House just voted to raise debt 1.9 Trillion. Gary Peters was for it before being against it.

A round of Bronx Cheers and boo birds go to the US House today. They voted 217-212 to raise the debt ceiling nearly $2 Trillion more dollars. Obama will sign this, proving that he is no fiscal conservative.

From the AP

The House on Thursday voted to allow the government to go $1.9 trillion deeper in debt — or about $6,000 more for every U.S. resident. The measure, approved 217-212, would raise the cap on federal borrowing to $14.3 trillion. That's enough to keep Congress from having to vote again before the November elections on an issue that is feeding a sense among voters that the government is spending too much and putting future generations under a mountain of debt to do it.
Already, the accumulated debt amounts to roughly $40,000 per person. And the debt is increasingly held by foreign nations such as China.
Passage of the bill would send it to President Barack Obama, who will sign it to avoid a first-ever, market-rattling default on U.S. obligations.
"I can't think of a more reckless or irresponsible act. Defaulting is not an option," said Rep. Jim McGovern, D-Mass. "If the United States defaults, investors will lose confidence that the U.S. will honor its debts in the future.
Democrats barely passed it through the Senate last week over a unanimous "no" vote from GOP members present.

And we have this half-arsed measure.

To help win passage, Democrats are also adopting — in a vote later Thursday afternoon — budget rules designed to curb a spiraling upward annual deficit — projected by Obama to hit a record $1.56 trillion for the budget year ending Sept. 30. The new rules would require future spending increases or tax cuts to be paid for with either cuts to other programs or equivalent tax increases.

Pay as you go, as this is referred to, is overrated. It doesn't do much. We don't need a pay as you go program. We need government to spend less money than it takes in period. 

If the rules are broken, the White House budget office would force automatic cuts to programs like Medicare, farm subsidies and unemployment insurance. Current rules lack such teeth and have commonly been waived over the past few years at a cost of almost $1 trillion.
Most other benefit programs — including Medicaid, Social Security and food stamps — would be exempt from such cuts, and Republicans said that the rules lack teeth.
"In place of real fiscal discipline, it offers a phony pay-as-you-go rule that is more loopholes and exceptions and does nothing to tackle our government's long-term structural deficit," said Rep. Pete Sessions, R-Texas.
Skeptics say lawmakers also will find ways around the new rules fairly easily. Congress, for example, can declare some spending an "emergency" — a likely scenario for votes later this month to extend jobless benefits for the long-term unemployed.

In other words, the supposed safeguards are smoke and mirrors. It was thrown in because this is unpopular, and those who voted for it can pat themselves on the back and say they are watching the spending. In reality, they are doing jack.

"We don't have a choice," said Rep. John Tanner, D-Tenn. "We are on an unsustainable march toward a fiscal Armageddon." Obama's budget projects the government's debt doubling to $26 trillion over the next decade. It offers few solutions for seriously closing the gap other than promising to appoint a bipartisan commission to come up with a plan to address the problem.

Commissions. Another joke. How about passing a budget that spends less money than it takes in. Period. That's it. It's not hard. All it takes is discipline, hard works, and balls. That's something that congress lacks, and that Obama never had.  

Thomas has the roll call vote. 217 yes votes. All democrats. 212 nays. 175 Republican and 37 democrat. 5 didn't vote, 2 democrats and 3 republicans.

Of the Michigan delegation.

District 1 - Stupak - Y
District 2 - Hoekstra - N
District 3 - Ehlers - N
District 4 - Camp - N
District 5 - Kildee - Y
District 6 - Upton - N
District 7 - Schauer - N
District 8 - Rogers - N
District 9 - Peters - N
District 10 - Miller - N
District 11 - McCotter - N
District 12 - Levin - Y
District 13 - Kilpatrick - Y
District 14 - Conyers - Y
District 15 - Dingell - Y

Mark Schauer and Gary Peters voted no. Feeling the heat from the populace? Or are you being chameleons? In reality, the no vote from Gary Peters was crap. Schauer's wasn't, and give credit where it is due. Peters however was for it before he was against it. Here's the procedure vote to consider the resolution in the first place. Peters voted yes to consider this, and then voted no for the final vote to make himself  look good.

If you're for big spending and debt, at least have the "Peter" to be for it both times it is up. At least Dingell is honest about his spending. Gary Peters is just a coward and I hope the voters of the 9th District send him home for his waste of money.

Ben Bernanke gets four more years

I'm not a fan of this decision. I think in hindsight that Bush made a big mistake four years ago with Bernanke and Paulson. Obama repeated the mistake with Bernanke and Geithner.

Desmond Lachman of Forbes magazine said it best:

Despite Bernanke's many egregious errors of judgment during his first term, which have cost the nation so dearly, President Obama is choosing to give him a second chance. And the president is doing so at the very time that the Federal Reserve will be facing extraordinarily difficult challenges of meeting its twin goals of maintaining price stability and promoting economic growth, which will require the exercise of the soundest degree of judgment.

In deciding to stick with Ben Bernanke, President Obama is exercising the most selective of memories. Indeed, the president is choosing to remember only Bernanke's valiant role over the past nine months in pulling the economy from the brink and from preventing the country's worst economic and financial crisis from morphing into a second Great Depression. What the president is blithely choosing to forget, however, is the role that Bernanke might have played during his first two years as chairman in creating the very economic and financial conditions that got us into the mess in the first place. He is also choosing to forget Bernanke's role in the Lehman Brothers ( LEHMQ - news - people ) debacle that was the trigger for the Great Panic of 2008.
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Being charitable, President Obama's decision to reappoint Bernanke is perhaps understandable given how Bernanke's aggressive and innovative policy response helped prevent our financial system from literally imploding following the Lehman bankruptcy debacle last fall. It is also perhaps understandable given how relatively well Bernanke has performed during President Obama's short term in office this year in calming financial markets and in helping to lay the basis for a sustainable economic recovery.

However, in a more sober state of mind, what is difficult to understand is why at the very time that the Federal Reserve is going to need the most judicious of leaderships, President Obama is choosing to turn a blind eye to Bernanke's all too many errors of judgment in 2006 and 2007. The president is choosing to forget that it was on Bernanke's watch as Fed chairman that the worst of the subprime mortgage lending was made and that the worst excesses of the housing market and credit market bubbles occurred without as much as an expression of concern from the Fed. The president is also choosing to forget how slow Bernanke was to comprehend the seriousness of the bursting of the housing market bubble and how slow he was to start cutting interest rates to provide much-needed support to the economy.

I hope I'm wrong about this.

What the hell is with these bailouts? (Fannie Mae, AIG, etc)

Fannie and Freddy, now this? The government is sending a message. If you are a bigtime company failing, do not worry. We'll save you from your mistakes.

WASHINGTON - Another day, but not just another bailout. This one's a stunning government takeover.

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In the most far-reaching intervention into the private sector ever for the Federal Reserve, the government stepped in Tuesday to rescue American International Group Inc. with an $85 billion injection of taxpayer money. Under the deal, the government will get a 79.9 percent stake in one of the world's largest insurers and the right to remove senior management.

AIG's chief executive, Robert Willumstad, is expected to be replaced by Edward Liddy, the former head of insurer Allstate Corp., according to The Wall Street Journal, citing a person it did not name. Willumstad had been at the helm of AIG since June.

A call to AIG to confirm the executive change was not immediately returned.

It was the second time this month the feds put taxpayer money on the hook to rescue a private financial company, saying its failure would further disrupt markets and threaten the already fragile economy.

AIG said it will repay the money in full with proceeds from the sales of some of its assets. It will be up to the company to decide which assets to sell and the timing. The government does, however, have veto power.

Under the deal, the Federal Reserve will provide a two-year $85 billion emergency loan at an interest rate of about 11.5 percent to AIG, which teetered on the edge of failure because of stresses caused by the collapse of the subprime mortgage market and the credit crunch that ensued. In return, the government will get a 79.9 percent stake in AIG and the right to remove senior management.

AIG shares sank $1.34, or 36 percent, to $2.41 in morning trading Wednesday. They traded as high as $70.13 in the past year.

The government's move was similar to its bailout of Sept. 7 of mortgage giants Fannie Mae and Freddie Mac, where the Treasury Department said it was prepared to put up as much as $100 billion over time in each of the companies if needed to keep them from going broke.

The Fed said it determined that a disorderly failure of AIG could hurt the already delicate financial markets and the economy.

I don't like this at all. Besides the socialism, this strikes me as a panicked decision. Every company now is going to be asking for even more handouts as usual.

Now, many saw problems far in advance on the horizon with this stuff. McCain called part of this back in 2005. Freddie and Frannie.

FEDERAL HOUSING ENTERPRISE REGULATORY REFORM ACT OF 2005

The United States Senate

May 25, 2006 Section 16

"For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac--known as Government-sponsored entities or GSEs--and the sheer magnitude of these companies and the role they play in the housing market. OFHEO's report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO's report solidifies my view that the GSEs need to be reformed without delay.

I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole."

I'm not a big fan of regulation, and probably would have balked on this back in 05. McCain called the problems with that. McCain wasn't the only one who called this. Bush called it. Back in 2003

Now I wish Bush and McCain pushed this through in 2005 (and Obama was part of the problem too).

The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.

The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.

The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.

''There is a general recognition that the supervisory system for housing-related government-sponsored enterprises neither has the tools, nor the stature, to deal effectively with the current size, complexity and importance of these enterprises,'' Treasury Secretary John W. Snow told the House Financial Services Committee in an appearance with Housing Secretary Mel Martinez, who also backed the plan.

Mr. Snow said that Congress should eliminate the power of the president to appoint directors to the companies, a sign that the administration is less concerned about the perks of patronage than it is about the potential political problems associated with any new difficulties arising at the companies.

The administration's proposal, which was endorsed in large part today by Fannie Mae and Freddie Mac, would not repeal the significant government subsidies granted to the two companies. And it does not alter the implicit guarantee that Washington will bail the companies out if they run into financial difficulty; that perception enables them to issue debt at significantly lower rates than their competitors. Nor would it remove the companies' exemptions from taxes and antifraud provisions of federal securities laws.

The proposal is the opening act in one of the biggest and most significant lobbying battles of the Congressional session.

Then there is Barney Frank and Mel Watt, democrats.

''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

Representative Melvin L. Watt, Democrat of North Carolina, agreed.

''I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,'' Mr. Watt said.

Now, what about Obama's ties to Fannie and Freddie?
Top Recipients of Fannie Mae and Freddie Mac
Campaign Contributions, 1989-2008

1. Dodd, Christopher J D-CT $133,900

2. Kerry, John D-MA $111,000

3. Obama, Barack D-IL $105,849

4. Clinton, Hillary D-NY $75,550

5. Kanjorski, Paul E D-PA $65,500

6. Bennett, Robert F R-UT $61,499

And it gets worse for Obama. Former CEO Jim Johnson was Obama's VP vetter. Elect Obama, and you get more of the same.