The formal request gives both chambers 15 days to vote on whether to approve of the $1.2 trillion hike. The House plans to vote on this request on Jan. 18, a spokeswoman for House Majority Leader Eric Cantor (R-Va.) said.

In a letter to House and Senate leaders sent Thursday, the president informed the Congress that the federal government had come within $100 billion of the existing limit and that another increase is “required to meet existing commitments.” The boost will be the third and final increase to the ceiling under the debt-limit deal struck in August, and is intended to cover the government’s borrowing through the 2012 elections.

The United States reached the $15.194 trillion debt limit on Jan. 4, according to Treasury statements. Since that time, Treasury has employed the “extraordinary measure” of tapping into its Exchange Stabilization Fund to avoid exceeding the limit.

Read more at The Hill.

The US government will hit its debt limit in the first week of January, the Treasury Department said on Tuesday, as it pointed to an imminent request for $1.2 trillion increase.

The government is expected to come within $100 billion of the current $15.2 trillion ceiling by the end of the year, Treasury Department officials said.

That effectively puts lawmakers on notice that they will have until mid-January to oppose a fresh increase.

But a reprise of the vicious political debates over the debt ceiling that brought the US to the brink of default over the summer is unlikely.

Congress agreed on July 31 to immediately increase the national debt by $400 billion, and then increase it in stages after that when necessary.

An increase can only be blocked if both the House of Representatives and the Senate pass measures opposing it.

Read more here.

On the morning of July 21, before the Eton Park meeting, Paulson had spoken to New York Times reporters and editors, according to his Treasury Department schedule. A Times article the next day said the Federal Reserve and the Office of the Comptroller of the Currency were inspecting Fannie and Freddie’s books and cited Paulson as saying he expected their examination would give a signal of confidence to the markets.

A Different Message

At the Eton Park meeting, he sent a different message, according to a fund manager who attended. Over sandwiches and pasta salad, he delivered that information to a group of men capable of profiting from any disclosure.

Around the conference room table were a dozen or so hedge- fund managers and other Wall Street executives — at least five of them alumni of Goldman Sachs Group Inc. (GS), of which Paulson was chief executive officer and chairman from 1999 to 2006. In addition to Eton Park founder Eric Mindich, they included such boldface names as Lone Pine Capital LLC founder Stephen Mandel, Dinakar Singh of TPG-Axon Capital Management LP and Daniel Och of Och-Ziff Capital Management Group LLC.

After a perfunctory discussion of the market turmoil, the fund manager says, the discussion turned to Fannie Mae and Freddie Mac. Paulson said he had erred by not punishing Bear Stearns shareholders more severely. The secretary, then 62, went on to describe a possible scenario for placing Fannie and Freddie into “conservatorship” — a government seizure designed to allow the firms to continue operations despite heavy losses in the mortgage markets.

Stock Wipeout

Paulson explained that under this scenario, the common stock of the two government-sponsored enterprises, or GSEs, would be effectively wiped out. So too would the various classes of preferred stock, he said.

The fund manager says he was shocked that Paulson would furnish such specific information — to his mind, leaving little doubt that the Treasury Department would carry out the plan. The managers attending the meeting were thus given a choice opportunity to trade on that information.

There’s no evidence that they did so after the meeting; tracking firm-specific short stock sales isn’t possible using public documents.

Read more here. We reached out to Breitbart Editor Peter Schweizer, whose new book Throw Them All Out has rocked DC, for comment on Sec’y Paulson’s actions:

This sort of behavior goes on regularly. Government officials can chose to release sensitive information to who they want. As I point out in my book, this has happened with Pentagon officials talking with investment houses about defense stocks and the defense budget, and Obama Administration discussions with commodity traders over plans to release the Strategic Petroleum Reserve. This is crony capitalism at its worse.

The professed purpose of these government agencies is to “keep watch” on the business dealings of corporations in order to “protect” the consumer. But after reading some documents JW obtained recently revealing the generous salaries and bonuses being paid to government workers in these agencies, I have one question: Who is watching out for the American taxpayer?

We obtained the documents in response to Freedom of Information (FOIA) requests filed on July 12, 2011, with the CFPB and the CFTC, as well as with the Federal Reserve, the Office of the Comptroller of the Currency (OCC), the U.S. Treasury, and the Securities & Exchange Commission (SEC).

The FOIAs requested Standard Form 50s (SF-50s) from each of the agencies. An SF-50 is a human resources form that documents any change in a government worker’s employment situation, including pay. Check out some of the responses we received:

• The CFPB responded on August 4, 2011. The SF-50s revealed CFPB workers being hired at salaries twice the maximum ordinarily allowed under guidelines published each year by the Office of Personnel Management. A dozen new hires take home more than $225,000 a year, and a student intern is currently being paid $42,036 “through completion of education & study” as a communications trainee.

• The CFTC responded on September 12, 2011, but blocked out most of the information on the 26 forms provided. The documents, however, reveal that the agency has instituted a cash award bonus system, and during the first six months of 2011, the agency doled out from $400 to $5,000 in bonus income to employees already earning $225,000 or more per year.
• The Federal Reserve, responding on August 25, 2011, denied using SF-50s, despite an apparent statutory requirement to do so. It also refused a subsequent request for “Transcripts of Service,” which the agency said it used instead of SF-50s.
• The OCC responded on August 22, 2011. The SF-50s indicated that 85 workers earn $225,000 or more per year. The employee names, as well as the legal authority under which the pay raises were issued, were blotted out.
• The U.S. Department of the Treasury, responding on August 25, 2011, indicated that two employees earn more than $225,000, but withheld their names.
• The SEC responded on October 3, 2011, reporting that 103 workers earn $225,000 or more per year.

(Judicial Watch filed administrative appeals regarding the withholding of information by the U.S. Commodity Futures Trading Commission, the Office of the Comptroller of the Currency, and the U.S. Department of the Treasury. What these agencies provided to us was disturbing enough, for certain. So we want to know what they’re hiding.)

These new salary records are bound to cause controversy.

No wonder Washington, DC, is the wealthiest area of the country! And the secrecy surrounding basic salary information of public employees shows an arrogance of power and contempt for transparency in an administration that promised the very opposite.

(Feel free to pass this along to the Obama army of Occupy Wall Street protestors, for they are sorely need in lessons of what’s really happening in Washington. It might surprise them to learn that Wall Street is already “occupied” – by well-paid “armies” of Washington bureaucracies and their politician “generals”.)

House Republicans released an email Friday evening showing that a senior Treasury Department official in August expressed concern that the Energy Department’s early 2011 restructuring of the solar company Solyndra’s $535 million loan guarantee may have been illegal.

The restructuring put private investors, who were providing another $75 million to the struggling company, first in line for repayment if the company went under. In addition, House Republicans probing Solyndra – which collapsed several weeks ago – say DOE may have violated requirements to consult with Treasury on the revision of the loan agreement.

The Energy and Commerce Committee’s GOP leaders wrote to Treasury Secretary Tim Geithner Friday seeking documents about Treasury’s communication with the White House, DOE and other agencies on the financing.

They are questioning whether DOE ran afoul of a provision in a 2005 statute, which first authorized the loan program, that requires DOE to consult with Treasury on loan guarantees and major subsequent changes in the terms.

“In the course of our investigation, we have uncovered information that raises questions as to whether the Department of Energy satisfied the requirement to consult with the Department of the Treasury about the $535 million loan guarantee issued to Solyndra in September 2009 and the restructuring of that agreement in February 2011,” states the letter from Rep. Fred Upton (R-Mich.) and Rep. Cliff Stearns (R-Fla.), who heads the committee’s investigations panel.

They cite an August 17, 2011, email from Treasury’s Assistant Secretary for Financial Markets Mary J. Miller to Jeffrey D. Zients, the deputy director of the White House Office of Management and Budget.

The email, according to the Republicans, states:

[O]ur legal counsel believes that the statute and the DOE regulations both require that the guaranteed loan should not be subordinate to any loan or other debt obligation. The DOE regulations also state that DOE shall consult with OMB and Treasury before any ‘deviation’ is granted from the financial terms of the Loan Guarantee Agreement. In February, we requested in writing that DOE seek the Department of Justice’s approval of any proposed restructuring. To our knowledge, that has never happened.

Read the whole thing here.

For all the talk about fairness and equity with the so-called Buffett Rule, there is one sneaky loophole in the Obama revenue proposal that has largely escaped notice. In doublespeak that would make even George Orwell do a doubletake, President Obama’s “financial crisis responsibility fee” would tax banks, insurance companies and brokerage houses that have paid back their bailout money — and even some firms that never took a bailout — to pay the tab of irresponsible firms, namely the auto companies that still owe the government billions.

“We also ask the largest financial firms — companies saved by tax dollars during the financial crisis — to repay the American people for every dime that we spent,” President Obama proclaimed in the Rose Garden two weeks ago. But the details of this “responsibility fee” in the 80-page plan the president submitted to the Joint Committee on Taxation makes it clear that this fee will only be on firms that have already repaid the TARP funds and likely on some firms who never took a dime of taxpayer money.

“Although many of the largest financial firms have repaid the Treasury for their TARP assistance, they continue to implicitly benefit from the TARP funds that bolstered their balance sheets during a period of great economic upheaval,” the administration states. A fee of an unspecified amount “will be restricted to financial firms with assets over $50 billion and will be imposed until all TARP costs have been recouped.”

But let’s look at the “fine print,” which Obama always talks about when making the case for his big new consumer agency, an agency created by the same “pro-consumer” Dodd-Frank law that is responsible for new monthly debit card fees due to price controls on debit card transactions that serve as corporate welfare for big retailers. (I had alerted BigGovernment readers about the dangers of the Senate Democratic Whip Dick Durbin’s destructive Dodd-Frank provisions last December.)

Careful readers of the tax plan can see that or all Obama’s talk of “repayment,” his proposed “responsibility fee” would not be levied on recipients of TARP per se, but “financial firms” with assets of more than $50 billion.

Let’s first examine the term “financial firm.” The Obama plan never exactly defines it, but appears narrow enough to exclude auto companies. Fannie and Freddie would also almost certainly be excluded, since they are now officially part of the government, and hence not private “financial firms.”

Yet the term “financial firm” is also broad enough to go beyond banks and rope in broker-dealers and insurance companies, most of which have never taken a dime from TARP. Fidelity Investments, for instance, has weathered the storm relatively well and has not taken any TARP money. But since it has assets of more than $1 trillion under management, Fidelity would still likely be hit by the Obama tax.

Other probable targets of this tax are well-managed insurance companies such as State Farm and USAA, which also never received taxpayer bailouts. It should also be remembered some of the TARP recipients, like BB&T Corp., hadn’t engaged in the foolish mortgage and credit practices, yet were pressured by the government to take the bailout money so that the truly insolvent banks wouldn’t be stigmatized by taking TARP money.

The Obama plan argues disingenuously that “shared responsibility requires that the largest financial firms pay back the taxpayer for the extraordinary support they received.” Yet there is no responsibility, “shared” or otherwise, for the auto companies General Motors and Chrysler that still owe the taxpayer billions. In fact it gives GM and Chrysler a free ride to cave to the United Auto Workers’ demands for thousands more unionized workers, as GM recently did in sham “negotiations” with the union bosses.

The White House “wants to make the nation’s largest banks pay for the losses incurred in the $85 billion auto bailout,” reports the Detroit News. And “last month, the Treasury Department raised the government’s estimate of taxpayer losses due to the auto bailout by more than $400 million to $14.33 billion,” the paper adds.

What this really means is that ordinary Americans — “working-class folks” as politicians like to call them — will pay for the auto bailouts twice. Once through their tax dollars, and again when their banks and insurance companies pass on the cost of the “responsibility fee” through higher borrowing costs, higher policy premiums, and lower returns on savings and investment. For we know from the experience of the Dodd-Frank debit card price controls that when government imposes costs on business, those costs are inevitably passed on to consumers.

So tell us, Mr. President and allies like MoveOn, how does Warren Buffett’s secretary benefit from that?!

The Treasury is weighing a proposal to eliminate some, but not all, of the taxes on overseas profits of U.S.-based companies, the Wall Street Journal reported on Saturday, citing two people familiar with the deliberations.

Eliminating the taxes on some of the profits is a central element of the Obama administration’s broader plans to overhaul the corporate tax code, the newspaper said.

Business have long complained that the U.S. system of taxing companies’ overseas profits hits companies that have often already paid been taxed in the countries where the profits were earned.

The details of the plan, including what profits would be excluded from taxation, could not be learned, the newspaper said.

Read the whole thing here. The US is one of the few countries that tax overseas profits. Eliminating or greatly reducing the burden could prompt countries to repatriate billions in profits locked overseas. Just two years ago, the Obama Administration was trying to RAISE these taxes. So, progress.