Thom Hartmann:

Thom Hartmann here with you, and one of the great warriors for our country, for our people, for we the people, is Dennis Kucinich. He’s on the line with us. His website kucinich.us of course, and Congressman Kucinich, welcome to the show.

Dennis Kucinich: Thom, it’s always good to be with you, thank you.

Thom Hartmann: Thank you so much, sir. You have inserted an amendment into the House version of the health care bill, correct me if I’m wrong, I think that you got this through, and you got it in, and it’s there, that will allow the states, no matter how badly the Senate screws this thing up, no matter how badly it comes out of conference or whatever, because we’re looking at some real schemes that the health insurance companies are doing, that will allow individual states to create their own single-payer healthcare systems if they want. Do I have that right?

Dennis Kucinich: Right. That’s right.

Thom Hartmann: Tell us about it.

Dennis Kucinich: The state single-payer option is an amendment that I put into the bill in the Labor and Education Committee, and it passed by a vote of twenty-seven to nineteen. And this bill will give states an automatic waiver when they apply for their own single-payer system, and it’s a waiver from the current law where states can be pre-empted from such a plan by the Employee Retirement Income Security Act, or ERISA.

So, you know, on one hand it’s a technical matter, but it is huge because there’s already case law where courts are blocking states and counties and locales from creating health care plans because they say it violates ERISA. We create the waiver so it’s a state single-payer option, and it’s the one thing that can keep the hopes of the single-payer alive.

Thom Hartmann: You know, I think that Congressman Kucinich, most Americans have no idea that there is a law, this ERISA law, the Employee Retirement Income Security Act, that explicitly says “A state may not create a single-payer health insurance programme” effectively. It has that consequence.

Dennis Kucinich: Right. It has that consequence. It’s not quite so explicit, but because ERISA, when it was created, called on states to a kind of harmonization of employer-related health care plans, so states couldn’t have their own plan. It looked for a kind of comprehensive unity of health care plans that would be offered. Any state that wanted to create its own health care system, would run afoul of the spirit of ERISA, and courts have used ERISA to block the creation of single-payer plans.

So, in looking at the legal history of it, I saw that if this bill, H.R. 3200 is to pass, if it doesn’t work out favorably for the American people, at least there'd be twelve states right now where there is a powerful single-payer movement going, where people could take matters into their own hands and say, “Look we want to cover everyone. We want doctor choice, and a range of other health care services. We’ll do it in our state.”

Thom Hartmann: Right, so people need to be contacting their members of the House of Representatives and then their two Senators, and saying “We want the Kucinich Amendment that will allow states to produce their own single-payer programme, the ERISA exemption, to be intact when this thing finally comes out of conference and is voted on”, and to lobby heavily for this.

Dennis Kucinich: Right. Right.

Thom Hartmann: It’s… This, by the way, is how Canada got single-payer healthcare system.

Dennis Kucinich: That’s true. It started with a province and it picked up steam from there. And I think that states, which Justice Brandeis described famously as laboratories for experimentation, have the ability to be able to move forward if they so choose, and in many states there is such a powerful movement going on already. I mean, look at California, twice has moved forward to pass a single-payer health plan, only to be vetoed by the Governor. And there are states like Pennsylvania, Ohio, New Mexico, and others who have various stages of involvement with single-payer. So this is something that we have to protect, this right, and by providing for a waiver from ERISA, we make sure that in the future, no court is going to turn around and say, “Look, we can’t let this happen because it violates standing Federal law,” and my state single-payer option amendment clears the way for states to move ahead with a single-payer plan, without being worried about running afoul of any existing Federal law.

Thom Hartmann: Good on you. We really need to be promoting that. If I may change topics…..

Dennis Kucinich: Sure.

Thom Hartmann: Senator Sanders was on our show last week, and he mentioned that you and Ron Paul and a few other members of the House, and he in the Senate, are pushing hard to have the Fed audited. Do I have that right?

Dennis Kucinich: Right. I actually was able to get an amendment passed, again in the Labor and Education Committee, to H.R. 2424, which would permit the government, the G.A.O. to audit the Fed. For the first time people would be able to understand the inner workings of this kind of a puzzle palace of monetary policy.

Thom Hartmann: For the first time since 1913.

Dennis Kucinich: That’s correct, and to give you an example of how significant this can be, the Fed has printed over a trillion dollars through a programme called quantitative easing. We don’t know who’s getting the money. We also know that right now, the Fed has encouraged banks which have been recipients of TARP funds and other Federal programmes, and money from the Fed, to park their money at the Fed. A year ago, Thom, the excess reserves of banks across America were in a range of two to nine, ten billion dollars. Today, the excess reserves are near a trillion dollars. The Fed’s paying banks high rates of interest in order for banks to keep their money at the Fed and not lend it to keep businesses hiring people, and to move commerce, and to have liquidity. They’re something going on there, and if we don’t have the ability to audit the Fed, at least we lack the ability to really understand what’s going on in our economy.

Thom Hartmann: Yeah. And Bernanke keeps saying, “Oh, we’re a Federal agency.” Nonsense. And if they were, they could be easily audited, and it wouldn’t require an Act of Congress.

Correct me if I’m wrong on this. This is my understanding of how this works. The Fed right now is basically creating money out of thin air, and loaning it to banks, at roughly zero interest. The banks can then take that... Say I own a bank, and I get, you know, five hundred million dollars or a billion dollars from the Fed, or five hundred billion dollars from the Fed if I’m CitiCorp or a trillion dollars from the Fed. I get a bunch of money from the Fed at zero percent interest. I then park that bank in a savings account, at the Fed, and the Fed pays me six percent interest. I’m making six percent, if my recollection of the numbers is right; I’m making six percent for doing absolutely nothing and taking no risk.

Why would I bother loaning that money to somebody who wants to buy a house who might default on it? Why would I bother loaning that money to somebody who wants to start a small business that might default on it? Why would I bother doing anything other than that? Have I described the situation, Congressman Kucinich:?

Dennis Kucinich: You have. We’re trying to validate the exact interest rate, but you described the situation that the Fed is paying banks not to loan money.

Thom Hartmann: Right, and it’s paying them by giving them interest when they give the money that they loaned to the banks back to the Fed.

Dennis Kucinich: Right.

Thom Hartmann: Which is nuts.

Dennis Kucinich: I just want everyone to hear that again. That the Fed is paying banks not to loan money.

Thom Hartmann: Right. And this should be a crime, frankly, and the fact...

Dennis Kucinich: Well, it’s a violation of public trust.

Thom Hartmann: Yes.

Dennis Kucinich: Remember when the TARP passed. I voted against the TARP but remember when it passed. People were told, well, this is going to deal with meltdown, and mortgage debt securities, to help people stay in their homes. That is the first thing Congress was told. Congress voted for the TARP. Then what happened is the administration changed the nature of it, said, "we’re not going to use it for that any more. We’re going to use it to have liquidity in credit markets", ok? And now, they’ve changed it again. They did another big switch. Because what TARP funds are being used for, aside from the fact of helping pay counterparties and invest in other countries, TARP funds are being used to help banks grow their income while parking their money at the Fed.

Thom Hartmann: Right. And with no benefit to we the people.

Dennis Kucinich: Exactly. Exactly.

Thom Hartmann: This is trickle-down economics of the very worst kind, and it’s a trickle-down that isn’t even happening. I mean this is all being held right there in the banks. Maybe if they get healthier, maybe if they get richer, maybe down the road they’ll loan a little bit of this to you and me, but it doesn’t seem like it.

Dennis Kucinich: Right. Look, this is the kind of thing that we’ve been talking about for years, in terms of how the wealth of the nation is accelerating upwards. These are taxpayers dollars we’re taking about. These are dollars that were used to try to ensure the solvency of the financial system, and liquidity in the system, and yet we know from reports in the “Wall Street Journal” two days ago that credit is still tight, people are having difficulty being able to get loans, businesses are in trouble. This continues to be the problem, just like the fact that, it’s not just the almost trillion dollars that’s parked at the Fed. Check this out. You know that reserve money is there to be leveraged by banks, that they will issue eight to twelve times the amount of money that’s in reserve.

Thom Hartmann: Right.

Dennis Kucinich: So there's potentially eight to twelve trillion dollars of liquidity that is pent up at the Fed, and I think it sets the stage for another boom-bust cycle, for more pump-and-dump schemes, and it’s part of a plan that just extracts money from investors and taxpayers and puts it into the hands of a few.

Thom Hartmann: Yeah, and I’m concerned, frankly, that Mr. Geithner and Mr. Bernanke are hoping that they can pull this thing off so that it won’t crash before the next elections. But that's you know, we’ll see. I see problems all the way around this. It’s not a political issue. In any case, Congressman Dennis Kucinich, Kucinich.us is the website. Congressman, thanks so much for being with us today.

Dennis Kucinich: Always a pleasure.

Thom Hartmann: Always a pleasure talking to you too, Sir. Thank you very much.

Transcribed by Gerard Aukstiejus.