From Volume 38, Issue 28 of EIR Online, Published July 22, 2011

United States News Digest

Fascist Compromise Sought in Debt-Ceiling Drama

July 17 (EIRNS)—With the bond market powers demanding that the U.S. Federal debt ceiling be raised, both Republicans and Democrats are seeking ways to do so, while, of course, maximizing their own partisan gain. One plan being advanced by House Republicans is to let the "Tea Party" faction introduce its "cut, cap, and balance" Constitutional amendment bill, which would limit Federal spending to 18% of GDP, and force balanced budgets every year. The bill is not expected to pass, but the hope is, that by letting it go to a vote, House Speaker John Boehner might gain some cooperation from that faction. Some Democrats are pushing their own version of an amendment, calling for an 18% spending limit and requiring a two-thirds vote on future tax increases. Currently, Federal spending is some 24% of GDP.

Meanwhile, work is continuing to forge a "Plan B," which would allow Obama to raise the debt ceiling, but also allow the Republicans to express their displeasure through meaningless votes against the increase. The plan would also include the creation of a special bipartisan budget-cutting committee in Congress, which would negotiate sharp cuts. The Democrats reportedly are already offering $1.5 trillion in spending cuts, while Obama is looking to cut a lot more.

We add a couple of obvious points: First, Federal spending is so high compared to GDP because of both the bailout and the collapse of the economy. Aside from the bailout, it is the lack of an economy that is the problem, and that is not being addressed. Second, to hell with the oligarchy's bond markets and their demands. Let's put them through bankruptcy reorganization and go with a Hamiltonian credit system. This will solve both problems, and put us back on track.

Obama Plays Hitler in Debt Ceiling Talks

July 15 (EIRNS)—President Obama's latest manifestation of insanity is his "channeling" of Hitler as the national leader—the man above the parties—who will lay out the most extreme cuts in the U.S. debt-ceiling negotiations, which will kill the greatest number of old and sick Americans, and thus greatly impress his British Malthusian masters.

Obama's proposed cuts, the threat of a QE3 by Fed Chairman Bernanke in Congressional testimony, as well as the possibility of an Italian default, have made the Glass-Steagall alternative much more live for many sleepers in the Congress. And, the spectacle of Obama demanding more fascist austerity than Republicans has the Progressive Democrats in shock.

The Huffington Post's headline on July 15 blares, "Obama Backs Means-Testing Medicare." A few days earlier, numerous sources had reported that it was Obama—not the Republicans—who proposed raising the eligibility age for Social Security to 67. In his July 15 press conference, Obama pushed hard on the need to cut entitlements.

Dems To Withdraw Support for Obama Over Social Security, Medicare Cuts

July 15 (EIRNS)—A group of protesters representing the Progressive Change Campaign Committee demonstrated outside Obama's campaign headquarters in Chicago today, and delivered over 200,000 signed pledges refusing to donate to or volunteer for Obama's reelection campaign, if he cuts Medicare, Medicaid, or Social Security.

The petition states: "President Obama: If you cut Social Security, Medicare, or Medicaid benefits for me, my family, or families like mine, don't ask for a penny of my money or an hour of my time in 2012. I'm going to focus on electing bold progressive candidates who will fight to protect our Democratic legacy."

Those signing the pledges represent over $17 million in donations to Obama's 2008 campaign, and over 2.6 million volunteer hours to the 2008 campaign.

GOP, Dems Oppose Death Panels in House Hearing

July 13 (EIRNS)—Putting nation and the Constitution above party loyalty, a handful of Democrats have broken with President Obama and their party leadership to come out publicly in support of abolishing the unconstitutional and genocidal Independent Payments Advisory Board (IPAB). Eight Democrats have now joined over 150 Republicans in the House in cosponsoring the bill sponsored by Rep. Phil Roe (R-Tenn.) to repeal the IPAB provisions of the Afforable Care Act (ACA) law, otherwise known as "Obamacare."

At today's hearing of the Health Subcommittee of the House Energy and Commerce Committee, Ranking Democrat Frank Pallone (N.J.) said that, although he supports the ACA overall, he opposes IPAB, stating: "I would certainly be in favor of abolishing it."

"It's about a growing imperial Presidency," Pallone declared. "This is about Congressional prerogatives being limited, and encroachments upon Congressional authority." He said had watched this develop in the administrations of both Bushes, and now Obama, specifying that, "The Presidency continues today taking over prerogatives of Congress."

The first panel featured Rep. Allyson Schwartz (D-Pa.), who said she strongly supports ACA, but opposes IPAB, charging that it would cut reimbursements to hospitals and make arbitrary cuts in health-care spending. Roe and Sen. John Cornyn (R-Tex.) were also on panel, along with Rep. George Miller (D-Calif.), who defended IPAB. Roe and Cornyn they have introduced bills in the House and Senate, respectively, to repeal IPAB. Roe compared IPAB to Britain's NICE (National Institute for Health and Clinical Excellence); and he noted that he has 160 co-sponsors for his bill, including some Democrats, and that repeal is also backed by a coalition of over 270 health-care providers.

Eight House Democrats are now co-sponsors of Roe's bill to repeal IPAB: Shelley Berkeley (Nev.), Michael Capuano (Mass.), Kathy Castor (Fla.), Del. Donna Christensen (Virgin Islands), Chaka Fattah (Pa.), Larry Kissell (N.C.), Linda Sanchez (Calif.), and Allyson Schwartz (Pa). Politico reports that Rep. Pete Stark (D-Calif.) also wants to repeal IPAB. And Frank Pallone, while saying he would like to see IPAB abolished, hasn't signed on to Roe's bill yet.

Layoffs in Bankrupt Cities and States Just Beginning

July 17 (EIRNS)—Cities and states that have been eliminating jobs for the last two years are beginning a new round of layoffs of crucial public sector jobs, and nothing will stop this hemorrhaging until Glass-Steagall is passed. Meanwhile, the National Governors Association is meeting in Utah this weekend with no answers. Here are some of the latest announced cuts.

Connecticut: 6,500 state employees will be laid off by the end of August, unless the public employees unions come up with concessions that include sweeping austerity: 328 employees in correctional facilities and 452 judicial employees will be the first to go, this week. Benjamin Barnes, Secretary of the Office of Policy and Management, said the layoffs will continue until the 6,500 job-cut level needed to balance the budget is reached, reported Business Week.

New Hampshire: Gov. John Lynch sent out letters demanding plans from all state agencies to cut a total of $50 million in labor costs by August 2014. Layoffs will begin this year if the cuts don't come about, but the number to be eliminated is not out yet.

Washington, D.C.: The school system laid off 413 employees on July 15, including 206 teachers who failed the "Impact" teacher rating system developed under former School Chancellor Michelle Rhee. There are more layoffs to come, and the disaster is national. The Center on Education Policy reported that 70% of school districts in the U.S. had budget cuts in the school year that just ended, and 84% anticipate cuts this year.

Lubbock, Tex.: Mayor Tom Martin says layoffs and program cuts are expected for the Lubbock Health Department. Budget cuts will include discontinuing immunization clinics and those that treat sexually transmitted diseases.

Sonoma County, Calif.: After losing over 3,800 public jobs from 2007 to 2010, public sector employment fell another 3% in May 2011, and the drop will be even higher when the June-July figures are computed. At the end of 2010, there were about 20,300 public employees.

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