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Audit The Fed

By Howie Rich

I'll be the first to admit that the notion of Washington politicians auditing the Federal Reserve initially struck me as a little bit kooky ­ and more than a little bit backward. Shouldn't the financial geniuses be auditing the politicians, not the other way around?

In fact, one of the reasons that the Fed has been given such wide latitude throughout its history is the widely-held belief that our nation's monetary policy should be conducted free from political "interference."

And so the Fed has existed as "an independent entity within the Federal government" for decades. Encompassing "both public purposes and private aspects," our nation's central bank claims that it is not "owned" by anyone and "is not a private, profit-making institution." From its founding in 1913, the Fed has existed as an island of almost total independence ­ setting interest rates, managing inflation and regulating banks according to the will of its Chairman and seven-member Board of Directors.

It cannot be audited. Its ledger is not disclosed. Its meetings are private. Its decisions are not up for debate.

Of course, this ongoing shroud of secrecy ignores the fact that the Fed ­ as it exists today ­ is a completely different animal than it was even two years ago.

No longer merely a "regulatory" agency, the Fed has used the current economic crisis as an excuse to dramatically expand its role. With zero transparency, accountability and effectiveness, it has printed and loaned trillions of dollars since mid-2007 in a costly and unsuccessful effort to mitigate fallout from the sub-prime mortgage crisis.

"The Federal Reserve's recent and unprecedented actions in the realm of monetary policy have provoked a backlash among the American people," Rep. Ron Paul wrote recently. "Trillions of dollars worth of loans and guarantees have been provided to Wall Street firms, while Main Street Americans suffocate under harsh taxation, the prospect of higher debt levels and increasing inflation."

Rep. Paul has sponsored a bill to "audit the fed," H.R. 1207, which has attracted a surprisingly strong bipartisan coalition of almost 170 lawmakers. Companion legislation has also been introduced by Sen. Bernie Sanders, while Rep. Dennis Kucinich has introduced separate legislation that would specifically audit the Fed's response to the current economic crisis.

"The Federal Reserve has been operating in a governmental netherworld, free from scrutiny or oversight," Kucinich said last week. "We know the Fed has printed and loaned trillions of dollars, but we don't know where the money went."

Obviously, Ron Paul, Bernie Sanders and Dennis Kucinich seldom agree on anything ­ but they all subscribe to the simple logic of having a public accounting of this massive cash outlay.

Similarly, Americans of all political persuasions deserve to know where all of this money went ­ just as they deserve to know whether or not the government entity that is tasked with keeping inflation low is in fact passing it on down the line and depressing economic growth.

Put another way, America deserves to know whether or not the Fed is worth keeping around anymore.

Not surprisingly, supporters of the Fed's failed policies ­ most of whom are lifelong champions of government intervention ­ have quickly seized on a familiar refrain.

For once, they are bemoaning the "intrusion" of government into the private sector.

"The very boldness of its actions has put the independence of the Fed at risk," an op-ed published last week in Forbes noted. "Congress is now clamoring to audit the Fed, and some of the policy proposals currently under discussion at the Federal Reserve will only increase the threat to its independence."

Frankly, the Fed's "independence" should be the least of our concerns.

Locating the trillions of dollars it has blown in the last year-and-a-half with absolutely no oversight or accountability?

Now that's something worth worrying about.

Editor's Note: Howard Rich is Chairman of Americans for Limited Government. Illinois Congressman Don Manzullo is a co-sponsor of H.R. 1207. Locally, on Thursday, May 21, the Carroll County Board approved a resolution in support of H.R. 1207 that would "provide greater transparency for the Federal Reserve System." The resolution was approved by a vote of 13-1, with Chuck Wemstrom (D-3) dissenting, and Kurt Dreger (D-1) absent.

Community care system in a "slow motion bankruptcy"

Lack of adequate funding for behavioral health services threatens to keep care from those in need

Without tapping cash from a dormant state health fund and without money from some form of tax increase to stage a financial rescue, more than 3,000 adults and children in northern Illinois will not receive the mental health and substance abuse treatment they need, according to a new survey of behavioral health care providers.

The Community Behavioral Healthcare Association (CBHA) survey of the state's top 80 mental health and drug treatment providers revealed that agencies ­ without an increase in state funding ­ will serve 16,000 fewer adults and children statewide, including 3,000 in northern Illinois.

"The Illinois mental health care and drug treatment system is in a slow motion bankruptcy because of the failure of the state to adequately fund care," states Jim Sarver of Sinnissippi Centers.

"It is estimated that our agency will serve 878 fewer clients between now and July 2010 because of the current level of state funding. Of those 878 individuals, 585 are adults and 293 are children who will go without the necessary services; that is a steep human toll."

"Sinnissippi is going to do what we have done during past difficult times; we will work together to engage client, staff, administration and our board to develop ways to address the ever changing fiscal environment we operate in," adds Sarver.

Sinnissippi Centers is not alone in feeling the effects of this funding shortfall. The impact of the cuts will mean elimination or severe reductions in services to an estimated 3,000 adults and children through the five mental health centers in the Northern Illinois which include; Ben Gordon Center in DeKalb; Freeport Health Network's Family Counseling Center in Freeport; North Central Behavioral Health Systems in the seven counties around La Salle Peru; Sinnissippi Centers, which serves Carroll, Lee, Ogle and Whiteside Counties; and Stepping Stones in Rockford.

"The Rockford community should know that we are taking every step to protect the services to individuals seeking mental health care, but the proposed cuts would result in the loss of services for adults and youth that we serve," says Frank Ware, CEO of Janet Wattles Center. "We at Janet Wattles will work to insure that those requiring the most intensive care can still receive it and that emergency services are able to respond to those in psychiatric crisis."

"I have people seeking service who can not get a first appointment until August," states Dan Neal, CEO of Freeport Health Network's Family Counseling Center. "How many of these people will be able to hang on that long without care? How can anyone accept that this is a humane and reasonable system of care?"

The Solution

"The State has about $49 million in a special mental health trust fund that continues to be a target for being swept into the general fund and used elsewhere in the state budget," according to Sarver. "In addition, CBHA has recommended that the legislators consider a small increase in the tax on alcohol which would provide in the area of $254 million for mental health, substance abuse, and the state's general revenue fund."

Other funds could come from the federal government's stimulus payment to Illinois, which would likely be made, at least in part, with an increase in the Medicaid rate for Illinois of 6.2 %. That would also place millions of dollars in the funding picture. At this time however, it is apparently planned that the state will allocate those stimulus dollars for other purposes. This may be capped with the tentative plan to cut up to 15% of the non Medicaid money from providers' contracts for 2010.

"Even aside from the current national and state crisis, recent history tells the story of the growing gap in funding versus the need for behavioral healthcare."

"If you look at the history of funding behavioral healthcare services in Illinois, there is a significant disparity. Since 2002, behavioral health agencies in Illinois have experienced a 23% rise in expenses, while overall state human service funding has increased by 3-7%," adds Sarver.

"The loss of care is an ongoing tragedy that can still be avoided if Governor Pat Quinn and lawmakers decide to use the dedicated but dormant special funds for their intended purposes and allow providers to keep the Medicaid increases they have already earned instead of using them in the general fund, or, by passing some form of a tax increase."

If you would like to add your voice in support of adequate mental health and substance abuse treatment funding, contact the Governor's office and your local legislators.

Contact Governor Quinn's Offices

Springfield

217-782-0244

FAX: 217-5244049

Chicago

312-814-2121

FAX: 312-814-5512

Office of the Governor

207 Statehouse

Springfield, IL 62706

Email: www.illinois.gov/gov/contactthegovernor.cfm Email: governor@state.il.us

Contact Your Local State Legislators

State Senators

36^th District Senator Michael Jacobs

606 19th Street Moline, IL 61265

309-797-0001

jacobs@senatedem.state.il.us

45th District Senator Tim Bivins

629 North Galena, Dixon, IL 61021

815-284-0045

senatorbivins@grics.net

State Representatives

71^st District Representative Mike Boland

4416 River Drive, Moline, IL 61265

309-736-3360

89^th District Representative Jim Sacia

50 West Douglas Street, Freeport, IL 61032

815-232-0774

Capitol Fax

Rich Miller's commentary on State Government

At the same time that Gov. Pat Quinn is pushing the General Assembly to pass major ethics reforms and solve a horribly complicated $12 billion budget deficit, his campaign committee has been calling top Statehouse groups to set up private meetings with the governor.

The asking price for the exclusive meetings? $15,000.

But the program may soon be shut down after questions were raised about at least the appearance of impropriety, particularly in the wake of ousted Gov. Rod Blagojevich's "pay to play" excesses.

Several association executives with Springfield lobbying interests said last week that they've recently received calls from Quinn's campaign. Some have big-ticket items that could be chopped out of the budget during the deficit crisis. All have significant issues pending in the General Assembly, pro and con.

"We turned them down," said one high-level exec about the campaign calls. The executive explained that his group does not contribute or discuss contributions during the legislative session. Ironically enough, several associations - which have been targeted for campaign contribution limits by the governor's reform commission - do not contribute during the end of session.

Also on the ironic side, $15,000 is far above the campaign contribution limits sought by Gov. Quinn and his reform commission, although these appear to be requests for "bundled" contributions from several different people at once.

And that $15,000 asking price clearly demonstrates how politicians - even self-professed reformers like Gov. Quinn - intend to get around any new contribution caps.

According to numerous sources, the campaign calls began with an offer for a private meeting with Gov. Quinn in June, often during breakfast or lunch.

"We were told they wanted to put our members together for 'face time' with the governor to talk about our interests or concerns," explained one exec. All of the executives contacted refused to go on the record for fear of possible retaliation during these crucial final session days.

Three association execs said they then asked whether this was a fundraiser and were told it was. One cut off the conversation immediately, the others listened to the pitch. "She said, 'Well, we want the one-on-one opportunity, but we'd certainly like to raise $15,000.'"

The "she" is Holly Copeland, a top official in the governor's campaign operation. Copeland said last week that she never discussed any legislation or the budget with any of the executives and lobbyists and said she has "no idea what's going on as far as specific bills."

But Dave Lundy, president of the Better Government Association, was shocked. "To say I find it surprising is to put it mildly," he said, adding: "The timing creates an enormous appearance problem."

Asked about the appearance of impropriety of calling associations with major issues pending in the closing days of the legislative session, Ms. Copeland said, "I can see what you're saying, but I can assure you that this is not the intent whatsoever."

Copeland pointed out that the private meetings are all scheduled for June, but asked whether associations might find it risky to turn down an offer from the governor's campaign during May, she said "I can assure you that there is in no way shape or form that there is any intent" to subtly strong-arm the groups.

Ms. Copeland also referred to the $15,000 price as an "arbitrary" number and said she has worked with groups which couldn't afford it. "If they can come up with five or less, it's OK."

Most of the association execs I spoke with said the contacts sounded like they were "cold calls," and Copeland implied the same when she said the campaign was "going through associations in the legislative directory, looking at groups that we thought might be interested."

Bob Reed, the governor's top spokesman, said he talked with the governor and was told that only people who had offered to set up fundraisers were contacted. Reed also said that these people and groups had long-standing relationships with Quinn.

However, at least two association executives whose groups were contacted by the campaign adamantly denied that anybody at their shops had ever approached anyone about raising money for the governor.

Whatever the case, Reed implied that the fundraising calls would cease soon.

"I think it's safe to say that we will rethink our approach here to make sure that misunderstandings like this don't occur," said Reed.

Rich Miller also publishes Capitol Fax, a daily political newsletter, and thecapitolfaxblog.com.

Prestons Say Thanks!

"At times out own light goes out and it is rekindled by a spark from another person. Each of us has cause to think with deep gratitude of those who have lighted the flame within us."

- Albert Schweitzer

This is the second time I have seen God's love shine on the faces of people, who without reservation gave financial support to people they hardly knew. Four years ago this community provided support for my family when our son Jalen was born 13 weeks early and weighed only 1 pound 15 ounces. We received gifts, restaurant cards, gas cards, and greeting cards and letters with money from people we didn't even know. This was such a blessing to us!

A few weeks ago, we had an opportunity to "pay it forward" by hosting a benefit hog roast for the Dylan Preston family, just a few days after Sam gave a kidney to his son Dylan. The businesses of Carroll County donated over 100 items to the live and silent auction, and for that we are very grateful! People filled the Church of God fellowship hall waiting for the live auction to begin. The bidding started with an anonymous donor who bid $500 on the first item-and has never even met this family-and it just got better from there! From $65 for a pie made by a special lady, to $55 for a pound of morels-people dipped into their pocket books and shared their earnings with this very needy family.

It amazes me that even during economically difficult times, the more support people give each other. So a big thank you to everyone involved in making this event possible! We appreciate the love and kindness you have shown the Preston family. You may not see much return here on Earth for your kindness, but you will be repaid tenfold in Heaven! God Bless you all!

Dana Keim, on behalf of the Sam Preston Family

Read on the Wild Side

The Lanark Public Library will be sponsoring a summer reading program called "Read on the Wild Side." Research has shown that children who read four to six or more books during

the summer maintain or improve their reading skills. On the other hand, children who do not read during vacation lose skills by September.

Our registration and goal setting begins on June 2 for children birth through high school. Preschoolers, elementary children and teens can join this program by reading alone, reading aloud to someone or being read to by a reading partner, such as Mom, Dad, sibling or grandparent. Look for the new easy reading collection called "We Both Read" that features a parent's page and child's page to read aloud. The program reading will end July 31 with reading logs turned in by August 8.

The kickoff party will be part of the Old Settler's Day Celebration. Entertainer Rob Erdman will present an entertaining program called Read on the Wild Side. Come to the Lanark City Park on Saturday, June 27 at 2 pm and participate in this fun show for all ages.

Family library cards are free to those living in the City of Lanark. Call 815-493-2166 during library hours for details about purchasing a non-resident card. Books, magazines, DVD's, books on tape for listening on vacation and inter-library loan are all services available with your library card. Libraries are more than books. Hours are Tuesday, Wednesday, Friday- Noon-5, Thursday Noon-7:30 and Saturday 10-3.

Stop by the Library soon and check us out.

Janie Dollinger, Director

Lanark Public Library

4th in a Series on Pure Drinking Water

A renowned health reporter, Tom Valentine, recently wrote about the dangers of fluoride in drinking water:

"An old friend sent me a label from some toothpaste he had picked up while traveling. He pointed out the label said sodium fluoride was in the product and he asked, "isn't that rat poison, or has that all changed?"

"Nothing has changed," I told him as I read him the accepted definition from an Internet site:

"Sodium fluoride is a colorless to white solid that is moderately soluble in water. It is used in the fluoridation of drinking water and in the manufacture of dental preparations such as toothpaste. It is also used in the production of steel and aluminum (to lower the melting temperature), glass and enamel, or as an insecticide, rodent poison and a preservative for glues and wood."

Despite decades of lies and propaganda from the Establishment, fluoridating community water turned out to be a bad idea because science says it does nothing good for teethe and has devastating health effects over time. Lately people around the world have rejected water fluoridation proposals, so why should anyone want or need sodium fluoride in their toothpaste? Is it less toxic being absorbed through gum tissue?

Of course not ­ smart people avoid it and buy toothpaste brands that advertise they have no fluoride of any kind.

Revisiting the controversies during the past 60 years, dredges up some very interesting information.

In 1974, a 3-year old child swallowed 45 cubic centimeters of 2 percent fluoride solution, estimated to be triple the fatal amount, and then died. The fluoride was administered during his first visit to the dentist, and the dental office was later found liable for the death.

The authorities are aware, but don't really care: In 1997 the FDA toughened the warning on every tube of toothpaste label to read, "If more than used for brushing is accidentally swallowed, get medical help or contact a poison-control center right away."

What about rat poison claims?

Historically, sodium fluoride was very expensive for certain giant companies to dispose of ­ but in the 1950s and 1960s, Alcoa and the entire aluminum industry with a vast overabundance of this toxic waste managed to lobby the FDA and the government into the insane notion that buying this poison at a 20,000 percent markup and then injecting it into the water supply as well as into the nation's toothpastes and dental rinse was a good idea.

All this fluoridating was facilitated following a talk by Francis Bull, dental director of the Wisconsin State Board of Health, at a meeting of the State Dental Directors in June 1951.

Dr. Bull said:

"Now, in regard to toxicity, I noticed that Dr. Bain used the term 'adding sodium fluoride.' We never do that. That is rat poison. You add fluorides. Never mind that sodium fluoride business, because in most instances we are not adding sodium fluoride anyhow. All of those things give the opposition something to pick at without our giving them any more."

The opposition Dr. Bull referred to meant sane citizens who knew better than to flood the environment with this toxin.

Sodium fluoride is also one of the basic ingredients in both Prozac and Sarin nerve gas. The technical name for Prozac is fluoxetine hydrochloride and for Sarin it is isopropoxy-methyl-phosphoryl fluoride.

In addition to being the primary ingredient in rat and cockroach poisons, it is also a main ingredient in anesthetic, hypnotic, and psychiatric drugs as well as military nerve gas. Why is it allowed to be added to the toothpaste and drinking water of the American people?'

Ron Rendelman, Chadwick, IL

Sen. Durbin Responds

I wrote to Senator Durbin several weeks ago about the bonus packages AIG, Freddie Mac & Fannie Mae employees received in the bailout, and have received a reply:

Dear Mr. Kocal:

Thank for contacting me about executive compensation. I appreciate hearing from you and share your concerns.

Over the last 40 years the difference between worker pay and executive compensation has grown exponentially. In 1965, the CEOs of major U.S. companies earned an average of 24 times the compensation of the typical worker. By 2007 the difference in compensation had grown to the point where CEOs earn an astonishing 275 times the typical worker's pay. Even in the midst of the worst economic downturn since the Great Depression, and as people are losing their jobs, their homes, and their savings, executives have continued to award themselves lavish bonus packages.

In order to address this ever-widening gap between employee and executive compensation, I have introduced two bills: the Excessive Pay Shareholder Approval Act and the Excessive Pay Capped Deduction Act.

The Excessive Pay Shareholder Approval Act returns decisions on executive compensation to the hands. It requires a supermajority of shareholders (60 percent) to approve a compensation package for any employee that would receive more than 100 times the compensation of an average worker. If the typical employee makes $50,000, close to the average yearly compensation for American workers, a supermajority of shareholders would have to approve any pay package larger than $5 million.

In addition, the Excessive Pay Capped Deduction Act would eliminate tax deductions for compensation packages that are more than 100 times the compensation of the average worker.

For top executives to continue these excessive compensation packages during this economic downturn is irresponsible and only serves to indicate how out of touch they remain with their workers, shareholders, and the public. These two bills will help restore the proper balance between executive and worker compensation while returning decisions regarding excessive compensation to shareholders.

Thank you again for your message. Please feel free to keep in touch.

Sincerely,

Richard J. Durbin

United States Senator

This was my response to Senator Durbin:

Thank you for your reply. However, with all due respect, I do not think creating more legislation is the solution. I think the Constitution is clear on this (Amendment 10). The federal government has become too large and too complex - from tax codes to controls and mandates that are simply unconstitutional or borderline unconstitutional.

It is just unfortunate that the American people do not vote, and just sit back and allow these things to continue. Please consider this, as I suspect that the next election(s), things WILL change . . . we do not want to live in a socialistic or fascist country, and the states should have more control on issues such as this - NOT the federal government!

Many of our freedoms have been compromised by minority factions that have pressured you and the other Senators and Congressmen into doing what they want, for their interests and ideas, probably for your own also, and NOT the American people! When can we expect to see real change? (Not the "change' that was promised, which is only full of lies and betrayals.)

Mike Kocal

Lanark, IL

Capitol Report

By Jim Sacia, State Representative, 89th District

The numbers are staggering: $500 million here $250 million there. Numerous agencies outside the chamber's doors sending in business cards requesting us to come out of session to discuss the needs they have and to lobby us to not forget them. After seven years, I am still amazed how it will all come together in the 11^th hour which is only ten days away.

A budget and a capitol bill, two distinct issues dealing with billions of dollars.

On Wednesday, May 20, we passed budget bills SB 2145 and SB 2206. They are preliminary and complex, more about them and the budget later.

The big news, at this writing, is before the end of today, Thursday May 21, the House will follow the lead of the Senate's action yesterday. Specifically we will pass HB 255 which will create the funding for jobs (capitol bill).

I will support it and many of you will vilify me. "How dare you increase video gaming? I can't believe you raised taxes on beer, wine and liquor. Oh my gosh! You raised fees on vehicle licenses, title transfers and driver license fees. Here it says you supported more taxes on candy, non carbonated beverages and health and beauty aids." I am guilty as charged.

Here is the trade off. Thousands of Illinoisans will go back to work in this $26 billion package over six years. 80,000 pound trucks will be allowed on 73,280 pound roads throughout Illinois. This one is huge to me and has created numerous calls to my office since my election. Our own 80,000 pound truck has been stopped traveling one hundred yards on a 73,280 pound road to make a delivery.

Over $3 billion will go to state infrastructure, i.e., bridges, roads and building projects including $38 million to complete the Highway 20 Bypass around Freeport. Another $16 million is projected for land acquisition and engineering on the Galena Bypass. I met with IDOT Director Hannig and he is committed to this project.

There are always such trade offs for these issues, voting for this will generate hundreds of calls to my office some condemning, some praising. It goes with the turf.

Today we will also act on SB 1333 fondly referred as the "Fumigation Bill." It potentially terminates the employment of many political appointees by former Governors Blagojevich and Ryan. Initially this bill included over 3,000 employees and has been amended to only about 750. Of course Governor Quinn could reappoint those who meet his criteria.

The next ten days will be the toughest of the year as we continue to work on a $59 billion budget, not to be confused with the capitol bill. My hats off to our budgeteers on both sides of the aisle who work tirelessly. I look forward to finishing in Springfield and returning to the district.

As always, you can reach me, Sally or Barb at 815/232-0774 or e-mail us at jimsacia@aeroinc.net. You can also visit my website at www.jimsacia.com. It's always a pleasure to hear from you.

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