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Archive for June 2009

Barack Obama on Wednesday, June 24th, 2009 in a town hall meeting

If the Federal and State governments can’t run healthcare NOW in the black, how can we trust them with ALL healthcare?

By the way, let the unions, congressman, senators and federal and state workers try the “Obama Plan”.

During a town hall on health care, an audience member asked President Barack Obama about the cost of health care reform, and whether the government could afford to do it.

Obama’s answer was a variation on the sales pitch, Can you afford not to?

“I think it’s a very legitimate question,” Obama began. “I guess that the first point I’d make is, if we don’t do anything, costs are going to go out of control. Nobody disputes this. Medicare and Medicaid are the single biggest drivers of the federal deficit and the federal debt by a huge margin.”

If we don’t do something soon to rein in health care costs, Obama said, Medicare and Medicaid “will consume all of the federal budget.”

We decided to check his statement that “Medicare and Medicaid are the single biggest drivers of the federal deficit and the federal debt by a huge margin.”

We consulted a number of experts, both left-leaning and right-leaning, and they agreed that over the long term, Medicare and Medicaid, along with Social Security — the programs popularly known as “entitlements” — will indeed overwhelm the federal budget and are the main drivers of the deficit. (Of the three programs, Medicare is the largest by a significant margin.)

But there’s also some explaining to do about Obama’s statement.

When he talks about Medicare and Medicaid driving the deficit, he’s not talking about 2009. The 2009 deficit will be powered primarily by the economic downturn, both spending on stimulus and bailouts, and lost tax revenues from the lack of economic activity. The Bush tax cuts, the wars in Iraq and Afghanistan, and the recent Medicare prescription drug benefit have also created gaps between spending and revenues in recent years.

But Obama’s singling out of Medicare and Medicaid is true over a much longer window of time, say, over the next 50 to 75 years.

Now, that may strike you — as it did us — as too far in the future to worry about. But the economists we spoke to are definitely worried about it right now.

A coalition of diverse think tanks —  the Concord Coalition, the Peter G. Peterson Foundation, the Brookings Institution, The Heritage Foundation, — teamed up several years ago for a “Fiscal Wake Up Tour” to alert people across the political spectrum about the poor outlook for the budget over the longterm.

“Unless lawmakers promptly reform Social Secu rity, Medicare, and Medicaid, America faces a future of soaring taxes and government spending that will cause poor economic performance,” wrote Brian Riedl, an economist with the conservative Heritage Foundation, who participated in the tour.

“Americans will pay onerous taxes, and future generations will have lower living standards than Americans enjoy today,” he said. “The longer lawmakers wait to enact the necessary reforms, the more painful those reforms will be.”

How bad could things get? The nonpartisan Concord Coalition, citing data models from the Government Accountability Office, found that by 2027, Social Security, Medicare, Medicaid and net interest would consume all revenues collected by the federal government. By 2047, Social Security, Medicare and Medicaid alone would consume all revenues. By 2052, the model is untenable, because the economy is in ruins. Gulp!

So if Obama is right that Medicare and Medicaid are driving the deficit, then health care reform can fix the long-term deficit, right?

Wrong.

“We have to do everything we can on the health care side, and then certainly there’s going to be even more that we have to do,” said James Horney, director of federal fiscal policy at the left-leaning Center for Budget and Policy Priorities. “Don’t assume we can wave the wand on health care reform and that will take care of everything.”

Obama has said many times that he wants health care reform to slow the growth of health care spending. But note the words slow the growth — that doesn’t mean a reduction in overall health care spending.

“Even if we significantly cut back the growth in health spending every year for the next 75 years, we still need more revenues to pay for our current obligations,” said Ben Harris, a senior research associate at Brookings and the Tax Policy Center. “There’s a need for a dramatic cut in spending or some way to raise more revenue, whether it’s a new tax or raising an existing tax.”

That’s where the economists disagree: Whether to cut spending or raise taxes. But we found little disagreement over the underlying problem.

So going back to Obama’s statement, Obama said, “Medicare and Medicaid are the single biggest drivers of the federal deficit and the federal debt by a huge margin.” But we do need to add the caveat that Medicare and Medicaid growth is a long-term problem, not what’s driving the deficits of this year or the next few years. We rate his statement Mostly True.

Source:  http://www.politifact.com/truth-o-meter/statements/2009/jun/25/barack-obama/obama-says-medicare-and-medicaid-are-largest-defic/

A vast and growing web of security cameras monitors the city of 55,000, operated by a private group of self-appointed gatekeepers. There’s been surprisingly little outcry.

By Bob Drogin

June 21, 2009

Reporting from Lancaster, Pa. — This historic town, where America’s founding fathers plotted during the Revolution and Milton Hershey later crafted his first chocolates, now boasts another distinction.

It may become the nation’s most closely watched small city.

Some 165 closed-circuit TV cameras soon will provide live, round-the-clock scrutiny of nearly every street, park and other public space used by the 55,000 residents and the town’s many tourists. That’s more outdoor cameras than are used by many major cities, including San Francisco and Boston.

Unlike anywhere else, cash-strapped Lancaster outsourced its surveillance to a private nonprofit group that hires civilians to tilt, pan and zoom the cameras — and to call police if they spot suspicious activity. No government agency is directly involved.

Perhaps most surprising, the near-saturation surveillance of a community that saw four murders last year has sparked little public debate about whether the benefits for law enforcement outweigh the loss of privacy.

“Years ago, there’s no way we could do this,” said Keith Sadler, Lancaster’s police chief. “It brings to mind Big Brother, George Orwell and ‘1984.’ It’s just funny how Americans have softened on these issues.”

“No one talks about it,” agreed Scott Martin, a Lancaster County commissioner who wants to expand the program. “Because people feel safer. Those who are law-abiding citizens, they don’t have anything to worry about.”

A few dozen people attended four community meetings held last spring to discuss what sponsors called “this exciting public safety initiative.” But opposition has grown since big red bulbs, which shield the video cameras, began appearing on corner after corner.

Mary Pat Donnellon, head of Mission Research, a local software company, vowed to move if she finds one on her block. “I don’t want to live like that,” she said. “I’m not afraid. And I don’t need to be under surveillance.”

“No one has the right to know who goes in and out my front door,” agreed David Mowrer, a laborer for a company that supplies quarry pits. “That’s my business. That’s not what America is about.”

Hundreds of municipalities — including Los Angeles and at least 36 other California cities — have built or expanded camera networks since the attacks of Sept. 11, 2001. In most cases, Department of Homeland Security grants helped cover the cost.

In the most ambitious project, New York City police announced plans several years ago to link 3,000 public and private security cameras across Lower Manhattan designed to help deter, track and detect terrorists. The network is not yet complete.

How they affect crime is open to debate. In the largest U.S. study, researchers at UC Berkeley evaluated 71 cameras that San Francisco put in high-crime areas starting in 2005. Their final report, released in December, found “no evidence” of a drop in violent crime but “substantial declines” in property crime near the cameras.

Only a few communities have said no. In February, the city council in Cambridge, Mass., voted not to use eight cameras already purchased with federal funds for fear police would improperly spy on residents. Officials in nearby Brookline are considering switching off a dozen cameras for the same reason.

Lancaster is different, and not just because it sits amid the rolling hills and rich farms of Pennsylvania Dutch country.

Laid out in 1730, the whole town is 4 square miles around a central square. Amish families still sell quilts in the nation’s oldest public market, and the Wal-Mart provides a hitching post to park a horse and buggy. Tourists flock to art galleries and Colonial-era churches near a glitzy new convention center.

But poverty is double the state’s average, and public school records list more than 900 children as homeless. Police blame most of last year’s 3,638 felony crimes, chiefly thefts, on gangs that use Lancaster as a way station to move cocaine, heroin and other illegal drugs along the Eastern Seaboard.

“It’s not like we’re making headlines as the worst crime-ridden city in the country,” said Craig Stedman, the county’s district attorney. “We have an average amount of crime for our size.”

In 2001, a local crime commission concluded that cameras might make the city safer. Business owners, civic boosters and city officials formed the Lancaster Community Safety Coalition, and the nonprofit organization installed its first camera downtown in 2004.

Raising money from private donors and foundations, the coalition had set up 70 cameras by last year. And the crime rate rose.

Officials explained the increase by saying cameras caught lesser offenses, such as prostitution and drunkenness, that otherwise often escape prosecution. The cameras also helped police capture and convict a murderer, and solve several other violent crimes.

Another local crime meeting last year urged an expansion of the video network, and the city and county governments agreed to share the $3-million cost with the coalition. Work crews are trying to connect 95 additional high-resolution cameras by mid-July.

“Per capita, we’re the most watched city in the state, if not the entire United States,” said Joseph Morales, a city councilman who is executive director of the coalition. “There are very few public streets that are not visible to our cameras.”

The digital video is transmitted to a bank of flat-screen TVs at coalition headquarters, several dingy offices beside a gas company depot. A small sign hangs outside.

On a recent afternoon, camera operator Doug Winglewich sat at a console and watched several dozen incoming video feeds plus a computer linked to the county 911 dispatcher. The cameras have no audio, so he works in silence.

Each time police logged a new 911 call, he punched up the camera closest to the address, and pushed a joystick to maneuver in for a closer look.

A license plate could be read a block away, and a face even farther could be identified. After four years in the job, Winglewich said, he “can pretty much tell right away if someone’s up to no good.”

He called up another feed and focused on a woman sitting on the curb. “You get to know people’s faces,” he said. “She’s been arrested for prostitution.”

Moments later, he called police when he spotted a man drinking beer in trouble-prone Farnum Park. Two police officers soon appeared on the screen, and as the camera watched, issued the man a ticket for violating a local ordinance.

“Lots of times, the police find outstanding warrants and the guy winds up in jail,” said Winglewich, 49, who works from a wheelchair on account of a spinal injury.

If a camera records a crime in progress, the video is given to police and prosecutors, and may be subpoenaed by defense lawyers in a criminal case. More than 300 tapes were handed over last year, records show.

Morales says he refuses all other requests. “The divorce lawyer who wants video of a husband coming out of a bar with his mistress, we won’t do it,” he said.

No state or federal law governs use of public cameras, so Morales is drafting ethical guidelines for the coalition’s 10 staffers and dozen volunteers. Training has been “informal” until now, he said, but will be stiffened.

Morales said he tries to weed out voyeurs and anyone who might use the tapes for blackmail or other illegal activity.

“We are not directly responsible to law enforcement or government at this point,” he said. “So we have to be above suspicion ourselves.”

Morales, 45, has a master’s degree in public administration. Born in Brooklyn, N.Y., he grew up mostly on Army bases. He was accepted to the U.S. Naval Academy, he said, but turned it down. “I made a lot of bad choices,” he said. “Substance abuse was part of that.”

Mary Catherine Roper, staff attorney for the American Civil Liberties Union of Pennsylvania, says the coalition’s role as a self-appointed, self-policed gatekeeper for blanket surveillance of an entire city is unique.

“This is the first time, the only time, I’ve heard of it anywhere,” she said. “It is such a phenomenally bad idea that it is stunning to me.”

She said the coalition structure provides no public oversight or accountability, and may be exempt from state laws governing release of public records.

“When I hear people off the street can come in and apply to watch the camera on my street, now I’m terrified,” she added. “That could be my nosy neighbor, or my stalker ex-boyfriend, or a burglar stalking my home.”

J. Richard Gray, Lancaster’s mayor since 2005, backs the program but worries about such abuses. He is a former defense attorney, a self-described civil libertarian, and a free-spirited figure who owns 12 motorcycles.

“I keep telling [the coalition] you’re on a short leash with me,” Gray said. “It’s one strike and you’re out as far as I’m concerned.”

His campaign treasurer, Larry Hinnenkamp, a tax attorney and certified public accountant, took a stronger view. He “responded with righteous indignation” when a camera was installed without prior notice by his home.

“I used to give it the finger when I walked by,” Hinnenkamp said.

But Jack Bauer, owner of the city’s largest beer and soft drink distributor, calls the network “a great thing.” His store hasn’t been robbed, he said, since four cameras went up nearby.

“There’s nothing wrong with instilling fear,” he said.

bob.drogin@latimes.com

Source:  http://www.latimes.com/news/nationworld/nation/la-na-spycam-city21-2009jun21,0,7166592,print.story

House Democrats on Friday answered President Obama’s call for a sweeping overhaul of the health care system by putting forward a 852-page draft billthat would require all Americans to obtain health insurance, force employers to provide benefits or help pay for them, and create a new public insurance program to compete with private insurers — a move that Republicans will bitterly oppose.

The bill was unveiled by a trio of committee chairman, George Miller of Education and Labor, Henry Waxman of Energy and Commerce, and Charles B. Rangel of Ways and Means, who have worked jointly for months to develop a seamless proposal. But the chairmen said they still did not know how much the plan would cost, even as they pledged to pay for it by cutting Medicare spending and imposing new, unspecified taxes.

The three chairmen described their bill as a starting point in a weeks-long legislative endeavor that they said would dominate Congress for the summer and ultimately involve the full panorama of stakeholders in the health care industry, which accounts for about one-sixth of the nation’s economy. They described their efforts as the historic culmination of a half-century of failed attempts across the tenure of a dozen presidents.

Mr. Miller, a Democrat of California, said that completing a bill would require extraordinary cooperation among lawmakers. “In order to change American’s health care system,” he declared, “Congress itself must change.”

House Republicans, who have had no involvement in the development of the health legislation so far, quickly denounced the Democrats’ proposal as a thinly disguised plan for an eventual government takeover of the health care system.

“Families and small businesses who are already footing the bill for Washington’s reckless spending binge will not support it,” the Republican leader, John A. Boehner of Ohio, said in a statement. “Raising taxes, rationing care, and empowering government bureaucrats — not patients and doctors — to make key medical decisions is not reform.”

The House Democrats’ plan is one of three distinct efforts underway on Capitol Hill to draft the health overhaul legislation. In the Senate, both the Finance Committee and the health committee have separate bills in the works, and in recent days those efforts seem to have stumbled.

The health committee, led by Senator Christopher J. Dodd, Democrat of Connecticut, in the absence of the panel’s Democratic chairman, Edward M. Kennedy of Massachusetts, began its public drafting sessions earlier this week. But the process was hampered by a much higher-than-expected cost projection from the Congressional Budget Office, which gave Republican critics ready artillery to fire at the bill.

In the Finance Committee, the chairman, Max Baucus, Democrat of Montana, announced that he had postponed his drafting process, expected to begin on Tuesday, until the week after July Fourth, to give him time to try to reduce the cost of his measure. The Finance Committee bill, being developed jointly with Senator Charles E. Grassley of Iowa, the senior Republican on the panel, may have the best chance of winning bipartisan support.

The House proposal unveiled on Friday was a decidedly progressive measure, which reflected many of the ideas championed by the White House, including such initiatives as the creation of public insurance plan, which Republicans have said they will never support.

In the Senate, lawmakers have been working on a number of potential compromise proposals, including the creation of nonprofit health care cooperatives that could compete with private insurers but would be regulated rather than controlled by the federal government.

The House proposal also included a requirement that employers either provide health insurance or pay a fee equal to 8 percent of their payroll. The House chairmen said that the 8 percent figure, along with virtually every other aspect of the draft legislation, was negotiable and intended as a starting point for deliberations.

But Republicans have voiced opposition to imposing any such requirement on employers, arguing that it would effectively lead to the elimination of jobs.

Source:  http://thecaucus.blogs.nytimes.com/2009/06/19/house-democrats-unveil-plan-for-health-care-overhaul/?hp

“Obama has more czars than the Romanovs.”
John McCain on Saturday, May 30th, 2009 in a twitter message

How many czars does it take to run the federal government? More and more, it seems.

In a Twitter message on May 30, 2009, Sen. John McCain took this poke at the Obama administration:

“Obama has more czars than the Romanovs – who ruled Russia for 3 centuries. Romanovs 18, cyberczar makes 20.”

First of all, yes, John McCain — the guy criticized during the presidential campaign for being computer illiterate – is tweeting.

But what about the czars? It sure seems like we keep reading about one czar after another being appointed to oversee the auto industry, the Great Lakes, and the closure of Gitmo, and we wondered: Just how many czars does the Obama administration actually have?

First off, the Obama administration doesn’t usually call any of these people czars. We only found two instances of President Obama using the term, once in an April 15, 2009, interview with CNN En Espanol when he talked about the role of his “border czar,” and once during the campaign when he promised to appoint an “autism czar” to coordinate a nationwide autism effort (he hasn’t yet). And in announcing Obama’s nomination of Gil Kerlikowske as director of the Office of National Drug Control Policy, Vice President Joe Biden referred to the position as “our nation’s drug czar.”

We’re sure there are more, but the point is that, by and large, you don’t often hear the administration talking about its czars.

In fact, the administration has at times gone to some lengths to avoid the moniker, as was the case in this somewhat humorous (in an inside-the-Beltway sorta way) exchange between a reporter and White House spokesman Robert Gibbs on June 10, 2009:

Reporter: On Ken Feinberg, I think that he’s maybe the 20th czar-type position you’ve named.

Gibbs: No, I think the title is “special master.”

So who exactly qualifies as a czar? As best we can tell, it’s whenever someone in the media says so. You can identify a guy as “Assistant to the President for Science and Technology, Director of the White House Office of Science and Technology Policy, and Co-Chair of the President’s Council of Advisors on Science and Technology,” but it’s a lot easier on everyone to just say “Science Czar.” And “Special Master” sounds like Richie Rich’s best friend.

So the title of czar is largely arbitrary media shorthand for “It’s this person’s job to make sure (blank) goes right.” And we think everyone can agree that “Terrorism Czar” sounds way cooler than “Deputy National Security Advisor for Homeland Security.”

Below, we have compiled a wildly unscientific list of Obama administration “czars.” But we’re not the first. Talking Points Memo has a slideshow of Obama’s “czars.” They count 23. And ForeignPolicy.com came up with at least 18. We’ve got 28.

Some of these “czars” are carryover positions from previous administrations. And “czars” go way back in presidential history. Roosevelt had a slew of so-called czars. But to the extent that Obama has created a number of new positions to oversee various issues and to cut through bureaucratic red tape, he seems to have a lot more czars than his predecessors. Or you could argue that the media has just seized on a new buzzword it likes. We’re not going to wade into the debate about whether having more czars is a good idea, but Fox ran a story about concerns some lawmakers have with it.

We’re just fact-checking McCain’s claim that Obama has more czars than the Romanovs. According to the World Book Encyclopedia, there were, as McCain said, 18 Romanov czars, starting with Michael Romanov in 1613 and ending with Nicholas II, who was killed by the Bolsheviks in 1917.

As for Obama’s czars, we’ve got 28 who have been referred to as a czar … somewhere. Undoubtedly some will take issue with some of the “czars” on our list, but we think McCain is on solid ground. He earns a True.

Name & Title
Herb Allison TARP Czar Assistant Secretary of the Treasury for Financial Stability
Alan Bersin Border Czar Assistant Secretary for International Affairs and Special Representative for Border Affairs
Dennis Blair Intelligence Czar Director of National Intelligence
John Brennan Terrorism Czar Deputy National Security Advisor for Homeland Security
Carol Browner Energy Czar Assistant to the President for Energy and Climate Change
Adolfo Carrion, Jr Urban Affairs Czar Director of the White House Office of Urban Affairs
Ashton Carter Weapons Czar Under Secretary of Defense for Acquisition, Technology, and Logistics
Aneesh Chopra Technology Czar Chief Technology Officer
Jeffrey Crowley AIDS Czar Director of the Office of National AIDS Policy
Cameron Davis Great Lakes Czar Special advisor to the U.S. EPA overseeing its Great Lakes restoration plan
Nancy-Ann DeParle Health Czar Director of the White House Office of Health Reform
Earl Devaney Stimulus Accountability Czar Chair of the Recovery Act Transparency and Accountability Board
Joshua DuBois Faith-based Czar Director of the Office of Faith Based and Neighborhood Partnerships
Kenneth Feinberg Pay Czar Special Master on executive pay
Danny Fried Guantanamo Closure Czar Special envoy to oversee the closure of the detention center at Guantanamo Bay
J. Scott Gration Sudan Czar Special Envoy to Sudan
Richard Holbrooke Afghanistan Czar Special Representative for Afghanistan and Pakistan
John Holdren Science Czar Assistant to the President for Science and Technology, Director of the White House Office of Science and Technology Policy, and Co-Chair of the President’s Council of Advisors on Science and Technology
Van Jones Green Jobs Czar Special Advisor for Green Jobs, Enterprise and Innovation at the White House Council on Environmental Quality
Gil Kerlikowske Drug Czar Director of the Office of National Drug Control Policy
Vivek Kundra Information Czar Federal Chief Information Officer
George Mitchell Mideast Peace Czar Special Envoy to the Middle East
Ed Montgomery Car Czar Director of Recovery for Auto Communities and Workers
Dennis Ross Mideast Policy Czar Special Advisor for the Persian Gulf and Southwest Asia
Gary Samore WMD Czar Coordinator for the Prevention of WMD Proliferation and Terrorism
Todd Stern Climate Czar Special Envoy for Climate Change
Cass Sunstein Regulatory Czar Director of the White House Office of Information and Regulatory Affairs
Paul Volcker Economic Czar

Source:  http://www.politifact.com/truth-o-meter/statements/2009/jun/12/john-mccain/McCain-says-Obama-has-more-czars-than-Romanovs/

Bankrupt automaker discloses details of plan to sell truck line to China’s industrial company Sichuan Tengzhong.

By Aaron Smith, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) — General Motors Corp. has struck a deal to sell its Hummer truck unit to a Chinese industrial business, the two companies confirmed Tuesday.

Privately owned Sichuan Tengzhong Heavy Industrial Machinery Company Ltd., based in China, will acquire the truck brand, which has been part of GM since 1999. Tengzhong said it plans to keep Hummer’s management team.

“We plan to … allow Humer to innovate and grow in exciting new ways under the leadership and continuity of its current management team,” said Yang Yi, chief executive of Tengzhong.

Yang said the deal “will allow Hummer to better meet demand for new products such as more fuel-efficient vehicles in the U.S.”

The companies said the deal would likely close by the end of September.

As part of the deal, some GM plants will continue to build the Hummer brand for the new owner, at least for awhile. The company said its Shreveport, La., plant will keep building Hummers for the new owner until at least 2010.

The news comes a day after GM (GMGMQ) filed for bankruptcy protection in New York.

“I’m confident that Hummer will thrive globally under its new ownership,” said Troy Clarke, president of GM North America, in a press release. “And for GM, this sale continues to accelerate the reinvention of GM into a leaner, more focused, and more cost-competitive automaker.”

GM also said that the deal should protect more than 3,000 jobs in manufacturing and engineering, and at dealerships “around the country.”

The sale of the Hummer brand to a Chinese company will not impact the production of U.S. military vehicles. Military Humvees are produced by a different company, privately held AM General, based in South Bend, Ind.

The Hummer and other large vehicles have been a drag on the U.S. auto industry since fuel prices spiked in 2008 and the recession deepened.

GM said it sold 5,013 Hummers worldwide in the first quarter, down 62% from the 13,050 that it sold in the same period the prior year.

Hummer isn’t the only brand that GM is leaving behind. The automaker will also shed its Pontiac, Saturn and Saab brands and cut loose more than 2,000 of its 6,000 U.S. dealerships by next year.

That could result in more than 100,000 additional job losses if those dealerships are forced to close.

GM filed for bankruptcy hours after Chrysler’s bankruptcy process cleared a hurdle when a federal judge approved its asset sale.

The GM bankruptcy was hailed by President Obama, who wants a complete overhaul of the U.S. auto industry, even though the Chapter 11 filing is expected to result in the loss of 20,000 jobs and the closure of a dozen facilities.

Citigroup (CFortune 500) was financial adviser in GM’s Hummer deal.

–CNNMoney.com senior writer Peter Valdes-Dapena contributed to this report. To top of page

Source:  http://money.cnn.com/2009/06/02/news/companies/gm_hummer/?postversion=2009060216

RNC Chairman Michael Steele claims that the government will be part owner of General Motors

Michael Steele on Monday, June 1st, 2009 in a press release.

Shortly after General Motors filed for bankruptcy, a plan that will involve significant government ownership of the auto company, Republicans went into attack mode.

The General Motors restructuring plan “is nothing more than another government grab of a private company and another handout to the union cronies who helped bankroll his presidential campaign,” said Republican National Committee Chairman Michael Steele in a statement accompanying a newly minted ad. “President Obama will now own 60 percent of GM, and his union buddies will own almost 20 percent. And what do the taxpayers get? They’ll get stuck with up to a $50 billion tab for the taxpayer dollars Obama is using to pay for his takeover of GM.”

In its bankruptcy filing, the company said it has $172.81 billion in debt and $82.29 billion in assets – all that despite a $20 billion General Motors has already received from the government, money that was initially earmarked for buying bad mortgages from banks.

Now, the company will adopt a restructuring plan that is “tailored to the realities of today’s auto market,” said Obama. It’s “a plan that positions GM to move toward profitability, even if it takes longer than expected for our economy to fully recover; and it’s a plan that builds on GM’s recent progress in making better cars.”

So, there’s no dispute that the government is invested in General Motors — it has already shelled out $20 billion in loans — but is Steele correct about the government’s new financial ties to the ailing company?

We assume that by referring to President Obama owning 60 percent of the automaker, Steele means that the government as a whole will own that stake under the restructuring plan. In fact, the White House was the first to state this fact, during a May 31 briefing with reporters. By the administration’s own words, the RNC is correct on this point.

Steele goes on to say that Obama’s “union buddies will own almost 20 percent.” To be exact, the United Auto Workers will get 17.5 percent of General Motor’s common stock, plus cash to help pay for a $20 billion health care trust fund for retirees. Whether this is a boon to Obama’s “union buddies,” as Steele’s statement says, is a matter of opinion. However, it’s worth noting that the UAW endorsed Obama for president and spent more than $4 million to assist his candidacy, according to the Center for Responsive Politics.

So Steele is right that the administration will have a 60 percent ownership in the new General Motors and that the union will have nearly 20 percent. Steele earns a True.

Source:  http://www.politifact.com/truth-o-meter/statements/2009/jun/01/michael-steele/rnc-chairman-michael-steele-claims-government-will/


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