Isakson Denounces White House Comments Connecting Him To Terribly Flawed House Health Care Bill

‘This Is What Happens When the President and Members of Congress Don’t Read the Bills’

U.S. Senator Johnny Isakson, R-Ga., today denounced comments made by President Obama and his spokesman regarding Isakson’s alleged connection to language contained in the House health care bill on “end-of-life counseling.”

Isakson vehemently opposes the House and Senate health care bills and he played no role in drafting language added to the House bill by House Democrats calling for the government to incentivize doctors by offering them money to conduct “end-of-life counseling” with Medicare patients every five years. Isakson also strongly opposed the House bill language calling for doctors to follow a government-mandated list of topics to discuss with patients during the counseling sessions.

By contrast, Isakson took a very different approach in July during the Senate HELP Committee hearings on the Senate version of the health care bill. Isakson’s amendment to the Senate bill says that anyone who participates in the long-term care benefit provided in the bill – if they so choose – may use that benefit to obtain assistance in formulating their own living will and durable power of attorney.

Isakson’s amendment, which was accepted unanimously by all Republicans and Democrats on the Senate HELP Committee, empowers the individual to make their own choices on these critical issues, rather than the government incentivizing doctors to conduct counseling on government-mandated topics. Isakson ultimately voted against the Senate health care bill.

“This is what happens when the President and members of Congress don’t read the bills. The White House and others are merely attempting to deflect attention from the intense negativity caused by their unpopular policies. I never consulted with the White House in this process and had no role whatsoever in the House Democrats’ bill. I categorically oppose the House bill and find it incredulous that the White House and others would use my amendment as a scapegoat for their misguided policies,” Isakson said. “My Senate amendment simply puts health care choices back in the hands of the individual and allows them to consider if they so choose a living will or durable power of attorney. The House provision is merely another ill-advised attempt at more government mandates, more government intrusion, and more government involvement in what should be an individual choice.”
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Key Clean Energy Vote Hours Away

The U.S. House of Representatives votes Friday to determine the fate of the American Clean Energy & Security Act - President Obama's climate change legislation.

Late yesterday, House Agriculture Committee Chairman Collin Peterson, D-MN, confirmed a compromise had been reached over difficult agriculture issues in the climate change bill. Peterson stated the votes to pass the bill when the full House meets Friday were in place - although the vote is expected to be close.

The most important plank in the bill - and the most contentious - is a 17 percent mandated reduction of greenhouse gases by 2020 -- mainly carbon dioxide from burning fossil fuels such as coal.

The 17 percent cap on greenhouse gases would have its greatest impact on utilities which today rely on coal to generate half the country's electric power. By placing a cost on pollution emitted into the atmosphere from the burning of coal, utilities will be mandated to either find ways to cut emissions or shift to clean energy.

The legislation holds the promise of a massive new boost to both the wind and nuclear power industries. Exelon (NYSE:EXC) , the nation's largest nuclear power company, recently exceeded Jefferies & Co's target price of $47, set just 2 months ago on April 15.

Also in April, Concentric Research put a $2.78 one year price target on wind power company NACEL Energy (OTC:NCEN) (BULLETIN BOARD: NCEN) , which has four wind farms underway in the Texas Panhandle - regarded as the nation's best region for wind turbines.

Entergy (NYSE:ETR) also has one of the largest nuclear power portfolio's in the country. Credit Suisse has an $89 target on the company - Entergy closed yesterday at $75.54.

Itron (NASDAQ:ITRI) , which makes sophisticated metering systems for all utilities, is another bet on the passage of the new climate bill. JP Morgan recently upgraded Itron from neutral to overweight.

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Will Over-Regulation Hamstring U.S. Competitive Advantage?

For decades, American presidents from both sides of the political aisle have steadily relaxed regulations governing areas from pollution to finance.

But as the U.S. faces its worst economy since the Great Depression—and with a new president who champions a stepped-up role for government—President Obama’s administration appears poised to move aggressively on a number of fronts: from reigning in the finance segment—including the formerly nearly ungoverned hedge fund market, to embracing new strategies to cut emissions.

A bigger dose of regulation may indeed be in order, say faculty from Emory University and its Goizueta Business School. But they also caution that heavy-handed oversight could pose fresh threats to financial institutions and to other struggling industries.

A new direction for regulation

”From Ronald Reagan onward, the general movement was in the direction of less government regulation,” observes William W. Buzbee, a professor of law at Emory’s School of Law and director of the institution’s Environmental and Natural Resources Law Program. “We will see more regulation under President Obama, but it took a long time for the economy to weaken, and it will take a long time to develop and implement the tighter rules.”

Financial institutions in particular will have to get used to the idea of more oversight, according to Buzbee.

“Many banks went over the edge when it came to overly liberal mortgage lending and exotic mortgage-linked securities, while hedge funds gambled too much on derivatives and other investment instruments,” he says. “The collapse of many companies has increased the momentum to reign in excesses.”

U.S. Treasury Secretary Timothy Geithner struck a similar note in his late-March written testimony to the House Financial Services Committee.

“The crisis of the past 18 months has exposed critical gaps and weaknesses in our regulatory system,” said Geithner. “As risks built up, internal risk management systems, rating agencies and regulators simply did not understand or address critical behaviors until they had already resulted in catastrophic losses. This crisis has made clear that certain large, interconnected firms and markets need to be under a more consistent, and more conservative regulatory regime.”

During his first few months in office, much of Obama’s attention has been focused on economic challenges. But during the presidential campaign, Obama also addressed environmental, healthcare and other issues. Buzbee thinks those issues will not stay sidelined very long.

“The recession has slowed the momentum for legislation targeting climate change,” he says. “Also, to make people pay for greenhouse gas emissions and encourage use of alternative energy sources could raise prices in the short-term, so those efforts too are on a slower track right now. But Obama is not likely to drop them from his agenda.”

In fact, says Buzbee, although industry lobbyists have already mounted a strong push against increased environmental and financial regulation, Obama is likely to get strong public support for some of the changes.

“The recent national recall of peanut products due to salmonella contamination concerns has a lot of people worried,” explains Buzbee. “So the support is there for expanded federal Food and Drug Administration activity. Also, the high number of Americans without health insurance—and the heavy costs to business under our current system—is likely to generate support for new legislation on that front.”


How far does Obama’s mandate go?

Obama may have a clear mandate for change, particularly when it comes to the financial industry, but will he go too far and make U.S. institutions less competitive?

“There is some concern that the administration is using the bank bailout as an excuse to dictate too much to the industry,” according to Narasimhan Jegadeesh, a chaired professor of finance at Emory University’s Goizueta Business School. “The salary restrictions and the prohibitions on hiring H-1B visa holders [both imposed on banks that received Troubled Asset Relief Program, or TARP funds], make some banks jump through very strict hoops and could end up damaging their ability to compete in a difficult market.”

Jegadeesh is quick to point out, however, that he’s not condemning any additional regulation. Instead, it’s a matter of degrees.

“Some enhanced oversight would not hurt,” he says. “For example, perhaps there should be restrictions on insured assets—like accounts that are covered by the Federal Deposit Insurance Corp—that prevent banks from investing them in risky securities.”

Hedge funds may also be subject to more rules—or at least more transparency, according to Treasury Secretary Geithner.

In the wake of the Bernard Madoff pyramid scheme, “it is clear that, in order to protect investors, we must close gaps and weaknesses in regulation of investment advisors and the funds they manage,” noted Geithner.

“Hedge fund investments are usually limited to wealthy people who should be sophisticated enough to take care of themselves,” says Jegadeesh. “But it would not hurt to require more disclosure, particularly about risk exposures. It’s still too early to determine how far the Obama administration will take regulation, but there is a general concern that restrictions in general can tie industries’ hands and weaken their competitive advantage.”

One concern is that the government may impose heavy regulation on the “low hanging fruit,” or easily visible targets like hedge funds, according to Kevin M. Crowley, an adjunct lecturer of finance at Goizueta.

“Some activity, like credit swaps, collateralized debt obligations and other derivatives that are not very transparent and that were traded with minimal regulations, probably should be subject to greater regulation,” he says. “But plans to increase taxes on money funds’ offshore profits may go too far, and could hinder the investment activity of U.S.-based funds.”

Unintended consequences and moral hazard

In fact, some “heavy handed” government regulation is already resulting in unintended consequences, says Klaas Baks, an assistant professor of finance at Goizueta and director of the Emory Center for Alternative Investments.

“The bonus and salary restrictions placed on banks that accepted TARP money represented a fairly crude measure,” he says. “Performance-based bonuses tend to align employees’ incentives with the interests of shareholders and incidentally, with the government, too. Even if the bonuses during Wall Street’s heyday were not perfectly structured to achieve this alignment, killing these bonuses altogether eliminates the link between the parties.”

Additionally, in the long run, says Baks, “people will follow the best economic opportunities,” so the banking segment is likely to lose valuable talent.

Part of the problem with the Obama administration’s efforts is that “you can’t simply regulate away losses,” says Tarun Chordia, a chaired professor of finance at Goizueta. “The optimal level of loan losses in a bank’s portfolio is not zero.”

Chordia says he can understand the concern among the president’s advisers, but adds that research indicates too much regulation can also hurt the economy.

In addition, Chordia worries about politicizing agencies that are supposed to exercise independent judgment.

“The Federal Reserve is getting more involved in market functions [like directly lending money to Wall St. firms and purchasing some mortgage-backed securities] than it ever did before,” he says. “So far the Fed has retained its independence, but will it stay that way? Its deep involvement with markets could leave it more susceptible to political pressure.”

There is better way, according to Goizueta’s Crowley.

“In a healthy free market, capital should flow to the strongest institutions and best management teams,” he says. “When the government interferes with the free market, this process is distorted. Sick companies and weak management teams are supported, and healthy competitors and strong, prudent managers are denied growth capital.”

Some observers, for example, have argued that the federal government should have saved former Wall Street powerhouse Lehman Brothers Inc. from liquidation. But that would be the wrong move, Crowley argues.

“According to this view, we could have avoided much of the market turmoil if Lehman had been protected,” he says. “In my view, this is not clear. We really do not know what the market reaction would have been if another sick company were propped up. And any potential short-term benefit of protecting insolvent banks would be offset in the long run by a financial system that lacks the necessary market disciplines of both risk and reward. Moral hazard would increase, and institutions would continue to take out-sized risks expecting that the government would shelter them from pain.”

In general, “a heavy regulatory hand could crimp the market, causing financial distortions and creating moral hazards,” he says. “Perhaps the best approach is simply to let people pay dearly for their own sins."

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Fannie Mae Undertakes 'Making Home Affordable' Refinancing and Modification Initiatives

/PRNewswire-FirstCall/ -- Fannie Mae (NYSE:FNM) today began making two new initiatives -- Home Affordable Refinance and Home Affordable Modification -- available to its servicers and borrowers as part of the Obama Administration's Making Home Affordable program. The two initiatives are designed to significantly expand the numbers of borrowers who can refinance or modify their mortgages to a payment that is affordable now and into the future......
http://georgiahousing.blogspot.com/2009/03/fannie-mae-undertakes-making-home.html

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Freddie Mac Announces Two Initiatives Supporting President Obama's Making Home Affordable Plan

/PRNewswire-FirstCall/ -- Freddie Mac (NYSE:FRE) today announced two new mortgage initiatives under President Obama's Making Home Affordable plan designed to help families with Freddie Mac-owned mortgages who are delinquent, at-risk of default, or struggling to refinance because of declining property values.

The new initiatives include.......
http://georgiahousing.blogspot.com/2009/03/freddie-mac-announces-two-initiatives.html

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TweetMyJOBS.com Distributing Economic Stimulus Jobs

(BUSINESS WIRE)--TweetMyJOBS.com, a Charlotte, NC startup, is doing its part to help jumpstart the economy. The company has built a sophisticated job distribution system on top of the widely popular online service Twitter.com, which allows users to send short messages to people’s cell phones as a text message. Companies that are looking to hire can post a job opening for free through TweetMyJOBS.com, and anyone interested in that type of job will automatically get the job posting sent to them as a text message. In addition, if the job opening has been created as a result of the U.S. stimulus package, it will be identified as a Stimulus Job and will be featured and headlined on TweetMyJOBS.com.

“There are currently a lot of unemployed people who have a family to feed and bills to pay,” said Gary Zukowski, President of TweetMyJOBS.com. “President Obama has stated that 3.5 million jobs will be saved or created by his stimulus package. TweetMyJOBS.com is designed to help get these jobs into the hands of people who need them as quickly as possible. By using TweetMyJOBS.com, job seekers will get instant notification of any new job openings in their desired field and location. In a competitive marketplace, this speed of notification could be the difference between getting a job or not.”

In addition to U.S. job postings, TweetMyJOBS.com is already expanding internationally in response to demand from employers interested in using the service to post job opportunities outside of the U.S.

TweetMyJOBS.com is an innovative online service based out of Charlotte, NC that connects employers and job seekers instantaneously using Twitter. Employers can post jobs on “Job Channels” that specify a particular job type and location, and notification of the job will automatically be sent to a job seeker’s cell phone as a text message.

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