From Volume 38, Issue 2 of EIR Online, Published Jan. 14, 2011

United States News Digest

Bernanke Grants Senate an Audience, But Reality Busts In

Jan. 7 (EIRNS)—U.S. Senators, this time from the Budget Committee, gathered this morning for one of their periodic rituals of kissing Federal Reserve chairman Ben Bernanke's foot—only this time, reality intruded, with a bang. West Virginia Democrat Joe Manchin overturned the scenario by insisting on the plain truth: that the Federal states are utterly insolvent. Within minutes, it became inescapably clear that no one, including the incompetent Bernanke, had any idea what to do. "No one," that is, except those who have the wisdom and courage to join LaRouche in insisting on reinstatement of Roosevelt's 1933 Glass-Steagall law as the unique solution to the crisis.

Manchin was West Virginia's governor when he became one of the few newly elected Democrats last November, after a hard-fought election in which he ran against Obama policies to a great extent. He had chaired the National Governors' Association.

This is the way he put it at one point:

"If I could ask one question, Mr. Chairman—and to Mr. Bernanke—is that—I think what we were asking—and the Senator from Texas was asking the same—is there any plan—I know it hasn't happened—it's been many, many years, and maybe—but we're seeing indications and concerns that we have right now, and states have done everything humanly possible, because they have to meet a balanced budget, you know, every year, and they've cut to the—to the bone, if you will.

"And if the cash flow is just not there, to suffice with the amount of services they have to give, is there any bailout or any other proposal that you all have or have been looking at? And I think that's what we're saying. Is there any plan available that could help a state that would prevent this from happening, falling into default, or could you do that?"

Senators John Cornyn (R-Tex.) and Committee chairman Kent Conrad (D-N.D.), although unlikely allies for him, backed up Manchin's concern. Cornyn asked Bernanke whether, having already bought foreign debt, he could buy U.S. state and municipal debt. Bernanke said no.

Conrad, although one of the worst members of President Obama's Deficit Reduction Commission, said that the Budget Committee would have to have an answer to the bankruptcy of the states, since state governments would surely be coming to ask. And soon. But because no one forced Glass-Steagall into the discussion, every participant reiterated that neither house of Congress would seriously consider a bailout for the states. In that circumstance, the best that Manchin could suggest was "creative financing."

Rep. Garrett Proposes To Eliminate General Welfare Clause

Jan. 6 (EIRNS)—While the House Republican leadership was reading the entirety of the U.S. Constitution on floor of the House, and with the House Republican Conference pledging to change the House rules so that anyone introducing a bill would have to cite the authority under the Constitution for that bill, Rep. Scott Garrett (R-N.J.) proposed an amendment to the proposed rule-change on Jan. 5, to forbid a member of the Congress from citing "the General Welfare Clause" or the "Necessary and Proper Clause" as his authority. The Republican Conference did not agree to his changes, but he has vowed to press for them.

Garrett's proposal is either illiterate, or traitorous, since these two clauses of the Constitution reflect the commitment of the most important part of that document, the statement of principle in the Preamble. Without their inclusion, the leading economic policies which have made the United States great, would never have been accomplished.

Garrett has also founded the new Congressional Constitutional Caucus, thus presenting himself as a leader in Constitutional reform in Congress. He would more correctly call it the Confederate Constitutional Caucus.

Vote Against Pelosi Biggest in Nearly 90 Years

Jan. 6 (EIRNS)—Yesterday, 19 Democrats, nearly 10% of the Democratic caucus, voted against Nancy Pelosi continuing as the House Democratic leader. This was the most votes against a party's own candidate in nearly 90 years, according to the House historian's office. In 1923, 23 Republicans voted against Massachusetts Republican Frederick Gillett's candidacy for speaker.

The vote against Pelosi would have been higher, but for the fact that committee assignments for the 112th Congress have not yet been made, and lawmakers feared they could be denied a spot on the panel of their choice. Forty-three Democrats had voted against her for the position in a caucus meeting late last year.

When Police Staffing Drops, Crime Spikes Upwards

Jan. 5 (EIRNS)—Mayors and city managers all over the country have claimed that their budget cuts to public safety services won't have any impact on the public safety. Yet, the news from several places gives the lie to that claim. Oakland, Calif., for example, made national headlines when it laid off 80 police officers, 10% of its police force, and it has since lost another 38 due to attrition. The Oakland Tribune reported on Jan. 3 that the number of homicides in the city in 2010 was 95, a drop of 15% from the 2009 level of 110. This looks good at first, except that the total number of shootings in 2010 was 433, or 22% more than in 2009. Trauma surgeons at the city's Highland Hospital accounted for the reduction in the number of homicides, not any reduction in crime. Police violence-suppression projects, which, among other things, took dozens of guns off the streets in the first half of 2010, were one of the casualties of the layoffs. There have been no such operations since the layoffs took effect in July.

Similarly, in New Jersey, where 2,200 law enforcement positions have been cut just this year, crime has spiked upwards. The chairman of the state legislature's two public safety commissions, in a joint statement released yesterday, called on Gov. Chris Christie (R) and Attorney General Paula Dow to deal with a 14% increase in the number of homicides in new Jersey, this year. The Newark Star-Ledger reported that there were 364 homicides in the state in 2010, compared to 320 in 2009. The two lawmakers, Sen. John Girgenti of Passaic and Assemblyman Gordon Johnson of Bergen, warned that statewide police layoffs and a stagnant economy could lead to continued increase in crime, and asked the Christie Administration to come up with a plan to deal with it.

"While the spike in homicides this year is truly disturbing, it is not altogether surprising, especially given the significant cuts in state aid that are causing massive layoffs in law enforcement in some of our largest cities," they wrote. "Cost-saving measures cannot trump public safety in the end."

Obama Worse than Bush on Secret Deals To Cut Social Security

Jan. 4 (EIRNS)—Defenders of Social Security fear that President Obama will betray them, by cutting a deal with Republicans to cut Social Security, in exchange for a vote increasing the debt ceiling, The Hill reports.

Maria Freese of the National Committee to Preserve Social Security and Medicare, said she thinks Social Security is "more at risk than it was in 2005," when President Bush proposed drastic changes to the Social Security program, including personal accounts.

"What I am really afraid of is another deal behind closed doors," said Nancy Altman, the codirector of Social Security Works, referring to Obama's tax-cut deal with Senate Republicans, which put Social Security at risk. "At least with President Bush, he went around the country on a tour and presented his plan, and people didn't like it," and so it never even came to a vote in Congress.

The Hill cites the comments by Sen. Lindsey Graham (R-S.C.), who said on Jan. 2 that he is prepared to see the U.S. default on its debt obligations if Social Security isn't "reformed." "I will not vote for the debt-ceiling increase until I see a plan in place that will deal with our long-term debt obligation, starting with Social Security, a real bipartisan effort to make sure that Social Security stays solvent, adjusting the age, looking at means test for benefits," Graham said on NBC's Meet the Press.

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