Bailout

Surprise! Obamacare’s crony health insurance company bailout could hit $1 billion in 2014

Remember when the Obamacare “risk corridors” bailout program wasn’t going to cost taxpayers anything? Well, that might not be true — surprise! At a House subcommittee hearing yesterday, Rep. Jim Jordan (R-OH) explained that the Obamacare bailout provision for health insurance companies could cost taxpayers as much as $1 billion in 2014:

An ObamaCare revenue-sharing program amounts to a taxpayer bailout of insurance companies, the chairman of a House Oversight subcommittee said Wednesday, adding the bill could run more than $1 billion just in 2014.

Rep. Jim Jordan (R-Ohio), chairman of the Economic Growth, Job Creation and Regulatory Affairs panel, disputed a previous Congressional Budget Office (CBO) report that the risk corridors would cost the government nothing.
[…]
Based on the committee’s own research of 15 traditional insurers and 23 ObamaCare co-op insurers, Jordan said companies expect to get nearly $730 million from the corridor.

“The information provided by the insurers suggests that the total taxpayer bailout could well exceed $1 billion this year alone,” he said.

The “risk corridors” provision — one of the “three “Rs” of Obamacare — guarantees payments from the federal government to insurers if the risk pool isn’t properly balanced with the young and healthy people who are intended to offset the costs of sick and unhealthy consumers.

“Fiscally conservative” Blue Dog Democrats fail to protect taxpayers

Blue Dog Democrats

Much ink has been spilled in the last few years over the decline of the Blue Dog Coalition in the House of Representatives. Just this week, the Washington Post ran a story noting that this group of purportedly centrist Democrats will has seen its numbers fall from 50 members four years ago.

“[T]he Blue Dog Coalition is a shell of its former self, shrunken to just 15 members because of political defeat, retirements after redrawn districts left them in enemy territory and just plain exhaustion from the constant battle to stay in office,” wrote Paul Kane at the Washington Post. “Several are not running for reelection in November, and a few others are top targets of Republicans.”

There actually 19 members of the Blue Dog Coalition, though three members aren’t running for reelection in 2014. Reps. Jim Matheson (D-UT) and Mike McIntyre (D-NC), whose districts were targeted by Republicans, decided to retire. Rep. Mike Michaud (D-ME) is running for governor in Maine. Other members of the Blue Dog Coalition face tough bids for reelection, which could further dwindle its numbers at the beginning of the next Congress.

Blue Dog Democrats claim to “represent the center of the House of Representatives” and purport to be “dedicated to the financial stability and national security of the United States.” In news stories, reporters will frequently refer to Blue Dogs as “fiscally conservative” or “deficit hawks.”

Senate Republicans should oppose Jack Lew

Jack Lew

At the end of last week, President Barack Obama nominated Jack Lew, who currently serves as White House Chief of State, to replace Timothy Geithner as the next Treasury Secretary. While he may eventually win confirmation, the White House and Lew may have a fight on their hands in the Senate:

Republicans say Jack Lew will have to answer for what they view as the president’s bare-knuckle tactics when Lew undergoes the Senate confirmation process for Treasury secretary. 
[…]
Republicans are frustrated that Obama has not put forth what they would consider a credible plan to reform entitlement programs. And they were angered when after the election he traveled to Pennsylvania and Virginia for campaign-style events to pressure Republicans to extend the middle-class tax cuts.

Senate GOP aides say Lew will be called to account for the White House’s tactics when he comes before the Senate Finance Committee.

“He’s coming to the Senate from the chief of staff’s role in the White House and this White House just points the finger at everyone else. It refuses to take the blame for the bad things that are happening. This is a White House that is overly political and not really interested in alternate points of view,” said a senior Senate GOP aide.

“He’s going to be facing a lot of questions related to his involvement in the White House. He’s the top dog over there. He’s responsible for the direction,” the aide said. “It’s a shame the president would send along such a divisive figure.”

The Truth about the GM and Chrysler Bailouts

Government Motors

Written by Randal O’Toole, Senior Fellow at the Cato Institute. Posted with permission from Cato @ Liberty.

Vice presidential candidate Paul Ryan has been accused of lying when he claimed that Obama broke a promise by letting a Wisconsin auto factory close, when in fact the factory closed before Obama took office. Although that isn’t precisely what Ryan said, there is some validity to the accusation that his statement was deceptive.

But numerous Obama supporters are playing just as loose with the facts when they say that, if Obama hadn’t rescued GM and Chrysler, far more factories would have closed permanently. That is simply untrue. While news agencies have fact-checked some of the things being said at the Democratic convention, I haven’t seen any challenges of this claim.

‘London Whale’ upsets J.P. Morgan

As many of you may already know, insvestment banking firm J.P Morgan recently lost nearly $2.3 billion dollars on some very, very, bad bets.

Sources in the MSM accordingly, show a trader only dignified by the sobriquet ‘London Whale’ was able to hedge together larger shares of Morgan company money and place them on malevolent trade returns. They did not pay off.

Some circles call it business as usual. Other circles call this collusion, or extended risk. Yet others would call this, hedging- or: placing large assets on wide-open targets, at just the right time and place. I don’t need to mention the implications of this; we’re back to 2007, when the Recession we are currently in, evolved- by these means.

Now, clearly- you could claim- the company knew what it’s employees were aiming at with their stoked assets. They didn’t. This story is just emerging, but it seems clear that this is a perfect example of those who don’t know what they are doing, laksadaising large amounts of money; and wielding power so great, there could be serious repercussions.

Gladly, at least so far, there have been few.

Nevertheless, what this shows is not only nefariousness on the part of some, but also the evident close ties in finance between Europe and the United States. We may think this country is just pulling from a recession, when in reality we’re right back to 2007, or earlier.

Entire Markets and nations are tanking in Europe: acidic debt scouring away at the health of entire economies. The European Union ready to dissect into multiple breakaway-province nationalities. National furor is high, while economic support has hit all-time lows.

At first sight, the entire investments-gone-wrong scenario would yearn for more oversight- but beware of what you ask for! Oversight by whom? I don’t think market regulation is a particularly good example of solving fiscal ‘problems’ by any stretch of the economic imagination.

Government Intervention Run Amuck: Bank Intervention

My list of examples of the unintended consequences of government intervention in the marketplace gets longer and longer. This time, I’m going to point out the latest irony: Investment banking’s profitable last quarter.

This would be wonderful news if it were genuine, but looking a little deeper reveals the truth. First, in one of Barron’s feature articles by Andrew Bary, we learn about a little-discussed fact: Goldman Sachs has only been able to issue low-cost debt due to the backing of the FDIC through a program called the TLGP, or Temporary Liquidity Guarantee Program.

Obama’s Socialism Problem

Barack Obama got a little touchy over a question from The New York Times during a recent interview:

President Obama was so concerned that he may have mishandled a question from New York Times reporters about whether he was a socialist, that he called the paper to clarify his position. The president initially answered the question aboard Air Force One saying, “Let’s take a look at the budget, the answer would be no.”

The president explained he wanted a return to the tax rates of the 1990s by giving a tax-cut to 95 percent of workers. But the president may have felt that was too dismissive, and called the Times from the Oval Office explaining: “It was hard for me to believe that you were entirely serious about that socialist question… it wasn’t under me that we started buying a bunch of shares of banks. it wasn’t on my watch.”

Peter Schiff: The Case Against the Stimulus Plan- “We’re a Ponzi economy.”

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Peter Schiff explains that we need to stimulate savings and production that the stimulus bill well depress that, making the situation worse.  A severe recession is the price that must be paid for years of reckless borrowing and spending.

Opposing ‘Stimulus’ — Hundreds of Economists Sign on to Cato Institute Ad

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This is a great video follow up to the full-page ad CATO published listing hundreds of economists who don’t believe that a “stimulus package” is the best option for American taxpayers.

Dr. Paul Speaks about the Stimulus Package

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Dr. Paul correctly terms the stimilus package a “spending bill” and voices encouragement that other Republicans are standing against it.


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