From Volume 38, Issue 16 of EIR Online, Published Apr. 22, 2011

United States News Digest

Growing Hatred for Obama Following Budget-Cutting Deals

April 15 (EIRNS)—The Obama-Boehner continuing resolution to (de)fund the Federal government for rest of FY2011 passed the House yesterday on a 260 to 167 vote—but was, in fact, a stunning repudiation of both President Obama and House Majority Leader John Boehner (R-Ohio). Three-fifths of House Democrats (108) voted against Obama's bill, with only 81 supporting it. Even Minority Leader Nancy Pelosi (D-Calif.) voted against it, with Minority Whip Steny Hoyer (D-Md.) being the only member of the elected Democratic leadership to support it.

When Pelosi was asked by Associated Press yesterday how she would vote on the budget compromise, she was fuming, according to the Washington Post's Dana Milbank. "As was pretty evident, the House Democrats were not a part of that agreement," she said. "I'd rather call it an agreement than a deal," she went on, adding, "I feel no ownership of that or any responsibility to it."

Politico reports that labor leaders excoriated Obama and Senate Majority Leader Harry Reid (D-Nev.) in a closed session of the AFL-CIO's executive board meeting this week in Washington. Furious union presidents complained about budget cuts, a new trade agreement, and what some view as their abandonment by Senate Democrats. "Now, not only are we getting screwed by the Republicans, but the Democrats are doing it, too," fumed one union official. Milbank reports the same, saying that among the labor leaders meeting this week, the criticism of Obama and Reid "turned caustic," and he quotes an unnamed prominent Democratic operative saying of Obama: "His decisions don't seem to be anchored to anything.... Democrats desperately want to support him, but aren't sure what they're supporting or why."

Senators Call for Criminal Probes of Banks, Rating Agencies, Regulators

April 15 (EIRNS)—Following the release of the Senate Subcommittee on Investigations report on the financial crisis yesterday, Senators Carl Levin (D-Mich.) and Tom Coburn (R-Okla.) held a press conference on the content of the report. Both made clear that they have referred the report and all the supporting documentation (5,800 pages) to the Justice Department and the Securities and Exchange Commission, and that, although it is not their job to bring indictments, they believe the criminality is blatant and rampant.

Coburn declared the report to be bipartisan, adding, "I agree with Senator Levin that a significant conflict of interests led to this precipitous change in our country and our economy." He criticized the Angelides Report, which, he claimed, "didn't report anything of significance," in order to assert that the Congress is fully capable of doing the investigation itself. He also called for other committees in Congress to follow their model, "given the plight of our financial system today and the waste, fraud, and abuse that's within the Federal government," adding that such a crisis could have been avoided, "if Congress [had done] its job on a routine daily basis instead of after the problems have occurred."

Levin outlined the criminal activity:

Banks and Thrifts (focus on Washington Mutual): "Selling tens of billions of dollars in dubious and often fraudulent mortgages either directly or through mortgage backed securities."

Regulatory Agencies (focus on the office of Thrift Supervision, OTS): "... seeing the danger, but sitting on its hands instead of acting to oversee a bank on which it depended for 15% of its budget ... [and] were well aware of, and had documented, the bank's high risk, poor quality loans and deficient lending practices."

Investment Banks (focus on Goldman Sachs, but including all of them): "... created a huge market for shoddy mortgage-related securities, then packaged and sold them using deceptive practices, placing bets, huge bets, and placing secret bets against the very securities that they were selling to their clients and then making big money when the house burned down."

Another Dem Seeks Repeal of Fascist IPAB

April 15 (EIRNS)—Rep. Allyson Schwartz (D-Pa.), a supporter of the Affordable Care Act, is circulating a "Dear Colleague" letter announcing her support for H.R. 452, a bill to repeal Obama's Independent Payment Advisory Board (IPAB), and asking others to join her. She is the fourth Democrat to co-sponsor the repeal bill, joining Reps. Shelley Berkley (D-Nev.), Michael Capuano (D-Mass.), and Larry Kissell (D-N.C.), and over 70 House Republicans. Schwartz is the most prominent Democratic defection so far, says The Hill, noting that she is a prominent health-reform advocate, and the vice-chair of the New Democratic Coalition.

Schwartz cites Congress's Constitutional authority as the first reason to repeal the program. "Congress is a representative body and must assume responsibility for legislating sound health care policy for Medicare beneficiaries, including those policies related to payment systems," she wrote. "Abdicating this responsibility, whether to insurance companies or an unelected commission, would undermine our ability to represent the needs of the seniors and disabled in our communities."

The Hill states that Schwartz's defection adds to already serious doubts that Obama will be able to garner enough votes to strengthen the IPAB, as he proposed in his April 13 deficit speech—unless, of course, he attempts to do this through an Executive Order. Rep. Joe Pitts (R-Pa.), chairman of the House Energy and Commerce health subcommittee, told Politico on Thursday that an IPAB repeal bill is most likely one of the next steps the subcommittee will take up, because it's "what I call low-hanging fruit." A corresponding bill in the Senate, S.668, has 18 sponsors and cosponsors.

Dodd-Frank Let Banks Off the Hook on Foreclosures

April 13 (EIRNS)—It's now official. On April 6, this news service reported that the Obama Administration's financial regulators had effectively deep-sixed the combined effort of the state attorneys-general to penalize the big mortgage banks, for their flagrant law-breaking and tax evasion in foreclosing on millions of American households.

Today, the non-regulators set up by the Dodd-Frank-Obama bill reached the consent agreements that let the 14 major mortgage banks and "service providers," like the MERSCORP and Lender Processing Servers, off the hook with civil fines and a consent order. The decision occurred as Rep. Elijah Cummings (D-Md.) and 22 other Democrats in the House scrambled with introduction of a bill, HR 1477, the Preserving Homes and Communities of 2011, to stop the deal. The Cummings bill, a replica of a Senate bill introduced earlier by Jack Reed (D-R.I.), could have been introduced earlier, but only occurred last night.

The Office of the Comptroller of the Currency (OCC), the Fed, the Office of Thrift Supervision, and the Federal Deposit Insurance Corporation (FDIC) reached the agreements with: Bank of America, Citibank, HSBC, JPMorgan Chase, MetLife Bank, PNC, U.S. Bank, and Wells Fargo. The two service providers are Lender Processing Services (LPS) and its subsidiaries DocX, LLC, and LPD Default Solutions, Inc.; and MERSCORP and its wholly owned subsidiary, Mortgage Electronic Registration Systems, Inc. (MERS).

There are absolutely no criminal penalties or mention of criminal investigations involved. Each of the banks has a more than 30-page consent order to comply with. John Walsh, acting Comptroller of the Currency, lied, in a statement on the OCC's website, that "these reforms will not only fix the problems we found in foreclosure processing, but will also correct failures in governance and the loan modification process...."

The FDIC press release says that this agreement is done to "complement, rather than preempt or impede" the "ongoing collaboration" with the Department of Justice and the various state attorneys-general who are looking into these cases, but it is well known that this White House-driven deal is out to stop any and all real investigations.

Rangel Sends Disapproving Signal on Obama

April 11 (EIRNS)—In a video uploaded on yesterday, under the headline "Congressman Rangel on Budget and Why Obama May Not Deserve a Second Term," the National Action Network gives coverage of an interview with Rep. Charles Rangel (D-N.Y.) on his dissatisfaction with the Obama regime's handling of the nation's affairs.

Rangel is quoted: "This President, other Presidents, getting America involved in wars that we shouldn't be involved in—whether it is in Libya, whether it is in Iraq, or whether it is in Afghanistan. We cannot do this all over the world. This is especially so, when we find young people who have no economic options except to go into the service. When I go to funerals, it is very difficult to explain to their loved ones as to why they were in these places. Whether we are talking about Vietnam—it's sad."

Rangel added, "Economically, the country is not poor. One percent of the population owns 40% of the wealth. They're not taxed, they get tax breaks—yet, we're talking about laying off teachers. There's something's wrong with this picture, I can tell you that."

In March, according to a Gallup poll, African-American approval of Obama fell by 7 percentage points, from 92% to 85%.

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