From Volume 38, Issue 6 of EIR Online, Published Feb. 11, 2011

United States News Digest

Congressional Battle Expected Over Angelides Report

Feb. 2 (EIRNS)—Three Republican House committee chairmen have launched an attack on the Financial Crisis Inquiry Commission (FCIC), or Angelides Commission, whose new report just showed how right economist Lyndon LaRouche was, in insisting that the 2007-08 financial/economic collapse was foreseeable and preventable, and publicizing the measures to prevent it (see InDepth).

The FCIC's full budget and spending records, staff records, and over 400,000 internal e-mails have been demanded, with subpoena threats from Rep. Darrell Issa (R-Calif.), chairman of the Government Oversight and Reform Committee; Financial Services Committee chairman Rep. Spencer Bachus (R-Ala.); and Banking subcommittee chairman Patrick McHenry (R-N.C.). In a letter of demand to FCIC chairman Philip Angelides, the three essentially charged that it was the Commission's fault that four of its Republican members had to write "dissents," defending Wall Street, and specifically denying that the repeal of FDR's Glass-Steagall Act led to the 2007-08 crash.

The Republican Congressional attack is sure to draw more attention to the crucial FCIC report, between now and when Angelides testifies to Bachus's committee on Feb. 16. Several blistering attacks on the "dissenting" Republican-appointed commissioners were published today, including one by Rep. Brad Miller (N.C.), a leading Democrat on that committee. Former Federal bank regulator Prof. William Black, in a contribution to Mortgage Investor newsletter, exposed the leading "dissident" commissioner, Peter Wallison of the American Enterprise Institute, as having severe conflicts of interest as President Ronald Reagan's leading deregulator of banking, and subsequently, as a Wall Street banker himself.

And a commentary in "Smart Investor" by Sara Nunelly, co-author of a book on the crash, emphasizes that the key issue involved in the fight is the repeal of Glass-Steagall, "with the Gramm-Leach-Bliley Act, also known as the Financial Services Modernization Act of 1999. Many folks believe this repeal was responsible for the buildup of risky assets and investments and contributed heavily to the global financial crisis." The Angelides Commission report makes that clear.

Responding in writing to Issa et al., Angelides said that the FCIC is scheduled to finish its work on Feb. 13, and that its remaining staff are working to gather the committee's historical records for the National Archives. He said it does not have the staff or the funds to comply with the GOP three's voluminous demands. Ironically, one of Issa's charges against the FCIC is that it has spent too much money.

Former Boston Official Cites 'Frühmenschen' in His Conviction

Feb. 5 (EIRNS)—Former Boston City Council member Chuck Turner was sentenced to three years in prison in a public corruption case that has all the earmarks of the FBI's infamous Operation Frühmenschen campaign against black elected officials, and Turner himself is saying so. According to the Jamaica Plain Gazette, Turner's lawyer Barry P. Wilson suggested in a sentencing memorandum that his client's conviction was related to the FBI's "Frühmenschen project." The Gazette notes that "a similar theory was posited in 2009 by controversial international political activist Lyndon LaRouche. LaRouche claimed the conspiracy is partly backed by a supposed secret Boston group he calls 'the Vault' that has 'historic connections to Anglo-Dutch imperial interests,' and is 'committed to the destruction of the US as a sovereign nation.'"

Turner told the Gazette that evidence that he has seen since then, including testimony from a former FBI agent, convinced him that the FBI program may have existed. "I saw some information that was substantive," he said. "Although I initially had questions about it, I thought there was enough information to include it [in the sentencing memorandum] as a footnote."

HHS to Governors: Use Obamacare To Cut Medicaid Benefits

Feb. 3 (EIRNS)—In a letter sent today to the nation's 50 governors, Health and Human Services Secretary Kathleen Sebelius suggested, in the words of the Los Angeles Times, "a range of cuts they can make to Medicaid, including dropping some people from the program." These "helpful" suggestions were made in response, in Sebelius's words, to the fact that "many States are re-examining their Medicaid programs and looking for opportunities to meet the pressing health-care challenges and better cope with rising costs. In light of difficult budget circumstances, we are stepping up our efforts to help you identify cost drivers in the Medicaid program and provide you with new tools and resources to achieve both short-term savings and longer-term sustainability while providing high-quality care to the citizens of your States. We are committed to responsiveness and flexibility, and will expedite review of State proposals."

The suggested cuts are outlined in Sebelius's letter (supplemented by an enclosed paper), after she tells the governors, that one option provided by the Obamacare law is "to reduce eligibility for non-disabled, non-pregnant adults with incomes above 133 percent of the Federal poverty line ($14,500 for an individual) if the State has a budget deficit." However, if this is done before June 30, "this would mean the loss of the enhanced FMAP [Federal Medical Assistance Percentage] under the Recovery Act."

Most of the proposals are written in technocratic jargon, but the first proposal is intelligible even to the average citizen: "While some benefits, such as hospital and physician services, are required to be provided by State Medicaid programs, many services, such as prescription drugs, dental services, and speech therapy, are optional. States can generally change optional benefits or limit their amount, duration or scope through an amendment to their State plan, provided that each service remains sufficient to reasonably achieve its purpose. In addition, States may add or increase cost sharing for services within limits...."

Republicans Push for Deal with Obama on Catfood Commission Diktats

Feb. 2 (EIRNS)—Proponents of the genocidal budget cuts proposed by President Obama's Catfood ("Fiscal") Commission continued to press for an alliance between Tea Party Republicans and the White House, in order to force through draconian austerity measures.

On Feb. 1, nearly one-half of the members of the Senate attended a morning briefing on the debt crisis, with many talking about bringing Obama to the table with the new House GOP majority, according to Politico. "I think we will make it easier for him [Obama] to jump in," said Sen. Tom Coburn (R-Okla.). Sen. Richard Burr (R-N.C.) gushed that "if we can bring the White House to the table on Social Security, the House will be there."

A few hours later, at a Senate Budget Committee hearing, chairman Kent Conrad (D-N.D.), who has been calling for a budget summit with the White House, said: "What I said at the last hearing, I think even more strongly today. It has to start somewhere. And in a Congressional process, we are it.... I think we have to prepare ourselves to begin crafting a plan here." Conrad's scenario is that the annual Spring budget resolution would be expanded to ten years, and would effectively adopt the deficit reduction targets set by the Catfood Commission.

Obamacare Promotes Medicare Cuts in 2012

Feb. 1 (EIRNS)—The U.S. hospital and medical treatment system is currently under assault by a number of pilot projects, under the ACO (accountable care organizations) rubric; among these is the TACO (Tucson Medical Center ACO, begun Jan. 1), Camden, N.J. This is preparatory to going live nationally in 2012 with cuts in treatment to the Medicare population, under the direction of Sir Donald Berwick, director of the Centers for Medicare and Medicaid Services (CMS). Berwick consulted on Tony Blair's formation in 1999 of the NICE (National Institute for Health and Clinical Services), whose ten years of "reforms" of the British National Health Service have dramatically driven up death rates for whole classes of patients.

Obamacare mandates that ACOs for Medicare, under its Medicare Shared Savings program, will begin in 2012. The nominal idea, is that the patient will be assigned to a team of treatment providers (doctor, hospital, home health, social staff, etc.) called the "care organization," whose members will be paid less, but be expected to treat you as an individual better, while meeting the "social need" to use less of scarce resources. ACOs are to start with the elderly and poor—those on Medicare and Medicaid.

All rights reserved © 2011 EIRNS