Tag Archives: Congress

Perspectives on the Supreme Court’s Obamacare Ruling: Blind Governance, the New Roe, and Hellish Socialism

By Daniel Downs

Several commentators provide additional perspective on the several problems inherent in Obamacare and the Supreme Court’s ruling on its constitutionality. The first commentator is David Zanotti, who is the President/CEO of the American Roundtable and author of the blog “For the Common Good” where the follow commentary was published. In his port, Mr. Zanotti points why the democrat’d healthcare reform law known as Obamacare is bad law unrepresentative of the American people.

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Governing in the Dark

At least we know it now. The pain is real but at least we can face it without mystery. We know Congress did not read the 2700 page health care bill. We know the Administration did not. Now we know that at least several of the Supreme Court Justices did not read the legislation either. In yesterday’s oral arguments, Justice Breyer admitted, “And I haven’t read every word of that, I promise…” (pg 23 at line 3). Chief Justice Roberts admitted much the same, but haltingly on page 40 at line 21. Justice Scalia even likened reading the legislation to the 8th Amendment of the Bill of Rights, which prohibits cruel and unusual punishment (pg 38 at line 7). (View the transcript from Wednesday morning’s hearing.)

So the cycle is complete. Congress didn’t read the bill. The President didn’t read the bill. The Justices of the Supreme Court (at least several who were honest about it) didn’t read the bill. Where does that leave us?

As a point of principle, is it ever right to pass a law that Congress has not read and fully debated? As a matter of common sense, how can we establish a system of health care delivery that touches every American if most in authority never had time to read or debate the enabling legislation?

Just for the sake of honesty, what is wrong with all of us that we are in a position of having to ask these questions in the first place?

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Lila Rose, President of Live Action, made the following comments about the Supreme Court’s favorable ruling of Obamacare:

“The Supreme Court ruling strikes at the heart of both Life and Liberty. Planned Parenthood and the abortion industry expect to make a killing off of Obamacare’s unconstitutional, socialized medicine scheme.”

She continued, “The Supreme Court has upheld nothing more than a Ponzi scheme to expand the abortion business. If this legislation is not overturned by the next administration, Obamacare’s socialist-style diktats will be used, not to provide better or more affordable health care, but to expand Planned Parenthood’s abortion empire across the backs of American taxpayers and people of conscience – and at the expense of our religious freedoms.

“In light of the ruling, Americans will greet Independence Day with prayer, sacrifice, and renewed energy to continue our opposition to this mandate. We must also recommit ourselves to restoring full constitutional protections of Life and Liberty to the most vulnerable in our society: unborn children.”

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If none of our public officials read the bill, one has to question the agenda of the democrats who wrote the bill, the President who signed it into law, and the Supreme Court who ruled it constitutional. Ms. Rose provided with one plausible agenda and another is the efforts of the left to make America a socialist nation.
Public education is the first government institution based on principles of socialism. It is also provides the premier method of indoctrinating citizens. Now, the health care system is by force of law another institution of socialism. In order to create subservient institutions of socialism, the ruling parties in government must have developed governmental socialism. Those same people had to convince a lot of citizens that socialism is the means to happiness and liberty. (Thank you FDR and media followers.) If aware of it, I imagine Marx, Lenin, and Krushev are all singing hallelujah and dancing in hell. I wonder how dark it is there?

Unconstitutional Appointments Violate Oath of Office

By Gary Palmer

The primary focus of the 2012 election has been the economy, but there is another major issue that should be on voters’ minds in November … the blatant disrespect and disregard of the Constitution.

With President Barack Obama’s appointment of Richard Cordray as director of the Consumer Financial Protection Bureau, the President brushed aside the Constitution’s requirement for all presidential appointees to be approved by the United States Senate. In addition to appointing Cordray, Obama also bypassed the Senate by appointing three new members to the National Labor Relations Board.

The Obama Administration attempts to justify these appointments by claiming that the Constitution provides for a president to make appointments while Congress is in recess. It should be noted that Congress is not in recess because the Republicans specifically wanted to block these and other Obama appointments. It should also be noted that the Democrats used the same tactics to block President George W. Bush’s appointees.

According to Article 1, Section 5 of the Constitution, Congress cannot be in recess for more than three days without the consent of both chambers. Neither chamber passed an adjournment resolution, therefore, Congress is not in recess and in fact, continues to hold pro-forma session.

Despite this fact, the Obama Administration has argued that Congress is not doing any work and is therefore not in session. Because the Constitution requires that both the House and the Senate pass adjournment resolutions, it doesn’t matter whether or not Congress is actually doing business or even if a majority of members are present. According to the Constitution, they are still in session.

During the Bush Administration, Democrat Senate Majority Leader Harry Reid kept the Senate in pro-forma session to prevent Bush from making any recess appointments. As a member of the Senate, Obama supported this tactic. And even though President Bush was urged to ignore the pro-forma sessions and make recess appointments anyway, he refused to do so.

In an effort to justify Obama’s appointments, some argue that Bush did the same thing when he appointed former Alabama Attorney General Bill Pryor to the 11th Circuit Court during an “intrasession” recess. That argument was whether or not the President could make appointments during an “intrasession” recess instead of an “intersession” recess and doesn’t apply here because Congress is not in recess.

On January 5th, The Wall Street Journal editors wrote, “These appointments are brazen enough that they have the smell of a deliberate, and politically motivated, provocation.” The Obama campaign has made it clear that running against Congress will be central to their re-election strategy. However, by running rough shod over the Senate’s advise and consent authority for presidential appointees, the Obama Administration has made the Constitution a major election issue.

Restoring constitutional government is a mainstay of the Tea Party Movement agenda. It was a major element in the 2010 elections that resulted in the Democrats losing control of the House of Representatives and almost losing the majority in the Senate. Voters in that election were outraged by the perceived abuses of the Constitution in everything from environmental policy to the passage of Obamacare.

Considering that a November 2011 Rasmussen survey reported that 69 percent of Americans believe that the federal government no longer has the consent of the governed, brushing aside the Constitution and making these appointments only reinforces that perception. It is the political equivalent of throwing more fuel on a political fire that burns hot, not only with Tea Party members, but also with millions of others who are concerned that the Constitution is being violated.

In the meantime, it remains to be seen whether or not the Republicans in Congress will stand and fight for the Constitution. After all, they did take an oath to uphold and defend it.

Gary Palmer is president of the Alabama Policy Institute, a non-partisan, non-profit research and education organization dedicated to the preservation of free markets, limited government and strong families, which are indispensable to a prosperous society.

Obama Seeking Another $50 Billion State Bailiout

The Business & Media Institute recently reported Obama is seeking $50 billion state bailout package from Congress. In a June 12 letter, Obama urged both parties to pass a derailed stimulus bill. He claims the bailout would preserve government and private sector jobs. Government jobs Obama is trying to protect include teachers, fire fighters, and police. If memory serves, the last $787 billion stimulus supposedly had already saved those jobs.

CATO Institute Budget Analyst Tad DeHaven criticized Obama’s latest request as a union bailout. Most, if not all, of the above government jobs are indeed union jobs.

Maybe Gov. Strickland’s comrades in the White House are trying trying to help him pay for Xenia’s union jobs too. I’m not sure it would ultimately save Xenia taxpayers any money for in the long run taxpayers will have to pay their portion of the $50 billion anyway. Taxpayers and consumer always pay for more government spending. But it sure would be nice for our local government union employees to get their raises without raising our taxes especially during the on-going Great Recession.

Health Care Reform Consensus: It Will Harm Millions of Small Businesses

By Daniel Downs

Small business employs more people than large corporate establishments. By comparison, small businesses employ 50.2 percent of all American workers, while large corporations employ only 49.8 percent. Depending on the statistical source used, the number of Americans employed by small businesses is between 60 to 69 million. Self employed entrepreneurs make up between 32 to 38 percent of small businesses.

Small businesses also lead the nation in creating new jobs. According to Small Business Trends, two-thirds of all new jobs are created by small business. http://smallbiztrends.com/2009/11/who-creates-the-most-jobs.html

So why do Congressional Democrats favor the interests of big business? Why does their health care reform legislation give them large deductions for self-insured health care? One answer might be elite the liberal Congressional millionaires maybe attempting to protect their investments self-insuring corporations. Another possibility maybe that big corporations have better lobbyists, but who cares?

The largest and best employers in America are overwhelmingly opposed to Congress’ health care reform legislation. They oppose it not only because it gives unfair breaks only to large corporations but also because it will raise the cost of doing business, and threatens the ability of small firms to grow their business and create new jobs.

One aspect of the legislation specifically targets the construction industry, according to the Small Business & Entrepreneurship Council. “The bill singles out the construction industry by not exempting businesses in this sector from the “play-or-pay” employer mandate that other firms with 50 or fewer employees are exempt from.” Interestingly, the government defines small business as firms with 500 or less employees. Consequently, many other small businesses will be adversely affected by the unfunded mandates.

About one-third of the 22 million self-employed cannot even afford health insurance. Those who do purchase health coverage have experienced double-digit premium increases every year, making it difficult to retain insurance, according to the National Association for the Self-Employed (NASE). Because the Senate tabled an amendment that would have given a 50 percent deduction to small businesses, the cost of adequate health care will continue rise if the Democrats health care bill passes.

As outlined by the National Federation of Independent Business (NFIB), Congress’ health care reform will significantly increase the cost of health care to small businesses in the following ways:

The legislation includes a new $60 billion tax that falls almost exclusively on small business because the fee (tax) is assessed on insurance companies, which is confirmed by the Congressional Budget Office. This cost will be passed on to small business in the form of higher premiums, at least 10 percent higher. The cost of health care insurance is already 18 percent higher for small businesses than for large corporations. And, as previously stated, the new legislation exempts self-insuring large corporations from the additional costs.

Because employer mandates assess multiple penalties based on the income of full-time employees, there will be job loss, greater reliance on part-time employees, and harm to entry-level and low-wage workers.

The new reporting requirements increases administrative costs by $17 billion.

Small business with high rates of employee turnover may be put out of business because of a $600 fine for not providing all employees health insurance within 60 days.

Congress’ health care reform also limits previous cost saving options like tax-exempt Health Savings Accounts.

According to Small Business Coalition for Affordable Healthcare, a government-run health care plan cannot compete fairly with the private market and threatens to destroy the marketplace, further limiting choices.

http://www.smallbusinesshealthcarecoalition.com/Portals/2/KeyVote-Senate-%20H.R.%203590%20-%2012-2.pdf

One thing is certain; the health care reform of congressional Democrats will be neither affordable nor free-market friendly. Those are a few reasons why small businesses should petition their representatives. Small business owners can also sign the SBECs “Not On Our Backs” Small Business Health Care “Not On Our BacksPetition to voice their opposition to the proposed national health care legislation.

Congress Moves Closer to Health Care Takeover

Yesterday, the final Congressional committee approved a fifth “version” of health care reform legislation. The truth is: there wasn’t a single page of actual legislative language passed. The Senate Committee passed a list of non-binding concepts – not a real bill. All the projected costs were based on “estimates” from concepts.

This health care debate is so complicated that Senators cannot deal with the thousands of pages of legal construction. It is too big for them or any single government agency to handle. This whole process proves the federal government is not designed to run the nation’s health care. The current bills are an unconstitutional expansion of federal authority and a dangerous threat to your civil rights.

Here are the “concepts” the Senate Committee voted to make law yesterday:

  • New mandates to force Americans to purchase insurance with tax penalties imposed on individuals and employers, enforced by the IRS.
  • New powers for the HHS Secretary to define benefits for every private plan in America and redefine those benefits annually.
  • Health care premiums for millions will go up, not down, starting in 2010.
  • Largest expansion in Medicaid since 1965, enrolling 14 million more at an estimated cost of $345 billion.
  • Medicaid expansion will be paid for by cuts to Medicare ($404 billion).
  • Medicare cuts will include a 25% payment cut to physicians in 2011.
  • Medicare cuts will also include cuts to Medicare Advantage ($117 billion), which will result in a 70% reduction in benefits.
  • Premium insurance plans will be taxed at 40% above set limits (expected to raise $201 billion in new taxes).

Real legislative language won’t be available until after these “concepts” are merged behind closed doors with an earlier version passed by the Senate Health Committee.

Physician groups, such as the American Academy of Ophthalmology, have now “taken the gloves off” to oppose the Senate Finance Committee bill. The insurance industry is finally waking up to this grave threat. Docs, hospitals and insurers made a TERRIBLE strategic mistake trying to cut their own deals with Congress. Now the true dangers of this government takeover are being exposed and the future of private health care in America is under fatal attack.

Within a few weeks we will likely see a consolidated Senate bill, as well as a House bill (consolidating three different versions) brought to the floor for a vote. Contacting your Representatives and Senators more critical than ever!

Source: The American Policy Roundtable, October 15, 2009.

American Policy Roundtable Announces 40 Days of Prayer for Congress

The American Policy Roundtable today called upon all Americans to lift the United States Congress in prayer for the next 40 days. The call went out via the national radio broadcast, The Public Square®, produced by the Roundtable and aired on over 140 radio stations and translators coast-to-coast.

“Criticism of Congress is high in every city and town, but the responsibilities before this Congress are even higher” stated David Zanotti, President/CEO of the Roundtable. “In the healthcare debate alone, Congress is now facing decisions that will impact every American. These are decisions that have life and death consequences for every household.”

The Roundtable has produced a daily Congressional prayer list to help people pray through the entire U.S. Congress, both House and Senate, in the forty days between May 7th and June 15th, 2009. The list is found on the Roundtable’s homepage at www.APRoundtable.org. Over one-million visitors log onto this site per year.

Individuals, churches, schools and organizations are all being invited by Internet email blasts to participate in the 40 Days of Prayer for Congress.

Ohio Senators Sherrod Brown and George Voinovich are on the calendar for May 31 (25th day). Ohioans will be united in prayer
for their Representatives on June 6 and 7. Rep. Steve Austria day
is June 6. Dayton’s Rep. Mike Turner and House leaders John
Boehner and Dennis Kucinich are among others who will be remembered in Ohioans’ prayers.

For more information about 40 Days of Prayer for Congress, go here.

Rep. Steve Austria on Cap and Trade Tax

By Rep. Steve Austria

Under the cap and trade program, household energy costs are expected to increase between $1,600-$3,100 annually.

Last week, the House and Senate debated and passed the conference report to accompany the Democrats’ budget resolution (S. Con. Res. 13). This budget proposal paves the way for a massive new $646 billion energy tax, known as cap and trade.

Cap and trade limits the amount of carbon allowed to be released into the air. For example, if an energy-producing entity, like a coal-fired power plant, is unable to sufficiently lower its emissions; they must spend money to upgrade the plant or pay to release the carbon. This extra cost to industry is passed along to the consumer through increased energy prices. The non-partisan Congressional Budget Office estimates that under this current proposal, the average American household’s energy bill could increase by $1,600 annually. According to one D.C.-based think tank, prices could increase to as much as $1,900, equivalent to what many families spend on groceries, clothes or property taxes in a given year.

In addition, states that rely on more carbon-intensive sources of energy, like coal, will suffer an even greater cost. According to the Energy Information Administration (EIA), approximately 90 percent of Ohio’s electricity generation comes from coal.

The program places new regulations on our domestic industries making them less competitive with countries, like China and India, that do not face similar restrictions. This could result in businesses establishing operations overseas or outsourcing jobs in an effort to dodge the regulations. This could further erode the job growth of the U.S. manufacturing sector where Ohio has a strong presence. Indeed, the impact cap and trade could have on the average American household, and Ohio in particular, is deeply concerning, specifically in this economic environment.

Source: E-Newsletter from Congressman Steve Austria, May 6, 2009

Sabbath Discussion : National debt and divine justice

By Daniel Downs

The national debt was $10.6 trillion. According to Rep. Steve Austria, the national debt will increase another $1.1 trillion as a result of recent stimulus-bailout legislation. If we add the previous $800 billion bank bailout legislation, a more accurate figure is $2 trillion raising the national debt to $12.5 trillion. The Government Accounting Office (GAO) reports that foreign ownership of the national debt was around 30 percent. But at the beginning of the year, it increased to over 50 percent. If that were not bad enough, the Congressional Budget Office reports that Congress will spend $1.2 trillion more than it will receive this year. Again, if we add the recent stimulus bill, the numbers climb to over $1.7 trillion more than last year and all of it on credit. The U.S. government not only owes around $6 trillion to foreigners, the two largest creditors being Japan and communist China, but Congress intends to spend $2.1 trillion more than it can repay. When we compare the national debt to the total national economic productivity or Gross Domestic Product (GDP), which is estimated at a little over $14 trillion, it becomes apparent that politicians assume they have right to spend nearly all of the people’s wealth on credit.

Sadly, America is a debtor nation. As we will see, this type of compulsive spending for the cause of secular, socialist, and global agendas is a curse of divine justice. The following then is what the penmen of God had to say about this matter.

One of the more pertinent illuminations of ancient wisdom comes from the writer of Proverbs, who many scholars believe King Solomon was its author. King Solomon wrote:

Do not be among those who become guarantors of debt. (Pro. 22:26)

The federal government is a guarantor of student loans, bank loans, business loans, mortgage loans, loans to foreign governments, and other types of loans. For decades, the federal government has been bailing out bank and Wall Street because of bad lending practices to corporations and foreign governments. It is part of the purpose of the Federal Reserve, federal deposit insurance, and federal loan guarantee programs. Taxpayers have been footing the bill without even realizing it. Maybe now it will be understood that working taxpaying Americans are ultimate bailing out all these rotten practices for the benefit of those in power. As Austria has pointed out, the average Joe or Juanita benefits little. It should be apparent that profit over people is not working well for most Americans.

It is important to note that the Hebrew word used for debt in the above verse refers to interest bearing loans. In the modern vernacular, the proverb could be rewritten thus: “Do not be among those who guarantee interest bearing bank or payday loans for anyone.”

The law of Israel prohibited loans with interest. At the same time, the law also required society to give loans to the needy or poor. According to the laws governing credit and debt, all outstanding loans to fellow citizens had to be canceled every seven years. Only loans to foreign nations or foreign individuals were exempt from God’s law of debt forgiveness. (Ex. 22:25; Deut. 16:1-11)

If the covenant people were faithful to covenantal law, God promised a specific kind of blessing: they would become creditor to the world but not a debtor. However, if they did not follow God’s law, the Jewish nation was promised judgment. One aspect of the promised judgment was that they would become debtors and foreigners would consume their productivity. (Deut. 28:44, 33, 38)

Right now, foreigners either through financial debt or through an on-going international trade imbalance consume over 50 percent of economic productivity of Americans. By importing more foreign goods and services than exported, more of working America’s wealth goes to foreigners. What America exports more than it imports is military related goods and services. Yet, that too is more allusion than reality. For example, Congress gives Israel $2 billion in aid for the purpose of Israel using most, if not all, of it to purchase military equipment like airplanes from American companies like Lockheed. That $2 billion is part of the public debt borrowed to fulfill the aforementioned allusion. It is taxpayers funding the purchase of weaponry for the sole benefit of only a few Americans.

Another voice of ancient wisdom and enlightenment was the priestly prophet Isaiah. During an earlier stage of his preaching for God, what appears to have been a message addressed to the whole world is recorded in chapter 24 of the book by his name. The following are a few excerpts relevant to our discussion:

“Behold, the Lord lays the earth waste, devastates it, distorts its surface and scatters its inhabitants. And the people will be like the priest, the servant like his master, the maid like her mistress, the buyer like the seller, the lender like the borrower, the creditor like the debtor. The earth will be completely laid waste and completely despoiled, for the Lord has spoken this word…. The earth is also polluted by its inhabitants, for they transgress laws, violated statutes, broke the everlasting covenant. Therefore, a curse devours the earth and those who live in it are held guilty…. So it will happen in that day, that the Lord will punish the host of heaven on high, and the kings of the earth on earth.” (Isa. 24:1-3, 5-6a, 21)

Isaiah probably had in mind the law of credit and debt when he wrote that God was going to waste the earth and cause it to be despoiled. (24:3) This divine punishment will be the result all inhabitants polluting the earth. The earth becomes corrupted because of the perpetual violations of the eternal covenant and its laws. (v. 4) Because all people are as guilty as the next guy, all would experience what God means by making the earth completely laid waste. (v5) The peculiar result is stated by the prophet this way: “The buyer will be like the seller, the lender will be like the borrower, and the creditor will be like the debtor.” (v 2)

Many scholars, Jewish and Christian, claim the eternal covenant refers only to the 663 laws written in the books of Moses or Torah. This is not the case. The eternal covenant began with Adam and his sons. It was perpetuated through Noah, later though Abraham, expanded to a national model of society through Moses and Israel, expanded again with the priesthood and the royal bloodline of David, and more fully completed through Jesus of Nazareth and his disciples. The moral law of the eternal covenant is still in effect today just as it was when most of the laws of the American colonies and later the states and the nation conformed to it.

What makes the prophecy of Isaiah so interesting is the fact that it has been happening in our lifetime. For example, most workers today produce goods and services that they or others within their companies sell. All workers in turn buy things they want or need from other sellers. Seller and buyer are virtually the same.

Okay, it could be rightly argued that it has always been the case since ancient times. Not so with banking, which didn’t exist universally? In banking, depositors lend their money to banks often believing that they will earn more money through interest. This belief is erroneous because banks only pay interest rates near the inflation rate. Bank CDs pay little over the inflation rate as well. Therefore, banks only allow depositors to keep the same value of their original loans also called deposits. Banks take the depositors loans and lend to borrowers at higher interest rates in order to make a profit. Depositors are very kind people because they lend money to needy bankers so that they can earn a living without having to do much strenuous labor.

We can apply the same to the national debt. Taxpayers hold the gigantic public debt in the federal government who lends to as well as borrows from the American people and from foreigners. Government borrows by exchanging paper bonds of specified value for money of equal value with a promise to repay at set interest rate, which rate is usually a little more and sometimes less than the inflation rate. As with depositing wealth in federal banks, lending wealth to the government is not very profitable, especially for individuals. It is an allusion because the feds inflationary program consumes any real profit. The actual beneficiaries are institutions of government and corporations. (By the way, Federal Reserve Banks, Fannie Mae, and Freddie Mac are unconstitutional and illegal corporations, and so are any other institutions incorporated by the federal government. The records of the Constitutional conventions prove it. Their existences are monuments to criminal acts against the Supreme Law of the Land.)

Another golden nugget of ancient enlightenment reveals the likely outcome of unethical and lawless financial acts against God’s eternal covenant. As it was written by the author of Proverbs:

“The borrower becomes the lender’s slave.” (22:7)

To whom then is the America enslaved? Is the imperial government enslaved to both the global agenda of its politicians as well as to foreigners? Are we the people really free? Are we not more like indentured servants to a corrupt government, corporate powers, and foreigners? Consider that foreigners now own a significant percentage of all industries and physical capital. Moreover, federal and state governments have seriously considered leasing our highways to foreigners to fund their transportation departments.

Isaiah 24 also sheds light on Revelation 13. When the beast or anti-Christ arises, he will gain control over the global economy. When this global dictator does, all–both buyer and seller–will become truly equal. They both will be subservient to him. None will they be able to buy or sell without giving allegiance to this dictator and his politics of change. Here is secular egalitarianism at its worst.

This is the end result of a globalized economy regulated by a unified world government fostered by world socialists on Capitol Hill, in state government, corporations, and universities of America. It is part of the divine judgment and the eventual end to their grand schemes whether called secularism or socialism or globalism or democracy.

As depicted by Isaiah 24, the eternal covenant will still stand after they have perished from the earth.

Bipartisan Banking Deregulation Produced Current Economic Crisis

Pres. Obama and other politicians blame our current economic crisis on Congressional deregulation of the banking system. A 2008 article published in OpenSecrets.org explains what they mean, why Capitol Hill politicians did it, and who benefited.

The last time Congress seriously debated how to regulate the financial industry, the result was legislation that allowed the nation’s largest banks to get even larger and take risks that had been prohibited since the Great Depression. A look back at that debate, which was over the 1999 Financial Services Modernization Act, reveals that campaign contributions may have influenced the votes of politicians who, a decade later, are now grappling with the implosion of the giant banks they helped to foster.

Looking back at the vote on the 1999 act, and the campaign contributions that led up to it, the nonpartisan Center for Responsive Politics has found that those members of Congress who supported lifting Depression-era restrictions on commercial banks, investment banks and insurance companies received more than twice as much money from those interests than did those lawmakers who opposed the measure.

In 2008, until the U.S. government threw a taxpayer-funded lifeline this month to Wall Street banks drowning in a sea of bad debt, the potential for these financial giants to go under had been dismissed. The banks were “too big too fail.” It was the 1999 legislation, commonly referred to as Gramm-Leach-Bliley (for its sponsors’ names), that cleared the way for these companies to grow so large.

For decades before, the financial industry had been segregated by government regulations dating to 1933, when Congress passed, and President Franklin Roosevelt signed, legislation known as the Glass-Steagall Act. Sponsored by a former Treasury Secretary known as the “father of the Federal Reserve,” Virginia Democrat Carter Glass, and Alabama Democrat Henry Steagall, the law responded to concerns that over-speculation by banks during the 1920s contributed to the stock market crash of 1929 and, in turn, the Great Depression. Commercial banks were taking too many risks with their depositors’ money. Glass-Steagall set up a regulatory wall between investment banking and commercial banking, prohibiting commercial banks from underwriting insurance or securities.

Sixty-six years later, in 1999, the financial services industry succeeded in essentially shattering Glass-Steagall, after putting a number of cracks in the law over the intervening years.

The congressional vote on Gramm-Leach-Bliley in November 1999 was not close. The bill passed handily with bipartisan support in both the House of Representatives and Senate, 450-64 between the two chambers. President Bill Clinton supported the legislation and readily signed it. There were some strong arguments for the bill, chiefly that American banks were too constrained to compete with German and Japanese banks. There was also criticism that the legislation was pushed through too quickly and that it didn’t modernize the marketplace’s regulatory system. Pressing most aggressively for Gramm-Leach-Bliley was Citigroup, which had merged its bank with Travelers insurance company, and needed a change in federal law to keep the giant corporation together.

There was little difference in the money collected by Republicans who supported the bill and those who opposed it; the 255 GOP supporters collected an average of $179,175, while the opponents in their ranks-and there were only five of them-collected $171,890. On the Democratic side, however, there was a wide gulf, as the graph indicates. The 195 Democrats who supported the Financial Services Modernization Act had received an average of $179,920 in the two years and 10 months leading up to its passage, while the 59 Democrats who opposed it received just $83,475.

Many of the Democrats who voted for Gramm-Leach-Bliley are still in Congress, as are many of the Republicans.

The new law paved the way for financial institutions, which were already large, to get even larger, and it put businesses that the nation’s financial regulators had intentionally segregated under the same umbrella once again. Critics of Gramm-Leach-Bliley predicted that if these mega-banks were to ever fail, the impact on the U.S. and global economy would be so great that the public treasury — i.e. taxpayers — would have to rescue them.

Nine years later, Congress is debating a proposal from the Treasury Secretary to assume the bad investments that are weighing down the nation’s financial institutions, at taxpayer expense. And lobbyists representing the financial services industry are trying to once again shape fast-moving legislation to their clients’ benefit.

I wonder how much money Congressional politicians have or will receive for bailing out their profitable benefactors.

Source: OpenSecrets.org, Sept. 23, 2008.

A Response to Austria Economics 101

In the February 4th article entitled Austria Economics 101,” Representative Austria was unfairly criticized for not supporting the “Stop the Congressional Pay Raise Act.” While it’s true that he did not join Representatives Kilroy, Latta, and Space as “Original Cosponsors” on January 6th, he did add his name to the list of this bill’s Cosponsors on January 21st — two weeks before the above article was printed. Three more of Ohio’s Representatives (Boccieri, Driehaus, and Kaptur) have signed on since then, raising the total number of Cosponsors from the article’s figure of 72 to 107.

In spite of such rapidly growing support, this pay freeze legislation lies buried in committees just like its previous two versions in 2007 and 2008. If anyone would like to help get the number of its official supporters up to a majority (218) of the 435 members of the House of Representatives, then please consider signing the online petition at www.payfreeze.org. A majority of 218 should be enough to pressure the congressional leadership into allowing it to be debated and voted on.

By Tom Foreman, Gainesville, FL