Bruce Braley’s Email Isn’t So Honest…
I wrote Bruce Braley awhile ago about the health care bills and finally received a response from him. His entire email is below:
Thank you for contacting me regarding healthcare reform. This is an important issue and I am glad you have shared your views with me.As you may know, the House passed H.R. 3962, the Affordable Health Care for America Act, by a vote of 220-215 on November 7, 2009. After reading the bill, hearing from constituents at town hall meetings, and debating the bill's provisions in Congress, I voted in favor of this bill, because it is a good fix to our current system where costs have spiraled out of control leaving healthcare out of the reach of many Americans. H.R. 3962 will decrease health insurance costs, expand access to quality, affordable healthcare, and maintain Americans' choice of health insurance, while reducing the federal deficit. You can view detailed summaries and the text of this bill by going to my website: http://www.braley.house.gov/healthcare
Despite many claims, this bill does not mandate coverage under a government run plan or promote a government take-over of healthcare. This plan will expand access to health insurance by removing barriers to coverage including limits for pre-existing conditions and preventing insurance plans from dropping patients when they most need assistance. This bill establishes a minimum standard of benefits for health insurance coverage which existing plans will be required to meet by 2018, allowing anyone who enjoys their current healthcare coverage to keep it. This bill does not provide assistance to illegal immigrants (section 347, page 274), federal funds to cover abortion (section 265, page 160), or permit healthcare rationing (Section 1181(h)(1)(A), page 766). Members of Congress and federal employees are not exempt from the provisions of this bill, and the new requirements of this bill mirror requirements of the Federal Employee Health Benefits Program (FEHBP) which insures over 8 million federal employees and Members of Congress.
To address costs of healthcare, this bill removes the current anti-trust immunity that health insurers enjoy, providing for increased competition. This bill would permit states to enter into healthcare compacts, permitting insurance to be sold across state lines while ensuring the state's regulations are met by participating plans. Finally, this bill will reduce frivolous lawsuits by establishing a voluntary state incentive grants program designed to encourage states to develop and implement "certificate of merit" and "early offer" alternatives to traditional medical malpractice litigation. The "certificate of merit" approach would require certified affidavits from a qualified medical specialist attesting to the validity of a claim before it would be admitted to court. "Early offer" programs would encourage the settlement of malpractice claims to prevent them from ending up in court, reducing court costs and payouts.
For further information, I have included a sheet with answers to many frequently asked questions. I also encourage you to visit my website where you can access a detailed summary and the text of the bill.
Thanks again for contacting me. I occasionally provide electronic updates on issues I think my constituents might be interested in. If you would like to receive my E-newsletter, please sign up at my website at http://braley.house.gov. On my website you can also view my voting record, and get information about issues important to the First District. If I can be of any further assistance, please don't hesitate to contact me.
Sincerely,
Bruce Braley
Member of Congress
Ok, so where do I start? Well, lets break it down as we go.
At the beginning of the email Braley states, "After reading the bill, hearing from constituents at town hall meetings,..." and tries to give the impression that he cares and he did the due diligence required. However, lets take a look at some of the facts starting with his statement that he actually read the bill. According to a report by PolitiFact it would take more than 3 days to read the bill and that doesn't count any further research or study one might want to make on it after they've read it. In fact, members of Congress even brought in a professional speed reader to read the bill! What an embarrasement! Now Braley tells us that he's read it? I doubt it.
Ok, so lets move on to his second statement of listeing to us at Town Hall Meetings. Here is only one, of MANY, videos of how well Braley listened to us. You'll see just before the 1 minute mark that everyone is cheering AGAINST the bill. Is he deaf, dumb, and blind!? Watch the video here:
I wanted to write this and target just that first paragraph (second paragraph technically) to show you the PERSONAL CHARACTER of Bruce Braley. He lied TWICE in a single sentence in which both ideas were related directly to who he is as a person. I hope you will join me in voting him out!
As for the rest of the email you can probably guess it is all bull as well. Here is an interesting thing to think about... it may be true (may is the key word) that it will reduce the premiums that we pay currently. However, how much in direct and indirect taxes are we going to end up paying that will cost us MUCH more in the long run?
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Senator Grassley – Fighting The Good Fight
Fellow patriots, I ask you today to review this statement released by our Senator Chuck Grassley in regards to the America's Healthy Future Act. He really fought for us on this one and we owe him a bill of thanks. His contact information can be found at the end.
Sen. Grassley delivered part of this statement, then submitted the rest into the committee record.
Markup of the America’s Healthy Future Act
Senate Finance Committee
Statement by Senator Chuck Grassley, Ranking Member
Tuesday, October 13, 2009
Mr. Chairman, first of all, I want to commend you for bringing this markup to where it is today. It seems like a long time since we started on September 22nd. We’ve been able to air our differences and have the votes. I wish I felt better about the substance of the bill.
The chairman’s mark has undergone many changes during this process and they are not to the good. I’ll highlight a few of the changes I find most disturbing. As I highlight these issues, it will be clear that this bill is already sliding rapidly down the slippery slope to more and more government control of health care.
It has the biggest expansion of Medicaid since it was created in 1965.
It imposes an unprecedented federal mandate for coverage backed by the enforcement authority of the Internal Revenue Service.
It increases the size of the government by at least $1.8 trillion when fully implemented.
It gives the secretary of Health and Human Services the power to define benefits for every private plan in America and to redefine those benefits annually. That’s a lot of power over people’s lives.
It will cause health care premiums for millions to go up, not down.
It tightens further the new federal rating bands for insurance rates. That means that millions who are expecting lower costs as a result of health reform will end up paying more in the form of higher premiums. The new rating reforms alone will raise premiums by as much as 50 percent on millions.
It imposes new fees and taxes. These new fees and taxes will total about a half trillion dollars over the next few years. On the front end, these fees and taxes will cause premium increases as early as 2010 even before most of the reforms take effect.
Then after forcing health premiums to go up, this bill makes it mandatory to buy it.
On several occasions, Republicans tried to take the chairman’s mark in a different direction. We tried to ensure that the President’s pledge to not tax middle-income families, seniors, or veterans was carried out. We were rebuffed every step of the way.
And Republican efforts to provide consumers with a lower cost benefit option were consistently defeated – this means that despite the promises, a lot of people aren’t actually going to be able to “keep what they have.”
It imposes higher premiums for prescription drug coverage on seniors and the disabled.
And it creates a new Medicare commission with broad authority to make further cuts in Medicare and it makes that commission permanent.
In our group of six negotiations, I resisted making the commission permanent. And I certainly wasn't going to agree to target prescription drug premiums.
But this bill now requires the Medicare commission to continue making cuts to Medicare forever. The damage this group of unelected people could do to Medicare is unknown.
What's more alarming is that so many providers got exempted from the cuts this commission would make that it forces the cuts to fall directly on seniors and the disabled.
The Congressional Budget Office has confirmed that the commission structure requires it to focus its budget axe on the premiums seniors pay for Part D prescription drug coverage and for Medicare Advantage.
Sooner or later, it has to be acknowledged that, by making the commission permanent, those savings are coming from more and more cuts to Medicare.
Finally, I can’t help but note the incredible cynicism in an amendment that took benefits away from children. That amendment was offered and passed because the chairman’s mark had the audacity to let children get covered through private insurance.
In 41 states, children would have received access to the EPSDT benefit.
EPSDT benefits cover vitally needed services for children such as rehabilitation services, physical, occupational and speech therapy particularly for children with developmental disabilities.
But those benefits were deleted by Rockefeller Amendment C21. Now children in 41 states won’t have access to health care and they’ll be left in a grossly underfunded public program. And they lost these important benefits.
What this mark up has shown is that there is a clear and significant philosophical difference between the two sides.
Throughout the markup, we have focused on trying to reduce the overall cost of the bill. We were told ‘no’.
We focused on trying to reduce the pervasive role of government in the chairman’s mark. We were told ‘no’.
We tried to make it harder to for illegal immigrants to get benefits. We were told ‘no’.
We tried to guarantee that federal funding for abortions wouldn’t be allowed under this bill. We were told ‘no’.
We tried to allow alternatives to the individual mandate and harsh penalties. We were told 'no'.
We tried to reward states with extra Medicaid dollars if they passed medical malpractice reform. We were told not just ‘no’ but shockingly we were told Medicaid isn’t even in the committee’s jurisdiction.
We have watched while the other side has expanded public coverage.
We saw Democrat amendments move millions from private coverage into public coverage.
We saw Democrat amendments create new government programs that cover families making close to 90 thousand dollars.
And at the end of the day, after raising billions in new taxes, cutting hundreds of billions from Medicare, and imposing stiff new penalties for people who don’t buy insurance, and increasing costs for those that do … 25 million people will still not even have health insurance.
I don’t think this is what the American people had in mind when we promised to fix the health care system.
As I said when this process started, the chairman’s mark that was released 27 days ago was an incomplete, but comprehensive, good faith attempt to reach a bipartisan agreement.
But then the modification pulled that attempt at bipartisan compromise very far toward a partisan approach on several key issues.
With this markup nearing its conclusion we can now see clearly that the bill continues its march leftward.
The broad bipartisan character of the reform proposal has changed.
This partisan change is precisely what Republicans feared would occur at later stages in the legislative process.
Today we see that those fears were legitimate and justified.
Nevertheless, I still hold out hope that at some point the doorway to bipartisanship will be opened once again.
I hope that at some point the White House and leadership will want to correct the mistake they made by ending our collaborative bipartisan work.
I hope at some point they will want to let that bipartisan work begin again. And then, they need to back that effort and give it the time needed to get it right.
But it is clear that today is not the day when that is going to happen.
Again, please send a quick note to Sen. Grassley thanking him for his hard work on this issue! As promised, here is his contact information:
Iowa Sen Chuck Grassley (R) - (202) 224-6020
http://grassley.senate.gov/contact.cfm#emailform
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TIME CRITICAL – We’re In the Fight Of Our Lives
The US House plans to vote on their massive takeover of our healthcare as early as this Friday. Everything we have done up until this point has just been the prelude. We have got to mobilize everyone we know to contact Congress on a daily basis. We are now in the fight of our lives, literally.
I will be contacting my own Representatives today and each day via phone and email for the rest of the week. However, Braley and Harre have made it clear where they stand, and it's not in support of their constituents. We will be focusing the remainder of the week on the Blue Dog Democrats who were elected in conservative districts and are fearful of re-election. They may be our only hope. Our work is cut out for us. Don't give up now. . .or we might as well kiss our beloved America good bye.
Contact your representative today and tell him we reject HR 3962 because:
1) We CANNOT afford this:
The nonpartisan Congressional Budget Office (CBO) estimates that the legislation will cost $1.05 trillion over the next ten years and $150-$200 billion annually. This massive expansion in government spending will increase the already bloated size of the federal government by about 5%.
With the federal deficit reaching $1.4 trillion in 2009—an all time high—and unemployment reaching 9.8% in September—a 26 year high—now is not the time to spend money that we simply do not have.
2) Our taxes will go up:
The federal government expects to generate revenue from tax increases that include but are not limited to:
A tax increase of 2.5% of adjusted gross income earned by individuals who do not purchase government-mandated insurance. This tax increase could affect individuals earning as little as $9,350 a year.
The repeal of tax incentives offered to those who purchase medical care with Health Savings Accounts (HSA) and Flexible Spending Accounts (FSA).
A 2.5% excise tax on medical device manufacturers that will be passed on to consumers in the form of higher prices.
A new tax on insurance policies—expected to raise $2 billion—which will be passed on to consumers in the form of higher premiums.
Vast expansions to the Medicaid program which will undoubtedly add to state and local taxes paid by individuals.
A 5.4% tax increase on the income of most small business owners which will equate into job losses.
An 8% “tax on jobs” for businesses that do not purchase government-mandated insurance.
A 2.5% excise tax on the purchase of private insurance plans.
Tax increases on healthcare, health insurance and jobs do not make health care more affordable.
3) Our insurance premiums will go up:
The new, $2 billion tax on insurance policies will be passed on to consumers in the form of higher premiums.
According to estimates by CBO, changes to the Medicare Part D prescription drug benefit will raise premiums paid by seniors enrolled in Medicare Part B by $25 billion.
Seniors enrolled in Part D will see premiums rise by 20%.
And those who purchase private insurance or are on Medicare won’t be the only ones affected by higher premiums. According to the CBO, the government-run public option “would typically have premiums that are somewhat higher than the average premiums for the private plans in the exchanges.”
4) Congress will use the force of government to make you buy a product:
The House bill includes an individual mandate which will make every American purchase health insurance. Non-compliance with this mandate could result in a tax increase of up to 2.5 percent of adjusted gross income. Forget to pay this tax and you could be fined an additional $25,000 and even face up to a year behind bars.
5) Mandating health insurance is unconstitutional:
Supporters of the House bill argue that Congress is granted constitutional authority to mandate health insurance under the Commerce Clause. Article 1 Section 8 of the Constitution gives Congress the power, “to regulate Commerce… among the several States.” However, the Supreme Court has held that in order for something to be considered commerce it must at the very least be an economic activity. A mandate on health insurance forces Americans to purchase a product simply because they are alive. Merely existing is not an economic activity. Giving Congress the ability to force citizens to buy a certain product eliminates every restraint put in place by our nation’s founders and imposes upon the liberties that our government was established to defend.
6) The House reform bill hurts consumers and employees:
The House bill aims to fund reform by placing higher tax burdens upon the insurance industry, the pharmaceutical industry, medical device manufactures and employers. Instead of footing the bill for these higher tax burdens, however, companies will pass taxes on to consumers in the form of higher prices and on to employees in the form of lower wages. Consumers and employees will suffer as a result of these “corporate” tax increases. If passed, the bill will ensure that prices go up which is the exact opposite of what we were told reform would do.
7) The House proposal hurts seniors:
A great deal of the spending included in the House reform bill is offset by hundreds of billions of dollars in cuts to Medicare. Such cuts will raise senior’s premiums and weaken their control over their own personal health care destiny. According to CBO estimates, changes in Medicare Part D will raise Medicare Part B premiums by $25 billion and Medicare Part D premiums by 20%. The bill also proposes over $150 billion in cuts from the popular Medicare Advantage plan which one out of every five senior citizens uses to get more benefits than traditional Medicare offers.
8.) Passing the “Doc Fix” as a separate bill is dishonest and will NOT preserve the bill’s “deficit neutral” status:
This deception explains why the House bill is estimated to reduce the deficit. If the “doc-fix” were included in the House bill, however, it would add at least $200 billion to the deficit in the first 10 years, and most likely much more beyond that. Splitting higher reimbursements into a separate piece of legislation is an underhanded attempt by Congress to deceive Americans about the true cost of their health care overhaul.
9) Sadly, Congress has missed an opportunity to incorporate reforms that make healthcare more accessible and affordable for American families:
HR3962 DOES NOT:
Allow families and businesses to purchase health insurance across state lines
Provide the same opportunities to individuals as are provided to corporations and unions
Provide equal tax treatment for all Americans
Provide adequate tort reform
Any Congressman who votes to pass this legislation is looking out for his own special interests and agenda. We are educated and we are watching. You work for us and the 2010 election is just a year away. VOTE NO.
Iowa Congressmen include:
Rep Bruce Braley (D-1st) - (202)225-2911
https://forms.house.gov/braley/webforms/issue_subscribe.html
Illinois Congressmen include:
Rep Phil Hare (D-17th) - (202) 225-5905
http://hare.house.gov/?sectionid=74§iontree=44,50,74
Please use the Share the Wealth feature at the bottom of this post to let everyone know about this post and the message we are trying to get out there. Once you've done that you need to call your friends and family and ask them help you to contact the Congressman in their districts and states because we need to overload the Congressional server and phone lines.
For more information:
http://www.freedomworks.org/publications/top-10-reasons-to-oppose-nancy-pelosi%E2%80%99s-takeover-o
http://online.wsj.com/article/SB10001424052748703399204574505423751140690.html
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Property Taxes In Scott County Expected To Rise
You probably already know that properties value here in the Quad Cities haven't changed all that much. There have been some foreclosures but nothing to really write home to Mom. That's the good news; prepare yourself for the bad news.
Property owners, according to Scott County Assessor Dale Denklau and Davenport Assessor Becky Eiting, could face higher property taxes next year because of several factors. When speaking to government officials like Denkalu, Eiting, and others you will hear that the State may change the rollback factor to increase to a higher percentage. Of course, local tax bodies like city governments can offset this change by adjusting lower their tax levies to keep our taxes at about the same level.
Now, what you don't hear is the REASON for the changes and that means we as citizens must dig deeper into the story. Well, considering the State of Iowa, like 45 other States, is facing a budget deficit for the current and next fiscal years. In fact, for the FY2009 Iowa is facing a $134 million deficit that the Center on Budget and Policy Priorities projects say will rise to $779 million for next years budget. Don't worry folks, things may look bad, but we're the government and we're here to help. If you would like more information about Iowa's budget woes you can find a great in-depth story here.
So because we as citizens have been working hard, keeping up our homes values by improving them and keeping them in good repair, and trying to do the right thing it is our State & Local Governments who are going to PUNISH us for our efforts. They have spent themselves silly and mismanaged our tax money and this is the thanks we get for it.
Please join me and write our State representatives and let them know exactly how you feel about the change in the rollback factor, the increase in property taxes, and finally how they've mismanaged our tax dollars and caused this whole mess. You can find the contact information below:
Governor Chet Culver & Lt. Governor Patty Judge
Legislators (find your district's rep and contact them)
If you would like more information on how Iowa Property Taxes work you can find that explanation here.
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Bridge Signs – Worth Taxpayer Money?
In today's Quad City Times Ask The Times section a question was asked about the expense of some unnecessary additions to a local bridge. The question and response are provided here:
Q: They have just opened the new Blackhawk Creek Bridge in West Davenport. On each of four corners, they have placed a fancy brass sign denoting Blackhawk Creek. These signs are at least 2 1/2 feet in width. They also have two tones, not just the brass. If I had to guess, they probably cost at least $300 each, not including the pillar they are installed upon. Since I have never heard of a tourist coming to Davenport looking specifically for this creek, how can this expense be justified?
- Quad-Citian
A: For starters, the signs cost $1,900 each, or less than 2 percent of the $439,000 rehabilitation cost, City Engineer Gene Hellige said.
He said it has been a tradition in bridge design and construction that a plaque be mounted listing the designer and contractor. Also, the city has long engaged in a program of providing creek name signs at creek crossings.
"When the Clark Street Bridge over Blackhawk Creek was rehabilitated, it was decided to provide plaques to announce the creek name with more distinction than the usual sign and to provide some information on the bridge, which was constructed in 1950," Hellige said.
Wow, so what looks like it might be worth $300 actually cost the Citizens of Davenport nearly $2000! All so the designer and contractor can have their name displayed (really.. as if anyone truly cares!)?
If they want their name on the bridge, THEY (contractor & designer) should pay for it! What an outrage when you consider Davenport could have given, for example, the nearly $2000 to the Police Department to use in the OUTRAGEOUS crime they now have there.
If you would like to contact your local representative about this matter you can do so here: http://www.cityofdavenportiowa.com/department/index.asp?fDD=6-0
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Obama & Al Gore Both Hold A Nobel Peace Prize – Really!?
What a shame this organization has come to over the last few years. They are literally giving out Nobel Peace Prizes like candy and diluting the prestige so much that I could only assume that previous winners might be considering giving them back.
Barack Obama was awarded the prize, "for his extraordinary efforts to strengthen international diplomacy and cooperation between peoples". Really!? He literally flew in a privately chartered 747 (that we the tax payers pay for) around the world and basically apologized for who we are and all the things we have done in the world. I won't get into the details of that for now but perhaps in a future blog post if anyone is interested.
So how much does it cost to send the President around the world so he can apologize on our behalf and win himself a Nobel Peace Prize? Well, according to a 2006 congressional study, the cost to fly Air Force One runs about $56,518 per HOUR! The Pentagon, however, had done a more recent study that states it now costs about $100,219 an hour to fly the huge, reconfigured Boeing 747, without the President even being on board.
I'm not sure, at this time, how many countries and how many flights that Obama has taken all together at this point in his term (less than a year) but I'm going to guess that the Nobel Peace Prize probably cost us tax payers very large pretty penny.
Finally, I wanted to pose a question to you and then share something I thought was fascinating. Did you ever wonder who came in second behind Al Gore when he won the Nobel Peace Prize? Well, Glenn Beck does an excellent job of describing the story of who that second place finisher was:
What do you think about Obama & Al Gore receiving the Nobel Peace Prize? What do you think about his expenditures when it comes to shuttling him around?
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Ron Paul & Alan Grayson Want Answers Or No Bernanke Nomination?
Reps. Ron Paul (R-Tex.) and Alan Grayson (D-Fla.) have sent a stern and inquisitive letter to the Senate in an attempt to delay the confirmation of Ben Bernanke as Fed chairman for a second term. Both want the Federal Reserve to be much more transparent and are asking for the release of documents that may shed some light on what the organization has been up to.
One exert of the letter, written to Senate Banking Committee Chairman Chris Dodd (D-Conn.), states, "Without such an understanding it is impossible to know whether Chairman Bernanke is fit to serve another term and fulfill the Federal Reserve's dual mandate to ensure price stability and full employment."
Some of the demands contained in the letter are:
- Requests of documentation in regards to the Bear Stearns bailout.
- Requests of all documentation given to New York Attorney General Andrew Cuomo for his investigation of the Bank of America-Merill Lynch deal.
- Information on which companies received $1.2 trillion dollars in reserve funds.
- Transcripts of meeting minutes.
- All off-balance sheet transactions over the last three years.
If you would like to read a copy of the letter you can do so here.
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September Unemployment @ 9.8%? I call BS!
Really, you think unemployment is "only" at 9.8%? I won't reinvent the wheel here trying to explain why I think unemployment is more around the 20% mark when my good friend over at Political Math explained the situation very well. Check out his post on the subject here.
Go ahead, I can see it through your monitor, you want to ask me what I would have done differently if I'd been elected the President of the United States of America, right? Ok, well since you asked so nicely I guess I'm obligated to explain myself. So here goes... I would have done hardly anything.
Yup, you heard me right, I would have done almost nothing; I wouldn't have passed any stimulus bills or done any bailouts and here's why.
I would have let the bankruptcies happen because the faster we let the debt die, the faster prices will fall. Remember right after World War I, sometime around the early 1920's, we had a recession/depression? Well, it only last a single year! Back then our government didn't do bailouts, stimulus packages, or any other such nonsense. It was a little later that Hoover destroyed the economy and Roosevelt compounded the issue because they thought government should force higher prices for products and particularly in labor. Those plans failed miserably.
Everyone knows that by doing such a thing our country would have to suffer a little pain. But the truth is, what medicine actually tastes good? It might be disgusting going down with that big swallow but after a short while doesn't everything feel a lot better? In fact, this is a perfect example of what I'm talking about. Our country and economy are very similar to the way our body's defense systems work. Although we may get sick from time-to-time, and we might need a little medicine here and there (tough love), it is ultimately the body that kills the disease and heals itself. No amount of medicine kills the cold virus, only our bodies can fight it off. So it goes with our economy, anything the government seems to do (history proves this) in an attempt to "rescue" the economy only seems to make things worse in the long run.
So where do I believe our economy is now and where are we headed?
I'm extremely pessimistic about the whole situation. I think we might be barely through the half of it the recession and the reason I say this is because our government is doing more to poison us then they are providing us the proper medication. The more they interfere with the economy with stimulus packages, bailouts, and so forth the LONGER it will take to recover from this problem. It is called a market correction for a reason. That is, something is broken and needs to be fixed or corrected. In our case, corrupt companies and quasi-government organizations like Freddy & Fanny are to blame and if we don't let these institutions go bankrupt then we will just repeat the same problem down the road but only a much larger scale each time. At some point something has to give and this house of cards is going to come down.
People were afraid of what the economy would bring and so they stopped spending and started saving. This is a very GOOD thing! But again, leave it to the government to do the wrong thing and tell people to SPEND SPEND SPEND our way back to prosperity. It is best to save your money, pay down your debts, and go back to work and the sooner that happens the faster our economy will return to normal or better than it has ever been.
In fact, only about 10% of the stimulus funds that the Obama Administration have been spent so far. You can see the data at the Recovery.gov website where they have some pretty graphs and other information. Don't forget that it is a government website and is filled BS on nearly every subject. So tread carefully when visiting that website.
I'd like to leave you with this video from CNBC's The Kudlow Report in which they are interviewing Ron Paul. Congressman Paul does an excellent job describing where we are now and were we are going and I think if you do the research, as I have, you too will see why what he says is the truth.
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FDIC Looks To Borrow Money From… Banks?
Our Federal government has been bailing out banks left and right over the last year or so. In fact, they've been doing it so often that most major news media are no longer covering the story because it has become so tedious. Here's the kicker though: Regulators are now saying that they want to have healthy banks lend billions of dollars to the FDIC. Who is the FDIC?
The Federal Deposit Insurance Corporation was established in 1933 to allow people who deposited money into bank accounts to feel confident that they were secure, even in cases where the bank itself is insolvent. "Runs on the bank" can be catastrophic for the economy as a whole, so this insurance is provided to make the public more confident in the institutions. The organization charges the banks insurance premiums to cover the costs of “bailing them out” in cases where they fail. The FDIC is backed by the full faith and credit of the US government, so even if the insurance charged is insufficient, the FDIC will still cover any losses.
- courtesy of Secure Saving
Here is a video explaining what the FDIC does (disclaimer: This video was created by the FDIC so viewer beware the bull$hit included):
The loans from healthy banks will enable the fund, which is blowing through cash like crazy due to the huge amount of bank failures, will be used to rescue the continuing number of failing banks to come. The FDIC, and banks, are requesting this option rather than the FDIC borrowing from the Treasury, which it is authorized to do by law. Just a note, the FDIC already has a $100 BILLION dollar line of credit with the Treasury!
So why not use the Treasury instead of borrowing from the banks? Wouldn't that be yet another corporation being bailed out by tax payer dollars and cause even more of an uproar? You bet it would. The other option is that the FDIC could push a special fee onto the banks to help pay for the shortfall. Note: In case you didn't know, banks and credit unions must pay fees to be a member of the FDIC and "protect" their depositor's funds. So it would be an increase on that fee of which we speak. Of course this is exactly what the banks do NOT want to happen.
So, their next best option is to literally borrow money from the banks that they themselves are supposed to be protecting!
Since January 2009 the FDIC has seized more than 94 failed banks and that is the reason for the shortage of funds. Oh, and remember when I said that they were thinking about maybe implementing a special fee to help fund themselves? Yeah, they've already had done that just a few months ago to bolster their funds to about $10 billion which is 1/3 of the fund's original size since the beginning of the year. FDIC officials have already set aside more than $32 billion dollars because they believe many more failures are coming.
By the way, ever wonder what it actually looked like when the FDIC seized a bank?
Want to see the FDIC actually seize a bank? 60 Minutes did a 13 minute segment following the FDIC as they seize and close down the five branches of Heritage Community Bank, a Chicago bank that failed on February 27th, 2009, and was acquired by MB Financial Bank. Closed on a Friday, all branches were open on Saturday. If you want to skip the talking head you can go about 5 minutes into it (people do go crazy a bit later on in the video!):
You might ask, can the FDIC do that? Can they really borrow from the very same banks they are supposed to be backing up? Yes, a very tiny section of a 1991 law adopted during the savings and loan crisis of the time lets banks receive bonds from the government at a rate set by the Treasury Secretary. That interest would be paid by, you guessed it, future payments by other member banks.
Here is one last video summing up the issue in an interesting way:
So let's sum up the story here in terms everyone can understand: The FDIC is yet ANOTHER government program failed. Lets all go out and vote on the healthcare industry now, shall we? Common sense just isn't as common as its name implies.
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Congressman Alan Grayson Grills Federal Reserve Inspector General Elizabeth Coleman
There aren't a lot of people sitting on Capital Hill that we can trust, as I'm sure you well know. Sometimes though one of the members of Congress steps out of the woodwork, stands up, and really does a great job of exposing others who aren't doing such. Congressman Alan Grayson, and his grilling of Federal Reserve Inspector General Elizabeth Coleman, is an excellent example of just such a moment.
Watch the video below and see just how much IG Coleman wiggles under Grayson's thumb:
Glenn Beck said, "Check out the fine work being done to keep up on things at the Fed. Skip to about 3 minutes where Alan Grayson asks about $9 trillion in off-balance-sheet transactions - the answer is amazing," in a video on his website.
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- QC Watchdog on Congressman Alan Grayson Grills Federal Reserve Inspector General Elizabeth Coleman
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