Senate Gives “Audit the Fed” a Unanimous Victory

May 13, 2010 by · Leave a Comment 

By John Nichols

“The Fed can no longer operate in virtual secrecy,” declared Vermont independent Bernie Sanders Tuesday after the Senate voted 96-0 to add his “Audit the Fed” amendment to the financial regulatory reform bill.

The Senate amendment is not as muscular as the bipartisan legislation backed by the House, which was sponsored by Florida Congressman Alan Grayson, an aggressive progressive, and Texas Congressman Ron Paul, an equally aggressive conservative with libertarian leanings. The Grayson-Paul bill authorizes audits by the Government Accountability Office of every item on the Federal Reserve’s balance sheet, including all credit facilities and all securities purchase programs; there would be exemption only for unreleased transcripts, minutes of closed-door meetings and the most recent decisions of the central bank. The Senate measure is narrower in its focus, but it would require the GAO to scrutinize some several trillion dollars in emergency lending that the Fed provided to big banks after the September 2008 economic meltdown.

The actual amount of public money that has been set aside for private banks is not known. That’s one reason why this audit is so important. But there can be no doubt that the figure is astronomical. The Center for Media and Democracy’s Wall Street Bailout Tally shows that since 2008, the U.S. government has flooded Wall Street banks and financial institutions with $4.7 trillion dollars in taxpayer money, mostly in the form of loans from the Fed reserve. The Fed has never told us which firms got these loans and what type of collateral American taxpayers got in return. This will now be revealed. We will also get an accounting of the Fed’s “stealth” bailout of Fannie Mae and Freddy Mac.

Sanders tried to pass a broader amendment, but when he faced roadblocks — and the prospect that audit language might be excluded entirely from the final bill — he agreed to propose an amendment outlining the one-time audit of post-meltdown Fed activity.  That did not sit well with all senators. Even as Republicans such as New Hampshire’s Judd Gregg tried to prevent any demand for transparency, Louisiana Republican David Vitter proposed tougher language along the lines what Grayson and Paul pushed through the House. While most Democrats and a number of Republicans opposed the tougher language, Sanders joined the most serious reformers in the Democratic caucus — Wisconsin’s Russ Feingold, Washington’s Maria Cantwell, North Dakota’s Byron Dorgan, Arkansas’s Blanche Lincoln, Virginia’s Jim Webb and Oregon’s Ron Wyden — in voting “yes.”

The Vitter amendment failed on a 62-37 vote and Feingold was especially disappointed.  “Unfortunately,” the Wisconsin progressive declared, “the defeat of the Vitter amendment means American taxpayers will still not have a complete picture of how one of the most powerful government agencies makes policy and spends their tax dollars.”

Still, Feingold acknowledged that, “Senator Sanders’ amendment will mean more transparency for the Federal Reserve, so the public will have a better idea of how it is spending taxpayer dollars.”

That transparency is consequential, noted Sanders. “Let’s be clear,” he explained, “when trillions of dollars of taxpayer money are being lent out to the largest financial institutions in this country, the American people have a right to know who received that money and what they did with it.  We also need to know what possible conflicts of interest exist involving the heads of large financial institutions who sat in the room helping to make those decisions.”

The “Audit the Fed” language that is included in the final legislation remains to be seen, as the differences between the House and Senate proposals will have to be reconciled by a conference committee. That will provide an opening for Grayson, Paul, Sanders and their allies to push for the broadest possible transparency. But, make no mistake, there will be pushback.

Fed Chairman Ben Bernanke has repeatedly refused to respond to demands from Sanders and others for information about the banks that have been bailed out by the taxpayers — and that continue to pad their accounts with public dollars. President Obama, Treasury Secretary Tim Geithner and their aides are critics of the “Audit the Fed” push, as well.

So why, with so much official opposition, did the “Audit the Fed” movement win a 96-0 vote in the Senate? Campaigners on the left and right made the issue a high priority. A good deal of credit must go to Sanders and Paul — long-time critics of the Fed who opposed the 2008 Wall Street bailouts and then steered anger at those bailouts toward the “Audit the Fed” movement — which was boosted on the left by websites such as Jane Hamsher’s Firedoglake and on the right by the Paul-linked Campaign for Liberty, as well as by outspoken economists such a Dean Baker and watchdog operations such as CMD’s BanksterUSA project.

Ultimately, however, much of the credit must go to Grayson, who embraced Paul’s proposal — which had languished in the House — and led the campaign to get Democrats to sign on to the bill. As Hamsher says, “Tremendous credit goes to Alan Grayson. It was Grayson who decided to take up Ron Paul’s bill and bring Democratic support for it.

Sanders, who took some hits for compromising, also deserves credit at this point for making sure, even when he was forced to trim back on his amendment, that critical elements of the initial proposal by Paul — especially the defined role for the GAO — were retained. That will make it harder for the Obama White House and their allies in the congressional leadership to gut the audit language in the conference committee.

There will, as well, be additional fights:

“While passage of Senator Sanders’ amendment will provide some long overdue accountability and transparency for the Federal Reserve, the overall bill still needs a lot of work,” said Feingold. In particular, Feingold and other real reformers have focused on the need for the bill to restore the firewall between Main Street banks and Wall Street securities firms and insurance companies, which contributed to financial institutions growing “too big to fail.”

While the bipartisan support for auditing the Fed represents a step in the right direction, Feingold is right when he says it is only one step on a long road toward addressing the way in which bad decisions by Congress “led to deregulation and the increased concentration of economic power and economic decision-making.”

John Nichols is Washington DC correspondent for The Nation magazine.

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Islam Siddiqui Appointed

April 1, 2010 by · Leave a Comment 

President Obama on Saturday announced the recess appointment of 15 political appointees whose nominations had been stalled by Republicans.

DrIslamSiddiqui “The United States Senate has the responsibility to approve or disapprove of my nominees. But if, in the interest of scoring political points, Republicans in the Senate refuse to exercise that responsibility, I must act in the interest of the American people and exercise my authority to fill these positions on an interim basis,” Obama said in a statement.

“Most of the men and women whose appointments I am announcing today were approved by Senate committees months ago, yet still await a vote of the Senate. At a time of economic emergency, two top appointees to the Department of Treasury have been held up for nearly six months. I simply cannot allow partisan politics to stand in the way of the basic functioning of government.”

The 15 newly appointed nominees are:

* Jeffrey Goldstein: Nominee for Under Secretary for Domestic Finance, Department of the Treasury
* Michael F. Mundaca: Nominee for Assistant Secretary for Tax Policy, Department of the Treasury
* Eric L. Hirschhorn: Nominee for Under Secretary of Commerce for Export Administration and head of the Bureau of Industry and Security, Department of Commerce
* Michael Punke: Nominee for Deputy Trade Representative – Geneva, Office of the United States Trade Representative
* Francisco “Frank” J. Sánchez: Nominee for Under Secretary for International Trade, Department of Commerce
* Islam A. Siddiqui: Nominee for Chief Agricultural Negotiator, Office of the U.S. Trade Representative
* Alan D. Bersin: Nominee for Commissioner, U.S. Customs and Border Protection, Department of Homeland Security
* Jill Long Thompson: Nominee for Member, Farm Credit Administration Board
* Rafael Borras: Nominee for Under Secretary for Management , Department of Homeland Security
* Craig Becker: Nominee for Board Member, National Labor Relations Board
* Mark Pearce: Nominee for Board Member, National Labor Relations Board
* Jacqueline A. Berrien: Nominee for Chair of the Equal Employment Opportunity Commission
* Chai R. Feldblum: Nominee for Commissioner, Equal Employment Opportunity Commission
* Victoria A. Lipnic: Nominee for Commissioner, Equal Employment Opportunity Commission
* P. David Lopez: Nominee for General Counsel, Equal Employment Opportunity Commission

In a post to the White House blog that accompanied Obama’s announcement, spokeswoman Jen Psaki wrote that the president “was no longer willing to let another month go by with key economic positions unfilled, especially at a time when our country is recovering from the worst economic crisis since the Great Depression.”

Article II, Section 2 of the U.S. Constitution gives the president the right to unilaterally fill any vacancy that would normally require Senate confirmation when the Senate is in recess.

Unlike appointments that are confirmed by the Senate, recess appointments only last until the end of the next session of Congress, which right now would mean until the end of 2011.

Obama had been widely expected to recess appoint Becker and Pearce to the labor relations board. As Jason Linkins wrote in the Huffington Post on Friday, GOP opposition to Obama’s nominees had left the board with only two of its five members, which has led to a lot of one-to-one ties.

Some of the other appointments are to critical positions, such as the two Treasury candidates whose nominations had been stalled.

And some were being obstructed for particularly outrageous reasons. As Ryan Grim recently reported for the Huffington Post, the two trade nominees — Bunke and Siddiqui — were being blocked by Kentucky Republican Sen. Jim Bunning because he is opposed to a tobacco-related law passed by the Canadian Parliament.

Sen. Sheldon Whitehouse (D-R.I.), was particularly eloquent on that matter on the Senate floor two weeks ago: “The Senator from Kentucky has said he doesn’t have any objection to these nominees. He’s only blocking the nominations as leverage against the President and [U.S. Trade Representative Ron] Kirk. That is pure obstructionism.”

Obama nevertheless shied away from what would have been some more controversial recess appointments. He did not unilaterally install any of his blocked nominees to the Justice Department, including Dawn Johnsen, his nominee to run the Office of Legal Counsel, and Chris Schroeder, his nominee to be assistant attorney general for legal policy — both of whom are beloved by progressives but reviled by Republicans. He also chose not to recess appoint one of his senior Treasury nominees, Lael Brainard, nominated for undersecretary of international affairs, who has run into some tax issues.

That Obama would use his recess appointment powers isn’t a surprise. According to the Congressional Research Service, President George W. Bush made 171 recess appointments; President Clinton made 139.

Until Saturday, Obama hadn’t made any — despite Republican obstruction so intense that even Senate Majority Leader Harry Reid in early February essentially begged Obama to do an end run.

“Frankly, I think the President should recess all of them — all of them,” Reid said of Obama’s stalled nominees. “There are scores of them being held up for reasons that have nothing to do with anything dealing with these people or how they will function once in office.”

There are still about 200 judicial and civilian nominees being held up, some of them for some pretty amazing reasons. And the Senate is in recess until April 12.

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Will Obama Play the War Card?

February 11, 2010 by · Leave a Comment 

By Patrick J. Buchanan, Antiwar.com

Republicans already counting the seats they will pick up this fall should keep in mind Obama has a big card yet to play.

Should the president declare he has gone the last mile for a negotiated end to Iran’s nuclear program and impose the “crippling” sanctions he promised in 2008, America would be on an escalator to confrontation that could lead straight to war.

And should war come, that would be the end of GOP dreams of adding three-dozen seats in the House and half a dozen in the Senate.

Harry Reid is surely aware a U.S. clash with Iran, with him at the presidents side, could assure his re-election. Last week, Reid whistled through the Senate, by voice vote, a bill to put us on that escalator.

Senate bill 2799 would punish any company exporting gasoline to Iran. Though swimming in oil, Iran has a limited refining capacity and must import 40 percent of the gas to operate its cars and trucks and heat its homes.

And cutting off a country’s oil or gas is a proven path to war.

In 1941, the United States froze Japans assets, denying her the funds to pay for the U.S. oil on which she relied, forcing Tokyo either to retreat from her empire or seize the only oil in reach, in the Dutch East Indies.

The only force able to interfere with a Japanese drive into the East Indies? The U.S. Pacific fleet at Pearl Harbor.

Egypts Gamel Abdel Nasser in 1967 threatened to close the Straits of Tiran between the Red Sea and Gulf of Aqaba to ships going to the Israeli port of Elath. That would have cut off 95 percent of Israel’s oil.

Israel response: a pre-emptive war that destroyed Egypt’s air force and put Israeli troops at Sharm el-Sheikh on the Straits of Tiran.

Were Reid and colleagues seeking to strengthen Obama’s negotiating hand?

The opposite is true. The Senate is trying to force Obama’s hand, box him in, restrict his freedom of action, by making him impose sanctions that would cut off the negotiating track and put us on a track to war a war to deny Iran weapons that the U.S. Intelligence community said in December 2007 Iran gave up trying to acquire in 2003.

Sound familiar?

Republican leader Mitch McConnell has made clear the Senate is seizing control of the Iran portfolio. “If the Obama administration will not take action against this regime, then Congress must.”

U.S. interests would seem to dictate supporting those elements in Iran who wish to be rid of the regime and re-engage the West. But if that is our goal, the Senate bill, and a House version that passed 412 to 12, seem almost diabolically perverse.

For a cutoff in gas would hammer Irans middle class. The Revolutionary Guard and Basij militia on their motorbikes would get all they need. Thus the leaders of the Green Movement who have stood up to Mahmoud Ahmadinejad and the Ayatollah oppose sanctions that inflict suffering on their own people.

Cutting off gas to Iran would cause many deaths. And the families of the sick, the old, the weak, the women and the children who die are unlikely to feel gratitude toward those who killed them.

And despite the hysteria about Iran’s imminent testing of a bomb, the U.S. intelligence community still has not changed its finding that Tehran is not seeking a bomb.

The low-enriched uranium at Natanz, enough for one test, has neither been moved nor enriched to weapons grade. Ahmadinejad this week offered to take the Wests deal and trade it for fuel for its reactor. Irans known nuclear facilities are under U.N. watch. The number of centrifuges operating at Natanz has fallen below 4,000. There is speculation they are breaking down or have been sabotaged.

And if Iran is hell-bent on a bomb, why has Director of National Intelligence Dennis Blair not revised the 2007 finding and given us the hard evidence?

U.S. anti-missile ships are moving into the Gulf. Anti-missile batteries are being deployed on the Arab shore. Yet, Gen. David Petraeus warned yesterday that a strike on Iran could stir nationalist sentiment behind the regime.

Nevertheless, the war drums have again begun to beat.

Daniel Pipes in a National Review Online piece featured by the Jerusalem Post “How to Save the Obama Presidency: Bomb Iran” urges Obama to make a “dramatic gesture to change the public perception of him as a lightweight, bumbling ideologue” by ordering the U.S. military to attack Irans nuclear facilities.

Citing six polls, Pipes says Americans support an attack today and will “presumably rally around the flag” when the bombs fall.

Will Obama cynically yield to temptation, play the war card and make “conservatives swoon,” in Pipes phrase, to save himself and his party? We shall see.

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