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Paul Ryan Assures America That Competition Will Drive Down Medical Costs

Click here to view this media (h/t Dave at VideoCafe ) Ah, the bliss of being an Ayn Rand devotee . Reality doesn’t need to apply, because your whole economic outlook is wrapped around a badly written book of fiction cum philosophical treatise. The word “fiction” should clue you in that it does not–and cannot–exist in reality. But that doesn’t stop Paul Ryan from creating a budget and economic plan for the entire country based on similarly fictional premises : are Ryan’s numbers just driven by the Heritage Foundation’s laughable macroeconomic projections ? The answer is that, no, they’re not. The reason is that Ryan’s proposals are all oriented around shares of GDP. On taxes, for example, he proposes cuts in the income tax rates paid by high-income people and then stipulates that total revenue will nonetheless equal the Bush share of GDP via a mysterious middle class tax increase . Similarly, what he does with Medicare is first privatize it, and then stipulate that the private vouchers will grow at the rate of general inflation plus one percent. Under that plan, Medicare spending as a share of GDP shrinks by definition. This also means that every time the engineers in Silicon Valley find out a way to make a cheaper computer, your Medicare benefits go down. And he does something similar to Medicaid, and then he does it again to basically every anti-poverty program out there. The math of this part of his agenda is totally impeccable. What’s deficient is the public policy and this is where Heritage’s bad math kicks in. After all, why would you enact this crazy agenda? Now in the case of Paul Ryan the answer is pretty clear—he’s an Ayn Rand fanatic who believes that any effort, whether public or private, to help the poor is immoral. Which is why a rather large grain of salt MUST be taken by Ryan’s Randian assurances that killing Medicare and Social Security will end up costing seniors less . Is that why KV Pharmaceutical suddenly upped the price of Makena $5,000 when given the exclusive patent rights? Truly, there’s nothing that makes sense of Ryan’s Randian claims. The reason Medicare is going bankrupt is because we continually opt to take money away from social programs in order to make up for corporate and upper income tax breaks. This is very much a case where “throwing money at it” *would* solve the problem. But this is part and parcel of the 30 year campaign to eliminate the social safety net, as Jon Perr writes . But as with my discussion in the Bobblehead thread , this is where I get stuck with Ryan’s plan: the consequences. Seniors may be living longer, but they need medical care for those additional years. Under Ryan’s plan, the government won’t be paying it…but those costs don’t go away. Who do you think is paying for it? Seniors don’t have that additional income–especially if Ryan gets his way and dismantles Social Security to boot. So who makes up that cost? It’s an easy answer: you do. And your children, and your grandchildren. Those costs get passed on to all of us. And that’s not cost effective, or economical. But try telling that to a Randian.

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Donovan charged over sub shooting

Ryan Donovan faces murder and attempted murder charges after fatal shooting on Royal Navy nuclear sub A Royal Navy serviceman has been charged with the murder of a colleague on board a nuclear submarine on Friday. Able Seaman Ryan Samuel Donovan, 22, was charged on Sunday with the murder of Lieutenant Commander Ian Molyneux, 36, who was fatally shot on board HMS Astute as it was docked in Southampton on a goodwill visit. Hampshire police said that Donovan was also charged with the attempted murder of Petty Officer Christopher Brown, 36, Chief Petty Officer David McCoy, 37, and Lieutenant Commander Christopher Hodge, 45, who remains in hospital after he was shot. Donovan, of Hillside Road, Dartford, Kent, is in custody and will appear at Southampton Magistrates’ Court on Monday. Nick Hawkins, chief prosecutor for the Crown Prosecution Service in Wessex, said: “I have been working closely with Hampshire Constabulary and now have authorised them to charge Ryan Samuel Donovan with Ian Molyneux’s murder and with the attempted murder of Christopher Brown, David McCoy, and Christopher Hodge. “Having reviewed the evidence, I am satisfied that there is sufficient to charge him, and that it is in the public interest to do so.” Lt Cdr Molyneux’s widow, Gillian, paid tribute to her late husband on Sunday, describing the father of four as “utterly devoted to his family”. She added: “Everything he did was for us. He was very proud to be an officer in the Royal Navy submarine service.” A group of children had just left HMS Astute and a party of dignitaries, including Southampton city council’s mayor, chief executive and leader, was being shown around when the incident happened. The visit to Southampton by HMS Astute was billed as the first chance for members of the public outside Scotland and the north-west of England, where she was built, to see her. Crime Military Ben Quinn guardian.co.uk

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NHS rationing care to save money

Royal College of Nursing study reveals that most job losses involve frontline staff as patient services are withdrawn Growing numbers of patients are being denied treatment for conditions such as loss of sight, arthritis and infertility as the NHS increasingly rations healthcare in order to save money, research by the Guardian shows. Services for patients with mental health problems and addictions and those who need physiotherapy after accidents are being scaled back, while operations to fix hernias or remove cataracts or varicose veins are either being refused or delayed. The cuts across England cast serious doubt over David Cameron and Health Secretary Andrew Lansley’s repeated pledges that NHS frontline services will be protected from budget-tightening across the rest of the public sector. There is further fresh evidence of cutbacks in the NHS in a dossier of evidence compiled by the Royal College of Nursing (RCN), which gathers on Monday for its annual congress in Liverpool. Meanwhile, the British Medical Association claimed that ministers are refusing to acknowledge an “accelerating withdrawal of services” that could weaken patients’ support for the NHS. “While there’s an absolute crisis going on in the NHS in terms of this accelerating withdrawal of services, you have got a government that through the health and social care bill currently going through parliament simply wants to discuss the finer points of the business organisation of the NHS and denies that this crisis is taking place,” said Dr Mark Porter, chairman of the BMA’s hospital consultants committee. “The examples [of cuts] are becoming more and more widespread. The national picture is that every primary care trust is taking steps to reduce access to whole swaths of healthcare, while the government says everything is fine and that its organisational changes to the NHS are what matter,” said Porter. While the cuts do not affect conditions such as cancer, refusing treatment for other conditions meant pain or discomfort for those affected, Porter added. “For the patient waiting for IVF, speech therapy or a new hip or knee, that’s their contact with the NHS. For them to be told that they aren’t a priority for the health service is totally at variance with the government’s mantra that, for patients, ‘No decision will be made about me without me.’” Growing numbers of NHS walk-in centres, intended to relieve overworked GPs surgeries and A&E departments, are closing or having their opening hours cut. In Islington, north London, services for children with speech problems have been reduced and a support group for women with postnatal depression axed altogether. Primary care trusts all over England are having to reduce their services or provide them in new ways, as they struggle to contribute to the £20bn savings drive imposed by the health service chief executive, Sir David Nicholson. Many PCTs are banning, restricting or imposing long waiting times on treatments that until recently were provided routinely by the NHS. More than half of the thousands of job losses in the health service are nurses, doctors and midwives rather than managers and administrative staff, the RCN has claimed. It has identified 40,000 jobs that have gone or are due to go in the near future as PCTs, hospitals and other NHS organisations across the UK adjust to flat or reduced budgets after years of big year-on-year increases under Labour and, in England, a series of other financial pressures. In a study of almost 10,000 job losses at 21 trusts, the majority (54%) turned out to be frontline clinical staff, the nurses’ union said. That revelation, and the disappearance of NHS services, expose coalition pledges to be protecting NHS frontline patient care and treatment as a myth, the RCN said. “Clinical staff are the lifeblood of the NHS and it is haemorrhaging at an alarming rate. Cutting thousands of frontline doctors and nurses could have a catastrophic impact on patient safety and care,” said Dr Peter Carter, the RCN’s chief executive and general secretary. Whole areas of patient services are being closed or decommissioned, the RCN added, citing Stockport PCT’s closure of family nurse partnerships and, in Birmingham, “talking therapies” for people with anxiety and depression disappearing. “Patients aren’t getting access to the same care they did a year ago. We know that savings need to be made but cutting frontline staff and services is not the way to do it. We are seeing services that may disappear for ever. We are concerned that the result will be patients left in limbo, fewer services, fewer nurses and a worse NHS,” added Carter. Nicholson and the health department said the NHS’s need to meet the £20bn target was no reason for limiting or abandoning treatment. “There is no excuse to cut back on services that patients need when the NHS will receive an extra £11.5bn of funding,” said Nicholson. “The NHS does need to become more efficient, but savings must not impact adversely on patient care. We are clear that every penny saved from efficiencies will be reinvested in patient services. We also have 2,677 more nurses now than we did in 2009.” The health department added: “The government is getting rid of bureaucracy and clinically unjustified targets so that nurses are freed up to do what they do best – taking care of patients. We are also protecting the NHS, ploughing in an extra £11.5bn of funding.” But senior NHS figures are worried that some PCTs are responding to the need for greater efficiency by scaling back services, sometimes dramatically, for example by using “referral management systems” – panels of doctors and managers examining requests for treatment – to bar many patients from receiving care. There is concern among health ministers that the growing cuts could add to their political difficulties over the NHS. Labour claimed the cuts proved that improvements in the NHS had stalled under the coalition. “The government’s obsession with reorganisation is piling extra pressure on the health service. Patients are starting to see the NHS going backwards again under the Tories with waiting times rising, frontline nursing jobs cut and services cut back,” said John Healey, the shadow health secretary. “This is not what people expected when David Cameron promised to ‘protect’ the NHS. The prime minister made health his most personal pledge, but it’s now becoming his biggest broken promise.” NHS Health Public sector cuts Public services policy Public finance Health policy Denis Campbell guardian.co.uk

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Nothing gets my blood boiling faster than listening to the Sunday talking heads bloviate about how all those old people don’t really need their Medicare anyway. Eric Cantor just couldn’t wait to call Medicaid and Medicare recipients welfare queens this morning — as if they don’t pay for it with the taxes THEY pay (unlike our corporate person counterparts), while extolling Ryan’s plan to gut health services to the entire nation. Really, his message (and Ryan’s) is this: If you’re under 55, die and die quickly so there’s more for us. Here’s the clip: CANTOR: We are in a situation where we have a safety net in place in this country for people who frankly don’t need one. We have to focus on making sure we have a safety net for those who need it. WALLACE: The Medicaid people — you’re going to cut that by $750 billion. CANTOR: The medicaid reductions are off the baseline. so what we’re saying is allow states to have the flexibility to deal with their populations, their indigent populations and the healthcare needs the way they know how to deal with them. Not to impose some mandate from a bureaucrat in washington. WALLACE: But you are giving them less money to do it. CANTOR: In terms of the baseline, that is correct…What we’re saying is there is so much imposition of a mandate that doesn’t relate to the actual quality of care. We believe if you put in place the mechanism that allow for personal choice as far as Medicare is concerned, as well as the programs in Medicaid, that we can actually get to a better resolve and do what most Americans are learning how to do, which is to do more with less. Here’s my response to Mr. Cantor. I would like for him to start doing more with less by immediately terminating his Federal Employees’ Health Benefit Plan and shopping for his own health insurance. Then I would like him to imagine himself in a scenario where an aged relative comes to him needing a home and financial assistance because their health is so fragile they can no longer care for themselves. He will be faced with the reality of having to find a qualified home health care provider at his own expense because said indigent relative does not really “need” Medicaid, since they have Uncle Eric to rely upon. All of the expenses will be out of his own pocket. But hey, he’ll definitely learn how to do more with less. Does Cantor not realize that more than half of Medicaid benefits go toward long term care for the elderly? Or maybe he does, and so the message is to die, and die quickly? Anyone within the reach of my keyboard already knows the Ryan plan is a big pile of nonsense. Unless, of course, they’re political opinion-makers with a wide platform. Then it’s “courageous.” And very, very “serious.” Again I ask, what are they smoking? How is it courageous to send us all back to the land of pre-existing conditions exclusions? How is it courageous to end Medicare and send THEM back into the markets for health insurance they won’t be able to afford? How is it courageous to tell poor people it’s perfectly all right for them to die in the streets, because the private ambulance and cremation market is there to pick up and dispose of their remains? Of course it’s not courageous. It’s also not serious, but now that every damn corporate media outlet on the planet has decided to use press releases instead of their own brains, it’s become courageous and serious. No. Paul Krugman is right on this one : In short, this plan isn’t remotely serious; on the contrary, it’s ludicrous. And it’s also cruel. In the past, Mr. Ryan has talked a good game about taking care of those in need. But as the Center on Budget and Policy Priorities points out, of the $4 trillion in spending cuts he proposes over the next decade, two-thirds involve cutting programs that mainly serve low-income Americans. And by repealing last year’s health reform, without any replacement, the plan would also deprive an estimated 34 million nonelderly Americans of health insurance. So the pundits who praised this proposal when it was released were punked. The G.O.P. budget plan isn’t a good-faith effort to put America’s fiscal house in order; it’s voodoo economics, with an extra dose of fantasy, and a large helping of mean-spiritedness.   No one exemplifies mean-spiritedness better than the young Eric Cantor, sneering at his elders while he lobbies for another wealth shift from the poor and middle class to the rich fat cats laying down those insurance premium rate hikes. Where’s Granny when you need her? All those tea party grannies ought to be beating this little schmuck over the head with their misspelled signs. Oh, wait. They’re not affected. It’s only those of us who have worked all our lives so Granny could have her Medicare that would lose the right to it. If you’re under age 55 and aren’t screaming about this, start. Single payer is now fully on the table.

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David Gregory to Paul Ryan: Your Problem Is Republicans Think You’re Smart But Don’t Support You

Now that Congressman Paul Ryan (R-Wisc.) has submitted a budget that actually produces over $6 trillion less debt in the next ten years than what the President has proposed, the job of the Obama-loving media is to discredit him whenever possible. NBC's David Gregory, ever the dutiful left-wing soldier, tried doing just that during his “Meet the Press” interview with Ryan Sunday even saying to his guest, “The problem that you've always had is that Republicans love to talk about you as a smart guy with really good ideas, but they don't actually support you” (video follows with transcript and commentary): DAVID GREGORY, HOST: The problem that you've always had is that Republicans love to talk about you as a smart guy with really good ideas, but they don't actually support you. REP. PAUL RYAN (R-WISCONSIN): Yeah. MR. GREGORY: You had 14 co-sponsors the last time you tried this. Advertise | AdChoices REP. RYAN: That's up from eight the session before. MR. GREGORY: Well, right. REP. RYAN: Yeah. MR. GREGORY: Congressman Pence is, is saying–a, a key member in the caucus–he'll probably not vote for this compromise. Who's with you? REP. RYAN: You're, you're talking about the CR. MR. GREGORY: In Congress and, and, and outside. REP. RYAN: We will find out on Friday. This budget comes to the floor Thursday and Friday. MR. GREGORY: Mm-hmm. REP. RYAN: I think what Mike Pence is talking about… MR. GREGORY: He's talking about the current, the current… REP. RYAN: …is probably the continuing resolution… Advertise | AdChoices MR. GREGORY: OK. REP. RYAN: Yeah, the, the deal that Boehner got with, with the president. This budget we had unanimous Republican vote in the Budget Committee just this week. This will be on the floor Thursday and Friday, and I expect we will pass this from the Republican caucus on Friday. MR. GREGORY: What about members who are running for the presidency? Who's with you on this? Will this be something that they carry forward? REP. RYAN: Well, you know, I don't really pay attention to all that. Honestly, I'm busy trying to write a budget. MR. GREGORY: Right. REP. RYAN: But I've, I've heard… MR. GREGORY: But you can't operate in a political vacuum… REP. RYAN: Sure, sure, sure. It's… MR. GREGORY: …if you want it to become law. REP. RYAN: But I've heard that all of our presidential candidates have been extremely supportive of it, have put out great statements in support of this. MR. GREGORY: All right. Chairman Ryan, we'll keep tabs on it. Advertise | AdChoices REP. RYAN: Thanks, David. MR. GREGORY: Thank you very much for being here. Appreciate it. Imagine for a moment Ryan was the young, rising star in the Democrat Party that had just proposed a ground-breaking budget challenging a Republican president. Can you envision Gregory or any liberal media member saying to his face, “The problem that you've always had is that Democrats love to talk about you as a smart guy with really good ideas, but they don't actually support you?” No – I can't either.

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Pass notes: crash test dummies

American safety campaigners say the dummies in car crash simulations should be bigger to reflect an increasingly obese population Age: 60 or so. Appearance: Nervous. My favourite Canadian folk-rock group! This must be something to do with last Friday’s cover story. Must it? Of course it must. First G2′s writers talk about the songs that get their tears flowing, then readers chip with their stories, and finally a consensus emerges that nothing sets off the waterworks like the 1990s hit Mmm Mmm Mmm Mmm. How does it go again? Ah yes: “Mmm mmm mmm mmm.” You’re thinking Crash Test Dummies with a capital C, T and D. We’re talking about the mannequins that are strapped into cars and driven into walls. Them? Why are they are in the news? Childhood obesity. American safety campaigners are particularly worried that as kids get fatter, the mini-dummies used to test child seats become less and less relevant. There are similar fears about the adult versions. Couldn’t you just shove a few sacks of potatoes up their jumpers? It’s not quite that simple. Dummies have come a long way since “Sierra Sam”, which the US air force used to test its ejection seats in the 50s. They’re now full of electronic kit, plus their bodies are carefully designed to flail around in the same way as a flesh-and-blood human. This might sound tasteless . . . That doesn’t usually stop you. . . . but couldn’t you use corpses instead? Wouldn’t they give more realistic results? It’s been tried – but no two dead bodies react in the same way. Then there’s the fact that by nature they’re already damaged. Animals, then? Live pigs were used for a while. That didn’t go down well with animal welfare groups. I can only see one quick and easy solution to the problem. Stop driving children everywhere so they lose a bit of weight? Actually I was thinking of tying helium balloons to them so they float. The sad thing is, that’s actually much more achievable. Do say: “I’m just off to Weight Watchers . . .” Don’t say: “. . . So can I borrow the

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Classes dismissed at UK art schools

The art schools that trained students from Tracey Emin to MIA are heavily targeted for cuts. What effect

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Pence still attacking Planned Parenthood, says budget deal ‘not good enough’

Click here to view this media Tea party favorite Rep. Mike Pence (R-IN) said Sunday that he was unlikely to support the new budget deal because it doesn’t strip all funds for Planned Parenthood. The last-minute deal between House Republicans and Democrats aimed to slash over $38 billion from government spending levels. Pence argued on ABC’s This Week Sunday that those cuts alone weren’t enough. “From what I know, it sounds like [House Speaker] John Boehner got a good deal — probably not good enough for me to support it,” he told ABC’s Christiane Amanpour. “Let me explain. I’m pro-life. I don’t apologize for it. I also think it’s morally wrong to take the tax dollars of millions of pro-life Americans and use it to fund abortion providers.” “You know the federal funds don’t do that?” Amanpour pointed out. “They tried to make this about women’s health,” Pence said of Democrats. “It wasn’t about that. Planned Parenthood’s clinics focus mainly on abortion.” Pence’s statement is similar to a claim made by Sen. John Kyl (R-AZ) last week. “If you want an abortion, you go to Planned Parenthood, and that’s well over 90 percent of what Planned Parenthood does,” Kyl said . The truth is that in 2009, 96 percent of the organization’s activities were dedicated cancer screenings, STD or STI testing, counseling and education, or pregnancy testing and prevention. “What was clear here, this administration, and liberals in Congress were willing to shut the government down to continue to fund abortion providers in this country,” Pence added. The Indiana Republican made it clear in a recent speech on the House floor that it was Republicans who were willing to see the government shut down if Democrats didn’t “respect our values.” “If Democrats here in Washington would rather play political games and shut down the government than support our troops, defend our treasury, and respect our values, then I say, ‘Shut it down,’” he said. “It’s time to take a stand. We need to say to liberals, ‘This far and no further,’” Pence told a tea party rally last week. “And if liberals in the Senate would rather play political games and force a government shutdown instead of accepting a modest down payment on fiscal discipline and reform, I say, ‘Shut it down.’”

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Ex-CIA agent acquittal a farce – Cuba

US accused of protecting a known terrorist after jury clears anti-communist agent of all 11 charges against him Cuba has denounced as a “farce” the acquittal in the United States of Luis Posada Carriles, a former CIA agent who is accused of terrorist attacks against the island. The foreign ministry said Friday’s verdict, which found the 83-year-old not guilty on all 11 counts of perjury, obstruction of justice and immigration fraud, showed the US continued to protect a known terrorist. “This is an additional demonstration of the support and shelter the American authorities have historically given him,” it said in a statement over the weekend. A jury in El Paso, Texas cleared Posada Carriles after deliberating for just three hours, an unexpectedly swift climax to a closely watched 13-week trial which cast fresh light on the octogenarian’s lengthy career as an anti-communist agent. The defendant, a hero to militant anti-Castro exiles, hugged his lawyers and told reporters he was grateful to the US, the court and the jury for what he said was a fair trial. “What happened here should serve as an example for justice in my country, Cuba, which is unfortunately in the hands of a dictator.” Posada Carriles, who as a student came into contact with a young Fidel Castro, opposed the revolutionary government which seized power in 1959 and three years later joined a CIA-backed invasion by Cuban exiles. The attack flopped but he escaped, was trained in sabotage by US handlers and spent the next decades plotting to kill Castro and other leftwing targets in the region. He moved to Venezuela where he was accused of masterminding the 1976 suitcase bombing of a Cubana Airlines jet that killed 73 people, including the national fencing team. Months earlier his links with the CIA were severed, according to declassified US documents. Posada Carriles escaped from a Venezuelan jail in 1985, where he spent eight years awaiting trial for the atrocity, which he denied, and resumed plotting against Castro. In an interview with the New York Times he took responsibility for 1997 bomb attacks against Cuba’s tourist industry, which killed an Italian tourist in a Havana hotel, but later recanted the confession. He was arrested in possession of explosives in Panama in 2000 and charged with plotting to assassinate Castro at a regional summit. He served four years in jail before being pardoned by Panama’s outgoing president, Mireya Moscoso, prompting accusations of political cronyism between Panama, Cuban exiles in Miami and the Bush administration. In 2005 Posada Carriles surfaced in Miami. The US refused Cuban and Venezuelan extradition requests, claiming he would not receive a fair trial in either country. Caracas and Havana accused the US of hypocrisy in allowing the region’s most notorious terrorist to live freely and openly while amid the post 9/11 “war on terror”. Soon afterwards US authorities charged Posada Carriles with the relatively minor offences of lying to immigration officials about how he entered the US and his role in the Havana bombings. More than 20 prosecution witnesses testified in the court. Jurors heard him speaking English in recordings by Ann Bardach, the New York Times journalist to whom he spoke about the bombings, despite later claiming he did not speak the language. Observers expected convictions on at least some of the charges but the jury stunned prosecutors with a swift, unanimous and complete acquittal. “We’re obviously disappointed by the decision,” said a justice department spokesman, Dean Boyd. The head of Cuba’s parliament, Ricardo Alarcon, accused the judge, Kathleen Cardone, of not allowing jurors to see crucial evidence. “The stupid and shameful farce is over,” he told AP. “There were things the jury did not know.” Venezuela’s government denounced the trial and verdict as “theatre” and said Washington continued to shelter a mass murderer. “The US government’s protection of Posada Carriles has become an emblematic case of the US double standard in the international fight against terrorism,” the foreign ministry said in a statement. Posada Carriles’s lawyer said he planned to return to his home and family in Miami. Leaders of Miami’s Cuban exile community said he should be left to live in peace and that it was time to look ahead, not backwards. Cuba United States Venezuela Rory Carroll guardian.co.uk

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Taxpayer bailout deal risks City ire

Commission’s plans unlikely to include breaking up institutions, but banks ‘may still quit UK’ A government commission is to unveil measures aimed at ensuring taxpayers will never again need to bail out Britain’s banks, with recommendations that risk splitting the coalition and infuriating the banking sector. Amid warnings from large banks such as Barclays, HSBC and Standard Chartered that they will leave London if the proposals by Sir John Vickers are too radical, the commission will seek to ringfence savers from riskier banking operations. The commission has considered the potential impact of its proposals on the City and is expected to counter suggestions that they would encourage banks to move to New York or Hong Kong. The report, thought to run to 200 pages, was handed to ministers late on Friday to be presented to the banks at 6am on Monday – an hour before its official release. It is expected to back away from proposals such as “narrow banks”, which only take savings, and splitting high street banks from their investment banking divisions, which Vince Cable, the business secretary, previously alluded to as “casinos”. But it sets out a handful of ideas to avoid another taxpayer bailout and bolster competition on the high street in the wake of the rescue of HBOS by Lloyds, which was only permitted because Labour overrode competition concerns. Crucially, Vickers and his four commissioners have looked at ways banks can bolster their capital through new types of loss-absorbing financial instruments. They are concerned that the capital held by banks before the crisis – largely equity – was too brittle and lacked the flexibility of other types of instruments that might be more effective incushioning the blow of multibillion-pound losses. Danny Alexander, the Lib Dem chief secretary to the Treasury, told the BBC : “Our priority as a government is to make sure that those people who recklessly gambled with our economy are no longer able to be bailed out by taxpayers. “That’s why this commission is looking at separation issues within the banking system to make sure that the bits that are valuable to us as an economy, retail banking and so on, could be protected, whereas those people who engage in that sort of casino banking take responsibility for themselves.” Sources close to Cable, the business secretary, and the chancellor, George Osborne, were this weekend trying to stifle suggestions of a rift between them over banking reform, which was the first item on the coalition agreement. Government sources noted that the combined balance sheet of Britain’s banks is still five times that of the British economy. “We have to get this right,” one said, pointing out that both Ireland and Iceland had economies dwarfed by the size of their banks. Although the commission is thought to have concluded that any suggestion of a full-break up the banks is not necessary, some of the ideas could have a similar impact. Vickers is known to have considered so-called subsidiarisation, which requires major banks to ringfence funds inside individual parts of the group. There are three main options: geographic, where business activities are segregated based on their domicile; functional, where business activities are segregated based on nature of business and client; and operational, where critical operations such as cash are segregated. RBS is the only bank to have made a public estimate about the cost of being a universal bank – putting it at between £3.5bn and £4.8bn annually – and analysts at Goldman Sachs believe Barclays has most to lose. Lord Oakeshott, the Liberal Democrat peer who resigned as party spokesman over the lax treatment of banks, said: “It’s in the whole City’s interest – not just the banks’ – that real bank reform makes London the world’s most trusted financial centre, instead of a British version of Las Vegas. Calling the banks’ bluff would be best business decision our government could make.” Although the interim report is being closely watched by the banks, any overhaul is unlikely to take place until 2012. A final report is due in September and will be considered by a cabinet committee chaired by Osborne. The presence of the former HSBC chairman Stephen Green, now a trade minister, on this cabinet committee has caused some controversy. Financial crisis Global recession Banking Financial sector Barclays HSBC London Danny Alexander Vince Cable George Osborne Jill Treanor guardian.co.uk

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