Congress Promises Bankers $4 Trillion for Next Bailout

BLOOMBERG– To close out 2009, I decided to do something I bet no member of Congress has done – actually read from cover to cover one of the pieces of sweeping legislation bouncing around Capitol Hill. Hunkering down by the fire, I snuggled up with H.R. 4173, the financial-reform legislation passed earlier this month by the House of Representatives. The Senate has yet to pass its own reform plan. The baby of Financial Services Committee Chairman Barney Frank, the House bill is meant to address everything from too-big-to-fail banks to asleep-at-the-switch credit-ratings companies to the protection of consumers from greedy lenders.

I quickly discovered why members of Congress rarely read legislation like this. At 1,279 pages, the “Wall Street Reform and Consumer Protection Act” is a real slog. And yes, I plowed through all those pages. The reading was especially painful since this reform sausage is stuffed with more gristle than meat. At least, that is, if you are a taxpayer hoping the bailout train is coming to a halt. If you’re a banker, the bill is tastier. While banks opposed the legislation, they should cheer for its passage by the full Congress in the New Year: There are huge giveaways insuring the government will again rescue banks and Wall Street if the need arises.

Here are some of the nuggets I gleaned from days spent reading Frank’s handiwork:

– For all its heft, the bill doesn’t once mention the words “too-big-to-fail,” the main issue confronting the financial system. Admitting you have a problem, as any 12- stepper knows, is the crucial first step toward recovery.
– Instead, it supports the biggest banks. It authorizes Federal Reserve banks to provide as much as $4 trillion in emergency funding the next time Wall Street crashes. So much for “no-more-bailouts” talk. That is more than twice what the Fed pumped into markets this time around. The size of the fund makes the bribes in the Senate’s health-care bill look minuscule.
– Oh, hold on, the Federal Reserve and Treasury Secretary can’t authorize these funds unless “there is at least a 99 percent likelihood that all funds and interest will be paid back.” Too bad the same models used to foresee the housing meltdown probably will be used to predict this likelihood as well.

Read full article about Congress Promising Trillions.

David Reilly is a Bloomberg News columnist.

© BLOOMBERG 2009

 

Key Members of Obama’s Aministration

RTE NEWS– Here are people Barack Obama has chosen for key posts in his administration after he takes office on 20 January.

Secretary of State– New York Senator Hillary Clinton, Mr Obama’s former Democratic Party rival for the White House, was named to the top diplomatic post. The move is seen as part of Mr Obama’s effort to rebuild the country’s reputation abroad. Aides have said Mr Obama admires Ms Clinton’s work ethic and also believes the former first lady’s star power would boost his vision of improving the country’s global standing.

Secretary of Defense- Current Secretary of Defense Robert Gates, named by President George W Bush in late 2006, is considered a moderate voice on the Republican’s national security team and embodies an important signal of continuity. Mr Obama had said early on he would include Republicans in his Cabinet and the 65-year-old Mr Gates has been lauded by members of both parties since taking over the Pentagon from Donald Rumsfeld.

Treasury Secretary- Timothy Geithner, president of the New York Federal Reserve Bank, is Mr Obama’s choice for the Treasury Department, making him Mr Obama’s point person in dealing with the economic crisis. Mr Geithner has helped lead efforts to stabilize financial markets and argued that banks crucial to the global financial system should operate under a unified regulatory framework.

Homeland Security- Janet Napolitano, the Democratic Governor of Arizona, was named to head the US Homeland Security Department, a sprawling agency formed to bolster civil defence following the 11 September attacks.

National Economic Council- Lawrence Summers, 53, has been chosen to head the council. He was treasury secretary for the final 1-1/2 years of the Clinton Administration and has been a senior adviser to Mr Obama for several months, helping to guide his response to the financial meltdown.

National Security Advisor- Retired Marine General James Jones, the former top operational commander of NATO, was named by Mr Obama to be his national security adviser. Mr Jones is widely respected by both Democrats and Republicans and has avoided aligning himself with either party but is known to have been a strong critic of the Bush administration’s handling of the Iraq war.

CIA Director- Former Clinton White House chief of staff Leon Panetta has received the nod to head the CIA. Mr Panetta, best known for imposing order on President Bill Clinton’s White House during his 1994-1997 stint as chief of staff, has relatively little experience in national security matters. But his choice could appease some liberal activists who have said that Mr Obama’s other picks for key national-security posts are too hawkish.

Attorney General- Eric Holder, a former Justice Department official in the Clinton Administration, will run the Justice Department. Mr Holder has been a senior legal adviser to Mr Obama’s campaign and helped vet his vice presidential candidates.

Secretary of Energy- Steven Chu, director of the Lawrence Berkeley National Laboratory who shared the 1997 Nobel Prize in physics, is Mr Obama’s choice for secretary of energy. Mr Chu was an early advocate for finding scientific solutions to climate change and guided the Lawrence Berkeley laboratory to become the world leader in alternative and renewable energy research.

Secretary of Interior- Senator Ken Salazar of Colorado, who once practiced as an environmental lawyer, was named to head the Interior Department. The son of Americans of Mexican descent, he will be a key member of Mr Obama’s energy team who would oversee the leasing of federal lands for oil and gas drilling.

Energy, Environment Coordinator- Carol Browner, the former head of the Environmental Protection Agency during the Clinton Administration, was named to a new position coordinating White House policy on energy, climate and environmental issues. The new position was expected to spearhead climate change policy.

Secretary of Health and Human Services- Tom Daschle, a key early supporter and savvy former US Senate leader, was selected by Mr Obama as Secretary of Health and Human Services. The high-profile selection signals that the push to extend health coverage to the 46 million uninsured Americans will be a high priority for Mr Obama.

Secretary of Education- Arne Duncan, head of the Chicago public school system, is Mr Obama’s pick for Secretary of Education. Mr Duncan, a fellow Harvard graduate and long-time friend of Mr Obama’s, has earned a strong reputation at the helm of the country’s third-largest public school district, tackling problems including teacher quality and failing schools.

Secretary of Agriculture- Tom Vilsack, a former governor from the major US farm state Iowa, is Mr Obama’s choice to be agriculture secretary. Mr Vilsack backs tighter farm subsidy rules and new-generation biofuels. One of his major issues as governor was bringing more high-tech agribusiness to Iowa.

Secretary of Transportation- Representative Ray LaHood, a Republican, has been offered the job of transportation secretary. Mr LaHood hails from Mr Obama’s home state of Illinois and is said to have a rapport with the president-elect.

Securities and Exchange Commission- Mary Schapiro, a veteran financial market regulator, is Mr Obama’s pick to head the Securities and Exchange Commission. Ms Schapiro currently leads the Financial Industry Regulatory Authority, the largest nongovernmental regulator for all securities firms doing business with the US public. She is a former SEC commissioner and former chairwoman of the US Commodity Futures Trading Commission.

Secretary of Labor- California Democratic Representative Hilda Solis, 51, has been chosen to lead the Department of Labor. Ms Solis, who represents a Southern California district made up largely of Hispanic and Asian voters, is among the most liberal members of the US House of Representatives and has taken a lead on both environmental and labour issues.

US Trade Representative- Former Dallas Mayor Ron Kirk has been selected to be US trade representative. Mr Kirk, a partner at the Houston-based law firm of Vinson and Elkins, is little known in Washington trade circles and became Mr Obama’s pick after his first choice, Representative Xavier Becerra, a California Democrat and member of the House of Representatives Ways and Means Committee, turned down the job.

Director of National Intelligence– Retired Navy Admiral Dennis Blair is Mr Obama’s choice to be the top US intelligence official. As director of national intelligence, Mr Blair would oversee the entire US intelligence apparatus and be responsible for delivering Mr Obama’s daily intelligence briefing. His nomination would keep an experienced military leader in the post. Mr Blair is a four-star admiral and former top US military commander in the Pacific region.

Photo by flickr user Ethan

© RTE NEWS 2009

Spying Goes Up as Terror Cases Diminish

LA TIMES— The number of Americans being secretly wiretapped or having their financial and other records reviewed by the government has continued to increase as officials aggressively use powers approved after the Sept. 11 attacks. But the number of terrorism prosecutions ending up in court — one measure of the effectiveness of such sleuthing — has continued to decline, in some cases precipitously.

The trends, visible in new government data and a private analysis of Justice Department records, are worrisome to civil liberties groups and some legal scholars. They say it is further evidence that the government has compromised the privacy rights of ordinary citizens without much to show for it.

The emphasis on spy programs also is starting to give pause to some members of Congress who fear the government is investing too much in anti-terrorism programs at the expense of traditional crime-fighting. Other lawmakers are raising questions about how well the FBI is performing its counter-terrorism mission.

The Senate Intelligence Committee last week concluded that the bureau was far behind in making internal changes to keep the nation safe from terrorist threats. Lawmakers urged that the FBI set specific benchmarks to measure its progress and make more regular reports to Congress.

These concerns come as the Bush administration has been seeking to expand its ability to gather intelligence without prior court approval. It has asked Congress for amendments to the 1978 Foreign Intelligence Surveillance Act to make it clear that eavesdropping on foreign telecommunications signals routed through the U.S. does not require a warrant.

Law enforcement officials say the additional surveillance powers have been critically important in ways the public does not always see. Threats can be mitigated, they say, by deporting suspicious people or letting them know that authorities are watching them.

“The fact that the prosecutions are down doesn’t mean that the utility of these investigations is down. It suggests that these investigations may be leading to other forms of prevention and protection,” said Thomas Newcomb, a former Bush White House national security aide. He said there were half a dozen actions outside of the criminal courts that the government could take to snuff out potential threats, including using diplomatic or military channels.

Written by Richard B. Schmitt

© LA TIMES 2008

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