United Liberty

With another debt ceiling fight potentially brewing, the House of Representatives passed the Full Faith and Credit Act, sponsored by Rep. Tom McClintock (R-CA), which would require the Treasury Department to prioritize debt service and Social Security payments to keep the United States’ credit rating intact:

The House on Thursday passed legislation that would allow the government to borrow money above the debt ceiling, but only to service U.S. bondholders and make payments related to the Social Security Trust Fund.

The Full Faith and Credit Act, H.R. 807, was passed in a 221-207 vote that saw all but eight Republicans favor the bill, and every Democrat oppose it.

Republicans said the bill creates a necessary option for the government to extend its borrowing ability in the event that it bumps up against the debt ceiling. Republicans and Democrats are expected to begin talks this month on increasing the debt limit.

You can view the roll call vote here.

President Obama, who has pledged a veto should it pass the Senate, Democrats have attacked the measure because it would take one of their favorite talking points off the table. President Obama has frequently claimed during debt ceiling fights that Social Security checks could be held up if the statutory national debt limit is not raised.

Written by Daniel J. Mitchell, a senior fellow at the Cato Institute. Posted with permission from Cato @ Liberty.

Every so often you get a “teaching moment” in Washington. We now have one excellent example, as President Obama’s nominee for treasury secretary has been caught with his hand in the “tax haven” cookie jar. Mr. Lew not only invested some of his own money in a Cayman-based fund, he also was in charge of a Citi Bank division that had over 100 Cayman-domiciled funds. This provides an opportunity to educate lawmakers about the “offshore” world.

As you can imagine, Republicans are having some fun with this issue. Mitt Romney was subjected to a lot of class warfare demagoguery during the 2012 campaign because he had invested some of his wealth in a Cayman fund. GOPers are now hoisting Lew on a petard and grilling him about the obvious hypocrisy of a “progressive” utilizing—both personally and professionally—a jurisdiction that commits the unforgivable crime of not imposing income tax.

Undeterred by Senate Majority Leader Harry Reid’s refusal to bring legislation up for a vote that would shine some light on the activities of the nation’s central bank, Sen. Rand Paul (R-KY) reintroduced the Audit the Fed bill today:

Following his father’s crusade, Sen. Rand Paul (R-Ky.) has refiled legislation that would require an expansive audit of the Federal Reserve.

The proposed audit of the bank that oversees the nation’s monetary system has been a longtime crusade of Ron Paul and became a banner issue during his unsuccessful 2012 presidential campaign. He argued that the Fed was responsible for manipulating currency and damaging the economy. Ron Paul was able to persuade Mitt Romney and Newt Gingrich to also support an audit.
[…]
“Harry Reid was the single reason Audit the Fed was not brought to the floor of the Senate in 2012,” John Tate, president of the Campaign for Liberty, said in a statement. “Harry Reid knows full well that Audit the Fed- which he previously claimed to be a strong supporter of- would pass both the House and the Senate if he allowed a vote. It seems the Senate Majority Leader doesn’t want the American people to know what he, President Obama, and the Federal Reserve have been doing to our money and our economy.”

This weekend, MoveOn.org pushed a petition written by economic policy expert actor Danny Glover asking President Barack Obama to appoint Paul Krugman to serve as the next Treasury Secretary. The petition, which has garnered nearly 200,000 signatures, states, “Press speculation has centered on candidates likely to support the Wall Street agenda of cuts to Social Security and Medicare benefits and other domestic spending rather than government policies to create jobs.”

“We want President Obama to nominate Nobel prize-winning economist Paul Krugman, who opposes austerity and wants the government to focus on creating jobs.”

While one may not put it past Obama to make such an appointment, there is next to no chance that Krugman would win confirmation from the Senate. If you though Timothy Geither has been worthless in his role as Treasury Secretary, Krugman would be a disaster, based on things he’s said since President Obama has been in office.

Here’s a sample of The Crazy™ from Krugman:

We’re starting the year right where we left off — in the red. After four consecutive years of $1 trillion budget deficits, the Treasury Department announced that the budget deficit for the first month of the 2013 fiscal year was $120 billion:

The Treasury said on Tuesday the October deficit was $120 billion, larger than economist forecasts for a $114 billion gap and up from $98 billion in October of 2011.

Growth in expenditures outpaced rising receipts, deepening the deficit. Outlays grew to $304 billion from around $262 billion in the same month last year while receipts rose to $184 billion from $163 billion.

The budget deficit for FY 2013 is expected to be just below $1 trillion, which still isn’t very encouraging. The national debt currently stands at $16.244 trillion dollars, up by $5.619 trillion since Barack Obama took office. This is the same guy who promised a net-spending cut in his first term and called his predecessor, who was horrible on spending, “unpatriotic” because he ran the national debt up by $4 trillion in eight years.

Written by Michael F. Cannon, Director of Health Policy Studies at the Cato Institute. Posted with permission from Cato @ Liberty.

Last Friday, House Oversight Committee chairman Darrell Issa (R-CA) and colleagues sent a letter to Treasury Secretary Timothy Geithner and Internal Revenue Service Commissioner Douglas Shulman accusing Treasury of “either willfully misleading the Committee or…purposefully withholding information that is essential to the Committee’s oversight effort.”

As Jonathan Adler and I document in our forthcoming Health Matrix article, “Taxation Without Representation: The Illegal IRS Rule to Expand Tax Credits Under the PPACA,” the IRS has announced it will impose ObamaCare’s taxes on employers and individuals whom Congress expressly exempted from those taxes, and will send potentially hundreds of billions of taxpayer dollars to private health insurance companies, also contrary to the plain language of the statute. Oklahoma attorney general Scott Pruitt has filed a legal challenge to the IRS rule that imposes those illegal taxes.