Wrath of the voters-TBA

I have no doubt that liberal Democrats (socialists) will suffer the wrath of the voters in the November election and beyond.  For moderate Democrats and moderate Republicans their fate is to be announced (TBA).  There is a lot at stake in the upcoming November elections. All of the US House of Representatives 435 seats and 100 US Senate seats will be voted on.  A major factor in the outcome of these elections will be how Congress will cast their votes on national health care.

On the Republican side we can already see that the rage of our majority of citizens who are against national health care as proposed, has translated into a huge decrease in contributions to US House Representative Anh Cao.

The lone Republican lawmaker to support Democratic health care legislation has seen his fundraising drop by nearly 40 percent since his vote, and he is quickly burning through a dwindling bank account after resorting to a costly national fundraising operation.

A concern of many against the Democrat’s plan is that the proposed bill will be forced upon Americans through a budget related process called Reconciliation.

Obama’s plan would make it easier to bypass Republicans if necessary and ram through legislation by a process requiring a simple majority in the 100-member Senate rather than the 60 votes needed to clear procedural hurdles.

Using Reconciliation as a way to impose national health care on citizens would be an exercise of power beyond what the original intent of the Parliamentary move was designed for, to reconcile budget issues.  Read more from Politico:

Sen. Lamar Alexander (R-Tenn.) said Republicans have never used reconciliation on this scale and as a way to make changes to a Senate bill that could not pass the House on its own.

This would be the ultimate trick to get votes,” Alexander said. “The reason for the American people rejecting the health care bill so far is because of the tricks. If Democrats try to jam the bill through this strange process to get votes, then they will just be guaranteeing themselves a political kamikaze mission in November.”

The national trend of kicking out supporters of liberal agendas appears to be on an upward spiral.  New Jersey & Virginia voted in Republic Governors, and Massachusetts replaced the Kennedy seat with a Republican.  Our neighbor state of Pennsylvania has its eyes on Senator Arlen Specter. Many former Obama supporters are now disagreeing with the current administration and not seeing the results as promised.

The dissatisfaction with Washington could claim five-term Sen. Arlen Specter, a Republican turned Democrat, who’s facing a primary challenge and running neck-and-neck in opinion polls with the likely Republican candidate in November, former U.S. Rep. Pat Toomey. In the Franklin & Marshall poll, only 29 percent of respondents said Specter deserved to be re-elected.

Some independent voters who oppose Obama invoked comparisons with staunchly Democratic Massachusetts, where a Republican neophyte, Scott Brown, scored a stunning victory in last month’s Senate race to fill the seat of the late Edward Kennedy.

“If that trend continues across the country, we’d have a whole new Congress come 2010,” said Lou Wasser, 70, a retired sales manager.”

Much of the voter retaliation stems from the majority who are not being heard on their stand against the presented national healthcare, hence not feeling represented.

Here is a side-by-side comparison of the three proposals offered by Democrats; the Obama plan, Senate bill, and House bill.  If Obama does not get the more aggressive plan through a less ambitious contingency may be considered.

During a New Jersey Americans for Prosperity (AFP) conference call the other night US Congressman Scott Garrett, policy analyst Phil Kerpen, & policy director for AFP Steve Lonegan discussed the latest on the national health care front.

Here is Obama’s plan overview that was released on Monday.

One thing we can count on the three massive proposals will cost lots of money and increase taxes.

Republicans have tried to introduce their ideas for quite some time but inclusion of their ideas had been blocked by the Democrats.  Republican ideas include:

• Expanding health savings accounts so citizens could accumulate finances.

• Encourage more doctors to enter the medical profession by reducing regulations.

• Tort reform that Democrats have not addressed because it would mean taking on the trial lawyers.

• Allow purchasing of health care plans across state borders.

Although Obama has touted that the American Medical Association (AMA) endorses the Democrats, the group only represents 16-17% of practicing doctors in the US.  There are many in the medical profession against Obama care: among them is the American College of Surgeons, and the American Association of Physicians and Surgeons.

Today’s healthcare summit is scheduled to run from 10:00am to 4pm and can be viewed on C-SPAN.

Invited Republican and Democratic leaders will attend the meeting with 4 guests of their choice from both houses. Hopefully the Republicans will be given the equal time they deserve, and state their case without this meeting becoming a “Press Conference” for the Obama agenda. Many are skeptical about the purpose of this event, and feel the Republican Party’s window of opportunity is there today to stand their ground on conservative principles and not be swayed into compromise on a bill that we as Americans reject in a large percentage.

There has been a lot of talk about the houses working in a “Bi-Partisan” way on this legislation, and so far it seems that bi-partisan is a term the Left uses but doesn’t practice. When we accept their version of the bill that’s considered Bipartisanism, and so far the American people have rejected the proposed bills and the tricks, rule bending, special exemptions, and tax breaks for unions that make this bill a push for control and not real health care reform.

Mark the date to confront DC-February 25

Americans for Prosperity has announced a summit this Thursday February 25th at 11:30am.  The same day that Obama is holding his summit, supposedly bipartisan, on national health care.  If health care is to be bipartisan then the current 2,400 page bill should be scrapped and the Republicans should be included from a new beginning.  Bipartisan does not mean simply inviting us to the ‘party’ when it is ending.  It is important for us to support the Congressional Members that are standing with the majority of Americans who do not like the current proposals.  If you are unable to attend, there is a link below to call your Congressperson.

Here is more from Americans for Prosperity.

I hate to tell you, BUT the battle to stop the takeover of our health care is not over.
In 6 days, on February 25, President Obama will hold a “Health Care Summit” where he and Speaker Nancy Pelosi will unveil their “new” health care plan that they are currently writing in secret behind closed doors.
The Left is hoping their “summit” will be the game-changer they need to re-launch their scheme to take over our health care system.
You and I need to make sure that does not happen.
At Americans for Prosperity, we’re holding our own Critical Care: The Patients’ Summit to deliver a simple message:  the American people have rejected this trillion-dollar takeover of health care. So Congress should start over from scratch, or better yet, focus on policies that create jobs and get our economy moving again.
First, we’ll gather outside the Blair House at 9:30 a.m. on February 25 where President Obama will be hosting his “summit.”  We’ll make sure attendees like Speaker Pelosi and Majority Leader Reid hear our message as they head inside.
Then, beginning at 11:30am we will hold our own Critical Care: The Patients’ Summit at the JW Marriott in DC.
If you can’t join us in person in Washington, you can still be a part of the Patients’ Summit. We’ll be Webcasting live online at AmericansforProsperity.org.
Between now and President Obama’s “summit,” we need to email and call our senators and member of Congress to tell them in advance that the American people do not want another big-government, tax-and-spend, freedom-crushing piece of legislation to come up again.
So, I’m asking you to CLICK HERE to call your elected representatives today.
It’s fast.  It’s easy.  More importantly, it makes a difference.
The Left is hoping that we have moved on from the health care battle.  They’re thinking that President Obama’s “summit” is their big chance to get the ball rolling again.
A lot of senators and congressmen are wondering if the mood of the American people has changed.
We’ve got to show them in a crystal clear fashion that the American people simply do not trust the Washington politicians with our health care.
Thanks for all you’re doing and let’s keep fighting.

NJ – “Overpromised” and “Underfunded”

The NJ Office of the Inspector General report, “2009 Summary and Analysis of State Authorities’ Employee Benefits” report examines over forty independent entities in New Jersey.  I have always looked upon many of our state independent authorities, boards and commissions as hidden troves of improper use of taxpayer money and self-fulfilling pits that rely on mandates and fees.

The report summarizes abundant excesses in salaries and benefits of more than forty NJ state independent entities.  Eight authority executives annual base salary is more than $175,000 and 748 authority employees have a pay in excess of $100,000.  On top of the base pay are described numerous deviations from general state policies on employee benefits.  These entities have their own policies for vacation, bonuses, holidays, and other benefits.  All these variances require a tremendous amount of bureaucracy to negotiate, administer, and track.  It is the taxpayers and service users who ultimately pay for all the administration of the numerous choices afforded to our public workforce at all government levels.

In another report “The Beat Goes On”, written by the NJ Commission of Investigation states, “The vast majority-some 80% of entities examined-were found to provide questionable and/or excessive benefits of one sort or another”.  Although in this review they are exploring local government employees it shows us there a pattern of excesses throughout all realms of government.

Compensation is what one would use when comparing the value or cost of particular positions, not base salary.  The NJ Civil Service Commission has an outline of benefits programs that gives us some ideas of the various benefits that may be available to public workers.

We can see that actual cost to the taxpayers for the benefits could easily exceed 20%, or even 30%, of the base pay.  Taxpayers are also ultimately responsible for pension liabilities and any mandated employer taxes such as Social Security and Medicare.  Here is a sample from the City of Rockford in Illinois that is a nice example of how a compensation statement is done.

State employees are often privy to some other nice perks such as vendor discounts and Domestic Partnerships.  Consumers frequenting the participating vender discount businesses will be making up for the discounts in the pricing scheme of the companies.  In the case of domestic partnerships other taxpayers will have to kick in more because of some of the tax exemptions afforded to this public worker perk.

The CATO Institute January bulletin provides a good overview of where our state and local governments stand cumulatively on a national and regional level.  They highlight a study that estimates each US household has a $27,000 liability because of “overpromised and underfunded” public worker pension plans.  The same publication also compares public and private sector compensation.

There are four major pension and benefit bills active in the New Jersey legislature.

I care not to repeat a lot of the hard research that others have offered so will reference a few for you to find information.  Here is a nice review by Michael Symons, who writes Capitol Quickies on the Gannett site.  John Bury, writer for the Star Ledger and a pension actuary, has extensive knowledge on pensions over years and I will reference a few of his posts below.

As a response to the “overpromised” pensions, on our state level, the NJ Senate has three bills that claim to reduce the generous benefits resulting from prior actions by legislative and governors.

S2 “Makes various pension system changes concerning eligibility, retirement allowance formula, compensation definition, position eligible for service credit, non-forfeitable rights, enrollment waiver, prosecutors part, PFRS special retirement, employer contributions.”  John Bury on S2, and here, and here.

S3 “Makes various changes to SHBP and SEHBP concerning eligibility, cost sharing, plan choice, benefit change application, coverage waiver, multiple coverage; requires contributions toward health care benefits by public employees and certain retirees.”

S4 “Makes various changes concerning payments to public employees for unused sick leave, sick leave injury in State service, and PERS and TPAF disability retirement.”  John Bury on S4.

To address the decades of “underfunded” pension plans there is a proposed amendment to the NJ Constitution that would need to be put before the voters.

SCR1 “Amends State Constitution to require annual contributions by the State and its political subdivisions to State-administered retirement systems.”  If approved by the voters the effort to begin full funding of the pension plans would begin July 1, 2011.

“This amendment permits the State, for the first seven years, to phase in this requirement, for the payments it is required to make, by paying at least 1/7th of the contribution in the first year with payments increasing by at least an additional 1/7th in each year thereafter in order to permit the State to gradually adjust the annual appropriations act to accommodate these payments.”

The money that would be needed to get the pensions back to full funding would of coarse come from the taxpayers.  Translation, more tax increases.  The raw fact is that the taxpayers are unable to sustain the current levies imposed on them and to increase taxes more would force greater numbers out of our state, higher unemployment, and increased bankruptcies.

Pension payment obligations continue to be deferred and fall even further behind.  Our ability to abide by SCR1 would rely on the economy, state and local spending cuts, and a commitment of all branches of state government to decrease costs for our citizens.  Spending cuts would include taking back “overpromised” benefits and I do not believe the three bills above will be near enough to achieve the cuts needed to accomplish the goals set forth in SCR1 without tax increases.

As expected unions that claim to represent their members are proclaiming the minimal givebacks, that apply mostly to NEW hires, outlined in S2, S3, and S4, are “unfair”.   For those believing they would find such a lucrative deal in the private sector, please exercise your option to do so.  There are plenty of our state’s 10.1% unemployed, underemployed and discouraged workers, waiting to fill your vacancy .

New Jersey property tax appeals

The notice of NJ property tax assessment postcard received in the mail recently confuses many people.  On the front of the card it states, “New appeals threshold to tax court must exceed $1,000,000 in assessed value”.  Some are reading the notice and thinking that they can no longer appeal unless their property is assessment is over the $1.000,000.  That is not what the notice says.

If your new assessed value is less than $1,000,000 you file with your County Tax Board.

If your new assessed value exceeds $1,000,000 you have the option of filing your appeal directly to the State Tax Court.  In the past the threshold was $750,000 to file directly to the state tax court.

Business boundaries 101

Either President Obama is totally clueless about business or he understands the economics of hiring and cares only to follow his agenda.  I believe the case is the latter.

A business hires employees because they are needed and the company has the resources to do so.  Each and every employee comes with a cost and the salary is only a part of the equation.  The employee must first earn their pay and by that I mean their work must produce enough to cover their wages at some point after hire.  But the amount each employee needs to bring into the business to cover their own overhead includes a number of other business outlays.

In New Jersey, Workers’ Compensation could be well in excess of $1,000 per year for each employee.  The cost basis for coverage rates factors such as the gross amount of wages, type of business, and injury risks of each position.  Essentially, paying well has a penalty in the form of higher Worker’s Compensation cost.

Employers also pay state and federal taxes on each employee, over and above what is taken out of a worker’s pay.   For an employee earning a gross salary of $25,000, this would amount to about $2,000 yearly.

Other costs of employment include job training, health care, increased bookkeeping, and yearly billings from the state for shortfalls in various state funds.  There are also liabilities and responsibilities associated with each employee.

This year New Jersey employers are facing a larger billing than normal because of a major shortfall in the Unemployment Trust Fund, as high as $1,000 per employee.  The ‘trust fund’ is broke because lawmakers raided $3.6 billion over the last decade and used the money for other projects.  Added conditions contributing to breaking the fund are, the NJ unemployment rate reaching 10.1%, extensions being granted, and the high payments afforded to individuals in NJ.

Adding the costs up, the actual cost of a business hiring a $25,000 employee at this time would likely be $30,000 to $36,000.  It is the consumer that ultimately pays for all the costs of the business, including employees.

The question is would you hire this employee based on the $5,000 tax credit proposal from Obama?  The answer is, only if you were probably going to hire the employee anyway, with or without an offer of a tax credit.  Our economy is abysmal and most businesses are not in any condition to hire, or borrow money to do so.  Companies don’t hire unneeded labor just because a carrot is dangled.  A business that was going to hire will now wait it out for that carrot to be finalized.

There will also be abuses and tracking the legitimacy of claims for credits will be a daunting task for the government, with costs attached to the undertaking.  Details of the jobs bill have not yet been presented, but the information released thus far is not what I see as a solution to the unemployment crisis.

There are many government proposals in Congress that also affect a company’s hiring decisions.  The national health care proposal, card check, and cap and trade add a dimension of uncertainty to business costs and employee responsibilities.  The banking industry bailout even gives unrelated businesses a shaky feeling.  Obama is proposing that there be an extra fee placed on only selected firms, even ones who paid the money back in full or never took any money.

Yet there is no mention of tacking on a fee to industries such as sports and movie industries that also often receive taxpayer money in some manner and certainly have their share of obscene incomes.  Not yet anyway.

What workers are important to Obama?  Numerous times I have heard Obama mention workers in the fields of construction, clean energy, teachers, education workers, police, firefighters, correction officers, and first responders.  What do most of these have in common?  They are either being subsidized (often from multiple sources), supported by taxes and debt, unionized, or a combination of all three.  For the most part, these are not the job creators, but are paid through some channel of taxation.  Most of the jobs on this list, although presumably important for health, safety, and education, raise our taxes.

Targeting who gets tax cuts and credits vs. who is levied and disproportionately taxed divides industries and individuals.  It partitions society, making us all more vulnerable to being conquered.   It creates a political divide, segmenting people and businesses into government evaluation of their importance.

Each time a government credit or exemption to a tax is granted, somewhere else the difference must be supported.

One division evidenced the last year was the growth of government jobs and salaries, while the private sector has essentially trimmed the fat in order to survive. Government is not bound by the limits of capital, as are private industries.  Employees in the private sector were laid off in an effort to keep the company profitable, which also resulted in the stock market gains.

Banks fear that businesses seeking loans will default and are reluctant to extend the credit, rightfully so.  Businesses are constrained by their own capital and the influx of customers with money who desire their services.  No amount of government credits will cause a business to hire, unless the demand and the capital exist.  They will not be looking to hire unless they would be anyway.  Companies must live within their means to survive, a concept that does not apply to the federal government because they do not have the same restrictive boundaries.  They can always print more money or increase taxes.

How about cutting the size and imposition of government and using the money to lower taxes for everyone?  Let’s distribute the tax cuts, not redistribute the wealth.

“It is not the employer who pays the wages. Employers only handle the money. It is the customer who pays the wages.” - Henry Ford