Obama to GOP: No More Debt Ceiling Blackmail 6DEZ12

I am not ready to forget about taxes, I do not trust the gop / tea-baggers or the resolve of all Democrats in Congress to do the right thing and eliminate the bush era tax cuts on income over $250,000. I do believe Pres Obama learned his lesson about trusting the gop / tea-bagger negotiators, and believe he is doing the right thing in refusing to give in to them on raising the federal debt ceiling. He needs to hold the line on the fiscal cliff negotiations and if we go over the cliff the repiglican / tea-bagger obstructionist will be to blame. From Mother Jones.....

Forget all the talk about taxes—the ultimate game of chicken is happening with the nation's debt limit and credit rating.

—By David Corn

T.J. Kirkpatrick/UPPA/ZUMAPress

In the ongoing bout between President Obama and House Speaker John Boehner—call it, the fiscal bluff—the main focus, as far as the media coverage goes, has been the Bush II-era tax cuts for the wealthy. (As Bloomberg reported, Obama "will make no deal on the country's fiscal future unless congressional leaders first accept tax-rate increases on top earners.") Obama has indeed insisted marginal tax rates for the rich go up to boost deficit-busting revenue, and he advocates a return to the levels of the booming Clinton years, with the tax cuts for the lower 98 percent extended. Boehner has countered with a vague offer to raise revenues but only by closing loopholes (which he will not identify) while lowering tax rates for the wealthy and nonwealthy. If the president stands fast on this position, as his aides assert he will, there will be no agreement unless Boehner yields. But there is another red line for Obama: the fiscal debt ceiling.
White House aides maintain that the president will not accede to any pre-cliff accord that does not avert a repeat of the last debt ceiling debacle. "He's unequivocal on this," a senior administration official says. For Obama, it's personal and it's historical: He's committed to preventing the House Republicans from once again holding him hostage and bolstering the precedent that Congress can use the debt ceiling to blackmail a president.

This past weekend Treasury Secretary Tim Geithner hit the Sunday talk show circuit to tout Obama's proposal for deficit reduction and spending, and he repeatedly noted that the president's package includes extending what's become known as the McConnell Provision, named after Sen. Mitch McConnell (R-Ky.), the wily Republican leader in the Senate. During the last dustup over the debt ceiling in the summer of 2011—when Republicans were insisting that Obama sign off on drastic spending cuts, or otherwise they'd refuse to raise the debt ceiling and prompt a default (which could lead to a global financial crisis)—McConnell cooked up a detour around the impasse. Under his plan, the president would request a hike in the debt ceiling (to pay the bills already accrued by Congress!) and then Congress would have a chance to disapprove. If Congress did so, the president could veto the measure, and the debt ceiling would be raised. Only if Congress mustered a veto-overriding two-thirds majority could it block the president from lifting the debt ceiling. With this provision, McConnell offered his fellow GOPers an escape route: They could vote against raising the debt ceiling without bearing the responsibility for triggering a financial panic. And that's what the tea partiers did.

"I want to send a very clear message to people here," President Obama said on Wednesday. "We are not going to play that game next year. "

Now Obama is saying that what was good enough for that near-crisis is all right by him for the next debt ceiling showdown. He and Geithner are proposing to extend the McConnell Provision to cover the pending debt ceiling tussle, which could come within weeks, and future ones. "[T]he virtue of that mechanism proposed by Sen. McConnell, a man of impeccable conservative credentials, is to make sure that the country is not left at risk of periodic threats of default," Geithner said on Meet the Press, laying it on thick. "It's a very good idea. It was a Republican idea. And we're suggesting they extend it." A subsequent posting on the Treasury Department's blog noted that adopting this idea would "remove politics from future debt limit debates, while preserving Congress' essential role in spending revenue, and borrowing decisions." (The post included a handy chart on how the McConnell Provision works.)
During a Wednesday morning meeting with business leaders, Obama was blunt: "I want to send a very clear message to people here. We are not going to play that game next year. If Congress in any way suggests that they're going to tie negotiations to debt ceiling votes and take us to the brink of default once again as part of a budget negotiation, which, by the way, we have never done in our history until we did it last year, I will not play that game."
The public comments from Geithner, Treasury, and the president do not fully reflect how passionate Obama is on this matter. "He really means it," a senior administration official insists. And Obama's top aides have seen him in private display fervor regarding this issue. During a meeting with his senior aides in the middle of the prolonged and heated negotiations in the summer of 2011, Obama let them know that he believed the debt ceiling face-off was in part a fight to save his presidency and those of future chief executives.
At that time, Obama was holding daily bargaining sessions with Republican and Democratic congressional leaders to resolve the debt ceiling crisis and possibly to craft a "grand bargain" budget agreement that would include tax revenue hikes, spending cuts, and reductions in entitlement programs. But with the talks not yielding much progress, Republicans—and some Democrats—were raising the prospect of proceeding with a short-term extension of the debt ceiling. On July 13, 2011, as Obama gathered in the Oval Office with Geithner, then-budget chief Jack Lew, senior economic adviser Gene Sperling, and other aides to prep for the next meeting with the legislators, he drew a line, telling his advisers, "I want to make something clear. I'm not going to accept a short-term extension of the debt." There was no way, he insisted, he would go through this again in 3, 6, or 12 months—certainly not before the next election.
Obama's aides empathized with him but explained that the president might have to yield on this to secure a deal that dodged a default. "I'm not doing it again," Obama said. "This is wrong."
Obama believed a constitutional principle was at stake: If the Republicans could threaten default to get their way on budget issues, it would distort the separation of powers. This was not what the framers of the Constitution intended, he believed. Moreover, it was embarrassing for the United States. He was determined to prevent this scenario from occurring again.
His aides could see that Obama would not bend. He was willing to go to the brink. Toward the end of that day's meeting with Hill leaders, when House Majority Leader Eric Cantor raised the idea of a short-term extension, Obama angrily said, "I'm not going to do it. We're not putting the country through this again. Don't call my bluff."
Through the subsequent weeks of those negotiations, Obama stubbornly held to this position, and the final deal ended up with the McConnell Provision and no short-term extension. Fast forward 16 months, and Obama is again (for the time being) sticking with a version of this demand.
Republicans and conservatives who fret that Obama may get his way on tax cuts—after all, the Bush tax cuts for the rich will disappear at the end of the month if there is no deal—have pointed to the debt ceiling, which will have to be raised in the next month or two, as the true showdown, threatening again to block an increase in the debt limit unless Obama buckles on spending and entitlements. Yet Obama seems willing to have this throw down with Boehner, McConnell, and the Republicans and blame them for endangering the credit rating of the United States and possibly causing a financial crisis. He certainly knows that the Rs took a bigger hit in public opinion polls at the conclusion of the 2011 debt ceiling fiasco than he did. Obama's resolve to thwart the Republicans on this front has not been widely noted, a senior administration official says, because "the emphasis has been on tax cuts with the December 31 deadline."
At the moment, the president appears to have the better hand on taxes. Consequently, he has the opportunity to bargain toughly with the GOPers and eschew a deal that doesn't meet his fundamental demands. If no agreement is reached by December 31, the odds are not bad that in the following weeks he and the Democrats, with the acquiescence of a sufficient number of Republicans, can succeed in enacting legislation that lowers tax rates for only those making under $250,000.
Yet if no deal covering the debt ceiling is hammered out by New Year's, a new game of chicken will ensue—one that has more potential to cause a financial calamity and one that would test Obama's determination to shield his presidency from GOP hostage taking. It could well make the current fiscal cliff seem like no more than a molehill.

David Corn

Washington Bureau Chief

David Corn is Mother Jones' Washington bureau chief. For more of his stories, click here. He's also on Twitter and Facebook. RSS | Twitter

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  http://www.motherjones.com/politics/2012/12/debt-ceiling-obama-boehner-fiscal-cliff 

Burden of Proof: Geithner, the President, and Wall Street's Unpunished Crimes 26APR12

I was naive, I thought that N.Y. AG Eric Schneiderman was going to go after the greedy wall street financiers and bankers that caused the "Great" recession that began in 2008 over the objections of the Treasury Dept. Now it seems, unless he moves quickly, the skeptics will be right, the bank-financial cabal and wall street corporations own a controlling majority of our elected officials and Schneiderman is a eunuch. Anyone wanna bet the winning word in the 2012 national spelling bee will be plutocracy? From HuffPost.....
Forgery. Perjury. Investor fraud. Bribery. Money laundering. The body of evidence against individuals at the nation's biggest banks is overwhelming. Nothing speaks louder about the banks' guilt than this evidence -- nothing, that is, except the billions they've paid to settle the charges.
The Administration reacted indignantly this week to suggestions it's still slow-walking its investigation. And then, despite all this evidence, the Treasury Secretary of the United States proclaimed that no laws had been broken. And the White House wonders why its word is no longer enough?
A source in the office of a key figure in the investigation has denied a new story that they've ruled out criminal prosecutions. But the burden of proof has shifted. Nothing will convince the public now except action.
Straw Men

Whether it's JPMorgan Chase settling bribery charges in Alabama, Wells Fargo settling charges of laundering drug-cartel money in Mexico, or the nation's five largest banks buying their way out of widespread foreclosure fraud and tax evasion, never in history has so much evidence led to so little action. Investigators pinpointed the fraudulent activity of individual accountants in GE Capital's settlement with the SEC, only to be dumbfounded to discover that no criminal indictments were handed down.
So it was nothing short of astonishing to hear the Secretary of the Treasury assert yesterday that no crimes were committed by America's banks, saying that "most financial crises are caused by a mix of stupidity and greed and recklessness and risk-taking and hope" and adding "you can't legislate away stupidity and risk-taking and greed and recklessness."
That's a straw-man argument, since nobody has suggested outlawing character traits. The Administration's critics are pointing to a mound of evidence implicating bankers in criminal activity and asking the simple question: Where are the prosecutions?
Free Pass

Geithner was doubling down on an assertion his boss made last December, when President Obama told 60 Minutes that "Some of the most damaging behavior on Wall Street -- in some cases some of the least ethical behavior on Wall Street -- wasn't illegal."
Deliberately or not, that sent a message to bankers that they could stop worrying about indictments -- that is, if they ever had worried. Why would they? There's been no investigation, no grilling, no subpoenaing of bank executives' emails or phone records. And as far back as 2010, Eric Holder and his Justice Department were trying to pass off long-standing investigations as part of a major assault against financial fraud called "Operation Blind Trust."
The DoJ's claims were quickly debunked and "Blind Trust" was shown to be nothing more than a deception which a Bloomberg columnist said used "trumped-up numbers." The Columbia Journalism Review summed up their recap of "Blind Trust" coverage with the headline, "Obama Administration's Financial Fraud Task Force Stunt Misfires."
Burden of Proof
But we were told those days are over. Now the President's really cracking down on Wall Street, we were told. In the face of widespread criticism for his proposed foreclosure fraud settlement with five top banks, the President eventually accompanied that deal with a promise of tougher enforcement. He appointed New York State Attorney General Eric Schneiderman, who had been pursuing banks and resisting previous deals, to his previously-lethargic mortgage fraud group.
"The mortgage fraud task force I announced in my State of the Union address retains its full authority to aggressively investigate the packaging and selling of risky mortgages that led to this crisis," the President said on February 9. "Working closely with state attorneys general, we're going to keep at it until we hold those who broke the law fully accountable."
But then there were stories that the task force's proposed staff, whose proposed numbers were already absurdly low when compared to those used to pursue criminal behavior under Reagan after the much smaller savings and loan scandal of the 1980s, hadn't even been hired.
The Administration responded swiftly. Unnamed Justice Department employees joined Schneiderman's press secretary in telling The Nation's George Zornick that the task force's five co-chairs are in "constant communication" and "meet regularly." Fifty attorneys and other employees were already working on the project, Zornick was told. (It was not made clear whether they were assigned to the task force full-time.)
The Candidate

Yesterday Zornick published a piece quoting former Democratic Rep. Brad Miller, an outspoken advocate for bank investigations, as saying he was strung along by the task force after being led to believe he was a leading candidate by Schneiderman's office. What's more, he made the explosive suggestion that, in Zornick's words, "the working group was afraid of Wall Street."
Miller told Zornick that he knew "Republicans were watching the work of the task force very closely and very critically, and that they would oppose my playing that role." Most explosively, he said he had been told that "People being indicted and looking at the possibility of prison sentences -- they were saying they did not expect any of that. They expect civil litigation or civil enforcement but not criminal prosecution."
If the task force had abandoned any thoughts of criminal prosecution with Schneiderman's assent, it would be a political and legal bombshell. But a source in Schneiderman's office who said he was Miller's point of contact denies that suggestion -- "vehemently," he added.
The source said Miller was a candidate for the job, but that some felt he lacked prosecutorial experience. In addition, I was told, concerns were expressed about appointing someone with a political background. "That would give Republicans another avenue of attack against the whole task force," the source said. (The Republicans have already been harrassing the group at every opportunity.) Schneiderman's office recognizes that statutes of limitation present a real problem.
"But abandon prosecutions altogether," the source added, "and let the word get out that everybody's off the hook? How silly would that be?"
The Problem

The real problem isn't that they haven't appointed the right Executive Director for the task force,although that's extremely important. The real problem is that the Administration didn't take more aggressive action in 2009 or 2010 to investigate criminal behavior on Wall Street. Now the wrongdoers -- and their political sympathizers -- are trying to run out the clock.
The real problem is that the senior officials in the same Administration are making public proclamations about the innocence of people who should, by all rights, be suspects in a criminal investigation.
The real problem isn't that somebody's lust for vengeance isn't being fulfilled. It's not even the fact that senior officials find it understandably difficult to contemplate criminal investigations of people they've known for years as colleagues, friends... and yes, as donors.
The real problem is this: As long as bankers know they won't be prosecuted for committing crimes they'll commit them again. Officials in the Justice Department and elsewhere privately express fears that it will be difficult to obtain convictions after so much time has passed, or in cases where intent is difficult to prove.
But they don't even look like they're trying. Comments like Mr. Geithner's only add to the perception that bankers have a free pass to commit crimes without fear of prosecution. That's not just an injustice. It's also a threat to our economic security.
This perception can only be changed if the Administration moves aggressively to hire and staff this Task Force with the best people and best managers possible. The public needs to see action, and it needs to see it now.
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