Archives for August 2010

August 31st, 2010, Fairfax, VA—The Obama Administration has significantly underestimated the paperwork and compliance costs on businesses associated with the 10 percent tanning excise tax in Obamacare, according to a government watchdog.

“Just filling out the paperwork alone will cost the tanning industry anywhere from $60 million to $120 million annually, and as much as 6,000 jobs. That’s not even counting the burden that the tax itself will put upon these businesses,” Americans for Limited Government (ALG) President Bill Wilson noted. His group’sObamacareWatcher.org has filed comments on the proposed regulation by the IRSthat tanning salons must fill out Form 720 in complying with the tax.

“The industry as a whole will spend from 924,000 to 1.84 million hours filling out these forms,” Wilson added. His comments note that Forms 720 are typically used for “Domestic petroleum oil spill tax,” “Ozone depleting chemicals,” “Local telephone service and teletypewriter exchange service,”
“Use of international air travel facilities,” “Aviation gasoline,” “Coal-Underground mined,” and “Arrow shafts.”

Wilson wrote, “There is no good reason to lump the small business owners who run tanning salons into a category of multi-national corporations that use international travel facilities.” He recommended that no special form be used “until a reasonable estimate of the costs is given to and approved by the Office of Management and Budget.”

The comments continued, “This new estimate must include detailed analysis so that affected members of the regulated community are on notice as to how the Department calculated the new burden it is now putting on them.”

In a statement, Wilson noted that it would be better if Congress repealed the tax all together, which he said “might soak the industry for as much as $2.7 billion by 2019,” according to the Congressional Joint Committee on Taxation.

With as many as 20,000 new regulations in the works for the implementation of Obamacare, Americans for Limited Government (ALG) Research Foundation recently launched ObamacareWatcher.org to keep track of the most damaging ones.

“ObamacareWatcher.org aims to keep the public informed about what is being proposed on the bureaucratic level to implement the national health care system, and to make it easy for activists to submit comments on proposed harmful regulations that will restrict the choices individuals can make about their doctors and their health care,” said Don Todd, ALG’s Research Director.

According to a brochure promoting the ALG effort, the Foundation will “respond by providing substantive, thorough comments on regulatory proposals and leading the grassroots response.”

Wilson concluded, “The bureaucrats are threatening to make Obamacare, as bad as it is, even worse. The paperwork burden being imposed by the 10 percent tanning excise tax’s Form 720 is not even the tip of the iceberg, but it is nonetheless still critical that it be stopped. These are real costs being imposed on American businesses, and they will result in real job losses.”

Attachments:

“Obamacare Reg Watcher,” Vol. 1, Issue 1, August 2010.

Comments Submitted on Obamacare 10 Percent Excise Tax on Tanning Salons, Americans for Limited Government, July 7th, 2010.

Interview Availability: Please contact Rebekah Rast at (703) 383-0880 or at rrast@getliberty.org to arrange an interview with ALG President Bill Wilson.

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August 27th, 2010, Fairfax, VA— Americans for Limited Government (ALG) President Bill Wilson today issued a statement responding to the downward revision of 2nd Quarter GDP growth to 1.6 percent, and Federal Reserve Chairman Ben Bernanke’s statement calling for more Fed purchases of treasuries:

“The government has pumped more than $2 trillion in monetary and fiscal ‘stimulus’ into the economy, granted perpetual unemployment extensions and handed out bailouts to bankrupt state governments and public sector unions. And yet, unemployment remains persistently high at 9.5 percent, and the recovery is slowing down to a snail’s pace at 1.6 percent in the second quarter.

“It is time for the government to admit that the ‘stimulus’ has failed, and to finally change course. All the bailouts, easy money, low interest rates, and spending have done is to increase the debt to over $13.3 trillion, and left the economy lost at sea. Now, Fed Chairman Ben Bernanke proposes purchasing ever more treasuries with printed money to pump hundreds of billions of more dollars into the economy.

“It won’t work. We’re still slowly sinking because the economy was never allowed to find its natural bottom, and it will continue along in a zombie-like state until government finally gets out of the way. Trying to prop up a sinking system will only continue to prevent that bottom from being hit. It’s a deflationary trap. We are postponing a robust recovery indefinitely because the government refuses to allow a bottom to occur.

“Simply printing more money to expand the national debt will not get us out of this web. It amounts to nothing more than a useless paper trade. Why are we spending trillions of dollars for more useless paper? If the American people want paper, they’ll go to Office Max. What they want are jobs, and the economy cannot produce jobs when the nation’s biggest investment is in paper debt.

“Now is the time to bring an end to the useless paper trade once and for all, to pay down and retire the national debt, and to reduce government’s footprint in the economy. The Fed’s easy money policies, and Congress’ big spending policies are only drowning the nation in debt. The sovereign debt crisis is already here, and if it is not addressed, the only outcome will be default, decline, and collapse. We cannot print enough money to create real jobs.”

Attachments:

“Economy Caught in a Web,” By ALG President Bill Wilson, August 27th, 2010.

Interview Availability: Please contact Rebekah Rast at (703) 383-0880 or at rrast@getliberty.org to arrange an interview with ALG President Bill Wilson.

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August 24th, 2010, Fairfax, VA— Americans for Limited Government President Bill Wilson today demanded the Federal Reserve comply with a court order to disclose the recipients of some $2 trillion of loans it made at the height of the financial crisis requested by Bloomberg News in a Freedom of Information Act (FOIA) request.

“The American people have a right to know just what has gone wrong with the nation’s monetary policy, how it contributed to the financial crisis, and what the true extent of the Fed’s relationship with financial institutions, foreign banks, and foreign central banks really is,” Wilson said, adding that “Complying with these multiple court rulings is the first step in that direction to financial transparency of the nation’s balance sheets.”

The central bank is still refusing to comply with Bloomberg’s FOIA request, despite a U.S. Court of Appeals decision not to hear their appeal, according to Bloomberg News. The Fed is planning to appeal to the Supreme Court.

“The shroud of secrecy at the Federal Reserve needs to come to an end. They have lost their court case, and now even in the Dodd-Frank financial takeover bill, there are provisions that call for the Federal Reserve to produce the information Bloomberg requested under the Freedom of Information Act,” Wilson declared, pointing to Section 1109(c) of HR 4173.

The provision provides for the Fed to publish on its website by December 1st all “loans and financial assistance” it provided from December 7th, 2007 through July 21st, 2010 provided under the authority of Section 13(3) of the Federal Reserve Act, including the Term Asset-Backed Securities Loan Facility and the Primary Dealer Credit Facility. Under the new law, it will have to disclose:

(1) the identity of each business, individual, entity, or foreign central bank to which the Board of Governors or a Federal reserve bank has provided such assistance;
(2) the type of financial assistance provided to that business, individual, entity, or foreign central bank;
(3) the value or amount of that financial assistance;
(4) the date on which the financial assistance was provided;
(5) the specific terms of any repayment expected, including the repayment time period, interest charges, collateral, limitations on executive compensation or dividends, and other material terms; and
(6) the specific rationale for each such facility or program.

Wilson noted that the provision in the Dodd-Frank bill was the result of a compromise between the amendment’s sponsor, Senator Bernie Sanders and Senator Chris Dodd.

“One would have thought that Section 1109(c) of the Dodd-Frank bill would have rendered Bloomberg’s case moot, however, it appears the Fed is still intent on preventing disclosure of its role in bailing out the financial sector,” Wilson said.

Wilson called it “hardly surprising” that “despite multiple court rulings demanding that it comply with Bloomberg’s FOIA request, and even changes to the law of the land to force this disclosure, that the Fed still refuses to comply. These are not military secrets, they are well within the scope of FOIA, and now the Dodd-Frank bill, too,” Wilson said.

“The Federal Reserve is not God. They must disclose,” Wilson posted on Twitter upon learning about the most recent court decision.

According to Bloomberg News, the Federal Reserve had committed over $7.76 trillion for the financial bailout. However, it is unclear who received $2 trillion loans from the Federal Reserve, or who will receive the remainder of the committed funds.

Wilsons said that the Federal Reserve was “one of the principal actors” that caused the financial crisis: “By keeping interest rates too low for too long, the Fed accommodated the inflation of the housing bubble throughout the 1990’s and 2000’s by pumping easy money into the system.”

Wilson cited research by Stanford economist John Taylor who in a recent Wall Street Journal column wrote, “the Fed’s target for the federal-funds interest rate was well below what the Taylor rule would call for in 2002-2005. By this measure the interest rate was too low for too long, reducing borrowing costs and accelerating the housing boom. The deviation from the Taylor rule, which had characterized good monetary policy during the previous two decades, was the largest since the turbulent 1970s.”

Wilson said that as the capital the Fed provided through the banking system helped to create the housing bubble and “disproportionately contributed the rise of the nation’s money supply.” In 1990, outstanding mortgage debt held was $3.805 trillion. By the end of 2007, total mortgage holdings had risen to $14.568 trillion, a monumental 282 percent jump of $10.763 trillion in new mortgages. During that same period, according to the True Money Supply index from the Ludwig Von Mises Institute, the money supply rose from about $1.787 trillion at the end of 1990 to about $5.268 trillion by the end of 2007, an 195 percent increase of $3.481 trillion.

In addition, Wilson said the Federal Reserve’s role in providing loans and other financial assistance are “very unclear.” According to Bloomberg, “The Federal Reserve so far is refusing to disclose loan recipients or reveal the collateral they are taking in return.” The Fed has argued it is actually allowed to withhold “internal” memos as well as commercial and trade secrets information. Bloomberg, on the other hand, has actively filed a Freedom of Information Act (FOIA) request, demanding the information.

Thus far, the Fed’s Board of Governors has refused to comply with Bloomberg’s FOIA requests, despite multiple court rulings in Bloomberg’s favor. The Fed’s regional Reserve Banks have argued that they are private institutions beyond the reach of the Freedom of Information Act.

The Southern District Court of New York has ordered that the Federal Reserve Board of Governors comply with Bloomberg News’ Freedom of Information Act (FOIA) request to produce the details of some $2 trillion in emergency loans that were made. This includes who received the $2 trillion of loans, the terms under which they were received, and what collateral was taken by the Reserve branches in exchange for the loans.

In answering questions from Congressman Alan Grayson (D-FL) last year, Fed Inspector General Elizabeth Coleman testified she could not account for “$1 trillion-plus that the Fed extended and put on its balance sheet since last September…”

An email to Bloomberg by Coleman’s office also revealed that “By law, we are the Office of Inspector General for the Board of Governors only… Consistent with our authority, we cannot conduct a direct audit of Reserve Bank operations.”

Wilson concluded, “The Federal Reserve must comply with the terms of the Freedom of Information Act, the Dodd-Frank bill, and be held answerable for its actions to bail out financial institutions. They must be held to account.”

Interview Availability: Please contact Rebekah Rast at (703) 383-0880 or at rrast@getliberty.org to arrange an interview with ALG President Bill Wilson.

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August 20th, 2010, Fairfax, VA—Americans for Limited Government President Bill Wilson today condemned Barack Obama’s recess appointment of Mari Del Carmen Aponte for the post of Ambassador to El Salvador, citing “unanswered questions” about Aponte’s romantic relationship with a Cuban spy, Roberto Tamayo.

“Because Aponte refused to submit to a polygraph test, the American people still have not received a full, public accounting of the extent of Aponte’s relationship with Tamayo. Instead, all they have received are vague assurances from Senators who claim to have seen the FBI records regarding Aponte and Tamayo,” Wilson said.

“Is Aponte a loyalty risk or not? Barack Obama’s recess appointment has sidestepped the constitutional Senate confirmation process to avoid having this question answered, leaving it open to interpretation by both the American people and foreign states,” Wilson explained, adding, “Without a full accounting, the American people must assume the worst.”

Sen. Robert Menendez (D-N.J.), had defended Aponte after he said he had seen some of the FBI’s materials on Aponte and Tamayo. Wilson said that was “not good enough.”

Wilson said the context of her 1986-94 live-in relationship with a Cuban Intelligence Service agent was “troubling, to say the least,” noting that during that period, Cuba, the then-Soviet Union, and Nicaragua were fighting a proxy war in El Salvador against the U.S.-backed government there.

“Aponte has been named ambassador of the very country that her friends in the Cuban government attempted to take over,” Wilson said.

In 1993, Florentino Aspillaga, a Cuban Interior Ministry intelligence agent, who defected in 1987, said that Cuban spies were trying to recruit Aponte through Tamayo.

An Insight on the News story detailed Aponte’s alleged recruitment by the Cuban spy agency, including receiving a loan which was never paid back that originated from Cuban sources. According to the a confidential intelligence memo delivered to Senate Foreign Relations Committee Chairman Jesse Helms and obtained by Insight, “When the FBI questioned her about her involvement with Cuban intelligence, she reportedly refused to cooperate, saying that since she was not seeking a permanent White House position she was not subject to a background check.”

After she failed to take a lie detector test in 1994, Aponte withdrew herself from consideration of Ambassador to the Dominican Republic after committee questions about her suitability continued.

According to a Washington Post article published prior to the appointment, “Republicans want access to all FBI’s records on the relationship. The FBI interviewed both Aponte and Tamayo about the matter back in 1993, but Aponte declined to take a lie-detector test. Citing ‘personal reasons,’ she withdrew from consideration to be ambassador to the Dominican Republic in 1998 after then-Sen. Jesse Helms promised to ask invasive questions about the relationship at her hearing.”

Senator Jim DeMint said in an interview with The Cable that “The allegations were apparently serious enough for her to withdraw her nomination in 1998, so I think it’s fair to ask some questions.”

In a letter to the Senate Foreign Relations Committee, Wilson had written to Senators, “Aponte’s nomination is permanently tainted by her 1990’s close, personal relationship with a man whom U.S. counterintelligence considered a Cuban DGI agent, according to a confidential intelligence memo that was obtained by Insight magazine.”

The letter continues, “Aponte’s failure to cooperate with a 1994 FBI investigation into the allegations, and her refusal to participate in a polygraph test after some of the answers to FBI questions showed minor inconsistencies serve as automatic disqualifiers for this nominee.”

Aponte had cleared the committee in a party line vote which sent her nomination to the floor of the Senate until Obama settled the issue with his recess appointment.

Wilson said that, “this is not over. It will be fair for Senators to still ask questions of Aponte now that she has been appointed, and it will be fair to closely examine Obama’s Central American policy that emerges as a result.”

Wilson concluded, “The American people have a right to know if one of their ambassadors has been compromised by enemy intelligence agents. There are certainly indications to that effect. Why would Barack Obama appoint somebody with such a troubling background? Why would he appoint somebody with ties to a regime that is the sworn enemy of the U.S.?”

Attachments:

Letter to the Senate Foreign Relations Committee, April 13th, 2010

“Aponte: A Loyalty Risk for Ambassador?”, Richard McCarty for ALG News, March 8th, 2010

ALG Nominee Alert, Mari Del Carmen Aponte, March 2010.

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August 19th, 2010, Fairfax, VA—With as many as 20,000 new regulations in the works for the implementation of Obamacare, Americans for Limited Government (ALG) Research Foundation has launched ObamacareWatcher.org to keep track of the most damaging ones.

“ObamacareWatcher.org aims to keep the public informed about what is being proposed on the bureaucratic level to implement the national health care system, and to make it easy for activists to submit comments on proposed harmful regulations that will restrict the choices individuals can make about their doctors and their health care,” said Don Todd, ALG’s Research Director.

According to a brochure promoting the ALG effort, the Foundation will “respond by providing substantive, thorough comments on regulatory proposals and leading the grassroots response.”

ALG President Bill Wilson said that aggressive participation in the regulatory process was “essential to keeping the public informed about how the bureaucracy will now be restricting their health care options, and giving them multiple avenues for directly affecting the regulatory process.”

“As the regulatory process unfolds, one of the goals in generating public awareness of the new rules is to build support for repealing Obamacare. When the public learns how much discretion has been given to faceless bureaucrats to make decisions about life and death, they will want the power over those decisions to be restored to doctors and patients,” Wilson said.

Wilson pointed to a recent rule by the Obama Labor Department where the Obama Administration admitted that up to 69% of all existing employer health plans will cease to exist by 2013, because they will lose their grandfathered status under the law and regulations. The interim rule sets the requirements for current health insurance plans to be grandfathered in under the law.

Secretary Solis admits that under the rule, “These interim final regulations will likely influence plan sponsors’ decisions to relinquish grandfather status.” Wilson called for the rule to be rescinded in comments submitted to the Department of Labor, which are now closed. Wilson added that this violated Obama’s pledge that “if you like your health plan you can keep it.”

Wilson noted that the new national health care system was already leading to rationing, pointing to a Washington Post reportthat Food and Drug Administration (FDA) officials are considering rescinding approval of the expensive breast cancer treating drug Avastin due to questions on whether its benefits are worth the cost.

Avastin is used by for more than 17,000 women who are literally battling for their lives with end stages of breast cancer. Dr. Eric P. Winer, director of the Breast Oncology Center at the Dana-Farber Cancer Institute in Boston who also serves as the Susan G. Komen for the Cure’s Chief Scientific Officer is quoted in the Post as saying, “This is not a worthless drug by any means. There is almost certainly a group of women who get a big benefit.”

“Should the FDA rescind approval of the drug as being beneficial to breast cancer patients, private insurers which rely on the FDA to determine which medicines to cover for different ailments will undoubtedly follow suit, leaving 17,000 women without coverage for the medicine that is their last hope of survival,” wrote ALG communications director Rick Manning in an oped.

Wilson concluded, “These new rules are just the beginning of the nightmare that Obamacare will spell for the American people. At ObamacareWatcher.org, we’ll be keeping meticulous track of how this new legislation will be implemented, and articulate the costs to the American people so they may make an informed judgment about whether it’s worth the price. Lives are on the line.”

Attachments:

“Obamacare Reg Watcher,” Vol. 1, Issue 1, August 2010.

Comments Submitted on Obamacare Labor Department Regulation, Americans for Limited Government, August 16th, 2010.

Interview Availability: Please contact Rebekah Rast at (703) 383-0880 or at rrast@getliberty.org to arrange an interview with ALG President Bill Wilson.

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August 17th, 2010, Fairfax, VA—Americans for Limited Government (ALG) President Bill Wilson today warned against an explicit guarantee for government-owned mortgage giants Fannie Mae and Freddie Mac, which own or guarantee $5.5 trillion in mortgages, as “a foolish mistake that will only compound what has been the unmitigated disaster of government running the mortgage industry.”

“The American people have already seen what the government’s implicit guarantee of Fannie-Freddie securities caused over the past three years, which was a lack of risk aversion on the part of lenders and borrowers. Investors may want to take bets without having to be exposed to any downside risk, but that’s how we got into this mess. Let’s not repeat the same mistakes,” Wilson said.

Today, at a Treasury-hosted conference by financial industry leaders, Treasury Secretary Timothy Geithner said “I believe there is a strong case to be made for a carefully designed guarantee in a reformed system, with the objective of providing a measure of stability in access to mortgages, even in future economic downturns.”

Wilson called Geithner’s stand “an about-face.”

That is because the Treasury Secretary’s statement today differed significantly from prior statements. In March he wrote to Congressman Scott Garrett that “By statute, all obligations and securities issued by the GSEs must include a statement that makes clear that such obligations and securities are not guaranteed by the United States and do not constitute a debt or obligation of the United States.”

Addressing the financial industry as recently as August 2nd, Geithner in a recent speech at NYU said not to anticipate “the false expectation that the government will be there in the future to rescue you.”

Wilson said “Government guarantees are not a false expectation at all, and now Geithner is out calling for an explicit one for virtually every mortgage in the country with the full faith and credit of the U.S.”

Wilson pointed to a new forensic study into the root, government causes of the financial crisis by former chief credit officer of Fannie Mae, Edward Pinto, as “yet more evidence of government’s complicity in the financial crisis, the Pinto study proves that government forced loose lending on the mortgage industry, weakened down payments and underwriting standards, and overleveraged Fannie and Freddie, all in pursuit of a misguided social policy to expand ‘affordable housing’.”

“Pinto has done the American people a great service in producing this volume, which is required reading for all lawmakers that wish to address the true causes of the financial crisis,” Wilson declared.

Wilson concluded, “Taxpayers cannot afford to double down on government’s catastrophic gamble into the mortgage market with an explicit guarantee of more losses. This will only place more pressure on the taxpayers and the national debt. If the government wants to explicitly guarantee these $5.5 trillion in obligations, then lawmakers should feel comfortable putting them on-budget. Add them to the national debt until the mortgages are paid back in full, or admit that taxpayers cannot withstand the burden and close Fannie and Freddie down permanently.”

Attachments:

“Government Housing Policies in the Lead-up to the Financial Crisis: A Forensic Study,” By Edward Pinto, August 14th, 2010.

Interview Availability: Please contact Rebekah Rast at (703) 383-0880 or at rrast@getliberty.org to arrange an interview with ALG President Bill Wilson.

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August 16th, 2010, Fairfax, VA—Calling a proposed Labor Department Obamacare rule, “the smoking gun showing that the Obama Administration lied when they claimed that people would be able to keep their health insurance and doctor’s choice,” Americans for Limited Government President Bill Wilson urged Labor Secretary Hilda Solis to rescind the rule in comments submitted to the Department of Labor today.

The interim rule sets the requirements for current health insurance plans to be grandfathered in under the law. Within the interim rule, Secretary Solis affirmatively declares that, “These interim final regulations will likely influence plan sponsors’ decisions to relinquish grandfather status.”

ALG President Bill Wilson’s comments reminded Labor Secretary Hilda Solis of President Obama’s rhetoric during the debate over passage of the law where he said, “if you like your health plan you can keep it,” promising that nothing in the health reform law would force businesses or consumers to change health plans or change their doctor.

In his submitted comments, ALG’s Wilson asks the Secretary, “how are people supposed to ‘keep it’ if ‘it’, i.e., their pre-existing plan, no longer exists?”

Solis admits in the Interim Rule that by the end of 2013 up to 69% of all employer health plans will lose their grandfathered status under the law.

Arguing that the decision on whether a health plan should be grandfathered under the law should be viewed expansively by the government to ensure that most Americans are allowed to keep the health insurance and see the doctor of their choice, Wilson urged Solis to rescind the Interim Final Rule, and to only include the statutory requirements found in the health care law as criteria for determining whether a health plan should be grandfathered.

Wilson concluded stating, “This Interim Rule is the smoking gun showing that the Obama Administration lied when they claimed that people would be able to keep their health insurance and doctor’s choice under the law.”

The comment period for the Interim rule ends today, and will be followed by a review of comments prior to issuance of final regulations.

Attachments:

Comments Submitted on ObamaCare Regulation, Americans for Limited Government, August 16th, 2010.

Interview Availability: Please contact Rebekah Rast at (703) 383-0880 or at rrast@getliberty.org to arrange an interview with ALG President Bill Wilson.

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