Wednesday, April 7, 2010


By Robert Romano

When Fannie Mae and Freddie Mac were nationalized in 2008, why were their debts never put on the federal government's ledger?

That's what Congressman Scott Garrett wanted to know. Noting that the "Treasury has provided $127 Billion to the GSEs to cover heavy losses stemming mainly from defaults on the home mortgages they own or guarantee," he told Treasury Secretary Timothy Geithner in a letter, "it seems obvious to me that Congress and the financial markets should consider the combined $1.6 trillion of debt issued by Fannie Mae and Freddie Mac as backed by the full faith and credit of the United States."

Fannie Mae and Freddie Mac were placed under conservatorship by Congress in 2008 under the administration of the newly-created Federal Housing Finance Agency (FHFA). According to the agency's website, "As of June 2008, the combined debt and obligations of these GSEs totaled $6.6 trillion."

But that was never added to the national debt, which now totals $12.6 trillion. Why? In reply Geithner wrote that the "corporate debt of the GSEs is not the same as U.S. Treasuries, nor should it be considered sovereign debt."

The letter continued, "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."

In the same letter, Geithner wrote, the "Treasury is committed to supporting the GSEs while in conservatorship and to ensuring that the GSEs have sufficient capital to meet their debt obligations and honor their guarantees." Huh?

Read that again: The Treasury is "committed" to providing the bankrupt Fannie and Freddie with "sufficient capital to meet their debt obligations and honor their guarantees" but those obligations "should not be considered sovereign debt."

In short, Fannie and Freddie debt is backed by the United States , but not the full faith and credit of the United States . Make sense?

In other words, Geithner's answer to Garrett's question, "Which way did Fannie and Freddie's debt go?" was the classic loony line: "Thataway!"

To be certain, Fannie and Freddie's $6.3 trillion balance sheet never was added to the national debt, as ALG News has previously reported. If it were, the nation's credit would surely be downgraded — as well it should.

It may yet be, too. In spite of Geithner's denial, after Fannie and Freddie were nationalized, FHFA director James Lockhart's Congressional testified that "the conservatorship and the access to credit from the U.S. Treasury provide an explicit guarantee to existing and future debt holders of Fannie Mae and Freddie Mac," as reported by Bloomberg News.

At the time, the agency distinguished between "an explicit guarantee" and the "full faith and credit of the United States ". After his testimony, Lockhart clarified that he meant "an effective guarantee because there's $100 billion backing their equity provided by the U.S. Treasury…That does give them effectively a guarantee of the U.S. government."

So, that "explicit guarantee," "effective guarantee," and "sufficient capital" all went — thataway!

The Treasury is obviously trying to have it both ways: assuming the power of underwriting the mortgages of the American people without assuming the inherent risks involved. Those assets included, according to Bloomberg News, $4.7 trillion in mortgage-backed securities (MBS).

Of that, $1.5 trillion had been sold to foreign investors, as reported by the New York Times. This is where it gets really interesting.

According to the Times article, in 2008 "Asian institutions and investors [held] some $800 billion in securities issued by Fannie and Freddie, the bulk of that in China and Japan . China held $376 billion and Japan $228 billion as of June 2007, the most recent country-specific Treasury figures… In Europe, roughly $39 billion in Fannie and Freddie debt is held in Luxembourg and $33 billion more in Belgium , countries that are home to large investment management firms. Investors in Britain hold $28 billion, and Russian buyers hold $75 billion. Sovereign wealth funds in the Middle East are also believed to be big investors in Fannie and Freddie debt."

At the time of the bailouts, on October 1st, 2008, Senator Jim DeMint theorized that these foreign entities were the principal cause of the then $700 billion Troubled Asset Relief Program. On "The Mark Levin Show," he said, "I think China and Saudi Arabia are holding a lot of these securitized mortgages. And I think they've basically said they're not going to loan us any more money until we buy them back. And if they don't give us loans every day, we default on our loans [because] we have so much debt as a nation. So, we're going to borrow more money to try to make this situation right. There's nothing else for me, Mark, that explains the urgency in using a sledgehammer to fix something that most of us know a few screwdrivers could fix."

Quite a charge. Of course, at the time, foreign central banks or institutions owned by foreign governments were explicitly prohibited that from participating in the Treasury-administered program to purchase the mortgage-backed securities. Then, the program was arbitrarily turned into a bank recapitalization program by then-Treasury Secretary Hank Paulson.

Since that time, the Federal Reserve has purchased $1.25 trillion of the mortgage-backed securities, a program that just ended on March 31st. Although it has not disclosed which securities it has purchased. The bailout may have gone to those foreign entities after all.

We know it was a full bailout, whoever got it. According to the Federal Reserve, the securities were purchased at "Current face value of the securities, which is the remaining principal balance of the underlying mortgages." The program itself was administered, according to the New York Fed, "by Wellington Management Company, LLP for trading, settlement and as a secondary provider of risk and analytics support; and BlackRock Inc. as the primary provider of risk and analytics support. The program custodian is J.P. Morgan."

And, according to the New York Fed, "Initially, the investment managers will trade only with primary dealers who are eligible to transact directly with the Federal Reserve Bank of New York . Primary dealers are encouraged to submit offers for themselves and for their customers." These are the same dealers who primarily purchase U.S. treasuries, as ALG News has previously reported, and several of them are indeed foreign institutions.

Certainly, it appears that the same entities who exclusively purchase treasuries from the government are the ones who got bailed out by the Federal Reserve's program. Was Senator DeMint right, after all?

It gets worse. According to the New York Fed's website, the Federal Reserve is not guaranteeing the securities nor by extension Fannie Mae and Freddie Mac: "Assets purchased under this program are fully guaranteed as to principal and interest by Fannie Mae, Freddie Mac, and Ginnie Mae, so the Federal Reserve's exposure to the credit risk of the underlying mortgages is minimal."

So, if Fannie and Freddie are bankrupt, and they are not backed by the full faith and credit of the U.S. , and the Federal Reserve is not vouching for their assets, what good is that $1.25 trillion in paper the Fed traded the securities for? Either that $1.25 trillion is not worth the paper it's printed on, or those securities are indeed backed by American taxpayers.

Indeed, how were they sold at all if not with the implicit or explicit backing of the United States ?

Geithner, Bernanke, Obama & Co. can't have it both ways. When the full faith and credit of the U.S. is downgraded, and the American people come asking where all of their nation's wealth went, their answer cannot be, "Thataway!"

Robert Romano is the Senior Editor of ALG News Bureau

California Water Crisis: Fish vs. Man

By Rebekah Rast

The Central Valley of California was once known as the breadbasket of the world—supplying about one-third of the nation's food. But today, the Westside of the Central Valley is home to hundreds of thousands of acres of dry and desolate land.

Water is now scarcer than ever in this agriculturally rich land. To make matters worse, about 40,000 jobs have been lost as a result, leaving families nowhere to go but to the local food banks.

The Delta smelt, a three-inch bait fish, seems to have won the battle for water—the same water that is necessary for food growth and jobs in the highest-producing valley in the nation. How did a small fish win such a big battle? On August 31, 2007, California Federal Judge Oliver Wanger of Federal District Court protected the declining fish by severely curtailing human use water deliveries at San Joaquin-Sacramento River delta from December to June. These are the pumps at the Banks Pumping Plant that send water to Central and Southern California for agricultural and residential use.

According to a May 2009 study conducted by the University of California , Davis , 35,285 jobs and $1.6 billion in economic revenue have been lost as a result of this environmental ploy in the Central Valley .

"The democrats have chosen radical environmental policies over workers," says Mario Lopez, President of the Hispanic Leadership Fund.

Giving farmers some reprieve was an announcement by Department of Interior Secretary Ken Salazar, stating Westside farmers would receive 25 percent of their water allocation versus the 5 percent they were projected to receive. But this is still not enough. What it comes down to is this: a democratic-run Congress and Administration sees fit to let 40,000-plus people lose their jobs and watch the most fertile ground in the nation go dry, simply to protect a bait fish.

Because of this, unemployment has reached about 30 percent in some of these agricultural towns. Though California and individual counties do not keep record of Latino employment numbers, in the Central California city of Mendota, unemployment averaged 39.4 percent for 2009, of which 94.7 percent of the population is Latino, according to the 2000 Census Report.

"This is a real travesty," Lopez says about Latinos being hit the hardest by the water crisis. "These people are ready to work. They want to pursue the American Dream and provide for their families. It's devastating to see the effects of these policies."

With the help of a few politicians and organizations, the plight of the Central Valley is being exposed. It is no small problem when a fish is valued over the lives of thousands of men, women and children.

"Every corner of the Central Valley is affected by this environmentalist-caused drought. People are losing good jobs because left-wing enviros placed the needs of a fish over thousands of hardworking families," says Richard Pombo (R-CA), the former Chair of the House Resources Committee.

Americans for Limited Government President Bill Wilson agrees stating, "When Nancy Pelosi and her environmental henchmen chose a minnow over jobs and growing food to feed the world they went too far. When voters across the nation learn about this travesty, the tidal wave for changing Congressional leadership will overwhelm partisan considerations."

Americans for Limited Government will continue covering this story as it develops.

Rebekah Rast is a contributing editor to ALG News Bureau.

Appointment Watch: Harding

The mainstream media continue to ignore President Obama's appointment of bizarre personnel to run the government. Personnel is policy. That being the case the American people need to know about these appointments. This week we look another Obama appointee. This is not an isolated incident or an occasional bad apple. This appointment is representative of the appointments he is making with little or no push back from the Senate during the confirmation process.

Robert Harding, Assistant Secretary of Homeland Security for the Transportation Security Administration

· Harding is the former owner of a military contractor.

· Harding's company was forced to repay $2 million to the Pentagon for overbilling.

· Harding while a nominee refused to take a stand on important policy issues.

· Harding withdrew from consideration on March 26, 2010.

This is just a sample of the type of people President Obama is placing in positions of power within his Administration. If you want more information please visit:

Don't Go Wobbly

By David Bozeman

According to the Associated Press (and giddily reported on page 1 of my hometown paper), some Republicans are rethinking their 'Repeal the Bill' mantra, fearful that voters might "begin to see benefits from Obama-care" (the AP never mentions what those health benefits might be). U.S. Senate candidate Paul Kirk of Illinois , who was adamant in his repeal-the-bill stance, has "eased back," and the U.S. Chamber of Commerce urges a "more effective approach to minimizing its harmful impacts." Senator Bob Corker of Tennessee notes that repeal is "just not going to happen," and Senator John Cornyn of Texas says the GOP should focus on the "misplaced priorities of Democrats."

Democrats didn't prevail on the strength of ideas, just by a slim plurality of numbers. They typically wear down voters through tedium and time — delaying much of the bill's implementation till 2014 and later was, tactically, brilliant. And surely one could make the case that, come November, the public will have moved on and will react bitterly to a rehash of a long-closed subject.

Or so the Democrats hope. Political prognosticators on both sides gauge public opinion, then react accordingly. Have Senators Corker and Cornyn forgotten that leadership entails molding public opinion and not merely following it? According to most polls, six in ten Americans still oppose Obama-care. What, between now and November, besides lethargy and spin, can change voters' minds that bold Republican leadership can't counter?

Even assuming some slight benefits (again, we're scratching our heads here), a freedom-loving people should reject Obama-care because of its staggering tolls of taxes, fees and lost choices and opportunities. Caterpillar recently announced a $100 million drag on profits thanks to Obama-care. According to The Christian Science Monitor (just before the vote), "If the health care reform vote succeeds today, the $940 billion bill would be the biggest change to domestic policy in a generation. The rich and the health industry would pick up most of the tab." Higher taxes and fees on health care industries, 'Cadillac' taxes on the most expensive insurance plans and stricter standards on insurers and private employers will surely be felt by consumers and will result in fewer choices, not more. But merely because someone in a higher income bracket is picking up the tab. I'm supposed to be pleased as punch that I'm paying little or nothing for my coverage?

That is what the Democrats are banking on. But then they don't really speak to America 's traditions of independence and self-sufficiency, now do they? Obama-care is a disease bred by the germs of class envy and deferred responsibility. A reader post at states, ". . . I am for anything that will bolster small and medium sized U.S. companies at the expense of large multi-national corporations." True, one should not take any raving on a message board too seriously, but how far out of the mainstream of liberal thought is such a sour sentiment? When a president announces to cheering college-age voters that they can stay on their parents' policies till age 26, the opposition is duty-bound to remind voters, before, during or after the fact, that they are saddled not with traditional American leadership but with a post-modern, Peter Pan presidency.

The health care debate has been dominated by the in-your-face arrogance and hubris of Barack Obama. Lacking seasoning and maturity, he has made little if any effort to ease public division, instead smirking that Republicans seeking to repeal health care reform should just "go for it." And yet the GOP fears looking negative and mean-spirited! Still, the mere passage of time will not make Obama-care any better for our nation's health, so Republicans should call his bluff. The health and freedom of our children and grandchildren demand that we do, indeed, GO FOR IT!

David Bozeman, former Libertarian Party Chairman, is a Liberty Features Syndicated writer for Americans for Limited Government.

Easy Money

By Bill Wilson

There's something to be said about profiting off of the ill fortunes of others.

In late January, the U.S. Treasury Department warned Congress that the U.S. was fast approaching the statutory limit on the national debt ceiling, then $12.394 trillion. They said, by the end of February, that limit would be reached.

Congress said that if they failed to raise that ceiling, the nation would default. Why? Because, the nation is so far in debt, it had to borrow money just to keep up with paying down its principal, the interest owed on said debt, and financing the $1.556 trillion budget deficit.

Of course, it need not have defaulted. It could have simply cut spending drastically. But instead, they raised the debt ceiling so that the borrowing binge could continue unabated, by $1.9 trillion to $14.294 trillion.

So, how did the debt go from $11.850 trillion in 2009 to its current $12.6 trillion? Debt auctions. In particular, emergency Cash Management Bills that are frequently issued by the Treasury to keep the nation from an ever-looming default. The only way the Treasury can keep up with paying off the principal on the debt is to simply sell more treasuries.

Here's how defines a Cash Management Bill: "A short-term security sold by the U.S. Department of the Treasury. The maturity on a CMB can range from a few days to six months. The money raised through these issues is used by the Treasury to meet any temporary shortfalls."

It's akin to the cartoon character that has to run as fast as possible to keep from the ground collapsing right behind him.

Since the beginning of 2009, there have been 46 such emergency auctions, according to an Americans for Limited Government analysis of CMB sales from January 7th, 2009 until April 1st, 2010. That's a lot of shortfalls.

In 2009, with 37 such auctions, that means the Treasury had a shortfall on average every 9.86 days. That's how quickly the national debt is coming due. Less than every ten days — quicker than that really, if one counted all of the other Treasury auctions — more and more principal owed on the debt comes due.

But, no problem, says Congress — for now. As long as the auctions run smoothly, everybody keeps investing, and the people's representatives keep raising the ceiling, taxpayers will never have to pay the debt principal in taxes. Because they couldn't.

The government would basically have to enslave the entire economy for an entire year at 100 percent tax owed to pay the debt. And then we'd have exactly nothing left. Zero.

Why? The national debt is fast approaching 100 percent of the Gross Domestic Product, which was measured at $14.256 trillion for 2009. But, Congress doesn't worry about it now. Investors buy the treasuries, so the people don't have to pay down the principal, they reason. They'll never have to pay. Right?

Here's a startling stat: on December 30th, 2009, the Treasury sold a $5 billion Cash Management Bill at 0 percent interest. That's right, 0 percent interest. What's that mean? Probably, that they were so close to the debt limit, and had principal due, they could not legally pay any more interest.

In other words, the Treasury auctions may be fixed. In the least, investors seemed remarkably willing to take very low yields on the CMB's as the Treasury was approaching its legal borrowing limit. And now that there's no limit, they're happy to take profits once again.

So, what does the chart reveal?

That, as pressure increases on the debt interest rates go up. On December 9th, 2009, after Moody's issued its first warning that the nation's worsening finances would "test the Aaa boundaries," interest rates went up temporarily from 0.07 percent to 0.08 percent, before crashing at the end of the year. On February 3rd, with the second warning, rates jumped from 0 percent to .002 percent, and then up to 0.1 percent at the February 24th auction.

Now, after Moody's third warning that the U.S. is "substantially" closer to being downgraded, interest rates are ticking up on practically a daily basis after crashing while Congress sat on the debt limit. In fact, as the debt limit approached, the interest rates sharply declined.

In fact, now that Congress, on February 4th, raised the debt ceiling for an entire year (they think), interest rates are moving rapidly up. With so much debt owed, this will place increasing pressure on taxpayers.

According to Moody's, annual interest owed needs to stay below 14 percent of revenue, or else the nation could be downgraded from its current Triple-A rating. And, according to the White House Office of Management and Budget's own numbers, that threshold will come as soon as 2014.

Time is running out. But one would not know it to look at the breathless sale of CMB's.

In total, Treasury in 2009 and 2010 has raised $1.3 trillion with CMB's, which pays out $2.954 billion in interest. That may seem small, but that means on average, they sold $28.253 billion at each auction, and paid out on average $64.134 million in interest to the bidders.

At a 35 percent maximum competitive bid, politically-favored institutions called "primary dealers", of which there are currently only 18 who the CMB's are, according to the New York Federal Reserve, "auctioned almost exclusively to" could purchase about $9.891 billion at each auction.

That means an entity at the average 0.2272 percent interest rate would make a whopping $22.472 million at each auction! And if this hypothetical institution participated in all 46 auctions, that entity would at a maximum walk away with about $1.034 billion.

From a Treasury that claims to want to rein in "payday lenders," it sure seems to have permanently indebted the American people to them. Talk about predatory lending. The useless Treasury paper trade is easy money for investors with sufficient funds to invest. And it's contributing to the enslavement of the American people, who are forced to keep making those interest payments as the principal just piles up.

That mountain of debt, if the Treasury ever fails to sell its bills to pay the bills, will instantly come due, and no amount of taxation will be able to pay it back without leaving the American people penniless.

Bill Wilson is the President of Americans for Limited Government.

Malignant Tumor

ALG Editor's Note:
William Warren's award-winning cartoons published at are a free service of ALG News Bureau. They may be reused and redistributed free of charge.

The Potemkin Candidate

By Michael Swartz

At first glance, Murray Hill wouldn't be a name to jump out at a political observer. In an era of political newcomers thanks to the effect of TEA Party activism, Murray Hill would seem to be just another Republican entering Maryland's Eighth Congressional District fray, seeking the GOP nomination to face entrenched Congressman Chris Van Hollen. Beating Van Hollen, the head of the Democratic Congressional Campaign Committee, would seem like a tall order and an incredible accomplishment in a district which arguably may be the most liberal-leaning in America.

The campaign has drawn a significant amount of attention, though, something that first-time political candidates would drool over – Murray Hill's campaign Facebook page has over 10,000 fans and the bid's YouTube advertisement has drawn over 200,000 views. Obviously their local Congressional campaign has taken on a national scope.

But Murray Hill isn't just one who would be derided as a RINO (Republican In Name Only.) In fact, Murray Hill isn't a person at all.

Call it the intersection of a fortunate choice of names and slick packaging, but the nascent Murray Hill campaign was a brainchild of the marketing and public relations firm which bears the name. Its Congressional bid was their logical extension of the recent Citizens United v. Federal Election Commission Supreme Court ruling which threw out several campaign finance prohibitions on corporate campaign expenditures. In their view, to give corporations free speech rights also gives their company the right to run for Congress. Murray Hill chose to run as a Republican "because we feel the Republican Party is more receptive to our basic message that corporations are people, too."

Yet the creative minds backing Murray Hill's bid think in a manner quite differently than the GOP mantra of lower taxes, less government, and increased freedom – in fact, they have seen the Republicans as their opposition. William Klein, Murray Hill's campaign manager, has worked on numerous Democratic campaigns and firm founders and partners Eric Hensal and Patrick Mancino cut their political teeth by promoting the interests of organized labor groups, particularly in the construction industry. Their client base has primarily come from labor and environmental groups wishing to promote a softer image.

So far Maryland's state board of elections has taken a dim view of Murray Hill's ballot bid, denying them in part because the five-year old company technically doesn't meet the age requirement for running for Congress. But that hasn't stopped the company from pressing on with its ersatz campaign, even asking RNC Chairman Michael Steele to intercede on their behalf in the effort to convince the elections board to allow them registration and candidacy.

Of course, their campaign isn't so much about running for Congress as it is being upset that the Supreme Court leveled the political playing field between corporations and unions – in fact, the changes made by the Supreme Court also helped labor interests by overturning precedent disallowing their participation, too. But the previous rules did give Big Labor an advantage, and the Citizens United ruling eroded that edge. Murray Hill would have never considered a political run had it not been for this particular Supreme Court decision.

But over twenty states – including Maryland – already allow corporate funding of elections, and one need only look at the Democratic dominance of the Free State to see that corporate funding alone hasn't helped the GOP there. In that respect, Murray Hill is acting like the five-year-old it is by putting up this petulant bid for a Congressional seat.

Michael Swartz, an architect and writer who lives in rural Maryland, is a Liberty Features Syndicated writer.

National debt seen heading for crisis level

By Carolyn Lochhead

Chronicle Washington Bureau

Health care may have been the last big bang of the Obama presidency.

With ferocious speed, the financial crisis, recession and efforts to combat the recession have swung the U.S. debt from worrisome to ruinous, promising to handcuff the administration.

Lost amid last month's passage of the new health care law, the Congressional Budget Office issued a report showing that within this decade, President Obama's own budget sends the U.S. government to a potential tipping point where the debt reaches 90 percent of gross domestic product.

Economists Carmen Reinhart of the University of Maryland and Kenneth Rogoff of Harvard University have recently shown that a 90 percent debt-to-GDP ratio usually touches off a crisis.

This year, the debt will reach 63 percent of GDP, a ratio that has ignited crises in smaller wealthy nations. Fiscal crises gripped Canada, Denmark, Sweden, Finland and Ireland when their debts were below where the United States is shortly headed.

Japan's debt is much higher, but most of it is held domestically, and Japan's economy has been weak for 20 years. "I really don't think we want to be like Japan," said UC Berkeley economist Alan Auerbach.

One advantage the United States has - and it is a big one - is that it issues the world's reserve currency and so can print dollars to service its debt.

The Obama budget will add $10 trillion to the national debt in the next decade and will not stabilize the deficit, the CBO found. Deficits are expected to dip as the recovery takes hold, but never below $724 billion a year. Interest costs alone will consume $5.6 trillion this decade. A balanced budget has been widely ruled out as unattainable.

"The real problem is not just current deficits but where we're heading," Auerbach said. "We're on a trajectory where the deficit's going to go down a little and then go up again. And we have no solution for that."

Deficits won't reverse

No one is advocating big tax increases or spending cuts before a recovery takes hold. The problem is that deficits will not reverse even after a full recovery.

Credit rating agency Moody's warned last month of a possible downgrade in U.S. Treasury debt. This year, Social Security is crossing a long-feared milestone at which it is paying more in benefits than it receives in payroll taxes. Study after study in the last year has raised alarms.

"In my judgment, a crisis could occur next week or 10 years from now," said Rudolph Penner, an Urban Institute economist who co-chaired a huge budget report sponsored by the National Academy of Sciences and the National Academy of Public Administration. "I don't really think we can go much beyond 10 years."

Polls show rising public alarm - and public refusal of specific spending cuts or tax increases required to change course. A Field Poll last month showed most Californians do not want to cut the largest parts of the state budget, such as education or transportation.

The polling firm Democracy Corps recently warned Democrats that the deficit now tops unemployment as a voter concern. But it also found voters "unenthusiastic" about the options to close the deficit. Voters overwhelmingly prefer spending cuts to tax hikes but reject cutting specific programs.

Republicans promise to make deficits a premier political issue. But during the health care debate, they opposed any cuts to Medicare, the chief source of rising deficits. They also oppose tax increases and defense cuts. In January, they sabotaged rare bipartisan legislation to create a powerful deficit-reduction commission that would have forced action.

Stabilizing the debt without raising taxes, cutting Medicare or defense, or defaulting on the debt would eviscerate everything else, from the Border Patrol to highways. Earmarks constitute a pittance.

The numbers don't add up for Democrats either. For all their railing against the Bush tax cuts that contributed to the current dilemma, Obama intends to extend almost all of them. That will cost $2.5 trillion, said the Committee for a Responsible Federal Budget.

Obama also escalated the war in Afghanistan.

And he joined Republicans in sabotaging the deficit commission by creating a substitute commission by executive order that seems designed to fail. It cannot compel action, and its recommendations are postponed until after the November election.

Consensus difficult

Obama and party leaders stacked it with partisans, from Rep. Jeb Hensarling, R-Texas, to Andrew Stern, head of the Service Employees International Union, making it difficult to get the 14 out of 18 votes required to agree on anything.

The executive order is a study in artfulness. It calls for a deficit target in 2015 that will be largely reached through the recovery and opens a wide escape hatch by saying decisions are contingent on the economy.

Democrats are already picking off low-hanging, deficit-reduction fruit to increase spending instead. Led by Rep. George Miller, D-Martinez, Democrats approved $61 billion in savings last week by cutting banks out of student lending - and used it to expand aid to students and colleges.

Democrats often give the impression that taxes on the rich can fix everything. But the center-left Tax Policy Center ran simulations showing that Obama's budget would have to raise $775 billion in new taxes every year to stabilize deficits at 2 percent of GDP. That means that if Obama keeps his promise not to raise taxes on the middle class, the rich would pay 90 percent of their income in taxes, the center said.

Obama "promised to be honest with the public, and he has a talent for doing so," said Maya MacGuineas, president of the moderate Committee for a Responsible Federal Budget. "Yet he hasn't used it yet to describe what types of hard choices will be involved."

Soaring levels of debt

$10 trillion -- Amount the Obama budget will add to the national debt in the next decade.

$5.6 trillion -- Amount interest costs alone will consume this decade.

63% -- Debt-to-gross domestic product ratio this year.

90% -- Debt-to-gross domestic product ratio anticipated within this decade.

FDA approves new version of painkiller OxyContin designed to be harder to abuse

FDA OKs new, harder-to-abuse OxyContin version

WASHINGTON — The Food and Drug Administration has approved a new version of the painkiller OxyContin designed to be harder for patients to abuse, but one of the regulator’s doctors said it may offer only “an incremental advantage.”

OxyContin treats severe chronic pain as a time-release version of the narcotic oxycodone. It is designed for use over 12 hours, to maintain a steady state of pain relief for seriously ill patients.

However, drug abusers quickly discovered they could get a heroin-like high by crushing the pills and snorting or injecting the dose. The new pill uses a coating designed to make the drug harder to crush and snort or inject.

The FDA’s Monday decision follows a vote last fall by its panel of experts in favor of the reformulated drug, which is made by Purdue Pharma of Stamford, Conn.

“Although this new formulation of OxyContin may provide only an incremental advantage over the current version of the drug, it is still a step in the right direction,” said Dr. Bob Rappaport in a statement from the FDA. Rappaport is director of the Division of Anesthesia and Analgesia Products in the FDA’s Center for Drug Evaluation and Research.

Purdue Pharma will be required to study whether the new formulation of the drug reduces its abuse.

Rashon East Turned A McDonalds Drive-Thru Window Into A Crawl-Thru Window

New Brunswick, New Jersey (The Weekly Vice) - Rashon East, a 34 -year-old New Jersey man, was arrested Monday after allegedly attacking a McDonalds drive thru employee because his Filet-O-Fish sandwich took too long.

According to the South Brunswick Police Department, East paid for his order, but became angry when he felt it took the worker too long to bring his sandwich.

East climbed through the pickup window, yelled at the employee, pushed him against the counter, threatened him then slapped the worker in the face.

East then reportedly went "west," leaving the restaurant with his sandwich.

Investigators say East saw the video footage of the assault televised and he decided to turn himself in.

He was booked into jail on charges of simple assault and making terroristic threats.

IRAQ: Controversial video of U.S. military shooting

A war video, leaked on the Internet site, shows U.S. military helicopters opening fire on men on a Baghdad street. Two of the individuals are thought to be an Iraqi photographer and a driver, both of whom worked for the Reuters news agency. Other men are believed to be holding guns.

The video is a look at the ugly realities of war. In Baghdad, news of the video prompted a protest and demands for an Iraqi government inquiry from the Iraqi Journalists Union, according to the Associated Press.

The leak came on a day when Baghdad was shocked by more bombings and uncertainty over the political process. The U.S. military said it was investigating the video and its contents.

Iraqi journalists and those working with the media have paid a huge price since 2003 as at least 221 media professionals have been killed, according to Reporters Without Borders.

Cherokee Nation Leader Wilma Mankiller Dead

Former Cherokee Nation Chief Wilma Mankiller died this morning of pancreatic cancer, a tribal spokesman said. She was 64.

Mankiller was elected the first female deputy chief and president of the tribal council in 1985. In 1987, she was elected to serve as the first female principal chief of the Cherokee Nation, the second-largest tribe in the United States. She was re-elected in 1991 and chose not to seek re-election in 1995.

After learning of her death, Governor Henry lauded Mankiller's visionary leadership and expressed his condolences to her family and loved ones.

“We have lost an inspirational leader and a great American, someone who was truly a legend in her own time.

“As a leader and a person, Chief Wilma Mankiller continually defied the odds and overcame seemingly insurmountable obstacles to better her tribe, her state and her nation. Oklahoma, the Cherokee Nation and the United States will dearly miss Wilma and her visionary leadership, but her words and deeds will live on forever to benefit future generations.

“Our thoughts and prayers are with the Mankiller family and Wilma’s many friends and loved ones.”
Leaders in both parties saluted Mankiller's leadership. Senate President Pro Tem Glenn Coffee, Oklahoma City Republican, said she left a
substantial legacy.

“She was a pioneer for her generation, and for the generations of women to follow,” said Rep. Danny Morgan of Prague, Democratic Leader in the House.

“It would be hard to overstate what a great role model she was, not only as a woman and a Cherokee, but as a leader and a public servant,” Morgan added. “Her death is a loss for all Oklahomans.”

Congressman Tom Cole said, "All Oklahomans and every Native American who knew her mourn the passing of Wilma Mankiller. Chief Mankiller was not only the first woman to serve as Principal Chief of the Cherokee Nation, she was a national icon and role model for women and Native Americans everywhere.

"Her strong, visionary and principled leadership set a standard seldom equaled and never to be surpassed. I had the opportunity over the years to get to know Chief Mankiller personally. She was tough, shrewd and dedicated to the well-being of the Cherokee Nation and all Native Americans. No one more fiercely defended the concept of tribal sovereignty, yet no one was more willing to partner with others of different backgrounds and points of view than Wilma Mankiller.

"My deepest sympathies go out to her family, the people of the Cherokee Nation, and all her many friends and admirers. We'll not soon see her like again. "

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Sister: Man in Murray threat wasn't an intimidator

SEATTLE — The sister of the Washington state man charged with threatening to kill Democratic Sen. Patty Murray over her support for health care reform said her brother has no history of intimidation.

Helen Evans was at the federal court in Yakima, Wash., Tuesday when 63-year-old Charles Alan Wilson made his first court appearance, hours after being arrested without incident by FBI agents.

Federal prosecutors allege that Wilson left several voicemails laden with expletives, some which included threats to Murray, between March 22 and April 4. He was charged with one count of Threatening a Federal Official.

"Obviously, my brother crossed over a line, if this is true," the 60-year-old Evans said. "But also, what can I believe when I read it? I'm not going to judge or make any assessments until I talk to him."

Murray's office had told the FBI it had been receiving harassing messages from a caller for months, but they became more threatening as Congress was voting on the health care legislation.

The report of the threats from Murray's office came amid a rash of ugliness aimed at lawmakers who supported the sweeping federal health care legislation. Some lawmakers have been spit on and several have reported receiving threatening calls.

FBI spokesman Bill Carter said Wilson is believed to be the first person in the country arrested for such threats.

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Major Earthquake Strikes Indonesia, But Damage Appears Moderate

A major earthquake has shaken Indonesia's northwest island of Sumatra, prompting a brief tsunami warning and sending residents rushing for higher ground.

The U.S. Geological Survey says a 7.7 magnitude earthquake occurred at sea about 215 kilometers northwest of the Indonesian island of Sumatra.

The quake was felt throughout northern Sumatra and in Malaysia. Local news reports say that patients from some area hospitals were evacuated and that some residents fled to high ground in case of a tsunami. Electricity in some areas was cut off but so far no major damage has been reported.

The Indonesia Meteorology and Geophysics Agency issued a tsunami warning following the quake, but lifted it two hours later.

Susan Potter, a geophysicist with the U.S. Geological Survey, says because the earthquake originated deep below the surface of the earth, the chances of it producing a major tsunami are low.

"This earthquake occurred at approximately 31 kilometers. To be an extremely shallow earthquake, it would be around 10 kilometers or so," said Potter. "An extremely large earthquake above the magnitude eight that was an extremely shallow depth, around a depth of 10 kilometers, would be prime candidate for creating, I am not saying definitely a large tsunami, but perhaps a regional tsunami or a tsunami in general. So the deeper the earthquake occurs, the less likely it is to cause a large scale tsunami."

Earthquakes are common in this region. Indonesia is located on the Pacific Ocean's so-called Ring of Fire, where the continental plates meet. A 9.1 magnitude quake off Aceh in December 2004 triggered a tsunami that killed more than 200,000 people around the Indian Ocean.

Stephen Almsteier has been a development worker in Aceh for the last five years. He says he has felt hundreds of earthquakes in this region and that this last one, and the aftershocks that followed, were not that strong.

"Obviously after several years here we're kind of used to aftershocks. People react in a different way," said Almsteier. "Once I realized that the aftershock was over I didn't leave my room, but obviously enough people here are very traumatized and some people did leave their houses and rooms in the center of town."

The U.S. Geological Survey says earthquakes of magnitude 7 and above occur on average 17 times a year.

Obama's Nuclear Strategy Intended as a Message

WASHINGTON - At the heart of President Obama's new nuclear strategy lies a central gamble: that an aging, oversize, increasingly outmoded nuclear arsenal can be turned to the new purpose of adding leverage.