Obama Lies To Us, Secretly Tells Banks - There Will Be No Default

Obama and the Democrats have been scaring everyone under the sun with their lies and deceit regarding raising the budget ceiling. They have told grandparents that they might not get their Social Security checks. They have said that the military might not get paid, and that food inspections, drug research, and other important functions may suffer as well. Now we learn that this is just another set of lies that Obama and the Democrats have used against the American People to try and get their way, which consists of increased taxes (revenues) and the killing of many more jobs.

Obama and the Democrats will not rest until we are all complete dependents of the U.S. Government.

While officials from the Obama Administration raised their rhetoric over the weekend about the possibility of a debt default if the debt ceiling isn’t raised, they privately have been telling top executives at major U.S. banks that such an event won’t happen, FOX Business has learned.

In a series of phone calls, administration officials have told bankers that the administration will not allow a default to happen even if the debt cap isn’t raised by the August 2 date Treasury Secretary Tim Geithner says the government will run out of money to pay all its bills, including obligations to bond holders. Geithner made the rounds on the Sunday talk shows saying a default is imminent if the debt ceiling isn’t raised, and President Obama issued a similar warning during a Friday press conference after budget negotiations with House Republicans broke down.

While the negotiations to craft a budget remain at an impasse, Republicans and Democrats on Monday began crafting their own plans to cut spending that could lead to an agreement to raise the debt ceiling. It’s unclear if a broad agreement can be reached any time soon, but even if a deal is struck, a complicating issue for lawmakers and the administration is the possibility of a downgrade to the US debt rating, which would cut the triple-A rating on the nation’s debt to a lower level.

Major ratings firms — namely Standard & Poor’s and Moody’s — have said even if the country raises the debt ceiling and doesn’t default, there’s a strong likelihood that the triple-A bond rating will be cut to double-A unless a budget can be crafted that results in $4 trillion in savings, the result of the massive debt load the country has accumulated in recent years. The nation’s outstanding debt is more than $14 trillion.

A senior banking official told FOX Business that administration officials have provided guidance to them that even though a default is off the table, a downgrade “is a real possibility for no other reason than S&P and Moody’s have to cover (themselves) since they’ve been speaking out on the debt cap so much.”

This guidance is a big reason why Wall Street has largely dismissed the possibility of default, and though the markets have been jittery amid the talk of default, they haven’t imploded as would be the case, many economists fear, if the nation missed a payment on its debt.

The banking official said the administration understands that if there were to be a default, it would likely spark another financial crisis.

"They also know they can pay the debt with cash on hand," this official told FOX Business. The Treasury collects around $2 trillion in tax revenues, and is scheduled to pay out $200 billion in interest to bond holders. In order to meet its obligations to contractors, social security recipients and others, the administration would have to raise another $1 trillion either through cuts, higher tax revenues, the issuance of debt or a combination of all three.

Congressional Republicans believe that the Administration is raising the possibility of a default as a way to ramp up pressure on Republicans to agree to a budget deal that includes tax increases, which they oppose.

A Treasury spokesman said that “when we exhaust our borrowing authority, as we will on August 2nd, there is no way to guarantee that we will be able to pay all of our bills. Any suggestion to the contrary is simply false.”

Even without a default, banks expect some market turbulence if the triple-A sovereign-debt rating is cut, sources tell FOX Business. While bank officials do not believe there will be a “catastrophic” effect to a downgrade, that’s not to say there won’t be negative ripple effects, notably to bond deals and derivatives priced off triple-A-rated Treasurys.

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Obama For-Profit College Crackdown Faces Much Bi-Partisan Anger

Obama For-Profit College Crackdown Faces Much Bi-Partisan AngerObama and some Democrats are trying to make it harder for low income students to graduate from college by cutting federal aid to vocational “for-profit” schools.

Many Republicans and Democrats oppose the crack0down, but just as the Obama administration has done every other time, we can expect this to be rammed down our throats as well.

President Obama and his education secretary are facing a bipartisan revolt from almost 300 lawmakers, an inspector general’s investigation and several lawsuits over a proposed crackdown on for-profit colleges, which train people for jobs ranging from plumbers to computer technicians.

"Can you think of any other issue that former Speaker Nancy Pelosi and the current Speaker John Boehner agree on?" asked Lanny Davis, a former legal counsel to President Clinton. "The policy is so wrongheaded that it brings liberals and conservatives together."

What’s causing all the ruckus? A proposed regulation from the administration is aimed at what are known as career or vocational schools which train medical technicians, chefs, welders, electricians and the like. The rule would cut federal aid to programs where student debt levels are deemed to be too high and where students are struggling to repay their loans.

But many critics are puzzled by the administration’s move. And they question whether the standards are too strict.

"There seems to be a big urgency here to go after for-profit colleges who educate a high number of African-American and Hispanic people in our communities," Harry Alford, the head of the National Black Chamber of Commerce, told Fox News. "And for some reason, it’s full speed ahead."

Melanie Sloan of the liberal watchdog group Citizens For Responsibility and Ethics in Washington notes it is “a regulation that would affect only for-profit colleges, not non for-profit colleges.”

Rep. Rob Andrews, D-N.J., thinks he may know why. “I think there is a bias against for-profit schools that has informed this rule.”

Many students at these colleges are poor and use federally backed student loans. Andrews told Fox News the idea behind the regulation idea was to make sure poor students aren’t persuaded to borrow a lot of money, then get an education they can’t afford and that doesn’t lead to a job.

But he argues the proposed regulation goes about it the wrong way and sets a standard that would be almost impossible for poor graduates to satisfy.

"If your student loan payments make up more than about 8 per cent of your monthly income, the school can’t get federal financial aid anymore," Andrews said. "It sort of knocks the school out of business."

Critics say most community colleges and universities couldn’t pass that standard either, but aren’t being asked to.

"There are first-year residents from Harvard Medical School whose student loan payments eat up 20 or 25 percent of their income. Is Harvard Medical School a bad medical school? I sure don’t think so," Andrews said.

So, the proposed regulation would hit poor students the hardest because many can’t afford college and depend on loans to attend career school to develop new skills or a new career.

"Minority kids and lower income kids who go to these career colleges are about to be decimated if this regulation goes through," Davis said.

That’s why the regulation is opposed by members of the Congressional Black Caucus, among others, who were among 113 lawmakers who wrote Obama a month ago and urged him to back off, saying “the implementation of these new rules will be so burdensome and the projected impact so broad that many reputable schools, particularly those serving the most at-risk students, will be adversely impacted.”

The Education Department issued a statement to Fox News saying this is an effort to “curb abuses by for-profit colleges. Far too many of these schools are saddling students with unmanageable debts, in exchange for largely worthless degrees.”

The critics of the regulation acknowledge some schools have questionable practices but say attacking the whole industry is not the solution.

"If someone is committing fraud, go after them, go after them with a vengeance," Alford said. "But don’t paint all these schools, a certain segment of our educational system as being fraudulent."

Davis argued that the Education Department shouldn’t even be considering such a rule. “You don’t make law that has such immense impact on kids that are vulnerable by regulation. You do it by legislation,” he said.

Nevertheless, many expect the regulation to be issued this week.

Government Corruption Exposed from the Midwest -