Intelligence Failure

Our Vision
A secure America, a confident public, and a strong and resilient society and economy.
Our Mission
We will lead the unified national effort to secure America. We will prevent and deter terrorist attacks and protect against and respond to threats and hazards to the Nation. We will secure our national borders while welcoming lawful immigrants, visitors, and trade. From Budget-in-Brief for Fiscal Year 2010, Department of Homeland Security[1]

On December 25, 2009, the Department of Homeland Security (DHS) was caught with its pants down when Umar Farouk Abdulmutallab set his own pants on fire. Abdulmutallab, a Nigerian traveling from Amsterdam, tried to bring down Northwest Airlines flight 253 and its 278 passengers by igniting an explosive in his underwear as the plane was on approach to Detroit.

This was a failure by the government to do the job it arrogated in 2002 with the creation of the DHS, which includes the Transportation Security Administration (TSA). Despite an annual budget of $55 billion, its performance was an intelligence failure in the truest sense. It wasn't a failure to put enough people or money into detecting potential terrorists--the would-be assassin's own father had reported him to US embassy officials in Nigeria six months earlier:

"Nigeria's This Day newspaper cited family members as saying that the suspect's father, Umaru Mutallab, the retired chairman of First Bank in Nigeria, has been uncomfortable with his son's 'extreme religious views' and had reported him to the US embassy and Nigerian security agencies six months ago.

"The US government created a record on Umar Farouk Abdulmutallab last month in the intelligence community's central repository of information for known and suspected international terrorists, but there was not enough negative data to place him on a no-fly list, a US official said."[2]

It was a failure of intelligence analysis.[3] The CIA knew about Abdulmutallab, but his name never made it to the no-fly list.[4] The DHS could not have dropped its pants any lower unless DHS agents had driven Abdulmutallab to the airport and stopped to pick up his explosives on the way.

Who actually protected citizens against the terrorist attack? Who responded in a way that "prevented and deterred" a terrorist attack? The passengers on the plane. It was only after passengers subdued the would-be bomber and the danger had passed that the DHS sprang into action, harassing civilian bloggers with a subpoena for revealing "sensitive content" from a leaked TSA security directive. It was "the second time in a month that the TSA has found some of its sensitive airline security documents on the Internet."[5] Apparently the DHS makes a habit of getting caught with its pants down.

What the Department of Homeland Security Does For You

What exactly do Americans get from the DHS for $55 billion? Compared to the $700 billion TARP bailout for bankers, that's not much, so we probably shouldn't expect much.

At the time of the attempted bombing, the DHS was very busy fulfilling its version of its mission to "secure America." On December 25, 2009, "A Sampling of Current Initiatives" on the Homeland Security web site showed the DHS was busy securing the DHS bureaucratic empire. The lead item on its list describes the construction of a $650 million temple for the DHS:

"The American Recovery and Reinvestment Act contains $650 million to support construction of the Department's new headquarters, which will bring together components scattered geographically throughout the Washington area. As part of the same effort, the Department has begun consolidating over 40 leases in the National Capital Region, saving taxpayers $163 million over the next 30 years."

Today businesses operate effectively with multiple locations around the world, staying connected with computers and cell phones, but the DHS needs to "bring together components scattered geographically throughout the Washington area"? Spending $650 million to save exactly 25% of the total over the next 30 years? Who else but the federal government would spend $650 million to save $163 million?

As the DHS pretends to "secure America," the result of its most visible activity is that airplane travelers get to be searched and abused by TSA personnel. Some Americans might imagine that these airport security measures are a necessary part of a well-thought out plan by the DHS to prevent terrorism. They would be wrong. They are in fact, knee jerk responses to incidents in the past where the DHS was habitually caught with its pants down. Consider the past actions of our protectors:

• Shoe bomber Richard C. Reid tried to detonate PETN explosive in his shoes during an American Airlines flight in December 2001. The federal government now requires all human cattle to take off their shoes before boarding.
• Next, British authorities said they uncovered a plot to use liquid explosives, so we can't carry liquids onboard.[6]

Now the underwear bomber tries to detonate PETN explosives in his underwear, so our "protectors" are planning full body scans with millimeter-wave and backscatter X-ray scanners so they can see beneath our underwear in a "virtual strip search."[7][8][9][10][11] President Obama directed the DHS to speed the installation of $1 billion in advanced-technology body scanners at American airports and to work with international airports so that they upgrade their own equipment for use on passengers on US-bound flights.[12]

How would the DHS respond if terrorists adopt drug-running mule techniques and a terrorist tries to bring explosives on the plane in his rectal cavity? We may find out: according to CBS News, Abdullah Asiera, an al Qaeda member tried to kill a Saudi Prince in a Saudi palace:

"Taking a trick from the narcotics trade - which has long smuggled drugs in body cavities - Asieri had a pound of high explosives, plus a detonator inserted in his rectum."[13]

If the DHS continues to respond as it has after every new security incident, and pulling our pants down isn't enough, we might expect arbitrary on-the-spot rectal and vaginal exams.[14] Whatever the DHS response, we can be sure it will involve more abuse by the TSA; America is the "land of the free" only as long as you do what you're told, and only if you adopt the fatuous mindset of James Carville who, if told to jump, would ask: "Off what cliff?"[15]

The Real Intelligence Failure

"The most dangerous man to any government is the man who is able to think things out... without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane, intolerable." H. L. Mencken

Since 9-11, most Americans followed in lock step as the Bush (R) administration and Congress used that crisis as an opportunity to pass the Patriot Act, and create the TSA and the DHS to "protect" Americans. The massive increase in government bureaucracy and the resultant loss of American freedoms is Bush's baby. Now that President Obama (D) and secretary of DHS Janet Napolitano (D) are in charge, Bush supporters can look in a mirror for an idea as to how things got this way.

Each time the DHS gets caught off guard, it responds with excuses, and then calls for more "security" measures that treat air travelers like cattle. Americans are becoming conditioned to reflexively relinquish responsibility to our rulers without wondering why people are literally dying to kill them. Could it have anything to do with US foreign policy?

The "candidate for change" not only hasn't closed Guantanamo (they're moving it to Illinois instead), and is maintaining the status quo in Iraq, but he is increasing US military efforts in Pakistan and Yemen. In addition to directing the DHS to speed use of body scanners a week after the underwear bomber incident, President Obama threatened to widen the war in the Middle East by moving the fight to Yemen and "more than doubling" military aid to Yemen.[16]

The real intelligence failure isn't in government; the real intelligence failure is with Americans who relinquish their freedoms and responsibilities, and trust politicians to keep them safe.

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[1] "Budget-in-Brief Fiscal Year 2010," US Department of Homeland Security, (Accessed at http://www.dhs.gov/xlibrary/assets/budget_bib_fy2010.pdf on January 9, 2010).

[2] "Flight terror suspect Abdulmutallab charged with trying to blow up jet," James Sturcke, guardian.co.uk, 27 December 2009, (Accessed at http://www.guardian.co.uk/world/2009/dec/27/us-terror-flight-abdulmutallab-charged on January 11, 2010).

The "system" knew about the underwear bomber in advance because they were told about him by the young man's father:

"The cable from the State Department outlining Mr. Abdulmutallab’s father’s warnings about his son was available to the N.C.T.C. officials who maintained the no-fly list, the report said. But the cable alone did not meet the minimum standard for Mr. Abdulmutallab to get on the list."[4]

[3] "Flight 235 (sic): This time, plenty of data but analysis failed," By LYNN SWEET, Chicago Sun-Times, January 8, 2010, (Accessed at http://www.suntimes.com/news/sweet/1980054,CST-NWS-sweet08.article on January 12, 2010).

[4] "Obama Details New Policies in Response to Terror Threat," By JEFF ZELENY and HELENE COOPER, NY Times, January 7, 2010, (Accessed at http://www.nytimes.com/2010/01/08/us/politics/08terror.html?th=&emc=th&pagewanted=all on January 9, 2010).

"Mr. Abdulmutallab, who has been linked to the Yemeni branch of Al Qaeda, came to the attention of the American authorities when his father went to the American Embassy in Nigeria last month to report that his son had expressed radical views before disappearing. The father, a respected retired banker, did not say his son planned to attack Americans but sought help locating him and bringing him home, United States officials said.

"After Mr. Abdulmutallab’s father asked for help, embassy officials from several agencies, including the Central Intelligence Agency, met to discuss the case, officials said.

"Paul Gimigliano, a C.I.A. spokesman, said that was the first time the agency had heard of the young Nigerian. 'We did not have his name before then,' he said.

"The embassy sent a cable to Washington, which resulted in Mr. Abdulmutallab’s name being entered in a database of 550,000 people with possible ties to terrorism. But he was not put on the much smaller no-fly list of 4,000 people or on a list of 14,000 people who are required to undergo additional screening before flying, nor was his multiple-entry visa to the United States revoked.

“'It now appears that weeks ago this information was passed to a component of our intelligence community but was not effectively distributed so as to get the suspect’s name on a no-fly list,' Mr. Obama said of the father’s warning. 'There appears to be other deficiencies as well. Even without this one report, there were bits of information available within the intelligence community that could have and should have been pieced together.'"[5]

[5] "TSA subpoenas bloggers, demands names of sources," By Eileen Sullivan, Associated Press, Dec 30, 2009 (Accessed at http://news.yahoo.com/s/ap/20091231/ap_on_go_ca_st_pe/us_airliner_attack_tsa_subpoenas on December 31, 2009).

[6] "British Authorities Say Plot to Blow Up Airliners Was Foiled," By ALAN COWELL and DEXTER FILKINS, NY Times, Published: August 10, 2006, (Accessed at http://www.nytimes.com/2006/08/10/world/europe/11terrorcnd.html?fta=y&pagewanted=all on December 31, 2009).

[7] "Explosive on Flight 253 Is Among Most Powerful," By KENNETH CHANG, NY Times, Published: December 27, 2009, (Accessed at http://www.nytimes.com/2009/12/28/us/28explosives.html?_r=1&sudsredirect=true on December 31, 2009).

[8] "Debate Over Full-Body Scans vs. Invasion of Privacy Flares Anew After Incident," By JOHN SCHWARTZ, NY Times, Published: December 29, 2009, (Accessed at http://www.nytimes.com/2009/12/30/us/30privacy.html?th&emc=th on December 31, 2009).

[9] "Underwear Bomber Renews Calls for ‘Naked Scanners’," By Noah Shachtman, Wired Magazine, December 28, 2009, (Accessed at http://www.wired.com/dangerroom/2009/12/underwear-bomber-renews-calls-for-naked-scanners/ on December 31, 2009).

[10] "New scanners break child porn laws," by Alan Travis, guardian.co.uk, 4 January 2010, (Accessed at http://www.guardian.co.uk/politics/2010/jan/04/new-scanners-child-porn-laws January 5, 2010).

"The rapid introduction of full body scanners at British airports threatens to breach child protection laws which ban the creation of indecent images of children...

"Privacy campaigners claim the images created by the machines are so graphic they amount to 'virtual strip-searching' and have called for safeguards to protect the privacy of passengers involved."

[11] "Child Porn Fears Block Under 18s From Full Body Scanners," Updated: 01- 5-10, Huffington Post, (Accessed at http://www.huffingtonpost.com/2010/01/05/child-porn-fears-limit-fu_n_411769.html on January 5, 2010).

Scans of children under 18 have been banned in Great Britain.

[12] "Obama Details New Policies in Response to Terror Threat," By JEFF ZELENY and HELENE COOPER, NY Times, January 7, 2010, (Accessed at http://www.nytimes.com/2010/01/08/us/politics/08terror.html?th=&emc=th&pagewanted=all on January 9, 2010).

[13] "Al Qaeda Bombers Learn from Drug Smugglers," By Sheila MacVicar , CBS News, LONDON, Sept. 28, 2009, (Accessed at http://www.cbsnews.com/stories/2009/09/28/eveningnews/main5347847.shtml on January 4, 2010).

[14] "Fliers Complain About X-Rated Security Screenings," by Pam Zekman, CBS Chicago, Jul 22, 2008, (Accessed at http://cbs2chicago.com/investigations/xrated.security.screenings.2.777423.html on January 11, 2010).

[15] "Carville: Airport scanners can 'measure my penis'," January 8, 2010, by Christina Wilkie, The Hill, (Accessed at http://washingtonscene.thehill.com/in-the-know/36-news/1349-carville-airport-scanners-can-measure-my-penis on January 9, 2010).

[16] "Obama Says Al Qaeda in Yemen Planned Bombing Plot, and He Vows Retribution," By PETER BAKER, NY Times, January 2, 2010, (Accessed at http://www.nytimes.com/2010/01/03/us/politics/03address.html?th&emc=th on January 3, 2010).

Eric Margolis points out some of what US military aid to Yemen has already accomplished:

"In December, the Saudis, backed by US air power, CIA and special forces, intervened against Shia Houthi tribesmen along Yemen’s northern desert border. A semisecret US base in Djibouti is being used for attacks on Yemen, Somalia and Kenya.

"Just before the Detroit air incident, US warplanes killed 50–100 Houthi tribesmen fighting the American-backed regime. US Special Forces, warplanes and killer drones have been active since 2001, assassinating Yemeni militants and antigovernment tribal leaders. It was only a matter of time before Yemeni jihadists struck back at the US."[17]

[17] "Welcome, Americans, to Mysterious Yemen," by Eric Margolis, LewRockwell.com, (Accessed at http://www.lewrockwell.com/margolis/margolis175.html on January 5, 2010).

Looking Without Seeing

He said, "Go and tell this people: 'Be ever hearing, but never understanding; be ever seeing, but never perceiving.' Make the heart of this people calloused; make their ears dull and close their eyes. Otherwise they might see with their eyes, hear with their ears, understand with their hearts, and turn and be healed."

Then I said, "For how long, O Lord?"

And he answered: "Until the cities lie ruined and without inhabitant, until the houses are left deserted and the fields ruined and ravaged, until the LORD has sent everyone far away and the land is utterly forsaken. Isaiah 6:9-12 NIV

In this most modern of countries, America, a plague ravages the land. Slowly at first, stores close their doors, neighbors lose their jobs, and random houses are emptied, abandoned and lifeless. Not because of any biological plague, instead America's cities suffer from an economic plague, a quiet plague that leaves people robbed and ruined. This is a plague of lies by accounting, numbers on a balance sheet manipulated by the federal government to show whatever it wants, promising people something for nothing, keeping them docile and waiting for the next government vaccine, all while they hope to avoid their neighbor's fate. The plague of lies is spreading, leaving more people unemployed, relying on charity for food and shelter, and losing hope.

How could this happen? We have access to vastly more information than any who have come before us. We see, we hear, yet we do not perceive.

"Accounting fraud at Enron is such a big story because it is so exceptional; only once in a blue moon does a major corporation destroy itself in this way. In contrast, “accounting” fraud is an inherent feature of government." Thomas DiLorenzo, "Real Accounting Fraud" [1]

Enron is synonymous with corporate dishonesty. Enron executives pretended to follow generally accepted accounting principles (GAAP), but used special purpose entities to hide liabilities and overstate the company's equity.[2] Investors lost nearly $45 billion in Enron and some executives went to prison for fraudulent accounting practices.[3] Most people won't forget the infamous Enron accounting scandal of 2001.

Why doesn't the news media ever mention a more blatant and worse accounting scandal that has been going on since 1968?

Our federal government, quick to prosecute Enron executives, doesn't even pretend to follow the GAAP standard, and is in a financial hole 1000 times deeper than Enron ever was. Estimates for federal government liabilities are as high as $65 trillion. But unlike the Enron accounting fraud, this time there won't be any trials.

Taxpayers, the "investors" in the US government accounting fraud, will pay with higher taxes, a stagnant economy that jeopardizes their incomes, and inflation that robs their savings. Instead of prosecutions, the federal government bails out wealthy executives, and "chastises" them by limiting their annual compensation to under $10 million.[4][5] Meanwhile, the vast majority of Americans will continue to support the federal government as it grinds them into the ground, all the while believing federal government lies that the government makes our lives better. All this is happening now before our eyes. Yet we make our ears dull and close our eyes.

John Williams' Shadow Government Statistics site reports on federal government lies about economic statistics. The federal government misrepresents unemployment and inflation rates, and minimizes the annual budget deficit. As they see their paychecks shrinking, houses abandoned, and businesses closing, most people know things are worse than the government reports. But the media and Americans continue to ignore the truth: federal government profligacy is destroying America. "...the cities lie ruined and without inhabitant, until the houses are left deserted and the fields ruined and ravaged..."

Since the Johnson administration, when LBJ created his "Great Society," the biggest "something for nothing" program since the New Deal, the federal government has used an accounting gimmick called "unified budget accounting" to misrepresent the size of the federal budget deficit.[6] For the last 40 years the federal government has consistently spent more money than it takes in, trying to hide the fact by using unified budget accounting rules that ignore off-budget spending.

Today people still believe that the Clinton (D) administration ran a budget surplus from 1998 to 2000. The government tells them so, using its unified budget accounting scheme to define a surplus as the amount by which "on-budget" federal revenues exceed outlays for a given fiscal year. What the government doesn't tell them is that the "on-budget surplus" excludes spending and revenues for the off-budget Social Security Trust Fund, Medicare, Postal Service, and pension funds. But if people looked at historical data available from the government, they would see that it shows the gross federal debt has increased every year since 1969. There has never been a surplus since then, no matter what the news media and then-President Clinton would have people believe.

In this decade, deficits have been so huge that the federal government doesn't even pretend to run a surplus. But it still can lie about the size of the shortfall: the annual deficit is much worse than Congress and the President profess. According to the GAAP standard used by private corporations, the 2008 US treasury report (pdf) for the last year of the Bush (R) administration showed an increased gross debt of $997.7 billion and liabilities of $4.1 trillion for an approximate $5.1 trillion total debt. Yet the unified budget reported a deficit of $454.8 billion. To further insult us, the Obama (D) administration told us we needed a stimulus program of increased federal spending as our latest vaccine.

The unified budget deficit reported for the first year of the Obama administration in 2009 is three times higher than in 2008: $1.417 trillion. The GAAP version of the deficit will be higher still.[7]

For how long can this continue? Until we either see with our eyes, hear with our ears, understand with our hearts, turn, and are healed, or until the land is utterly forsaken.

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[1] "Real Accounting Fraud," The Free Market, April 2002; Volume 20, Number 4, by Thomas J. DiLorenzo, (Accessed at http://mises.org/freemarket_detail.aspx?control=395 January 3, 2010).

[2] "Causey May Put GAAP On Trial," by Dan Ackman, January 23, 1004, Forbes.com, (Accessed at http://www.forbes.com/2004/01/23/cx_da_0123topnewse.html on January 2, 2010).

[3] "How Enron awards do, or don't, trickle down," By Kris Axtman, Staff writer of The Christian Science Monitor, June 20, 2005, (Accessed at http://www.csmonitor.com/2005/0620/p02s01-usju.html on January 2, 2010).

[4] "Fannie’s Christmas Eve Surprise," by Steven Davidoff, NY Times, January 4, 2010, (Accessed at http://dealbook.blogs.nytimes.com/2010/01/04/fannies-christmas-surprise/ on January 4, 2010).

[5] "What’s a Bailed-Out Banker Really Worth?," By STEVEN BRILL, NY Times, Published: December 29, 2009, (Accessed at http://www.nytimes.com/2010/01/03/magazine/03Compensation-t.html?pagewanted=all on January 4, 2010).

[6] "GOVERNMENT ECONOMIC REPORTS: THINGS YOU’VE SUSPECTED BUT WERE AFRAID TO ASK! Federal Deficit Reality (Part Three in a Series of Five), by Walter J. "John" Williams, September 7th, 2004, (Accessed at http://www.shadowstats.com/article/federal_deficit_reality on January 3, 2010).

[7] "A Citizen's Guide to the 2008 Financial Report of the US Government," (Accessed at http://www.fms.treas.gov/fr/08frusg/08frusg.pdf on January 3, 2010).

Table 1, page 4 of the report compares the budget deficit of $454.8 billion and the net operating cost of $1.009 trillion. "A Snapshot of the Government's Financial Position & Condition" on page 10 shows Social Insurance Liabilities that increased from fiscal year 2007 to 2008 by $4.073 trillion. So a deficit of $454.8 billion is reported, while the national debt increases by $997.7 billion, and total liabilities increase by approximately $5.1 trillion.

According to the annual letter from the commissioner for the US Treasury for the fiscal year ended October 2008 (pdf):

"The financial results for the year include total receipts of $2,523.6 billion, a decrease of $44 billion under 2007 receipts; total outlays of $2,978.4 billion, an increase of $249.2 billion over 2007 outlays; and a $454.8 billion deficit, a decrease of $293.3 billion under the 2007 deficit."

From the letter from the commissioner of the US Treasury for the fiscal year ended October 2009 (pdf):

"The financial results for the year include total receipts of $2,104.6 billion, a decrease of $419 billion from 2008 receipts; total outlays of $3,521.7 billion, an increase of $543.3 billion from 2008 outlays; and a $1,417.1 billion deficit, an increase of $962.3 billion from the 2008 deficit."

Separation of Powers

"Ultimate sovereignty (power) in the United States resides with the people. In an attempt to govern themselves better, the people adopted the U.S. Constitution. Those persons present for the writing of the Constitution at the Constitutional Convention of 1787, known as the Framers, feared the concentration of too much power in any one person or governmental agency. In an attempt to prevent such an accumulation of power, the Framers wrote a Constitution with a system of checks and balances." Myth from a government website [1]

On Monday, November 30, 2009, the day after the biggest shopping weekend of the year, when most Americans are busy with the holiday season (and might be distracted), our three branches of government worked tirelessly (but not for us) to increase government power:

• A Congressional Budget Office (CBO) estimate said that the Senate healthcare "re-form" bill could significantly reduce costs for many people who buy health insurance on their own, and would not raise costs for the vast numbers of Americans who receive coverage from large employers. In other words, increased government involvement in healthcare would only be a good thing for everyone.
• President Obama (D) issued orders to send about 30,000 additional American troops to Afghanistan. The eight year war will continue.
• The Supreme Court vacated a lower court ruling requiring the government to release photographs showing the abuse of prisoners in Iraq and Afghanistan. We wouldn't want people seeing what's really going on over there would we? Especially US citizens who think they're being protected from terrorism.

The Legislative Branch at Work for You

According to a November 30, 2009 NY Times article, "No Big Cost Rise in U.S. Premiums Is Seen in Study," a CBO estimate of costs for Senator Reid's "Patient Protection and Affordable Care Act" reassured healthcare "re-form" supporters:

"Centrist Democrats like Senator Evan Bayh of Indiana, whose votes are vital to President Obama’s hopes of getting the bill approved, had feared that the measure would drive up costs for people with employer-sponsored coverage. After reading the budget office report, Mr. Bayh said he was reassured on that point."

Now the esteemed Senator can continue pretending he's taking good care of his constituents by voting for more government.

The 29 page letter (pdf) from the CBO to Senator Evan Bayh (D) was supposed to prove that individual insurance premiums wouldn't increase. According to the article:

"Before taking account of federal subsidies to help people buy insurance on their own, the budget office said the bill would tend to drive up premiums. But as a result of the subsidies, it said, most people in the individual insurance market would see their costs decline, compared with the costs expected under current law. The subsidies, a main feature of the bill, would cost the government nearly $450 billion in the next 10 years and would cover nearly two-thirds of premiums for people who receive them."

Earlier CBO estimates stated that the budget deficit wouldn't increase with healthcare "re-form" legislation. By successfully obfuscating healthcare "re-form" costs, the CBO accomplished its mission to confirm the benefits of increased government involvement in healthcare. Rahm Emanuel (D), White House chief of staff, welcomed the latest CBO estimate:

“The CBO has rendered a fundamental judgment that this will reduce the deficit and reduce people’s premium costs.”

Opposing Rs chose not to argue that socialized healthcare doesn't work and is just wrong. Instead Rs said the CBO estimate confirmed their concerns about premium price increases, which is about as relevant as arguing that they believe fewer angels can dance on the head of a pin than do Ds:

"...Republican senators like Charles E. Grassley of Iowa and Mitch McConnell of Kentucky, the minority leader, said the report validated their concerns. They focused on the prediction that unsubsidized premiums in the individual insurance market, less than a fifth of those with health insurance, would rise an average of 10 percent to 13 percent."

On several pages of the estimate, the CBO said the analysis of premiums was extremely complex, so the experience of individuals and families "could vary significantly from the average.” On the final page, the CBO estimate explained the political nature of healthcare budget estimates (pdf):

"All of those considerations serve to emphasize the considerable uncertainty that surrounds any estimate of the impact of any proposal that would make substantial changes in the health insurance or health care sectors, given the size and the complexity of those sectors. That uncertainty applies to the estimated effects of proposals on the federal budget and insurance coverage rates, as well as to their impact on premiums."

Or to paraphrase: despite our pretensions of analysis, don't count on any of this to be accurate.

The Executive Branch at Work for You

According to another November 30, 2009 NY Times article, "Obama Issues Order for More Troops in Afghanistan," President Obama is trying to mimic two Presidents:

• LBJ (D) in his escalation of the Vietnam war simultaneous with his orchestration of a massive federal government intrusion in healthcare with the creation of Medicare in 1965, and
• GWB (R) on the deck of the USS Abraham Lincoln announcing "Mission Accomplished."

But in President Obama's case, healthcare "re-form" legislation hasn't passed yet, and apparently no aircraft carrier was available. Instead the President delivered a speech at the United States Military Academy at West Point Tuesday night.

The Obama administration also announced it was sending its special representative for Afghanistan and Pakistan, and former arms dealer to Suharto, Richard Holbrooke, to Brussels on Tuesday to brief NATO and European allies about the escalation.

The Judicial Branch at Work for You

In "Supreme Court Overturns Decision on Detainee Photos," the third November 30, 2009 NY Times article documenting the tireless work ethic of our rulers and our wonderful system of checks and balances, the robed wise men and women of the US Supreme Court issued a three sentence ruling to vacate a lower court ruling. The end result is that the secretary of defense can block the release of incriminating photographs of prisoner abuse in Iraq and Afghanistan.

The Justice department of the Obama administration originally planned to release the photographs, but according to the article, the President, who is "committed to creating an unprecedented level of openness in government" [2]:

"...overruled his lawyers, saying his national security advisers had persuaded him that releasing the photos would inflame anti-American sentiment abroad and endanger American troops. Some of the pictures, according to a government brief, showed 'soldiers pointing pistols or rifles at the heads of hooded and handcuffed detainees,' a soldier who appears to be striking a detainee with the butt of a rifle, and a soldier holding a broom 'as if sticking its end' into a prisoner’s rectum."

Justice for all: as long as they aren't American citizens. As with the equivocal CBO report, the wise men and women of the Supreme Court were equally adept at pencil-whipping an issue. According to the article:

"The Supreme Court’s summary order in the case, Department of Defense v. A.C.L.U., No. 09-160, did not address whether that ruling was correct. It merely said the new law required reconsideration of the case."

The new law to which the Supreme Court referred, is a special dispensation by Congress delegating responsibility to the Executive branch to decide whether or not to release the incriminating photographs. According to the article:

"The law applies to photographs taken from Sept. 11, 2001, to Jan. 22, 2009, showing 'the treatment of individuals engaged, captured or detained after Sept. 11, 2001, by the armed forces of the United States in operations outside of the United States,' so long as the secretary of defense certifies that disclosure 'would endanger citizens of the United States, members of the United States armed forces or employees of the United States government deployed outside of the United States.' ”

Would it surprise you to know that secretary of defense Robert Gates signed just such a statement certifying that disclosure of photographs of criminal behavior by employees of the US government would endanger citizens and government employees of the US on November 13, 2009?

So much for checks and balances.

Our rulers think that separation of powers means separating you from yours. Aren't you reassured knowing they're working overtime to do so?

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[1] U.S. Courts The Federal Judiciary Separation of Powers Background information. (Accessed on December 1, 2009 at http://www.uscourts.gov/outreach/resources/separationofpowers.html)

[2] Memorandum by President Barack Obama on "Transparency and Open Government," (Accessed on December 1, 2009 at http://www.whitehouse.gov/the_press_office/TransparencyandOpenGovernment/)

Memorandum for the Heads of Executive Departments and Agencies

SUBJECT: Transparency and Open Government

My Administration is committed to creating an unprecedented level of openness in Government. We will work together to ensure the public trust and establish a system of transparency, public participation, and collaboration. Openness will strengthen our democracy and promote efficiency and effectiveness in Government.

Government should be transparent. Transparency promotes accountability and provides information for citizens about what their Government is doing. Information maintained by the Federal Government is a national asset. My Administration will take appropriate action, consistent with law and policy, to disclose information rapidly in forms that the public can readily find and use. Executive departments and agencies should harness new technologies to put information about their operations and decisions online and readily available to the public. Executive departments and agencies should also solicit public feedback to identify information of greatest use to the public...

Is the Public "Option" a Trojan Horse for a Single-Payer Plan?

“Someone once said to me, ‘This is a Trojan Horse for single-payer,’ and I said, ‘Well, it’s not a Trojan Horse – it’s right there! I’m telling you: we’re going to get there, over time, slowly.’” Jacob Hacker, professor of political science at Yale, and author of the basis of the healthcare "re-form" plan that Obama and Ds are selling. (Youtube video July 2008) [1]

The Trojan Horse story teaches us to beware of foes bearing gifts. Healthcare "re-formers" bring gifts to the people with today's healthcare "re-form" legislation. Professor Jacob Hacker denies any stealth in the gift of the public "option," since it's obvious to him that the public "option" will lead to socialized healthcare in the US. While acknowledging the inevitability of single-payer, Hacker is still careful with his terminology, using "single-payer" instead of "socialism". President Obama (D), politically constrained as Anita Dunn pointed out, can no longer even proclaim his professed goal of a universal single-payer plan.

So the President denies that the public "option" will lead to socialized healthcare. In a speech on June 11, 2009 at a town hall rally for healthcare "re-form" in Green Bay, WI, Obama disingenuously described R opposition to a public health insurance option in the healthcare re-form bill (video):

"It's not clear that it's based on any evidence, as much as it is their thinking, their fear that somehow once you have a public plan, that government will take over the entire healthcare system."

But it's not only Rs who see it as a step to socialized healthcare, "progressive" Paul Waldman, an advocate for socialized healthcare, explains in a December 23, 2008 American Prospect article:

"That isn't to say a public option is just a modified single-payer system. It would be one option among many for individuals and businesses, and would leave the private insurance system in place (you can read more on the benefits of the public option here). But it does crack the door open for expanding the number of Americans who get their health insurance through the government."

The Trojan Horse Strategy

While the President denies that the public "option" is a Trojan Horse for a single-payer healthcare system, what do other healthcare "re-formers" say?

Rahm Emanuel (D), the President’s chief of staff, "Mr. Don't-Let-a-Crisis-Go-to-Waste," clearly states how you are being lied to by the President in this video from June 17, 2009:

Socialized Healthcare Supporter: "Hey Rahm, why'd the President take single payer off the table? In 2003 he said he was for single-payer, now he's against it, why did he flip-flop?"

Emanuel: "Because it's just what I said in there. The objective is important, it's not the means."

Healthcare for America Now (HCAN) spokesman John Gaudette, speaking at a monthly meeting of the Progressive Democrats of America in May 11, 2009 outlines the strategy (at 3:00 in this video):

"...the public health insurance option is the thing to do because that's what's winnable. And you can make that strong enough and leave it to the American people to determine where this thing goes, its much easier to fix legislation when its created than to create something new, and that's something important to remember. This tension, this idea that we can hold out for something that's as grand and hopeful as we want tends to run counter to what's going on in DC."

In this one minute video, Gaudette, like Hacker and Emanuel, advises single-payer supporters to be patient, the public "option" will become single-payer. Gaudette credits congresswoman Jan Schakowsky (D) from the Illinois 9th district, part of the House D leadership, for pushing the public "option." Watch this video of Schakowsky speaking to advocates of single-payer healthcare on April 18, 2009, as she vehemently affirms the strategy:

"And next to me was a guy from the insurance company, who then argued against the public health insurance option, saying 'it wouldn't let private insurance compete, that a public option will put the private insurance industry out of business and lead to single-payer.' (audience cheers)

“My single-payer friends, he was right. The man was right... I know that many of you here today are single-payer advocates and so am I... Those of us who are pushing for a public healthcare option don't disagree with the goal. This is not a principled fight. This is a fight about strategy for getting there, and I believe we will.”

Wisconsin senator Russ Feingold (D) also confirmed the strategy of using this year's iteration of healthcare "re-form" as a Trojan Horse for a socialist single-payer system in an interview May 5, 2009 (video):

"I would love to see it, and I believe the goal here is to create whatever legislation we have in a way that could be developed into something like a single-payer system."

Single-payer proponent and congressman, Barney Frank (D), acknowledges that the public "option" is a Trojan Horse in this July 27, 2009 video:

Socialized Healthcare Supporter: "Don't you think we should scratch everything and start anew with single-payer?"

Frank: "No."

Socialized Healthcare Supporter: "Why not? ...Why shouldn't we start with single-payer anew?"

Frank: "Because we don't have the votes for it. I wish we did. I think, if we get a good public option, it could lead to single-payer, and that's the best way to reach single-payer. Saying you'll do nothing until you reach single-payer is a sure way to never get it..."

Socialized Healthcare Supporter: "Right now there's not a strong public option, is there?"

Frank: "We don't know what the plan is. I'm for a strong public option. I think your strategy is suicidal for trying to get the single-payer. The best way we're going to get single-payer, the only way, is to have a public option and demonstrate its strength and its power."

Health and Human Services secretary Katherine Sebelius now denies the public "option" is the path to socialized healthcare according to a June 2009 AP interview:

"The notion that a public option 'is really the stalking horse' for a government-run system 'is not accurate,' Sebelius said."

But Sebelius, like Obama in 2007, outlined the gradual path to single-payer universal healthcare in this 2007 video:

“I’m all for a single-payer system…eventually"

Our political doctors have slipped on their rubber glove, and while they may start with a finger, soon it will be a fist.

Remember, it's for your own good.

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[1] Patients United Now, “The Public Plan Deception—It’s Not About Choice” video: (accessed 24 Nov 2009 at http://www.youtube.com/watch?v=zZ-6ebku3_E )

Watch the video and decide what you think Hacker is saying. Hacker acknowledges that the public "option" will lead to single payer socialism while he shills for his brainchild (pdf). He supplies the talking points that "re-form" proponents use, and believes that Medicare, one of the reasons the Obama administration is so hot to regulate healthcare costs is working well:

"The idea of a public insurance plan goes back very far, and the Medicare program, of course, embodies that ideal. In 1965, the United State decided that for America's elderly, and later for America's disabled, there would be a public health insurance plan available regardless of income or medical conditions. And that plan is enormously popular today, to the point that many Americans, it seems, aren't fully aware that it's a government insurance plan, because it works so well they just can't believe the government actually gets things right."[2]

Hacker says he was taken out of context in footnote 37 of PUBLIC PLAN CHOICE IN CONGRESSIONAL HEALTH PLANS: THE GOOD, THE NOT-SO-GOOD, AND THE UGLY, By Jacob S. Hacker, Ph.D., Aug 20, 2009, (accessed 24 Nov 2009 at http://www.metaglyfix.com/jsh/pdfs/Hacker_Public_Plan_August_2009.pdf):

"However, when a small firm decides to purchase coverage through the exchange, they are in effect buying group health insurance for their workers. If firms believe their workers would have access to better options through the exchange, why should they not be able to buy coverage for their workers through it? After all, employers who enrolled their workers in the exchange would have to pay the same share of the premium that they would have to pay if they purchased coverage outside the exchange, so the main attraction of going into the exchange for employers would be to obtain better value group health plans, including the public plan.37"

"37 Lately, comments I made at a 2008 forum have been taken out of context to suggest that public plan choice is a stealth strategy of eliminating private insurance. This is nonsense: I developed the public plan idea as an alternative to “Medicare for All” (see Hacker, Jacob S., “Fixing the Left’s Health Care Prescription,” Slate, 10 October 2006, accessed at http://www.slate.com/id/2151269/?nav=tap3), as well as a competitive alternative to private insurance that would compete on a level playing field with private plans within a new national insurance exchange (see Hacker, supra note 6). I do not believe that a new public plan will evolve into a single payer system. My aforementioned comment at the 2008 event was that the new public plan is not a hidden “Trojan Horse.” The public plan is right out in the open, as it should be, since most Americans say they want the choice of a new public plan. While I believe that we should move over time toward a system in which lower-wage workers and the employees of small firms—who are not served or ill-served by the private market today—have access to a more stable set of public and private insurance options, I have always contended that most higher-wage workers and large employers will continue to be covered by employment-based plans. As I wrote in my proposal, “The main reason why Health Care for America is comparatively inexpensive [with regard to new federal spending] is that higher-wage and larger employers would continue to offer qualified coverage privately. For large employers with higher payrolls, private employment-based coverage would remain a good deal—especially since this proposal would not eliminate the tax-favored status of private coverage. For employers not enjoying the administrative economies of large-group purchase or with lower payrolls, the Health Care for America Plan [offering the new public plan and private plans] would be the better option. Thus, most of the new federal spending would be targeted on those firms and workers least capable of providing or obtaining insurance today.” (Hacker, Jacob S., “Health Care for America,” EPI Briefing Paper #180, 11 January 2007, accessed at http://www.sharedprosperity.org/bp180.html.)"

[2] "Inventor of the public option explains why it's crucial," Alex Koppelman, Salon, September 9, 2009, (accessed 24 Nov 2009 at http://www.salon.com/news/feature/2009/09/09/public_option/index.html).

Liars, Damned Liars, and Politicians (Part 3)

"The ability for elected officials to say things that are untrue, and I would say the ability to say one thing to one audience, and another thing to another audience has ended... There is no such thing as off the record. There is no such thing as a 'closed to press' meeting. Anybody with a cell phone can pick up the video.

"Senator Obama himself learned that when he told a fundraising group in San Francisco in March... He made some comments about people who owned guns in small communities that ended up, of course, costing us a lot of votes in rural Pennsylvania... Anything you say you should expect to be on Youtube...

"The premium for what ... I might just call being honest is much higher than it used to be: that what people could get away with even 4 years ago isn't going to happen." Anita Dunn, White House communications director for the first year of the Obama administration, speaking at a Jan. 12, 2009 event in the Dominican Republic on Obama's media tactics. (Minutes 4:40-6:32 of Youtube video)

Anita Dunn reminisces about the lost "ability for politicians to say things that are untrue" or more precisely, "to say one thing to one audience and another thing to another audience." What? Politicians lie?

Dunn acknowledges a premium for a politician speaking truthfully. Robert Reich (D) alluded to the same phenomenon in his September 26, 2007 speech at Berkeley, where he listed the goals of government-run healthcare.

According to Dunn, politicians can't "get away with" being honest about their goals any more. She even notes how her politician, Obama (D), unfortunately found he could no longer speak so truthfully in public settings. In Obama's case, he revealed his distaste for small town gun owners and people who "cling" to religion out of frustration (Youtube video).

The premium to politicians for revealing the true goals of their policies to the people is that those politicians might not get to inflict their visions on anyone. To paraphrase Lincoln, you can fool all of the people some of the time, but you can't fool anyone if you actually tell them the truth about your plans for them. Imitating a doctor or nurse, but on a grander scale, politicians pretend they're saving the world with their "re-forms," lying to you that "it won't hurt a bit," right until they jab the needle in. Healthcare "re-form" will hurt, but according to the politicians, it's for our own good, so it's ok for them to lie; we can thank them later.

Politicians know what's best for us--just ask them.

Obama and the Public "Option"

On August 11, 2009 in Portsmouth, N.H., in his pursuit of healthcare "re-form," the President carefully made "a distinction between a universal plan versus a single payer plan" (video):

Q: "Mr. President, you've been quoted over the years -- when you were a senator and perhaps even before then -- that you were essentially a supporter of a universal plan. I'm beginning to see that you're changing that. Do you honestly believe that? Because that is my concern. I'm on Medicare, but I still worry that if we go to a public option, period, that the private companies, the insurance companies, rather than competing -- because who can compete with the government; the answer is nobody. So my question is do you still -- as yourself, now -- support a universal plan? Or are you open to the private industry still being maintained?"

PRESIDENT: "Well, I think it's an excellent question, so I appreciate the chance to respond. First of all, I want to make a distinction between a universal plan versus a single-payer plan, because those are two different things.

"A single-payer plan would be a plan like Medicare for all, or the kind of plan that they have in Canada, where basically government is the only person -- is the only entity that pays for all health care. Everybody has a government-paid-for plan, even though in, depending on which country, the doctors are still private or the hospitals might still be private. In some countries, the doctors work for the government and the hospitals are owned by the government. But the point is, is that government pays for everything, like Medicare for all. That is a single-payer plan.

"I have not said that I was a single-payer supporter because, frankly, we historically have had a employer-based system in this country with private insurers, and for us to transition to a system like that I believe would be too disruptive. So what would end up happening would be, a lot of people who currently have employer-based health care would suddenly find themselves dropped, and they would have to go into an entirely new system that had not been fully set up yet. And I would be concerned about the potential destructiveness of that kind of transition. All right? So I'm not promoting a single-payer plan."

The President wanted to make a distinction between a universal plan and a socialist single payer plan because he pretends that one will not lead to another. He says he is not "promoting" a single payer plan, but we do know he is "a proponent of a single payer universal healthcare plan" as he said in 2003 in this video of his speech to an AFL-CIO group during his US Senate campaign:

“I happen to be a proponent of a single-payer universal health care plan.”

As late as 2007, then Senator Obama was advocating a gradual move to a universal single-payer healthcare plan. Forty seconds into this May 2007 video of then Senator Obama during his campaign for President, he described how the US could gradually be moved to a single payer plan:

“But I don’t think we’re going to be able to eliminate employer coverage immediately. There’s going to be potentially some transition process — I can envision a decade out, or 15 years out, or 20 years out...”

Why do you think they call it "single payer" and not socialism?

Today the President says he wants only mandatory universal healthcare, not single-payer. The proposed mandatory universal healthcare includes a curiously named public "option." The public "option" will be mandatory--if you don't have healthcare insurance, the government will force you to buy it. President Obama is not telling Americans that he ultimately wants universal single-payer healthcare because healthcare "re-form" would not pass in Congress if he advocated socialism directly. Most Congressional "re-form" supporters pretend for the public that individual Americans will still be in control of their healthcare after healthcare "re-form" legislation passes. "Re-formers" are rushing to pass legislation in Obama's first year because of the fleeting nature of political capital.

As Anita Dunn said, pols can't be "honest" with Americans about their real vision for America; no longer can a politician "get away with" what they could just four years ago. Dunn is right, and President Obama has learned his lesson: he can no longer pay the premium for honesty. The President is lying because he thinks he knows what's best for Americans. Remember: it's for your own good, it won't hurt a bit, and you'll be thanking them later.

Or will you?

Liars, Damned Liars, and Politicians (Part 2)

OBAMA: Now there are also those who claim that our reform efforts would insure illegal immigrants. This too is false. The reforms I'm proposing would not apply to those who are here illegally.

WILSON: You lie.

OBAMA: That's not true. From an exchange during President Obama's speech before a joint session of Congress September 9, 2009

Was Joe Wilson (R) right? Did Obama (D) lie? Decide for yourself.

"Raul Grijalva, an Arizona Democrat, said Hispanic lawmakers got a pledge from leaders to defeat any Republican attempt to insert language to bar undocumented immigrants from exchanges." From Bloomberg article "Democrats Seek Votes on Health-Care as Delay Possible (Update1)" the day before the US House passed healthcare "re-form" legislation HR 3962 by a vote of 210-205.

Representative Wilson's rudeness during President Obama's speech to Congress on healthcare "re-form" drew attention to the messenger. But what about Wilson's message? President Obama promised his healthcare "re-forms" wouldn't apply to illegal aliens, so why was it so important to Hispanic lawmakers that D-leaders pledge to defeat any language that barred illegal aliens from the health insurance exchanges?

On November 7, 2009, the House passed the largest expansion of the nation’s healthcare system since the 1965 creation of Medicare.[1] The Congressional Budget Office estimate for HR 3962 (CBO estimate pdf) predicted:

"According to CBO and JCT’s assessment, enacting H.R. 3962 would result in a net reduction in federal budget deficits of $109 billion over the 2010–2019 period (see Table 1). In the subsequent decade, the collective effect of its provisions would probably be slight reductions in federal budget deficits. Those estimates are all subject to substantial uncertainty.

"The estimate includes a projected net cost of $891 billion over 10 years for the proposed expansions in insurance coverage. That net cost itself reflects a gross total of $1,052 billion in subsidies provided through the exchanges (and related spending), increased net outlays for Medicaid and the Children’s Health Insurance Program (CHIP), and tax credits for small employers; those costs are partly offset by $167 billion in collections of penalties paid by individuals and employers."

Statistics and Illegal Alien Demographics

Only in Washington, D.C. can a bill projected to cost more than $1 trillion over 10 years be considered to reduce the budget deficit over the same time period by $109 billion. To do the equivalent on a small scale, you'd have to plan to buy a yacht while you're millions of dollars in debt, buy a speedboat instead, and then tell your family you're saving lots of money because you didn't buy the yacht.

Notice also how the CBO estimate (see Table 3 of estimate) counts $168 billion in penalties paid by individuals and employers as income. House Ways and Means Committee Member Dave Camp (R) released a letter (pdf) from the non-partisan Joint Committee on Taxation (JCT) confirming that failure to comply with the mandate in HR 3962 for individuals to buy health insurance would land people in jail. People who do not maintain “acceptable health insurance coverage” and do not to pay the bill’s new individual mandate tax (generally 2.5% of income), are subject to numerous civil and criminal penalties, including criminal fines of up to $250,000 and imprisonment of up to five years.

The CBO is so certain that this onerous bill will oppress people and that many will try to avoid complying with it, that its budget estimate includes future penalties. Adding penalties as income to the estimate lets the CBO pretend HR 3962 costs even less than everyone knows it will. Congress is depending on people breaking the law, so they made it painful enough to force many people to break it. This lets the CBO publicize that the inevitable penalties collected are not an increase in taxes.

If Congress makes it illegal to breathe and collects penalties when people do what it takes to survive, they could subsidize lots of programs while bragging that taxes were low.

Magic and misdirection while the crowd cheers for more.

Federal bureaucrats also plan for illegal aliens to help pay for the extra costs through FICA taxes. The 2009 Annual Report by the Board of Trustees for Social Security and Medicare uses illegal aliens in their estimates of the future costs of Social Security and Medicare.[2] The federal government has no incentive to stop illegal border crossings because it depends on enough people crossing the border illegally to help pay for Medicare and Social Security. Actuaries count illegal aliens favorably in their calculations of future program costs.[3]

Paying Off the AMA

Is Obama lying about anything else?

The AMA usually opposes changes in the status quo. But this time the AMA supports healthcare "re-form" because it was bought off (pdf) with promises of change to the Medicare Sustainable Growth Rate (SGR) payment system for physicians. Without a change to current law, SGR Medicare payments to doctors are scheduled to be cut 21.5 percent as of January 1, 2010, and by an additional 5.5 percent each year from 2011 through 2014, with another small reduction in 2015.[4] Typically, Congress--under both D and R leadership--routinely prevents the cuts from taking effect for a year or two at a time. But House and Senate leaders have always left intact the underlying requirement to keep doctor payment below the rate of GDP growth.[5]

To get AMA support, healthcare "re-formers" promised to end for the next ten years the annual question of whether the SGR Medicare payment cuts will go into effect . To do that, "re-formers" must commit to spending an additional $247 billion on healthcare. The problem for "re-formers" is this impacts the perceived cost of healthcare "re-form." President Obama had initially targeted the cost for "re-form" at $900 billion over 10 years. Adding the $247 billion to the healthcare "re-form" legislation obviously puts the cost at over trillion dollars.

Healthcare "re-formers" tried to hide the bribe to the AMA. They didn't want it tabulated in the CBO estimate for what healthcare "re-form" legislation would cost. A separate $247 billion Senate measure, S.1776, the Stabenow bill, would have imposed a 10-year freeze on mandated cuts in Medicare payments to doctors. Rs defeated S.1776 on October 21, 2009, signaling the House that it would have to bury some of that money in the House version of healthcare "re-form": HR 3962.

On November 7, 2009, the House passed an amendment to HR 3962, HR 3961, which did just that. HR 3961, the Medicare Physician Payment Reform Act of 2009, amends title XVIII of the Social Security Act to reform the Medicare SGR payment system. HR 3962 exceeds the $900 billion cost target by approximately $200 billion: the CBO estimates it will cost $1.1 trillion over 10 years.

As for the Senate, Alexander Bolton writes in The Hill:

"A senior Democratic senator who spoke on condition of anonymity said the defeat of Stabenow’s bill could have reverberations, but only if Democratic leaders fail to assure doctors groups that that they will find another way to avert cuts in their Medicare reimbursements, which are mandated by a 1997 budget law."

Candidate Obama vowed he'd be open with the American people (video). President Obama has not kept his promise, making backroom deals with the AMA and planning for continued use of taxpayer resources for illegal aliens.

Wilson told Obama: "You lie."

Is it true? You decide.

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[1] HR 3962 was 1990 pages (pdf) before amendments were added. The Senate is considering a similar bill.

[2] The Social Security Act requires that the Board, among other duties, report annually to the Congress on the actuarial (financial) status of the OASI and DI Trust Funds. The 2009 annual report, "THE 2009 ANNUAL REPORT OF THE BOARD OF TRUSTEES OF THE FEDERAL OLD-AGE AND SURVIVORS INSURANCE AND FEDERAL DISABILITY INSURANCE TRUST FUNDS" is the 69th such report.

The Board of Trustees was established under the Social Security Act to oversee the financial operations of the OASI and DI Trust Funds. The Deputy Commissioner of the Social Security Administration (SSA) is designated as Secretary of the Board. The Board is composed of six members:

• Four members serve by virtue of their positions in the Federal Government: the Secretary of the Treasury, who is the Managing Trustee; the Secretary of Labor; the Secretary of Health and Human Services; and the Commissioner of Social Security.
• The other two positions, which are currently vacant, are for members of the public, to be appointed by the President, subject to confirmation by the Senate.

[3] THE 2009 ANNUAL REPORT OF THE BOARD OF TRUSTEES OF THE FEDERAL OLD-AGE AND SURVIVORS INSURANCE AND FEDERAL DISABILITY INSURANCE TRUST FUNDS, V. ASSUMPTIONS AND METHODS UNDERLYING ACTUARIAL ESTIMATES, at http://www.ssa.gov/OACT/TR/2009/trTOC.html (November 10, 2009)

In the "2009 OASDI Trustees Report," illegal immigration is considered as "Other Immigration," in contrast to legal immigration. In Section V ASSUMPTIONS AND METHODS UNDERLYING ACTUARIAL ESTIMATES, Part 3 Immigration Assumptions, illegal immigration helps the calculation by adding to the number of taxpayers paying Social Security and Medicare taxes:

"Other immigration consists of immigrants who enter the Social Security area in a given year and stay to the end of that year without having LPR status, such as undocumented immigrants and temporary foreign workers and students.

...

"Combining the annual legal immigration and emigration assumptions results in ultimate net legal immigration of 750,000 persons per year under the intermediate alternative. For the low-cost and high-cost scenarios, ultimate annual net legal immigration is 960,000 persons and 560,000 persons, respectively.

"The number of other immigrants residing in the Social Security area population is estimated to have been about 9.7 million persons as of January 1, 2000, increasing to about 12.8 million persons as of January 1, 2006. This other-immigrant population is highly mobile and far more likely to leave the Social Security area than is the native-born or legal-immigrant population. The average number of persons entering the other-immigrant population in the period 2000 through 2006 is estimated to have been about 1.5 million per year. During the same period, the number of other immigrants who left the Social Security area or adjusted status to become LPRs is estimated to have averaged about 960,000 per year. Thus, annual net other immigration during this time period is estimated to have averaged approximately 540,000 persons.

"For the intermediate assumptions, annual other immigration is assumed to continue at the level of 1.5 million persons throughout the projection period. For the low- and high-cost scenarios, future annual other immigration is assumed to average 1.8 million persons and 1.2 million persons, respectively.

"Emigration from the other-immigrant population includes those who leave the Social Security area and those who adjust status to become LPRs. The annual number of other immigrants who leave the Social Security area is estimated based on modeled departures, disaggregated into two groups, for the period 2000-06. The first departing group is set at fixed annual numbers of departures, by age and sex, which remain constant throughout the projection period. This first group is directly related to the number of other immigrants that are assumed to have recently entered the Social Security area. The second departing group is calculated by applying a set of annual departure rates, by age and sex, to the other-immigrant population in the Social Security area. In addition, the annual number of other immigrants who adjust status to become LPRs is assumed to ultimately be 500,000 for the intermediate assumptions. This level is one third of the annual number of other immigrants assumed to enter the Social Security area. For the low- and high-cost scenarios, ultimate annual numbers adjusting status to LPR are assumed to average 600,000 persons and 400,000 persons, respectively.

"Under the assumptions and methods described above, the size of the other-immigrant population is projected to grow substantially. This growth reflects the excess of annual other immigration over the combined annual numbers of emigrants and deaths that occur within the other-immigrant population.

"Net other immigration decreased from a level averaging over 590,000 per year in the period 2000 through 2003, to about 465,000 in 2006, reflecting an increase in the number of other immigrants adjusting to LPR status as a result of the effort to reduce the backlog of applications for LPR status. By 2010, when the backlog of applications is expected to be eliminated, net other immigration is projected to be about 440,000 persons per year. After 2010, net other immigration is projected to decline steadily to about 275,000 in 2063 and to remain fairly stable thereafter. The decline in net other immigration is attributable to the increasing number of other immigrants residing in the Social Security area. This results in an increase in the numbers who emigrate out of the area based on the rates of departure described above. All other components of other immigration and emigration are set at fixed levels after 2010, and thus do not contribute toward any change in net other immigration. The average annual level of net other immigration over the 75-year projection period is about 315,000 persons. Net other immigration is estimated to average about 410,000 persons per year under the low-cost assumptions and 220,000 persons per year under the high-cost assumptions.

"The total level of net immigration (legal and other combined) is estimated to average 1,065,000 persons per year during the 75-year projection period under the intermediate assumptions. For the low-cost assumptions, total net immigration is estimated to average 1,370,000 persons per year. Under the high-cost assumptions, total net immigration is estimated to average 785,000 persons per year.

"Demographers express a wide range of views about the future course of immigration for the United States. Some, like the 2007 Technical Panel mentioned in the previous section, believe that immigration will increase substantially in the future. Others believe that potential immigrants may be attracted to other countries or that the U.S. borders could be tightened in the future."

[4] 2009 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, May 12, 2009, p. 22, at http://www.cms.hhs.gov/reportstrustfunds/downloads/tr2009.pdf (September 24, 2009).

[5] The Baucus Health Bill: A Medicare Physician Payment Shell Game, by Dennis G Smith, September 25, 2009, at http://www.heritage.org/Research/healthcare/wm2629.cfm (November 10, 2009)

Liars, Damned Liars, and Politicians (Part 1)

"One plain fact should outweigh all the words of Barack Obama and all the impressive trappings of the setting in which he says them: He tried to rush Congress into passing a massive government takeover of the nation's medical care before the August recess-- for a program that would not take effect until 2013!" Thomas Sowell, "Listening to a Liar" on the eve of the President's September 9, 2009 speech to Congress on Healthcare "Re-form"

When politicians talk about how things get paid for, they're usually talking about the free market vs. some form of collectivism: either socialism or fascism. Certain words are hot buttons in American politics, so instead of speaking truthfully, politicians use euphemisms to distract the majority, who often don't understand what socialism or fascism even mean.

For example, when the US government invaded Iraq, they called it Operation Iraqi Freedom and not Operation Iraqi Liberation (OIL)--they want to distract you, not inform you. When the government wants to subsidize an industry, it gives the operation a benign-sounding label:

• Cash for Clunkers subsidized a government enterprise while supposedly helping the environment.
• TARP subsidized well-connected investment bankers by clearing toxic investments off their books and loaning them money.
• The Stimulus bill plans to dump hundreds of billions of dollars off a cliff with special interests at the bottom waiting with empty dump trucks, ready to drive off laden with cash. Are you stimulated?

Similarly, all the debate about healthcare reform isn't about improving health care. The re-form is about who pays.

Calling it "healthcare" reform is the first lie.

Now is the time to deliver

President Obama (D) and his supporters have a vision of how you should pay for healthcare in America. He seems to believe, as does his White House communications director Anita Dunn, that once you choose "your Calcutta"--your vision--you don't have to let anyone tell you how to get there. Anything goes. Apparently lying included. Sowell has similarly observed this motif in the Obama administration:

"There are lots of people in the Obama administration who want to do things that have not been done before-- and to do them before the public realizes what is happening."

The second lie: the Obama administration's urgency to push healthcare "re-form" legislation through Congress before its August recess, when the legislation wouldn't take effect until 2013, and while so many Americans oppose it.

Read my lips

The White House website lists talking points about the latest incarnation of the healthcare "re-form" legislation saying: "it is fully paid for and will reduce the deficit in the long term." In his September 9, 2009 speech to a joint session of Congress, President Obama said:

"And here's what you need to know. First, I will not sign a plan that adds one dime to our deficits -- either now or in the future. (Applause.) I will not sign it if it adds one dime to the deficit, now or in the future, period."

Sounds a little like "Read my lips: no new taxes," uttered by GHW Bush (R) in 1988, doesn't it? He too was lying back then. But President Obama doesn't pretend that he won't increase taxes to pay for his "re-form":

"Now, part of the reason I faced a trillion-dollar deficit when I walked in the door of the White House is because too many initiatives over the last decade were not paid for -- from the Iraq war to tax breaks for the wealthy. (Applause.) I will not make that same mistake with health care."

Are you wealthy? In today's economy that might mean anyone not broke. Get ready to get it good and hard from the "healthcare re-formers."

In a column, "Listening to a Liar Part II," economist Thomas Sowell suggests:

"To tell us, with a straight face, that he can insure millions more people without adding to the already skyrocketing deficit, is world-class chutzpa and an insult to anyone's intelligence."

Are you insulted by the President and his healthcare "re-form" supporters? Need more proof? The phony 1/4 trillion dollar bill to buy AMA support was an attempt to keep the "re-form" legislation under the $900 billion limit set by President Obama. Anything more makes the CBO estimate show a deficit increase.

To say healthcare "re-form" legislation won't increase the deficit is also a lie.

When "option" doesn't mean optional

Well before his campaign for President, then Illinois state senator Barack Obama made clear his preference for a universal single-payer healthcare system--where the government pays healthcare bills. In a June 30, 2003 talk to the Illinois AFL-CIO (video) he said:

“I happen to be a proponent of a single payer universal health care program.” (applause) “I see no reason why the United States of America, the wealthiest country in the history of the world, spending 14 percent of its Gross National Product on health care cannot provide basic health insurance to everybody. And that’s what Jim is talking about when he says everybody in, nobody out. A single payer health care plan, a universal health care plan. And that’s what I’d like to see. But as all of you know, we may not get there immediately. Because first we have to take back the White House, we have to take back the Senate, and we have to take back the House.”

Obama's socialist view dogged him during his campaign for President (video). He squirmed out of his history of support for a single payer universal health care system, saying that while he preferred a single payer system, he wasn't proposing one. Instead, candidate Obama proposed a "public option." In this case, "public option" means that if you have other insurance, you don't have to select the "public option." But everyone must buy healthcare insurance: you would not be allowed to go without health insurance.

Many of the 40 plus million people without health insurance make a decision to go without because they can't afford it, or because they don't think healthcare insurance is worth the price. That would no longer be an option if the "public option" becomes law. This is similar to government elections: you can decide not to vote, but you can't vote "none of the above" to throw the bums out. You always get stuck with one of the "choices" on the ballot.

Another lie then: calling the "public option" optional.

Single Payer Trojan Horse

The President repeatedly says the public "option" is the best way "to ensure choice and competition so badly needed in today’s market." Sowell disputes this:

"President Obama tells us that he will impose various mandates on insurance companies but will not interfere with our free choice between being insured by these companies or by the government. But if he can drive up the cost of private insurance with mandates and subsidize government insurance with the taxpayers' money, how long do you think it will be before we have the 'single payer' system he has advocated in the past?"

The biggest lie: the President denies the public "option" is a Trojan horse for socialized healthcare.