Quote of the Day
Only the young die good.
Oliver Herford
President Obama's Crony Union Bosses
Order Him to Stay the Course: More of the Same
Mission Accomplished on Wisconsin Education:
Order Him to Stay the Course: More of the Same
Mission Accomplished on Wisconsin Education:
Time for a Change....2012
Some of what I've heard coming out of Wisconsin, where they're just making it harder for public employees to collectively bargain generally, seems like more of an assault on unions.- President Obama, Milwaukee news interview
Well, who could have EVER guessed that President Obama, whom paid off one of his chits to Big Labor by screwing corporate bondholders over in favor of Big Labor during the corrupt auto bankruptcies, would decide to intervene in the Wisconsin kerfuffle? It's not enough that conservatives have to constantly clean up after the fiscal messes left by progressives (e.g., Prime Minister Cameron in Great Britain); Speaker John Boehner is having to pick up from a fiscally irresponsible House (110th and 111th) and facing hyperbolic threats from Obama to veto a budget cutting a mere $61B out of a projected deficit of $1.65T. Oh, to be sure, Obama pays lip service to the new governor needing to cut costs, but heaven help those poor defenseless, exploited teachers, with many reaching up to six-figures in salaries and benefits and civil servant protections.
In fact, state/local government employees (vs. private-sector workers) are subject to state, not federal law. Wisconsin has a state union law from 1971 which allows public sector unions to negotiate with the state on a number of issues (including escalating cost health care and pension benefits). There are already a list of items unions can't initiate with the state (e.g., agency policies). What Walker essentially wants to do is add high-cost benefits to the list of excluded items. There are reasons for this: the state currently splits income with counties/municipalities. One of the practical issues is that lower-level public sector executives find themselves with little leverage to work around union deals cut with the state. (Right now their only option is to work through arbitrators, i.e., the Wisconsin Employment Relations Commission.) Noting a limited budget, especially to share with county/municipality executives, Walker wants to empower lower-level executives to deal more directly with these costs for which they are responsible.
I should note that Walker's steps were not unexpected; Indiana Governor Mitch Daniels took similar actions early in his first term. And former Democratic Governor and Walker predecessor Doyle, no doubt hoping that Walker's opponent would win, worked furiously during the lame duck session (just like Congress), trying to preempt Walker's actions.
There is no "assault" on unions; unions can continue representing teachers on salary. The teachers are quick to suggest they are willing to do their part by freezing their salary, etc.--but don't touch the 1971 law. This is not unlike Obama believing that a freeze on employee pay (but not on step increases) is sufficient, leaving intact a huge gap in place between the federal "have's" versus the private sector "have not's". The Republicans, as usual, have to play the "bad cop"--they have to cut costs and know whatever cuts they make will somehow be demagogued as taking cops off the street or putting cat food on Grandma's plate.
I am not impressed by carpetbagging union protesters or Big Labor's political attacks on Walker. In fact, even Huffington Post noted two recent polls, a Pew survey showing the lowest favorable rating for unions in several years and a Clarus study showing 2-to-1 disapproval of public sector unions bargaining salary and benefits. I cannot speak for Wisconsin residents, but Wisconsin voters kicked out their liberal incumbent US Senator (Feingold) and voted Republicans to the US Senate, governor's office, and majorities in both state legislative chambers. The ideas that Democratic state senators are trying to extort concessions from Walker by leaving the state and thus not allowing a vote and that teachers are phoning in sick (a de facto strike) to march in Madison are not winning friends and influencing the electorate. Democrats know that their attempts to water down union reforms will fail on party lines, so they are trying to leverage a quorum call by forcing Walker to make a concession that wouldn't pass on the floor. I think this will be badly backfire on the Democrats.
I saw one clip on Fox News where a protester screamed out that she was not protesting on behalf of herself but for the children (and dragging a young boy in front of herself). Totally obnoxious. During my three years at UWM, I got a good look at hundreds of students educated in the Wisconsin system: many of them came into my classes with false expectations based on inflated grades, bad study habits, inability to write well-structured essays, etc. What's going to happen next--Obama hiding behind Michelle's skirt while Speaker Boehner wants to confront him?
Unfinished Business: Entitlement Reforms
By official SSA statistics, the total unfunded liabilities in 2009 amounted to $106.8T, roughly $89T of which involved Medicare. The Democratic Party Health Care Bill reduced the combined unfunded liabilities to about $53T, although I believe this assumes highly improbable savings (think of the "doc fix" on steroids) are being double-counted, i.e., Medicare cost savings are being used to shore up the new, separate entitlement. If, in effect, Medicare services are reimbursed at lower rates than Medicaid by the end of the decade, one can expect the quality of senior care (e.g., waiting periods for willing providers) to suffer. I seriously believe that policymakers will face enormous political pressure from a growing rank of baby boomer retirees not to let that happen.
The key point is, look at the exhaustion dates in the first chart below; next, particularly notice the growing exposure to general revenues in the second chart. Now exhaustion means that anything not covered by payroll contributions, (subsidized) premium payments and/or miscellaneous related fees must come out of general revenues--right now, a $2T annual pot of money, an increasing portion of which is taken up merely paying interest on a $14T national debt. By any objective analysis, we future retirees face a situation whereas we have been paying into the system, not enough has been set aside to avoid having tomorrow's taxpayers having to make up the difference. This is yet another example of Democrats' unsustainable promises, which operate in a stealth mode, inevitably result in a day of reckoning, like I described for Wisconsin above. Our inability to control the national debt TODAY, our lack of testicular fortitude to face modest austerity in entitlements TODAY will force our children and grandchildren to either face steep tax hikes--or make benefit cuts at our expense. Just like Wisconsin taxpayers, the next generations will be tapped out; it will be tough simply to meet their own national expenditures.
What I see President Obama and the Democrats doing is a blatant form of generational theft, pure and simple. It's gross negligence and a violation of professional ethics. I believe that we need shared sacrifice: modest across-the-board tax increases (I recommend, once again, a national sales tax), higher age eligibility, increased premiums, higher annual deductibles, etc.
OASI | DI | OASDI | HI | |
|---|---|---|---|---|
First year outgo exceeds income excluding interest | 2018 | 2005 | 2015 | 2020 |
First year outgo exceeds income including interest | 2026 | 2009 | 2025 | 2022 |
Year trust funds are exhausted | 2040 | 2018 | 2037 | 2029 |
"There are four separate trust funds. For Social Security, the Old-Age and Survivors Insurance (OASI) Trust Fund pays retirement and survivors benefits, and the Disability Insurance (DI) Trust Fund pays disability benefits. (The two trust funds are often considered on a combined basis designated OASDI.) For Medicare, the Hospital Insurance (HI) Trust Fund pays for inpatient hospital and related care. The Supplementary Medical Insurance (SMI) Trust Fund comprises two separate accounts: Part B, which pays for physician and outpatient services, and Part D, which covers the prescription drug benefit.
"The projected improvement in Medicare finances is due to a provision of the [Democratic Party Health Care Law] that reduces payment updates for most Medicare goods and services other than physicians’ services and drugs by measured total economy multifactor productivity growth, which is projected to increase at a 1.1 percent annual rate on average. This provision is premised on the assumption that productivity growth in the health care sector can match that in the economy overall, rather than lag behind as has been the case in the past. This report notes that achieving this objective for long periods of time may prove difficult..."
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Political Humor
An original:
- President Obama recently met with high tech executives on the West Coast. But as soon he heard among those available were Jobs from Apple,..., he made a beeline for that table: he didn't know how many openings were available at the Beatles' old music label, but he wanted to follow up...
Retrospective: President Jintao's Visit to DC
The Jintao Visit Part II
Musical Interlude: My Favorite Groups
The Bee Gees, "Love So Right"
