Pelosi Says Federal Health Care Bills Are Dead
Jan. 21, 2010 – Two days after Republican Scott Brown upset early favorite and Democratic Party candidate Martha Coakley for the Massachusetts U.S. Senate seat held for decades by the late Edward Kennedy, House Speaker Nancy Pelosi essentially told reporters the health care bills approved by the House and Senate are dead.
With Brown’s victory, Senate Republicans now have the critical 41st vote necessary to prevent Democrats from blocking filibuster attempts on highly controversial health care reform measures. Some Congressional Democrats suggested the House simply could vote to approve the Senate version with no amendments and send it to President Barack Obama for signing.
But Pelosi today told a group of reporters that she does not have the votes necessary to approve the Senate’s version of national health care reform, which does not restrict federal funding of abortions to the same extent as the measure approved in the House. The President previously wanted to have health care reform legislation signed into law before his Jan. 27 State of the Union Address. Brown’s victory means Obama won’t have a bill to sign.
Part of Brown’s successful platform is a campaign promise to vote against current health care reform measures, which propelled the Republican upstart to victory in a state traditionally leaning toward Democrats. But while Brown’s win means Senate Democrats no longer have free reign to impose their will on the upper chamber of Congress, internal opposition from other Democrats is stopping Pelosi from imposing her will in the House of Representatives.
“I know leadership has flowed with the idea over the weekend that let’s just take the Senate bill and just vote on it in the House floor. I bet it wouldn’t get a hundred votes,” Congressman Bart Stupak (D-Michigan) told the Fox Business Network yesterday. Stupak heads a coalition of moderate House Democrats opposed to federal funding of abortions, which the Senate version would allow.
“Members are very upset about the Senate bill … especially when it looked like states were paid off for that 60th vote,” Stupak explained. “Have we relegated the legislative body to who can get the best deal? People should have been able to put their vote up based on policy, not on what did I get for my state. And that really soured the American people and House members. We’re not willing to take that Senate bill – that Nebraska’s guy’s special deal or Louisiana or Florida or whatever.”
Another option Democrats have considered is to create a compromise measure requiring only a simple majority of 51 votes for approval in the Senate. But without 60 votes to stop a likely Republican filibuster, Senate Democrats most likely would not be able to call for a vote to approve or disapprove a potential compromise measure.
Health Care Legislation Stalls as Brown Wins U.S. Senate Seat
Jan. 20, 2010 – Republican Scott Brown upset Democratic candidate and Massachusetts Attorney General Martha Coakley to fill the U.S. Senate seat left vacant upon Ted Kennedy’s recent demise casts doubt on the ability of Congressional Democrats to pass hotly contested health care reform measures.
Brown’s clear victory over early favorite Coakley means Senate Democrats no longer have the 60 votes necessary to prevent a Republican filibuster. Democrats now have 57 seats in the U.S. Senate to 41 seats for Republicans. Two Senate seats are held by independents who have chosen to caucus with Democrats.
Both chambers of Congress have approved widely varying versions of national health care reform, but without a clear 60-seat majority in the Senate, getting a bill finalized for President Barack Obama to sign before delivering his Jan. 27 State of the Union Address has become doubtful. Some Congressional Democrats have suggested they simply would approve the Senate’s health care package without amending it, but several prominent Democrats have said that won’t happen.
“I know leadership has flowed with the idea over the weekend that let’s just take the Senate bill and just vote on it in the House floor. I bet it wouldn’t get a hundred votes,” Congressman Bart Stupak (D-Michigan) told the Fox Business Network today. Stupak heads a coalition of moderate House Democrats opposed to federal funding of abortions, which the Senate version would allow.
“Members are very upset about the Senate bill … especially when it looked like states were paid off for that 60th vote,” Stupak explained. “Have we relegated the legislative body to who can get the best deal? People should have been able to put their vote up based on policy, not on what did I get for my state. And that really soured the American people and House members. We’re not willing to take that Senate bill – that Nebraska’s guy’s special deal or Louisiana or Florida or whatever.”
House Majority Leader Steny Hoyer earlier told reporters he hoped Coakley would win but suggested the best move if Brown won would be for House Democrats to simply approve the Senate version of health care reform. And CNN has reported the White House and Democrat strategists are trying to lay the groundwork for having the Senate measure passed without amendment.
Another option is for Democrats to employ a Parliamentary sleight-of-hand and craft a compromise measure requiring only a simple majority of 51 votes for approval in the Senate. But without 60 votes to stop a likely Republican filibuster, Senate Democrats would not be able to call for a vote to approve or disapprove a potential compromise measure.
But with strong internal opposition in addition to opposition from newly empowered Senate Republicans, several leading Democrats have said current efforts likely will be scrapped. Congressman Barney Frank of Massachusetts has said a victory by Brown would “kill” the health care bills. And Senator Jim Webb (D-Virginia) yesterday issued a statement saying: “I believe it would only be fair and prudent that we suspend further votes on health care legislation until Senator-elect Brown is seated.”
Coakley already has conceded the U.S. Senate race in Massachusetts. Now it remains to be seen how President Obama and Congressional leaders react to the largest setback to their domestic agenda.
Democrats Exempt Unions from Benefits Tax; Senate Race Might Kill Bill
Jan. 15, 2010 – Democrats have cut yet another political deal to move forward with health care reform efforts by exempting union members from paying a 40 percent tax on so-called “Cadillac” health insurance benefits, but a pending U.S. Senate special election might kill all efforts.
The exemption was agreed to as Congressional leaders met with union officials and others behind closed doors during a 15-hour negotiations session in the White House on Wednesday. Union officials had threatened to withhold support of Democratic efforts to reform the United States’ $2.5 trillion-a-year health care system if they levied a 40 percent excise tax on generous group health care benefits.
Labor unions opposed the measure, saying their members accept lower pay in exchange for better benefits packages. The proposed 40 percent excise tax essentially is a tax on middle class families, and union members would have paid an estimated $60 billion over the duration of the tax.
But Congressional Democrats meeting with union representatives behind closed doors agreed to exempt union members from paying the so-called “Cadillac tax” on costly health care benefits until 2018. The deal means union members would be spared paying the estimated $60 billion in taxes while other working families would have to pay up to $90 billion in additional taxes simply for not being members of a union subject to collective bargaining agreements.
Lawmakers also agreed to exempt the dental and vision plans for collective bargaining units from the 40 percent excise tax, which would be levied on health insurance benefits totaling at least $8,900 annually for individuals and $24,000 annually for families. The annual benefits threshold will be even higher for health insurance plans with higher percentages of older workers and women, according to new reports.
Among union leaders participating in the secret discussions were Service Employees Union chief, Andy Stern, and AFL-CIO President Richard Trumka. Union officials representing teachers, food and commercial workers, electricians and government workers also participated in the marathon, private negotiations.
President Obama claims the excise tax would decrease health care costs by forcing health insurance companies to offer more affordable group health insurance plans to prevent paying the 40 percent excise tax. Congressional Democrats are trying to iron out differences between health reform measures approved separately in the U.S. Senate and House of Representatives. A compromise measure might be ready before the President delivers his annual State of the Union Address in late January or early February.
But even if Senate and House Democrats manage to craft a compromise measure, Tuesday’s special election to replace the Massachusetts Senate seat formerly occupied by the late Edward Kennedy might nix all agreements. Recent polling shows Republican Scott Brown has taken a slight lead over Democrat Martha Coakley.
If Brown wins, Democrats no longer would have the necessary support to defeat a Republican filibuster in the U.S. Senate. Congressman Barney Frank (D-Massachusetts) said a win for Brown would “kill the health bill,” and President Obama has gone to Massachusetts to campaign for Coakley during the final days before the special election.
Fed: Geithner Not Privy to AIG Payout Information
Jan. 11, 2010 – Legal counsel for the Federal Reserve Bank of New York says U.S. Treasury Secretary Timothy Geithner did not participate in or know about negotiations ensuring U.S. taxpayers would fully reimburse American International Group’s (AIG) banking partners soon after AIG received an initial $85 billion in taxpayer funds during the financial crisis of 2008.
Geithner was the president of the Federal Reserve Bank of New York until President Barack Obama appointed him U.S. Treasury Secretary. But several federal lawmakers during the past week have accused Geithner of orchestrating full payments for AIG’s banking partners during the fall and winter of 2008, when Geithner was the president of the Federal Reserve Bank of New York.
Congressman Darrell Issa (R-California) yesterday said he is requesting more information after recently receiving a letter from the head legal counsel for the Federal Reserve Bank of New York stating Geithner had no role in and was not aware of efforts by Federal Reserve officials to ensure AIG fully reimbursed its banking partners rather than negotiate a lower settlement amount when the insurance giant faced bankruptcy in 2008. Issa last week released copies of e-mails indicating Federal Reserve officials actively sought to keep U.S. taxpayers from knowing about efforts to fully reimburse banks with contractual business ties to AIG.
But the Jan. 8 letter to Issa from the Federal Reserve Bank of New York’s general counsel, Thomas Baxter, suggests lower-level employees kept Geithner out of the loop regarding negotiations and settlement amounts.
“In my judgment, as the New York Fed’s chief legal officer, disclosure matters of this nature did not warrant the attention of the president,” Baxter wrote. “Further, Mr. Geithner played no role in, and had no knowledge of, the disclosure deliberations and communications referenced in those e-mails.”
Geithner last week denied having any role in the controversial negotiations between AIG officials and representatives of banking giants Goldman Sachs, Deutsche Bank and Societe Generale. But Issa suggested the letter from Baxter confirms Federal Reserve Bank officials already knew Geithner’s position on the matter and carried out his will.
“It’s a staggering admission by Mr. Baxter that he felt strong enough that Secretary Geithner wanted him to limit AIG’s disclosures on counterparty payments to the SEC that he says he didn’t even feel a need to bring the details to his boss’ attention,” Issa said. “This letter raises more questions on the inner-workings of the New York Fed during one of the most pivotal periods in our nation’s history.”
Issa isn’t the only federal lawmaker looking into the matter.
Congressman Spencer Bachus (R-Alabama) and Congressman Elijah Cummings (D-Maryland), last week requested Geithner appear before the House committees on which they serve to explain how AIG’s banking partners received 100 cents on the dollar for high-risk, mortgage-backed securities deals known as credit default swaps, which crippled AIG and would have bankrupted the insurer had it not received tens of billions of dollars in involuntary aid from U.S. taxpayers. Because an AIG bankruptcy would have meant banks a much lower – if any – payout from AIG, federal lawmakers want to know why and how banks received full payments and to what extent Geithner, then the head of the Federal Reserve Bank of New York, might have acted to hide the payments from U.S. taxpayers.
AIG paid more than $62 billion to fully reimburse the Goldman Sachs Group and other banking partners on high-risk credit default swaps tied to various mortgage markets after receiving its initial $85 billion taxpayer bailout. But instead of revealing the extent of payments to banks, Federal Reserve officials sought to keep them hidden from the public, Issa contends.
New York Federal Reserve officials negotiated the payments to banks, which was some $13 billion more than the settlement AIG officials attempted to negotiate. Issa suggested Geithner used the AIG bailout as a “backdoor” bailout for banks without taxpayers knowing.
Formerly the world’s largest insurance company, AIG became the world’s most indebted insurer after federal officials in September 2008 agreed to extend the company an $85 billion loan in exchange for an 80 percent share of company stocks. Federal officials said allowing AIG to go bankrupt would have a devastating impact on U.S. and international financial markets and later revised lending terms, making it a $153 billion loan with a lower interest rate and longer repayment period.
Report: Geithner Sought to Keep Taxpayers in Dark Over AIG Payments
Jan. 7, 2010 – Even after U.S. taxpayers involuntarily provided an initial $85 billion bailout to ailing insurer American International Group (AIG), U.S. Treasury Secretary Timothy Geithner pressured company officials not to inform taxpayers about payments to AIG’s banking partners.
Geithner’s efforts at secrecy occurred while he was head of the Federal Reserve Bank of New York, which initially allocated some $85 billion in taxpayer funds to AIG in late 20087. But instead of letting U.S. taxpayers know which banks would receive funds, Geithner pressured AIG officials to not disclose the names of its banking partners and the amounts of taxpayer dollars the banks would get through their contractual ties.
Congressman Darrell Issa (R-California) recently obtained e-mail correspondences between AIG officials and the Federal Reserve Bank of New York showing Federal Reserve officials attempted to hide the fact AIG fully would reimburse its trading partners on mortgage-backed securities and other contracts. Issa is the ranking member of the House Oversight and Government Reform Committee and requested copies of e-mails and other correspondences between AIG and Federal Reserve officials in October after news reports indicated AIG fully reimbursed its trading partners instead of negotiating settlement terms after nearly averting bankruptcy via AIG’s taxpayer-funded federal bailout.
“It appears that the New York Fed deliberately pressured AIG to restrict and delay the disclosure of important information,” Issa told Bloomberg News. Issa suggested Geithner wanted to keep U.S. taxpayers in the dark about “politically inconvenient information.” Geithner became chairman of the U.S. Federal Reserve soon afterward upon President Barack Obama’s appointment.
AIG paid more than $62 billion to fully reimburse the Goldman Sachs Group and other banking partners on high-risk credit default swaps tied to various mortgage markets after receiving its initial $85 billion taxpayer bailout. But instead of revealing the extent of payments to banks, Geithner sought to keep them hidden from the public, Issa contends.
New York Federal Reserve officials negotiated the payments to banks, which was some $13 billion more than the settlement AIG officials attempted to negotiate. Issa suggested Geithner used the AIG bailout as a “backdoor” bailout for banks without taxpayers knowing.
Formerly the world’s largest insurance company, AIG became the world’s most indebted insurer after federal officials in September 2008 agreed to extend the company an $85 billion loan in exchange for an 80 percent share of company stocks. Federal officials said allowing AIG to go bankrupt would have a devastating impact on U.S. and international financial markets and later revised lending terms, making it a $153 billion loan with a lower interest rate and longer repayment period.
Under the new plan, the Federal Reserve provided AIG $60 billion in loans and the U.S. Treasury another $40 billion so company officials could buy up preferred stock. Federal officials also approved $53 billion to purchase the company’s risky mortgage-backed assets and other debt contracts.
AIG Execs Threaten to Quit Over Pay Restrictions
Dec. 8, 2009 – Five high-level executives at taxpayer-rescued insurance giant American International Group (AIG) earlier this month threatened to resign over federal pay restrictions, but two already have recanted, the Wall Street Journal reported this week.
High-level AIG executives – financial services head William Dooley, domestic property and casualty chief John Doyle, company attorney Anastasia Kelly, international life insurance chief Rodney Martin, and board vice chairman and international property and casualty insurance chief Nicholas Walsh – on Dec. 1 submitted notices stating their intent to resign their respective positions by the end of the month if President Barack Obama’s “Pay Czar,” Kenneth Feinberg, deeply slashed salaries, according to the Wall Street Journal. Two reportedly since have backed down from their threats to resign.
Obama appointed Feinberg to oversee executive pay at seven U.S. firms accepting taxpayer bailout funds. Feinberg in October reduced pay for AIG’s 13 highest-ranking executives by an average 57 percent and is assessing pay scales for the next 75 highest-paid employees, including the five executives who threatened to resign, according to the Wall Street Journal.
The threatened resignations were not the first at AIG over Feinberg’s limitations on executive pay. Barely a month after receiving approval for an executive compensation package valued at up to $10.5 million per year, AIG’s newest chief executive officer last month threatened to quit and later recanted over potential federal limitations on executive pay.
Robert H. Benmosche, AIG’s current chief executive and formerly the top executive at MetLife, reportedly threatened to resign his new position after Feinberg said he would limit executive compensation at corporations that accepted funds through the $700 billion federal Troubled Asset Relief Program (TARP), which was created last year during the economic meltdown and designed to relieve ailing corporations of their toxic assets, such as mortgage-backed securities, which were dragging them down into bankruptcy.
Benmosche threatened to step down when the AIG chief executive informed the company’s board of directors he would resign from the position he accepted in August in light of executive compensation limitations recently announced by federal officials and after Feinberg had approved Benmosche’s $10.5 million pay package.
Benmosche reportedly cited potential problems retaining top executives with federally limited pay amounts when telling AIG’s board of directors he would resign last week, according to the Wall Street Journal, which cited anonymous sources. Benmosche allegedly clarified his comments later, telling board members he intends to stay on at AIG and telling employees he would “fight” on their behalf while continuing to work with Feinberg.
Feinberg in October ordered an average 50 percent pay cut for the top 25 executives at AIG and six other corporations that accepted taxpayer funds through the federal TARP program. Although Feinberg’s decision only applies to the remainder of 2009, executives at affected companies anticipate he will base 2010 compensation levels on the same criteria.
Proponents say the scaled-back compensation amounts are justified for firms that would be bankrupt but for taxpayer intervention. But opponents say the reduced pay levels only punish people not responsible for current company woes and make it harder for struggling firms to get back on their feet and retain critical staff capable of finding jobs elsewhere – as well as make it more difficult for firms to repay their respective debts to U.S. taxpayers.
AIG’s Top Executive Threatens to Quit, Recants Over Executive Pay
Nov. 16, 2009 — Barely a month after receiving approval for an executive compensation package valued at up to $10.5 million per year, the newest chief executive officer of taxpayer-rescued American International Group (AIG) last week threatened to quit and later recanted over potential federal limitations on executive pay at firms rescued by U.S. taxpayers.
Robert H. Benmosche, AIG’s current chief executive and formerly the top executive at MetLife, last week reportedly threatened to resign his new position after President Barack Obama’s “Pay Czar,” Kenneth Feinberg, said he would limit executive compensation at corporations that accepted funds through the $700 billion federal Troubled Asset Relief Program (TARP), which was created last year during the economic meltdown and designed to relieve ailing corporations of their toxic assets, such as mortgage-backed securities, which were dragging them down into bankruptcy.
The Wall Street Journal last week reported Benmosche might step down after the AIG chief executive informed AIG’s board of directors he would resign from the position he accepted in August in light of executive compensation limitations recently announced by federal officials and after Feinberg had approved Benmosche’s $10.5 million pay package.
Benmosche reportedly cited potential problems retaining top executives with federally limited pay amounts when telling AIG’s board of directors he would resign last week, according to the Wall Street Journal, which cited anonymous sources. Benmosche allegedly clarified his comments later, telling board members he intends to stay on at AIG and telling employees he would “fight” on their behalf while continuing to work with Feinberg.
Feinberg in October ordered an average 50 percent pay cut for the top 25 executives at AIG and six other corporations that accepted taxpayer funds through the federal TARP program. Another decision is coming regarding the next 75-highest paid positions at the same seven firms.
Although Feinberg’s decision only applies to the remainder of 2009, executives at affected companies anticipate he will base 2010 compensation levels on the same criteria. Proponents say the scaled-back compensation amounts are justified for firms that would be bankrupt but for taxpayer intervention. But opponents say the reduced pay levels only punish people not responsible for current company woes and make it harder for struggling firms to get back on their feet and retain critical staff capable of finding jobs elsewhere – as well as make it more difficult for firms to repay their respective debts to U.S. taxpayers.
AIG officials last year accepted what has become a nearly $183 billion, taxpayer-funded federal rescue package after what formerly was the world’s largest insurer became its most indebted on bad bets tied to various mortgage markets. Federal officials approved the bailout funds for AIG and other firms to stave off what they claimed would be a devastating domino effect on global financial markets.