Health Care Legislation Lawsuits Gearing Up – Updated

CNSNews has two different stories here and here saying that the lawsuits against the U.S. Government are about to begin as soon as Obama signs the health care legislation (H.R. 3590) into law.  The lawsuits are an attempt by States and other agencies to strike down the required health care insurance law in the latest bill.

Update (1/22 @13:29): Reuters reports that 11 Attorneys General are geared to sue the Government after it is signed.  The full story is at the bottom.

Health Care Legislation: Here Come the Lawsuits

Monday, March 22, 2010
By Susan Jones, Senior Editor

(CNSNews.com) – The American Center for Law and Justice, a conservative civil liberties group, says it is preparing to file a federal lawsuit challenging the “flawed” health care package that passed the House 219-212 on Sunday night.

The law “fails the American people and does not provide permanent protections for the life of the unborn,” the group said in a Sunday night news release.

The ACLJ said it would file a lawsuit “soon” in federal court, challenging the forced mandate that penalizes Americans who choose not to participate in universal health care. “That is unconstitutional, and we believe ultimately it will be overturned by the courts,” it said.

“The fact remains that the actual health care bill just approved does fund abortion,” ACLJ said.

“Those self-proclaimed pro-life Democrats put their trust in an executive order — subject to being rescinded by the president — a move that is not only short-sighted but does not provide the guarantees and pro-life protections secured by statutory language in a law approved by Congress.”

Which President Obama do you believe? ACLJ asked: The president who repeatedly and publicly opposed the pro-life language in the earlier House-passed bill, or the president who now promises an Executive Order to secure the votes he needed to pass a very dangerous health care package?

ACLJ noted that an executive order “is not a legislative fix and does not carry the force of congressionally approved legislation.  It does not supersede law.  It can be rescinded.”

Another concern, the group said, is that the executive order promised by President Obama will put Health and Human Services Secretary Kathleen Sebelius in charge of the funding process – and she is a cabinet member “who has a long and documented history of supporting abortion.”

also:

Virginia Is First to Announce Lawsuit Over Health-Care Bill

Monday, March 22, 2010
By Bob Lewis, Associated Press

Richmond, Va. (AP) – Less than eight hours after Congress passed sweeping healthcare reforms, Virginia’s Attorney General became the first to announce a legal challenge against it.

Republican Ken Cuccinelli said early Monday that he will file a court challenge against what he and other conservatives decry as an unconstitutional overreach of federal authority.

Cuccinelli said he would file the lawsuit as soon as President Barack Obama signs the bill passed Sunday night into law.

Earlier this month, Virginia became the first state to finish legislative passage of a law that bucks any effort by President Barack Obama and an allied Democratic Congress to impose federal health care reform in the states.

Similar measures were filed or proposed in 34 other state legislatures.

Cuccinelli is expected to argue that the bill, with its mandate that requires nearly every American to be insured by 2014, violates the commerce clause of the U.S. Constitution. The attorney general’s office will file suit once President Barack Obama signs the bill into law, which could occur early this week.

“At no time in our history has the government mandated its citizens buy a good or service,” Cuccinelli said in a statement Sunday night.

Word of the impending legal action came as the U.S. House debated late into the evening and passed the landmark reform legislation, 219-212.

Update from Reuters:

States launch lawsuits against healthcare plan

CHICAGO

Mon Mar 22, 2010 1:21pm EDT

CHICAGO (Reuters) – Less than 24 hours after the House of Representatives gave final approval to a sweeping overhaul of healthcare, attorneys general from several states on Monday said they will sue to block the plan on constitutional grounds.

Republican attorneys general in 11 states warned that lawsuits will be filed to stop the federal government overstepping its constitutional powers and usurping states’ sovereignty.

States are concerned the burden of providing healthcare will fall on them without enough federal support.

Ten of the attorneys general plan to band together in a collective lawsuit on behalf of Alabama, Florida, Nebraska, North Dakota, Pennsylvania, South Carolina, South Dakota, Texas, Utah and Washington.

“To protect all Texans’ constitutional rights, preserve the constitutional framework intended by our nation’s founders, and defend our state from further infringement by the federal government, the State of Texas and other states will legally challenge the federal health care legislation,” said Texas Attorney General Greg Abbott, in a statement.

The Republican attorney generals say the reforms infringe on state powers under the Constitution’s Bill of Rights.

Virginia Attorney General Kenneth Cuccinelli, who plans to file a lawsuit in federal court in Richmond, Virginia, said Congress lacks authority under its constitutional power to regulate interstate commerce to force people to buy insurance. The bill also conflicts with a state law that says Virginians cannot be required to buy insurance, he added.

“If a person decides not to buy health insurance, that person by definition is not engaging in commerce,” Cuccinelli said in recorded comments. “If you are not engaging in commerce, how can the federal government regulate you?”

In addition to the pending lawsuits, bills and resolutions have been introduced in at least 36 state legislatures seeking to limit or oppose various aspects of the reform plan through laws or state constitutional amendments, according to the National Conference of State Legislatures.

So far, only two states, Idaho and Virginia, have enacted laws, while an Arizona constitutional amendment is seeking voter approval on the November ballot. But the actual enactment of the bill by President Barack Obama could spur more movement on the measures by state lawmakers.

As is the case on the Congressional level, partisan politics is in play on the state level, where no anti-health care reform legislation has emerged in Democrat-dominated states like Illinois and New York, according to the NCSL.

Florida Attorney General Bill McCollum, a Republican candidate running for governor, said the mandate would cost Florida at least $1.6 billion in Medicaid alone.

All states would receive extra funding to cover Medicaid costs that are expected to rise under the reform, including 100 percent federal coverage for new enrollees under the plan through 2016.

Medicaid is the healthcare program for the poor jointly administered by the states and federal government.

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Democrat Rep Becerra Laughs At Suggestion To Recite Pledge, Gives BS Response To Fox News

Fox News reports to us that, during a union meeting in Los Angeles, Congressman Xavier Becerra, and several other people attending the meeting, start laughing when a supporter of a Republican candidate in a neighboring district requests that the meeting open with reciting the Pledge of Allegiance.

Congressman Derided for Laughing at Suggestion to Recite the Pledge of Allegiance

By Joshua Rhett Miller

– FOXNews.com

A candidate for Congress in California’s 30th district is calling on Democratic U.S. Rep. Xavier Becerra to “clarify his reaction” caught on a YouTube video that depicts the lawmaker laughing at the suggestion that the Pledge of Allegiance be recited prior to a Feb. 20 meeting.

If the Pledge of Allegiance is a laughing matter, then the joke may be on a California congressman.

A Republican candidate for Congress in California is calling on U.S. Rep. Xavier Becerra to “clarify his reaction” after the Democrat was caught on a YouTube video laughing at a suggestion that the Pledge of Allegiance be recited prior to a union meeting in Los Angeles.

The 46-second video was captured by an unidentified staffer who accompanied candidate Ari David to a Service Employees International Union meeting on Saturday. By early Tuesday, the video had been viewed roughly 10,000 times.

David will not be opposing Becerra in November; he is running to replace Democratic U.S. Rep. Henry Waxman in a neighboring district. He said he attended the meeting in Becerra’s district in hopes of meeting with Waxman, who he said was an invited guest.

On the video, a man off camera can be heard saying: “I’m here for Ari David for Congress. Can we start this meeting with the Pledge of Allegiance?”

Hilarity ensues, most notably on behalf of an unidentified woman standing behind a lectern. Becerra, seated on stage, can be seen smiling and stifling his laughter as he bends slightly forward in his chair.

“No, I’m serious,” David’s staffer continues. “Congressman, shouldn’t we say the Pledge of Allegiance if we all want to be citizens? Wouldn’t that be appropriate to say the Pledge of Allegiance?”

“Sure, of course,” the woman on stage replies. “OK, let’s go for it — you lead.”

The pledge is then recited by everyone in the room, followed by raucous applause.

David told Fox News he found Becerra’s reaction “completely inappropriate,” adding: “I was stunned as an American that one of our members of Congress would act that way.

“Considering these people want immigration reform, shouldn’t they say the national anthem before a public meeting with their elected official there?”

If Becerra thought the situation was comical, it was the congressman’s “prerogative” to laugh, David said.

“Is it that offensive of a notion to be asked to say the Pledge of Allegiance?” the candidate continued.

Becerra defended the reaction in a statement to Fox News, saying:

“On the morning of February 20th, I was invited to address some 500 people gathered to discuss the human tragedy of a broken immigration system and the need to fix it. At some point during that meeting, a political operative for a congressional campaign asked if we could recite the pledge of allegiance. The meeting was already under way and the question was unexpected. It took us all by surprise. When the speaker explained that he was serious and asked me specifically if we could say the pledge, I said yes and gestured to the moderator, who then led the entire gathering in reciting the pledge.”

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TEA Party Turnout Estimated Around One Million

WorldNetDaily reports that the estimated turnout for the over 1,000 TEA parties held on Tax Day is about 1 million.

1 million attend tea parties in 50 states

‘Obama has awakened a sleeping giant’

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Posted: April 17, 2009
12:00 am Eastern

By Jerome Corsi and Chelsea Schilling
© 2009 WorldNetDaily

Aerial view of Alamo tea party protest in San Antonio, Texas (photo: Texas Tea Parties)

An estimated 1 million Americans participated in at least 1,000 tea parties, according to reports by organizers tabulating the nationwide numbers, with documented protests held in 50 states.

Grover Norquist, president of Americans for Tax Reform told WND, “The Obama administration has awakened a sleeping giant.”

Tax Day Tea Party national event coordinator Amy Kremer told WND she has confirmed that more than 850 parties took place. She has at least 100 more reports in her e-mail inbox that have not been posted.

Asked how many people attended the events, she responded, “I would estimate it at over 1 million. I’m waiting on more numbers to come in from organizers right now. I can tell you it is absolutely over 750,000 right now.”

The largest protests occurred in Atlanta, Ga., with 15,000 participants. As many as 10,000 protesters participating in Sacramento, Calif., and Overland Park, Kan., according to data compiled by Americans for Tax Reform on more than 207 tea parties.

Americans for Tax Reform has established an Internet page on the group’s website where organizers of tea parties can submit attendance estimates to be included in the running tally.

Michael DePrimo, special counsel to American Family Association President Tim Wildmon, told WND that AFA’s tea party website, Tea Party Day, had 2,031 confirmations that tea parties were to be held in as many cities.

“Since yesterday, we have had 394 cities give us reports, many with photographs, about the tea parties that were held,” he said. “We have not been able to get all the information up. We expect more to come in as the days go by.”

Glenn Beck reported yesterday on his Fox News program that official estimates of the participation in the Tea Party held in San Antonio, Texas, reached as many as 20,000 people.

The Glenn Beck show broadcast on Fox News live on April 15, from the Tea Party held at the Alamo in San Antonio.

Tea partiers in Sacramento, Calif. ( WND photo / Chelsea Schilling)

“The establishment in Washington, D.C., is terrified,” Norquist said. “There were no such demonstrations four months into the administrations of Democratic presidents Carter or Clinton.”

Norquist told WND that the Obama administration was taken by surprise by the nationwide protests because the administration had calculated increased government spending was supposed to be the popular part of President Obama’s economic stimulus plan.

Instead, Norquist said, the tea parties held in every state on Wednesday proved Americans nationwide are demonstrating in anger and disappointment against Obama administration plans for massive deficit spending.

Tax Day protester in Kansas City, Mo., holds sign (photo: Posted to Tea Party Day)

“Imagine what happens when President Obama, House Speaker Pelosi and Majority Leader Reid begin to pay for their ‘spend-fest’ with higher taxes and inflation,” Norquist said.

Kremer said the mainstream media have completely neglected their duty to accurately report on this nationwide movement.

“It’s amazing that the mainstream media is reporting it the way that they are,” she said. “It’s just crazy. It’s basically just going to come down to us. We’re now reporting it ourselves because they are not reporting it accurately.”

Many say the mainstream media attempted either to ignore the protests altogether or characterized tea partiers as disgruntled Republicans unable to accept that “they lost” the 2008 presidential campaign or as “rich taxpayers” unwilling to pay their fair burden of taxes.

However, Kremer said she is constantly receiving reports from organizers about the movement’s resounding success.

“I think it was an absolute success,” she said. “We want to send a message to them: We hired them; we can fire them. They work for us. They seem to have forgotten that.”

She continued, “If it means we have to go after every incumbent in office from now until 2012, we will do that. But the American people are tired of sitting by, and they are starting to step forward and take notice.”

Related Posts: No Suprise: Mainstream Media Devolves Into Childish Humor Over TEA Parties
TEA Party Images
Media Covers Anti-Prop 8 Activists, Dismisses TEA Parties

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No Suprise: Mainstream Media Devolves Into Childish Humor Over TEA Parties

FOX News is reporting on the other media outlets’ coverage of the Tax Day TEA Parties.  Showing their true colors and maturity level, MSNBC, CNN, and the rest of the leftist media hosts show how they are in the pocket for Obama by their immature sexual references to “teabagging”, and the like, in reference to Government protests on taxation and spending as opposed to their glowing coverage of the anti-prop 8 crowd.

Cable Anchors, Guests Use Tea Parties as Platform for Frat House Humor

Cable anchors and guests covered the anti-tax tea party protests by cracking a litany of barely concealed sexual references.

FOXNews.com

Thursday, April 16, 2009

For thousands of Americans, Tax Day was a moment to protest what they see as bloated budgets and a pile of debt being passed on to their children.

For CNN, MSNBC and other media outlets, it was a once-in-a-lifetime opportunity to use the word “teabagging” in a sentence.

Teabagging, for those who don’t live in a frat house, refers to a sexual act involving part of the male genitalia and a second person’s face or mouth.

So when the anti-tax “tea party” protests were held Wednesday across the country, cable anchors and guests — who for weeks had all but ignored the story — covered the protests by cracking a litany of barely concealed sexual references.

CNN anchor Anderson Cooper interspersed “teabagging” references with analyst David Gergen’s more staid commentary on how Republicans are still “searching for their voice.”

“It’s hard to talk when you’re teabagging,” Cooper explained. Gergen laughed, but Cooper kept a straight face.

MSNBC’s David Shuster weaved a tapestry of “Animal House” humor Monday as he filled in for Countdown host Keith Olbermann.

The protests, he explained, amount to “Teabagging day for the right wing and they are going nuts for it.”

He described the parties as simultaneously “full-throated” and “toothless,” and continued: “They want to give President Obama a strong tongue-lashing and lick government spending.” Shuster also noted how the protesters “whipped out” the demonstrations this past weekend.

Tea Party participants were not amused. The events were held in dozens of cities across the country, and while some demonstrators were criticized for wielding off-topic and sometimes insensitive protest signs, most took to the streets to speak out against government spending.

Brent Bozell, president of the conservative Media Research Center, said the media coverage was “insulting,” reacting specifically to CNN reporter Susan Roesgen’s combative interviews with Illinois demonstrators in which she declared that the protests were “anti-CNN” and supported by FOX News. She left the teabagging jokes to her colleagues, though.

“I’ve never seen anything like it,” Bozell said. “The oral sex jokes on (CNN) and particularly MSNBC on teabagging … they had them by the dozens. That’s how insulting they were toward people who believe they’re being taxed too highly.”

Max Pappas, public policy vice president at FreedomWorks — a small-government group which promoted the tea parties — said it’s a “shame” media outlets cracked jokes at a genuine “grassroots uprising.”

“I think what that reveals is how worried they are that this might actually be something serious. You make fun of things you’re afraid of, I’d say,” Pappas said.

If anyone thinks the orally charged remarks on mainstream cable were just a coincidence, MSNBC’s Rachel Maddow’s segments over the past week with guest, Air America’s Ana Marie Cox, would dissolve all doubt. Their on-air gymnastics, dancing around the double entendre of the week, looked like live-action Beavis and Butthead.

By one count, the two of them used the word “teabag” more than 50 times on one show. And on Monday, Cox even let the viewers in on their joke — referencing Urbandictionary.com, a site which offers a number of colorful definitions for the term “teabagging.”

“Well, there is a lot of love in teabagging,” Cox said. “It is curious, though, as you point out, they do not use the verb ‘teabag.’ It might be because they’re less enthusiastic about teabagging than some of the more corporate conservatives who seem to have taken to it quite easily.”

Jenny Beth Martin, a Republican activist who helped organize one protest in Atlanta, said she’s not too worried about the protests being dismissed by some media outlets. She estimated 750,000 people attended more than 800 protests in all 50 states, and that at the very least the local media and community newspapers documented it.

“Our message definitely got out where it needed to get,” she said.

Related Posts: TEA Party Images
Media Covers Anti-Prop 8 Activists, Dismisses TEA Parties

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TEA Party Images

WorldNetDaily has a post with images from the TEA party in West Palm Beach, Florida.

Obama slammed: ‘Chains we can believe in’

Americans thrash president for perceived pursuit of socialism

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Posted: April 15, 2009
10:22 pm Eastern

By Joe Kovacs
© 2009 WorldNetDaily WEST PALM BEACH, Fla. – A sign with President Obama’s famous “O” logo stating, “Chains we can believe in” welcomed hundreds of protesters to a tea party event here this evening in one of the nation’s most affluent regions.

The well-known “O” logo of President Obama is combined with a play on his “Change we can believe in” slogan at a tea party protest April 15, 2009, in West Palm Beach, Fla. (WND photo / Joe Kovacs)

Those braving rain showers to sound their objections to Obama’s policies voiced a common theme, one suggesting America is rapidly racing toward socialism.

“We’re headed toward socialism, and socialism is anathema to everything this country’s ever stood for,” said Fritz Breland, a self-employed yacht broker from Boynton Beach, Fla. “I’m essentially unemployed because no one’s buying.”

Bearing a simple cardboard sign equating Obama with socialism and evil, Breland was outspoken in his disgust for the direction in which he believes the U.S. is now headed.

Fritz Breland of Boynton Beach, Fla., displays a sign associating President Obama with socialism and evil at a tea party protest in West Palm Beach, Fla., April 15, 2009 (WND photo / Joe Kovacs)

“I see through you, Mr. Obama. You’re a socialist, and I will fight you with my last dying breath,” he said.

(Story continues below)

A West Palm Beach police officer monitoring the event from several stories up in a parking garage estimated the crowd to be approximately 500 before a downpour began to disperse some participants.

Carole Buell of Wellington, Fla., holds sign protesting government spending at West Palm Beach’s tea party April 15, 2009 (WND photo / Joe Kovacs)

Among those seeking shelter from the weather was Cheri Goldberg of Boca Raton, Fla., who admitted this was her first political rally.

“I have never in my entire life demonstrated, and I’m in my mid-sixties,” she told WND. She said she was upset because lawmakers are “signing these bills giving out money. They haven’t even read them.”

An unidentified girl braves rain showers to display a sign at West Palm Beach’s tea party April 15, 2009 (WND photo / Joe Kovacs)

Her message to Obama and Congress was simple: “Obey the Constitution, stop the bailouts and stop spending. Spend only what we have.”

Tom and Carol Dekker of Palm Beach Gardens, Fla., said they fled California five years ago, closing their construction business because of a high tax burden there.

“In California, we were paying upwards of 70 percent of our income to the government in taxes,” said Mrs. Dekker. “Seventy percent! That’s socialism.”

Two unidenitified girls hold signs while relaxing during West Palm Beach’s tea party April 15, 2009 (WND photo / Joe Kovacs)

She said if she could talk to the president in person, her advice to him would be, “Step down. He’s ruining our country.”

A sign calling the Federal Reserve Bank a terrorist organization is displayed at West Palm Beach’s tea party protest April 15, 2009 (WND photo / Joe Kovacs)

Tom Dekker said Obama’s mantra of “change” and his new direction are not where America has been since its inception, and says it’s unfortunate the former state lawmaker and congressman hasn’t had “any knowledge of running businesses to appreciate what it’s like to be able to pay your taxes, pay your employees, pay all your bills.”

“He thinks that he’s got an endless pot of money that he can continue to spend, and he’s mistaken. He does not. People are just at the tipping point right now, and if they don’t change their ways in Washington, people are going to stop … maybe they just stop paying taxes. If everyone stopped paying their taxes, I think that would really impact what’s going on.”

Related Posts: Media Covers Anti-Prop 8 Activists, Dismisses TEA Parties

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March 31: Red Envelope Day

Don’t forget that March 31 is Red Envelope Day.  RED is a grassroots effort to show Washington, specifically Barack Obama, that we are outraged that abortion is still legal in the U.S.  Every empty red envelope is a representation of an aborted baby that never had the chance to make an impact on the world.

Please take a look at redenvelopeproject.org for more information and how to format your red letters for the White House.  I realize this is short notice, but they need to be in the mail tomorrow, March 31.  You can have redenvelopeday.com send them for you tomorrow if you purchase them online.

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U.S. Begins Borrowing From Itself To Pay Itself, Economists Forecast Possible Disaster

WorldNetDaily is reporting on today’s move by the Fed to purchase long-term Treasury securities in an effort to create inflation to hopefully bypass deflation, a situation that has never worked in any economy successfully.

Fed begins move that could sink dollar

Economists warn government subsidizing purchase of its debt

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Posted: March 25, 2009
4:04 pm Eastern

By Jerome R. Corsi
© 2009 WorldNetDaily

NEW YORK – The Federal Reserve began today to buy longer-term U.S. Treasury securities in a move some economists believe will end up “monetizing” the dollar, a process that could inflate the amount of money in circulation and cause serious devaluation of the currency on world markets.

The move comes the same day U.S. Treasury Secretary Tim Geithner told the Council on Foreign Relations that the U.S. is “open” to a proposal by China to replace the dollar as the world’s reserve currency with a “super-currency” to be created by the International Monetary Fund, or IMF.

The Federal Reserve Bank of New York released yesterday a statement specifying that the Federal Open Market Trading Desk within the Fed will purchase up to $300 billion of longer-term U.S. Treasury securities over the next six months in what amounts to the a government-subsidized purchase of U.S. government debt.

To many Americans, the move appears equivalent to a retail consumer in debt using a Master Card to pay a Visa credit card bill.

“The Fed is monetizing U.S. Treasury debt in order to debase the dollar – to create inflation – in hopes of avoiding deflation,” economist John Williams, author of the Internet newsletter Shadow Government Statistics, told WND in an e-mail.

“This move also sets the precedent for the Fed acting as lender of last resort to the U.S. Treasury, if foreign and other investors in U.S. treasuries balk at upcoming auctions or look to dump existing holdings,” Williams said.

“The record federal deficits ahead mean record Treasury borrowings,” he explained. “Fed monetization of the debt eventually means surging money supply growth and much higher inflation.”

WND previously reported Williams’ analysis of the U.S. Treasury’s GAAP accounting of the federal budget deficit, which indicated the negative net worth of the U.S. government last year was $65.5 trillion in total obligations, a sum that exceeds the gross domestic product of the world.

“Because of the U.S. government’s effective insolvency with $65 trillion in obligations, even before the Obama administration deficits, the higher inflation caused by the Fed buying Treasury debt has the early potential of evolving into an uncontrolled hyperinflation in which the U.S. dollar becomes totally worthless.”

Williams’ comments were especially pertinent after Britain announced earlier today that for the first time in almost seven years the country failed to find enough buyers of £1.75 billion ($2.55 billion) of bonds as debt investors rejected Prime Minister Gordon Brown’s plan to stimulate England’s economy with deficit-financed government spending, according to Bloomberg.

International economist Bob Chapman, author of the Internet newsletter International Forecaster, agrees.

“This is just the beginning,” Chapman told WND in an e-mail. “The Obama administration expects to run annual deficits between $1-$2 trillion a year for the next decade, and we estimate that foreign buyers might only buy one-third to half that amount of debt. The Fed will have to monetize $3.75 trillion to $5.25 trillion over the next few years, just to buy the U.S. government debt.”

The move by the Fed to buy Treasury debt comes as China proposes to replace the dollar as the world’s reserve currency.

As the Financial Times in London reported today, China’s central bank governor Zhou Xiaochuan has proposed to utilize Special Drawing Rights, or SDRs, issued by the IMF as a world reserve currency.

Red Alert explained in an article in this week’s issue that the IMF, with the support of the United States and Russia, appears positioned to launch a one-world currency at the G-20 meeting scheduled for London April 2, with the move intended as a last ditch effort to prevent massive bank failures throughout the European Union.

The idea is for the IMF to issue at least $250 billion in Special Drawing Rights, or SDRs, to IMF member states, as a method of placing a safety net under developing countries that might otherwise have to declare bankruptcy.

The idea gained momentum last week when the Moscow Times published an article revealing that the Kremlin intended to use the G-20- meeting to push for the IMF to utilize SDRs as “a super-reserve currency widely accepted by the whole of the international community.”

U.S. Treasury Secretary Tim Geithner is on the record calling for the G-20 to support “substantially increasing emergency IMF resources” by up to $500 billion to deal with the global economic crisis.

SDRs are international reserve assets calculated by the IMF in a basket of major currencies allocated to its 185 member nation-states in relation to the capital, largely in gold or widely accepted foreign currencies that the members have on deposit with the IMF.

China’s proposal would require the IMF to issue SDRs to central banks of IMF member states far in excess of any gold or currency reserves the states have on deposit with the IMF.

The idea to utilize the little-understood and largely ignored SDR’s in this new capacity, as a sort of an international overdraft facility made available to bankrupt or financially failing IMF member nation-states, originated with Ted Truman, formerly a senior official at both the Federal Reserve and the U.S. Treasury.

According to Reuters, Truman has returned to the U.S. Treasury for the past six weeks to explain his proposal to revitalize the IMF Special Drawing Rights facility with at least a $250 billion commitment from the Obama administration.

This year, China’s holdings of U.S. Treasury securities have jumped to $739 billion, up dramatically in less than a year, from $535 billion in June 2008.

China is clearly worried that its massive holdings of U.S. dollars are at risk of devaluation because of the massive deficit financing required by the Obama administration’s proposed $3.7 trillion budget, on top of the administration’s deficit-financed $787 billion economic stimulus plan and $410 billion omnibus funding bill passed by Congress in the last two months.

China currently holds approximately $2 trillion in foreign exchange reserves, the most any nation has ever held in the history of the world. The reserves have been gained largely by the positive balance of trade China has enjoyed exporting cheap goods to the U.S. since 2000, when President Bill Clinton signed a landmark bill granting permanent normalized trade relations status to China to accommodate the communist nation’s entrance into the World Trade Organization.

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