin, the FDIC will be helping bring about more of the failures it says it wants to prevent.
But this is the government we're talking about, so logic goes out the window. First, the FDIC insists its mythical bank insurance fund exists, when it really doesn't. Then the agency does what it can to run the imaginary fund's finances straight into the ground. Your tax dollars (sorry, "premiums") at work.

FDIC Gearing Up for Bank Closures

July 8, 2009

Washington Business Journal - The Federal Deposit Insurance Corp. is gearing up to handle a large number of bank failures expected as a result of bad mortgages, both in residential and commercial real estate, an economist said Tuesday.

They know they’re going to take down a large number of banks and they can’t do it until they’re staffed up,” said Mark Dotzour, chief economist and director of research for the Real Estate Center at Texas A&M University. Dotzour expects federal regulators to establish an agency, similar to the Resolution Trust Corp. that disposed of assets belonging to insolvent S&Ls in the late 1980s and early 1990s.

Once they start to sell [foreclosed real estate], we’ll find out what the market really is,” Dotzour told attendees at an economic summit hosted by a handful of real estate groups in Tampa, Fla.

Dotzour blamed federal intervention for the lack of commercial real estate investment activity in recent months, as well as the failure of businesses to make major decisions. “Nobody knows what to do so they’re doing nothing,” Dotzour said at the luncheon meeting at the Intercontinental Tampa.

Government, in its quest to help the economy, is causing harm by propping up failing companies and regularly changing rules, he said.

“No one can predict what the government will do,” Dotzour said. “People are frozen. It’s not that they don’t want to invest in the future, the rules are unclear,” he said.

He jokingly called the Federal Reserve “inksters” for routinely printing money to bail out big business, including banks that are still not making many loans. The government’s role in a capitalistic society, he said, “is to make the rules and get off the dance floor.”

Businesses and individuals that can’t pay their bills should resolve their problems in bankruptcy court, not with money from the government, he said. It’s a process that has worked for decades, for generations. “Everyone has a lesson to learn here, including you and me,” he said. “We have to live within our means.”

Dotzour expects foreclosure rates to continue to climb, real estate prices to fall more, and cap rates to rise to at least 9 percent before leveling off. In 2010 and 2011, interest rates will begin to rise, as will inflation. Once investors realize the market is at bottom, deals will begin to flow again, he said.

In the meantime, he compared the bad loans that remain on banks’ books to a smelly cat litter box and the feds keep throwing more litter on top to mask the smell. But they’ll eventually have to remove the organic material to fix the problem.

Seven More Banks Fail, Bringing U.S. Total for 2009 to 52

July 2, 2009

Associated Press - Six Illinois banks and one bank in Texas were shuttered Thursday as government regulators proposed new rules for private equity firms seeking to take over failed banks.

This brings the U.S. total for 2009 to 52, which is more than double the 25 that failed in all of 2008 and the three closed in 2007.

The Federal Deposit Insurance Corp. was appointed receiver of all seven. The total cost to the Deposit Insurance Fund from the seven closings will be $314.3 million, the FDIC said.

The failure of the six Illinois banks, which are all controlled by one family, resulted primarily from losses on investments in risky instruments known as collateralized debt obligations and other loan losses, the FDIC said. The closings bring to 12 the number of Illinois banks closed this year...

Under new rules proposed Thursday by the FDIC, private equity firms seeking to buy failed banks would face strict capitalization and disclosure requirements, but some regulators already warn the proposal may go too far.

The FDIC is seeking to expand the number of potential buyers for the growing number of banks it has closed during the financial crisis. With mounting interest from private equity firms, whose methods and motives aren't always clear, the FDIC is trying to set requirements to ensure the banks won't fail again.

One of the new proposals under discussion would require investors to maintain a healthy amount of cash in the banks they acquire, keeping them at about a 15-percent leverage ratio for three years. Most banks have lower leverage ratios, which measure capital divided by assets. Investors also would have to own the banks for at least three years and face limits on their ability to lend to any of the owners' affiliates.

Regulators said their intent was to tap into the potentially deep source of private equity, while ensuring that banks remain well capitalized once they are sold. "We want nontraditional investors," FDIC Chairman Sheila Bair said at the board meeting. "There is a significant need for capital and there is capital out there."

Still, some regulators worried that the rules could stifle a potentially valuable new source of investment. Bair said the proposal was "solid," but acknowledged that some details, including the high capital requirements, could be controversial. Comptroller of the Currency John Dugan said that the rules, which will now be subject to public comment, may be too restrictive.

The Private Equity Council, a Washington-based advocacy group for firms, criticized the proposed FDIC guidelines. In a statement, the group's president, Douglas Lowenstein, said the proposals would "deter future private investments in banks that need fresh capital."

The proposals will be subject to a 30-day public comment period, after which the bank regulators likely will meet again to finalize the rules, said FDIC spokesman David Barr.

The FDIC monitors the health of banks to ensure that they have enough capital to stay afloat and cover their deposits. When banks get in trouble, the FDIC can seize and sell them. Prior to Thursday, the FDIC already had closed 45 banks this year, many of them community or regional institutions. That compares with 25 failures last year and three in 2007.

The FDIC already has brokered two sales this year to entities controlled by private equity firms. In March, the government sold IndyMac Federal Bank for $13.9 billion to a bank formed by investors that included billionaire George Soros and Dell Inc. founder Michael Dell.

But the business practices and ownership of the lightly regulated pools of investor funds often can be difficult to penetrate. The FDIC proposals include requirements meant to pry some information out of the investors, including disclosing the owners of private equity groups. The FDIC rules also would prevent the groups from using overseas secrecy laws to shield details of their operations. Under the regulations, banks also would not be sold to investors with so-called "silo" structures that make it hard to determine who is behind a private equity group.

The FDIC had 305 banks with $220 billion of assets on its list of problem institutions at the end of the first quarter, the highest number since the 1994 savings and loan crisis.

Paramilitary Police State & Private Prisons

Army National Guard Advertises for “Internment Specialists”

July 31, 2009

Infowars - Doubt the government plans to impose martial law and round up dissidents and other malcontents? Well, the Army National Guard is advertising for qualified personnel to work as Corrections Officers and Internment/Resettlement Specialists.

“As an Internment/Resettlement Specialist for the Army National Guard, you will ensure the smooth running of military confinement/correctional facility or detention/internment facility, similar to those duties conducted by civilian Corrections Officers,” a classified ad posted on the web states. “This will require you to know proper procedures and military law; and have the ability to think quickly in high-stress situations. Specific duties may include assisting with supervision and management operations; providing facility security; providing custody, control, supervision, and escort; and counseling individual prisoners in rehabilitative programs...”

New Law Lets Police Use Force to Compel Hurricane Evacuation

July 26, 2009

caller.com - A new Texax state law will allow police to arrest people who don’t leave town under mandatory evacuation orders.

As it stands, officials cannot compel people to evacuate, only warn that those who stay behind won’t have any emergency services at their disposal. The new law gives county judges and mayors the power to authorize use of “reasonable force” to remove people from the area.

The law, passed this year, takes effect Sept. 1, in the heart of hurricane season in Texas. It also applies to other disasters, such as fires or floods.

Don’t expect police to go door to door arresting people or forcing them from their homes if a hurricane is headed toward Corpus Christi.

“If the hurricane is arriving here, we’re going to be doing the best we can to hunker things down, to make sure we have as many special-needs patients evacuated, to prevent crime and looting,” Corpus Christi Police Cmdr. Mark Schauer said. “We’re going to have a hard enough time preventing crime, let alone arresting people who don’t leave.”

County Judge Loyd Neal agreed that arrests for ignoring orders are unlikely. “I don’t have a jail big enough to put 20,000 people in,” Neal said. “You have to hope people will use good sense. The majority of people usually do...”

Martial Law Bridges in Seward, Alaska?

July 9, 2009

Infowars - In April, a caller to the Alex Jones Show provided details on Department of Homeland Security drill in Seward, Alaska. Alex had received several emails from residents of Seward claiming the town would be locked down and a Homeland Security exercise conducted there. Seward was not subjected to a DHS martial law exercise, but they did get new bridges that appear designed to lock down the city, as the video here demonstrates:

July 30, 2009

Government Takeover of Health Care

What's Really in Obama's Health Care Reform Bill - A Plain English Translation

July 30, 2009

From CMS at FreeRepublic.com:

• Page 16: States that if you have insurance at the time of the bill becoming law and change, you will be required to take a similar plan. If that is not available, you will be required to take the government option!

• Page 22: Mandates audits of all employers that self-insure!

• Page 29: Admission: your health care will be rationed!

• Page 30: A government committee will decide what treatments and benefits you get (and, unlike an insurer, there will be no appeals process)

• Page 42: The “Health Choices Commissioner” will decide health benefits for you. You will have no choice. None.

• Page 50: All non-US citizens, illegal or not, will be provided with free healthcare services.

• Page 58: Every person will be issued a National ID Healthcard.

• Page 59: The federal government will have direct, real-time access to all individual bank accounts for electronic funds transfer.

• Page 65: Taxpayers will subsidize all union retiree and community organizer health plans (example: SEIU, UAW and ACORN)

• Page 72: All private healthcare plans must conform to government rules to participate in a Healthcare Exchange.

• Page 84: All private healthcare plans must participate in the Healthcare Exchange (i.e., total government control of private plans)

• Page 91: Government mandates linguistic infrastructure for services; translation: illegal aliens

• Page 95: The Government will pay ACORN and Americorps to sign up individuals for Government-run Health Care plan.

• Page 102: Those eligible for Medicaid will be automatically enrolled: you have no choice in the matter.

• Page 124: No company can sue the government for price-fixing. No “judicial review” is permitted against the government monopoly. Put simply, private insurers will be crushed.

• Page 127: The AMA sold doctors out: the government will set wages.

Stimulus Bill Raises Concerns Over Government Rationing of Health Care

February 13, 2009

Infowars - Two provisions in President Barack Obama’s economic stimulus plan could give the federal government the authority to oversee the medical decisions made between doctors and patients, critics warn, which could result in the rationing of health care. The plan to make all health records electronic and establish an effectiveness board to review health care costs was part of the $838 billion economic stimulus bill that passed the Senate Tuesday...

The Collapse of the U.S. Economy

Pennsylvania State Workers Go Without Pay

July 30, 2009

World Socialist Web Site - More than half of Pennsylvania’s state employees—some 44,000 workers—received only two days pay last Friday for a pay period that normally covers two weeks. Many workers did not receive any pay at all, because deductions for healthcare, dental and other benefits were taken out in full.

This Friday the other 33,000 state workers will receive no money in their paycheck. State employees have been working without pay since July 1 as a result of the inability of Pennsylvania State Legislature and Governor Ed Rendell to reach a budget agreement...

In addition to state employees, vendors also have not been paid. Many vendors provide social services such as foster care, care for the elderly and disabled, as well as health care and other services. Many of these facilities have been forced to ask their workers to work without pay, lay off workers and cut back on services.

Pennsylvania finished the 2008-09 fiscal year June 30 with a $1.7 billion deficit. This was made up with service cuts, the elimination of 800 jobs, the use of reserve funds and loans. This year the state is facing a multi-billion dollar deficit with the governor and state lawmakers putting forward different versions of how to pay for it.

Rendell, a Democrat, has proposed a $28.8 billion dollar budget that cuts funds for state supported universities, libraries, museums, public broadcasting and other services, while providing a paltry $481 million increase for kindergarten through 12th grade education. The increase in education spending would mainly be used by local school districts to offset property tax increases. In addition, Rendell is calling for an increase in the state income tax rate from 3.07 to 3.57 percent. Democrats in the state house have proposed a slightly higher $29.1 billion budget.

Republicans control the State Senate and are opposed to any increase in the state income tax and instead are calling for a $27.1 billion budget, without the additional funding for public education and with even deeper cuts in social services. The Republican budget would cut spending by 3.6 percent and force the layoff of 3,000 state workers. The Democratic plan would lead to a layoff of at least 800 state workers.

While state workers are working without pay, state lawmakers and their aides are still getting paid. Lawmakers, while technically not receiving a salary, are receiving $158-a-day stipends and are able to claim expenses, while their aides are being paid from a fund set up for this purpose...

CIT Group Board OKs Rescue Loan from Bondholders

July 21, 2009

Associated Press - The board of CIT Group Inc., one of the nation’s largest lenders to small and midsize businesses, approved a deal with major bondholders to keep the company out of bankruptcy, said two people briefed on the talks. CIT will receive a rescue loan from key bondholders hoping to keep it alive long enough to restructure its debt, these people said.

The emergency loan would provide temporary financing to CIT so it could launch a debt exchange offer to free itself from upcoming debt maturities. Under the deal, CIT’s main bondholders would give CIT $3 billion at an initial interest rate of about 10.5 percent, according to a New York Times report.

The deal will not necessarily prevent a bankruptcy filing for the ailing firm, but will give it desperately needed breathing room while it attempts to refinance existing debt. CIT has a $1 billion payment due in August.

The Times said the temporary funding would provide CIT time to launch an exchange of outstanding debt for equity. By swapping debt for an equity stake in the company, CIT would no longer have to pay back the debt, which is essentially a loan. Instead, investors would hold an ownership stake in the company.

CIT has been scrambling to raise $2 billion to $4 billion. The New York-based lender received $2.3 billion from the government’s Troubled Asset Relief Program last fall. That money could be lost if CIT files for bankruptcy protection. The lender faces $7.4 billion in debt due in the first quarter of next year.

CIT’s failure could pose a major threat to the economy, industry representatives have warned. A collapse of CIT could cut off financing just as businesses need it most during the ongoing recession. Its failure could force thousands of companies to cut costs or shut down — driving up unemployment and dashing hopes for an economic recovery.
CIT serves as short-term financier to about 2,000 vendors that supply merchandise to 300,000 stores, according to the National Retail Federation. Analysts say 60 percent of the apparel industry depends on CIT for financing, so other lenders taking up all the slack would pose a big financial strain.

CIT Clinches $3 Billion Rescue

July 20, 2009

Reuters - CIT Group Inc has clinched $3 billion of emergency financing from bondholders, keeping the struggling lender out of bankruptcy, a person close to the matter said. The rescue from several big bondholders, including Pacific Investment Management Co (Pimco), has been approved by CIT's board and could be announced on Monday, the source said.

A rescue could allow more time for the 101-year-old lender to small and mid-sized businesses to restructure its debt, and preserve the ability of thousands of businesses to obtain cash needed for day-to-day operations.

Yet several analysts and bankers said it might only delay a bankruptcy filing, in light of skittishness among CIT customers and the New York-based company's inability to readily tap capital markets. "The deal is a negative for bondholders as it does not fix the underlying problem and layers in more secured debt," wrote CreditSights Inc analysts Adam Steer and David Hendler. "Without a viable funding model, we believe CIT may still be at risk of filing for bankruptcy..."

The bondholder group includes Pimco, a unit of German insurer Allianz SE, and other large investors, and is expected to provide financing with a 2-1/2-year term, two people familiar with the matter said. This financing would be backed by unsecuritized CIT assets, which probably exceed $10 billion, one of the sources said. An announcement of the rescue had been expected as early as Monday morning but was delayed by regulatory issues, a person familiar with the matter said. The various sources requested anonymity because the rescue talks are private...

CIT had sought emergency federal funding, but talks with the government broke down last week. The Obama administration appeared to draw a line as to how readily it would bail out troubled companies, following several big corporate bailouts over the last year.

Restructuring experts said CIT has some valuable businesses that could be acquired or survive as part of a scaled-down CIT, including its factoring business. Factors buy receivables, or the right to receive money owed, from suppliers at a discount so that those suppliers can continue to have working capital. CIT gets paid back when retailers sell goods, typically within 90 days...

The bondholder rescue could preserve the government's $2.33 billion investment in CIT from the Troubled Asset Relief Program. CIT became eligible for such financing when it became a bank holding company in December.

A rescue "comes as a great relief" for retailers preparing for the back-to-school and holiday shopping seasons, said Tracy Mullin, chief executive of the National Retail Federation.

Problems at CIT mushroomed two years ago in the wake of Chief Executive Jeffrey Peek's decision earlier in the decade to expand into subprime mortgages and student loans. Last week's government decision not to provide aid surprised Peek, leading him to seek help from private investors, one of the people familiar with the matter said.

A bankruptcy would make CIT, with $75.7 billion of reported assets, the largest U.S. financial company to go bankrupt since Lehman Brothers Holdings Inc last September.
CIT has about $40 billion of long-term debt, CreditSights said. It has lost close to $3.3 billion since the end of 2007... The company has been scheduled to report second-quarter results on July 23. It was unclear how the bailout talks might affect the timing of that report.

No Rescue for CIT, Taxpayers Lose $2.3 Billion

July 16, 2009

Reuters Blog - CIT Group Inc. has been advised that there is no appreciable likelihood of additional government support being provided over the near term. The company’s Board of Directors and management, in consultation with its advisors, are evaluating alternatives. The company likely has only one alternative… bankruptcy.

With the fall in CIT’s preferred stock, taxpayers’ money is already lost. According to the WSJ:
U.S. Treasury Department officials believe they will lose their entire $2.3 billion investment in CIT Group Inc., a spokeswoman said, which could mark the first loss of public money injected in banks through the Troubled Asset Relief Program.
According to the World Socialist Web Site:
CIT is a New York-based bank that finances nearly one million small and midsize companies in the U.S. The collapse of CIT’s efforts to secure government relief on Wednesday has left the 101-year-old bank teetering on the edge of bankruptcy and threatens a cut-off of funding to retailers and suppliers. That could result in a wave of bankruptcies and closures, leading to tens of thousands of layoffs.

Obama's Health Care Reform Bill Will Destroy U.S. Jobs and Devastate the Economy

July 17, 2009

NaturalNews - If you want to know why U.S. businesses increasingly outsource jobs to other countries, just add up the cost of doing business in America: As an employer, you have to pay not only higher wages than most other countries, but you also have to pay for the lost productivity and missed days due to the astonishingly poor health of the U.S. workforce.

Now, under the new Obama health care reform bill, you'll have to pay an additional eight percent of your payroll as a new tax to cover the costs of Big Government running its new sick-care system where nobody gets healthy, but everybody gets hammered with new taxes.

As a small business owner myself, I can tell you what this will cause in America: A massive shift of jobs out of the U.S. to other countries where health care costs are more reasonable (and the workers are healthier)...

America, on the other hand, runs a disastrously inefficient health care quagmire. The drug companies are paid monopoly prices on their drugs (enforced by the hopelessly corrupt FDA and FTC), doctors and hospitals are paid ridiculously high fees for services that cost a fraction of the price in other countries, the medical malpractice insurance companies collect a huge premium on everything (driving medical service costs ever higher), and the health insurance companies collect their profits on top of the whole cesspool, employing a literal army of paper pushers who sit in busy rooms, thinking of clever ways to deny payment to health care providers who have spent countless hours attempting to comply with complex billing rules.

CBO Chief Says Democrats' Health Care Proposals Lack Necessary Controls on Spending

July 17, 2009

Washington Post - Congress's chief budget analyst delivered a devastating assessment yesterday of the health-care proposals drafted by congressional Democrats, fueling an insurrection among fiscal conservatives in the House and pushing negotiators in the Senate to redouble efforts to draw up a new plan that more effectively restrains federal spending.

Under questioning by members of the Senate Budget Committee, Douglas Elmendorf, director of the nonpartisan Congressional Budget Office, said bills crafted by House leaders and the Senate health committee do not propose "the sort of fundamental changes" necessary to rein in the skyrocketing cost of government health programs, particularly Medicare. On the contrary, Elmendorf said, the measures would pile on an expensive new program to cover the uninsured.

Though President Obama and Democratic leaders have repeatedly pledged to alter the soaring trajectory -- or cost curve -- of federal health spending, the proposals so far would not meet that goal, Elmendorf said, noting, "The curve is being raised." His remarks suggested that rather than averting a looming fiscal crisis, the measures could make the nation's bleak budget outlook even worse.

Elmendorf's blunt language startled lawmakers racing to meet Obama's deadline for approving a bill by the August break. The CBO is the official arbiter of the cost of legislation. Fiscal conservatives in the House said Elmendorf's testimony would galvanize the growing number of Democrats agitating for changes in the more than $1.2 trillion House bill, which aims to cover 97 percent of Americans by 2015...

Although the House plan to cover the uninsured, for example, would add more than $1 trillion to federal health spending over the next decade, according to the CBO, it would trim about $500 billion from existing programs -- increasing federal health spending overall...

Meanwhile, a growing number of physician groups are also objecting to the House package. Although the chief executive of the American Medical Association pledged yesterday to "help build support" for the legislation, as many as 20 state medical societies have drafted a letter to congressional leaders vowing to fight creation of a government-sponsored health insurance program that could compete with private firms.

Paulson Reveals U.S. Concerns of Breakdown in Law and Order

July 17, 2009

The Independent - The Bush administration and Congress discussed the possibility of a breakdown in law and order and the logistics of feeding U.S. citizens if commerce and banking collapsed as a result of last autumn's financial panic, it was disclosed yesterday.

Making his first appearance on Capitol Hill since leaving office, the former Treasury secretary Hank Paulson said it was important at the time not to reveal the extent of officials' concerns, for fear it would "terrify the American people and lead to an even bigger problem."

Mr Paulson testified to the House Oversight Committee on the Bush administration's unpopular $700bn (£426bn) bailout of Wall Street, which was triggered by the failure of Lehman Brothers last September. In the days that followed, a run on some of the safest investment vehicles in the financial markets threatened to make it impossible for people to access their savings.

Paul Kanjorski, a Pennsylvania Democrat, asked Mr Paulson to reveal details of officials' concerns, which were relayed to Congress in hasty conference calls last year. The calls included discussion of law and order and whether it would be possible to feed the American people, and for how long, according to Mr Kanjorski.

"In a world where information can flow, money can move with the speed of light electronically, I looked at the ripple effect, and looked at when a financial system fails, a whole country's economic system can fail," Mr Paulson said. "I believe we could have gone back to the sorts of situations we saw in the Depression. I try not to use hyperbole. It's impossible to prove now since it didn't happen."

The Oversight committee is investigating the takeover of Merrill Lynch by Bank of America, a deal forged in the desperate weekend that Lehman Brothers failed, and which later required government support because of Merrill's spiralling losses.

Mr Paulson defended putting pressure on Bank of America when it had last-minute doubts about the deal in December. Not to have done so could have rekindled the "financial havoc" the bailout had calmed.

California's Crisis Hits Its Prized Universities

July 18, 2009

Time - California's crisis continues while Gov. Arnold Schwarzenegger and legislative leaders inch slowly toward agreement on the deep cuts necessary to close California's massive $26 billion budget shortfall. Now, even as the state continues to pay its bills with IOUs, the University of California, the nation's leading public university, is being forced to cut its budget by $813 million - or 20%. It is highly unlikely that these cuts will be reduced by a budget agreement in Sacramento.

UC Berkeley will see recruitment of faculty drop from the normal 100 positions a year to 10. At 28,000-student UC San Diego, also ranked with Berkeley and UCLA among the world's top 20 research universities, recruitment has been halted. More than 300 UC scientists have issued a white paper warning Schwarzenegger that the sharp reduction endangers the 10-campus system's position as the premier public university in the United States and could have a negative impact on California's future economic growth. According to UC officials, the cut in state funding brings the "amount of state investment in the University down to $2.4 billion - exactly where it was in real dollars a decade ago." During the same time period, spending on state prisons has more than doubled to $11 billion...

Marc Faber: Next Stimulus Will Be Worse (Click for Video)

July 16, 2009

Money News - Some economists think that another bubble is what’s needed to get the economy moving again. Gloom, Boom and Doom publisher Marc Faber said this is ridiculous, and that the Federal Reserve — which he holds responsible for creating the housing bubble — wants to do it all over again. The central bank should not encourage excessive credit growth, Faber tells Moneynews.com’s Dan Mangru in an exclusive interview.

Between 2000 and 2007 the total U.S. credit market debt increased at five times the rate of nominal gross domestic product.

Unfortunately, Faber said, the next bubble is already here. This time it’s government spending and fiscal deficits that Faber thinks will double the government’s debt during the next six years or less.

Health Legislation Might Bar Some from Public Insurance

July 15, 2009

Kaiser Health News - President Barack Obama and leading Democrats have stressed that people who like their employer-sponsored insurance would be able to keep it under a health care overhaul. They haven't emphasized the flip side, however: that people who don't like their coverage might have to keep it.

Under the main Democratic health bills that are being debated in Congress, many people with job-based insurance could find it difficult or impossible to switch to health plans on a new insurance exchange, even if those plans were cheaper or offered better coverage. The restrictions would extend to any government-run plan.

The provisions could change, and there are a few exceptions: Workers would be allowed to buy insurance through the exchange if their job-based coverage gobbled up too much of their incomes or was too skimpy. Also, under the proposal by Democrats in the House of Representatives, people could get insurance through the exchange if they paid their entire premiums, a cost that would be prohibitive for many.

Democratic lawmakers and administration officials say the restrictions are crucial to maintaining a strong employer-based insurance system, which covers 158 million Americans.

Critics argue, however, that the rules run counter to suggestions that a health care overhaul could provide people with a broader choice of insurance options. The restrictions, they say, could be especially unfair to some lower-income workers who are enrolled in costly job-based insurance. Also, they warn that the rules could hurt the proposed public plan by limiting enrollment.

Jonathan Oberlander, an associate professor at the University of North Carolina at Chapel Hill, said, "The rhetoric is that Americans will gain new alternatives, but the reality is that they are putting up firewalls that are going to restrict the access of people with employer-sponsored insurance to the exchange."

One result, he said, is that any public plan would be substantially smaller and less powerful than many backers are envisioning.

James Capretta, a fellow at the Ethics and Public Policy Center, a conservative research center in Washington, said that the government was "essentially telling people you have to take your employer-based plan. . . . I think that's a huge issue."

Most individuals would have to carry insurance or pay fines under the congressional proposals.
Much of the debate is driven by cost. Under the proposals before Congress, people who could go on the exchange include the uninsured, the self-employed and those who aren't offered employer-sponsored coverage. Small businesses also would be allowed to use the exchange.
Most individuals who use the exchange would get government subsidies. Limiting the number of people who could use the exchange, therefore, would hold down the cost.

At a "town hall" meeting on health care July 1, Obama said that any overhaul must "fix what's broken about the system, and that means permanently bringing down costs and giving more choice for everyone."

The exchange, he said, would benefit small businesses and the self-employed, as well as workers at firms that don't provide coverage.

Linda Douglass, the communications director of the White House Office of Health Reform, said that the president "believes that health reform must be built upon our current employer-based system" and the exchange "is there to provide security and affordable options to Americans who don't have those options now."

To prod employers to continue to offer coverage, the bills would require most of them to provide insurance to workers or pay penalties. Employers also would have to meet minimum coverage standards and help workers buy insurance.

As a result, job-based coverage is most likely to be the least expensive option for many people, especially those who don't qualify for government subsidies.

However, those who might get better deals on the exchange would have trouble transferring if they already have employer-sponsored insurance. Under one leading Senate bill, individuals who are offered employer-sponsored coverage could switch to the exchange only if their shares of the premiums exceeded 12.5 percent of their incomes or their plans didn't meet minimum coverage standards.

Under the House Democrats' legislation, workers who are eligible for job-based insurance could go on the exchange only if their costs were more than 11 percent of their incomes. People who were willing to pay their entire premiums, without subsidies, also could enroll through the exchange under the House bill.

Lawmakers and some health care analysts say that legislation has to create barriers around the exchange to protect the stability of the employer-provided insurance market. Without them, younger and healthier employees, they say, might find cheaper options on the exchange, leaving older and sicker workers in their employers' plans — and driving up their costs.

"We are trying to provide as much choice as possible and trying to honor the president's promise to protect the employer-based system so that if people have coverage they like they'll get to keep it," said Sen. Sheldon Whitehouse, D-R.I., a member of the health committee.

Jacob Hacker, a Yale University professor of political science, said the debate reflected "a delicate dance" in which lawmakers were trying to give some people access to the exchange while preserving the employer-based insurance system. "To my mind," he added, the House bill "errs too far on the side of making it hard for workers to obtain coverage through the exchange."

Richard Curtis, the president of the Institute for Health Policy Solutions, a nonprofit research group, said that some lower-income workers with employer-sponsored coverage could wind up paying bigger chunks of their incomes for coverage than those with the same incomes who weren't offered job-based insurance. The reason: The latter group would be able to get subsidized coverage through the exchange.

That sends an unfortunate signal, he said, to people who are struggling to pay for employer-sponsored insurance. "So the message to them is, 'Congratulations . . . so now you get to continue paying several times as much as your next-door neighbor who has access to highly subsidized coverage in the exchange,' " he said. "On its face, it's just not fair."

Democrats’ $540-Billion Tax Hike Will Force People into Government-Run Health Care

July 14, 2009

CNSNews - The Democrats’ proposed $540-billion tax hike to help pay for President Obama’s health care reform plan will boost costs for small businesses and thus force more people into the president’s proposed government-run health insurance program...

Obama Promises Government Health Care in Weeks

July 14, 2009

Bloomberg - President Barack Obama may rely only on Democrats to push health-care legislation through the U.S. Congress if Republican opposition doesn’t yield soon, two of the president’s top advisers said.

“Ultimately, this is not about a process, it’s about results,” David Axelrod, Obama’s senior political strategist, said during an interview in his White House office. “If we’re going to get this thing done, obviously time is a-wasting...”

House Democrats today unveiled legislation totaling about $1 trillion that would expand health care to millions of Americans over the next decade by raising taxes on the wealthiest households. The Senate has yet to agree on a bill as Democratic lawmakers struggle to get Republican support...

Time is running short for the House and Senate to pass the legislation before their August recess, the deadline Obama has set. In entertaining the possibility of a party-line vote on health care, Emanuel cited “reconciliation,” a parliamentary procedure that a dominant party can use to prevent the other party from blocking legislation.

“It’s not the first priority, or the second priority, or the third priority. We think we can get it done without it,” he said...

The White House and Congress are trying to agree on ways to cover the estimated 46 million uninsured Americans and rein in health-care costs.

U.S. Budget Gap Exceeds $1 Trillion

July 14, 2009

Bloomberg - The shortfall for the fiscal year that began Oct. 1 totaled $1.1 trillion, the first time that the gap for the period surpassed $1 trillion, Treasury figures showed today in Washington...

House Democrats Will Seek Massive $540 Billion Tax Increase

July 13, 2009

CNSNews - House Democrats announced late yesterday that they will seek a massive increase in federal income taxes to help pay for the national health-care reform proposal that President Obama is urging Congress to enact this summer...

Obama Adviser Says U.S. Should Mull Second Stimulus

July 7, 2009

Bloomberg - The U.S. should consider drafting a second stimulus package focusing on infrastructure projects because the $787 billion approved in February was “a bit too small,” said Laura Tyson, an outside adviser to President Barack Obama...

U.S. State Budget Crises Fuel Massive Spending Cuts: Deadlines Threaten Government Shutdowns

July 1, 2009

World Socialist Web Site - State legislatures in many states across the US worked late Tuesday to push through budgets containing massive spending cuts, as five states—California, Arizona, Mississippi, Pennsylvania and Indiana—faced the possibility of at least partial shutdowns if their legislatures were unable to reach agreement.

The overarching theme of this budget scramble is the drive to impose the burden of the budget crises on the backs of the working class and poor. With states’ populations already facing record unemployment levels, state workers are facing wage cuts, mandatory furloughs and layoffs. At the same time, social services—in demand more than ever due to the worsening recession—are being targeted for draconian cuts.

As late as Monday afternoon, 32 of the 46 states whose fiscal year ended midnight Tuesday did not have budgets signed by their governors. States are grappling with deficits totaling a collective $121 billion, and all states but Vermont require that their budgets be balanced.

Personal income tax, which accounts for more than a third of state revenues, dropped by 26 percent in the first four months of 2009, according to the Albany, New York-based Rockefeller Institute of Government.

With consumer spending down significantly, sales tax revenues have also fallen. Many state budget proposals include new sales taxes and increases in existing ones—measures that will disproportionately hit working families and the unemployed already struggling to keep up with the cost of housing, food, medical bills and other basic necessities.

Since 2002, government shutdowns have hit only five states. The current rash of threatened budget crises has been fueled by the deepening recession. “It’s a lot of states that are coming down to the wire,” Todd Haggerty, a research analysis with the National Conference of State Legislatures, told the Los Angeles Times. “It’s far more than we’ve seen in the past, and it’s because of the state of the economy.”

President Obama has made clear that the government will not step in to alleviate the crisis facing the states. In May, Treasury Secretary Timothy Geithner rejected a federal bailout of the largest US state, California, which now faces a $24.3 billion budget deficit. Geithner demanded instead that California and other states “put in place reforms that will restore their creditworthiness.”

With its refusal to take any action to stanch the budget crisis, the Obama administration is signaling that the price of this “creditworthiness” is to be paid by the American population, with a massive drive for cuts in jobs and social services at the local level.

The ruling class is seizing on the budget crisis and its subsequent bloodletting as the model for a permanent reduction in working-class living standards...

July 29, 2009

Detention Facilities for Mysterious 'New Programs'

Detention Facilities for Mysterious 'New Programs'

On August 14, 2002, the Los Angeles Times published a story by Jonathan Turley titled Camps for Citizens: Ashcroft's Hellish Vision. According to Turley (a professor of constitutional law at George Washington University):
"Attorney General John Ashcroft's announced desire for camps for U.S. citizens he deems to be 'enemy combatants' has moved him from merely being a political embarrassment to being a constitutional menace. Ashcroft's plan, disclosed last week but little publicized, would allow him to order the indefinite incarceration of U.S. citizens and summarily strip them of their constitutional rights and access to the courts by declaring them enemy combatants... The camp plan was forged at an optimistic time for Ashcroft's small inner circle, which has been carefully watching two test cases to see whether this vision could become a reality. The cases of Jose Padilla and Yaser Esam Hamdi will determine whether U.S. citizens can be held without charges and subject to the arbitrary and unchecked authority of the government... Ashcroft hopes to use his self-made 'enemy combatant' stamp for any citizen whom he deems to be part of a wider terrorist conspiracy."
According to former Congressman Dan Hamburg (Democrat-California), since 1999, the government has entered into a series of single-bid contracts with Halliburton subsidiary Kellogg, Brown and Root (KBR) to build detention facilities at undisclosed locations within the United States (most of these sites only need refurbished because they are mostly closed prisons, former WWII internment camps, and other facilities taken over by the government).

On January 26, 2006, KBR (recently reprimanded for gross overcharging in its military contracts in Iraq) announced that it was awarded a $385 million contract to build detention centers in the United States. Two weeks later, on February 6, 2006, Homeland Security Secretary Michael Chertoff announced that the fiscal year 2007 federal budget would allocate over $400 million to add 6,700 additional detention beds. This $400 million allocation is more than a four-fold increase over the fiscal year 2006 budget, which provided only $90 million for the same purpose.

Buried in Halliburton's press release "2005 Full Year and Fourth Quarter Results" (PDF file, page 5) on Halliburton's website (please note that the press release has since been removed from their website), is the announcement of the $385 million contract, awarded by the Department of Homeland Security's U.S. Immigration and Customs Enforcement (ICE) component. According to Halliburtion:
"The Indefinate Delivery/Indefinate Quantity contingency contract is to support ICE facilities and has a maximum total value of $385 million over a five-year term. The contract provides for establishing temporary detention and processing capabilities in the event of an emergency influx of immigrants into the U.S. or to support the rapid development of new programs."
Note: The contract for Halliburton's subsidiary to build detention facilities is part of a longer-term Homeland Security plan titled ENDGAME, which sets as its goal the removal of "illegal economic migrants, aliens who have committed criminal acts, asylum-seekers (required to be retained by law), or potential terrorists."

During this same time period from 2005 to early 2006, H.R. 1492 was passed (on November 16, 2005); it was signed into Public Law 109-441 by President Bush on December 21, 2006. H.R. 1492 guaranteed $38 million in federal money to restore 10 former internment camps where Japanese Americans were detained during WWII.



On the Army's website is an unclassified document, first posted in February 2006, titled Civilian Inmate Labor Program (Army Regulation 210–35). This regulation, effective one year earlier on February 14, 2005, "provides policy and guidance for establishing civilian inmate labor programs and civilian prison camps on Army installations."
The document, first drafted in 1997, underwent a "rapid action revision" on January 14, 2005; the revision provides a "template for developing agreements" between the Army and corrections facilities for the use of civilian inmate labor on Army installations. On its face, the Army's labor program refers to inmates housed in federal, state and local jails. The Army also cites various federal laws that govern the use of civilian labor and provide for the establishment of prison camps in the United States, including a federal statute that authorizes the Attorney General to "establish, equip, and maintain camps" upon sites selected by him and "make available… the services of United States prisoners" to various government departments, including the Department of Defense.

Though the timing of the document's posting in February 2006 may just be a coincidence, the reference to a "rapid action revision" and KBR contract's contemplation of "rapid development of new programs" have raised eyebrows about why this sudden need for urgency. These developments also are drawing more attention now because of earlier Bush administration policies to involve the Pentagon in "counter-terrorism" operations inside the United States.
The El Pais interview (excerpt below) on February 1, 2006 with U.S. Assistant Secretary of State for Western Hemisphere Affairs, Tom Shannon, contradicts the Homeland Security plan to build additional detention facilities for illegal immigrants, leading one to believe that the facilities will be used for the other purposes, such as stated in KBR's contract: "to support the rapid development of new programs:"
Question: When President Bush came to the White House for the first time, he came with the idea of opening the borders and allowing the Mexicans, the Guatemalans to come in, then something happened—the borders were closed, but the Mexicans are still crossing the borders. What are the plans of the American administration? The United States needs all these laborers for its economy.

A/S Shannon: President Bush has committed himself to immigration reform—and especially the immigration reform that would include a temporary workers' program. A temporary workers' program would attempt to link willing workers with willing employers and create a process whereby employers in the United States who need workers could bring those workers into the United States from a foreign country—and not just Mexico or Central America, but any country—in a way that would regularize their status within the United States. That proposal is being debated and worked on in our Congress right now; the process still has a ways to go. So we'll see what legislation eventually emerges from the Congress. But the President is committed to immigration reform and he is committed to a temporary workers' program.
On January 22, 2009 (two days after the inauguration of Barack Obama as President of the United States), H.R. 645, the National Emergency Centers Establishment Act (NECEA), was submitted during the first session of the 111th Congress. The bill directs "the Secretary of Homeland Security to establish national emergency centers on military installations." NECEA mandates that no fewer than six separate facilities be established in different Federal Emergency Management Agency (FEMA) regions throughout the country for the concentration of civilian internees on military installations.

These existing military installations will be used for emergency situations or natural disasters that might render individuals and families "dislocated." NECEA further proposes that over the course of the next two years, $360 million is to be appropriated for this initiative. [The Senate version of this bill, S.3476: National Emergency Centers Establishment, was introduced on June 10, 2010, where it was "read twice and referred to the Committee on Armed Services."]

In July 2009, the Army National Guard began advertising for Corrections Officers and Internment/Resettlement Specialists:
“As an Internment/Resettlement Specialist for the Army National Guard, you will ensure the smooth running of military confinement/correctional facility or detention/internment facility, similar to those duties conducted by civilian Corrections Officers. This will require you to know proper procedures and military law; and have the ability to think quickly in high-stress situations. Specific duties may include assisting with supervision and management operations; providing facility security; providing custody, control, supervision, and escort; and counseling individual prisoners in rehabilitative programs.”

Army ‘Strategic Shock’ Report Says Troops May Be Needed To Quell U.S. Civil Unrest (November 2008):

Violent, Strategic Dislocation Inside the United States (Pages 31-32)
As a community, the defense establishment swears to protect and defend the constitution against all enemies foreign and domestic. DoD’s role in combating “domestic enemies” has never been thoughtfully examined. Thus, there is perhaps no greater source of strategic shock for DoD than operationalizing that component of the oath of service in a widespread domestic emergency that entails rapid dissolution of public order in all or significant parts of the United States.

While likely not an immediate prospect, this is clearly a “Black Swan” that merits some visibility inside DoD and the Department of Homeland Security. To the extent events like this involve organized violence against local, state, and national authorities and exceed the capacity of the former two to restore public order and protect vulnerable populations, DoD would be required to fill the gap. This is largely uncharted strategic territory.

Widespread civil violence inside the United States would force the defense establishment to reorient priorities in extremis to defend basic domestic order and human security. Deliberate employment of weapons of mass destruction or other catastrophic capabilities, unforeseen economic collapse, loss of functioning political and legal order, purposeful domestic resistance or insurgency, pervasive public health emergencies, and catastrophic natural and human disasters are all paths to disruptive domestic shock.

An American government and defense establishment lulled into complacency by a long-secure domestic order would be forced to rapidly divest some or most external security commitments in order to address rapidly expanding human insecurity at home. Already predisposed to defer to the primacy of civilian authorities in instances of domestic security and divest all but the most extreme demands in areas like civil support and consequence management, DoD might be forced by circumstances to put its broad resources at the disposal of civil authorities to contain and reverse violent threats to domestic tranquility. Under the most extreme circumstances, this might include use of military force against hostile groups inside the United States. Further, DoD would be, by necessity, an essential enabling hub for the continuity of political authority in a multi-state or nationwide civil conflict or disturbance.

A whole host of long-standing defense conventions would be severely tested. Under these conditions and at their most violent extreme, civilian authorities, on advice of the defense establishment, would need to rapidly determine the parameters defining the legitimate use of military force inside the United States. Further still, the whole concept of conflict termination and/or transition to the primacy of civilian security institutions would be uncharted ground. DoD is already challenged by stabilization abroad. Imagine the challenges associated with doing so on a massive scale at home.
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