Saturday, February 28, 2009
Obama's Speech Filled with Rhetoric, Wishful Thinking, According to Fitzgerald Griffin Foundation Columnist, Robert Hale
Some of Hale's 14 points include:
--The President said: "In order to save our children from a future of debt, we will also end the tax breaks for the wealthiest 2 percent of Americans." Hale comments: "Does it seem a realistic that two percent of Americans are going to pay off a federal debt estimated to be between $12 trillion and $19 trillion?"
--The President said: "We have done more to advance the cause of health care reform in the last thirty days than we have in the last decade." Hale replies: "What has been provided is health care insurance -- not health care reform. Nothing has been done to reform a health care system that is bloated by massive Medicare and Medicaid mismanagement.
--The President said: "...we will put Americans to work making our homes and buildings more efficient so that we can save billions of dollars on our energy bills." Hale replies: "As a builder for more than 30 years, I can state unequivocally this is a fiction. It is simply cannot be done.
--The President said: "I'm proud that we passed a recovery plan free of earmarks." Hale comments: "Yet news reports identified up to 9,000 earmarks in Congress' $410 billion omnibus spending bill."
--The President said: "The ability to get a loan is how you finance the purchase of everything... and [how] businesses make payroll." Hale responds: "Businesses do not make payrolls with loans. Those that do, don't stay in business; they fail."
For more than three decades, Mr. Hale has been involved in drafting proposed laws and counseling elected officials in ways to remove burdensome and unnecessary rules and regulations.
"For those who listened carefully and understand how sustainable jobs and prosperity happen, the President's speech was a terrible disappointment," Mr. Hale said.
Friday, February 27, 2009
"Apparently, the staff at US Department of Transportation (DOT) and the Office of Management and Budget have not been listening to President Obama and Secretary of Transportation Ray LaHood.
"Throughout his campaign and during his inauguration speech, President Obama promoted investment in 'roads and bridges' to keep our country moving. During his confirmation hearing, Secretary LaHood opposed the tolling of existing, toll-free roads. Yet the authors of the Transportation Department's 2010 budget framework must have been out of the office when their bosses were speaking.
"The President's strong support for roads and bridges serves him well. Despite the controversy over the Economic Recovery package, 94% of Americans supported the President's call to increase infrastructure investments. Roads and bridges rank #2 in importance among infrastructure priorities for the American people. And while Congress only provided 3.6% of the Economic Recovery funds for roads and bridges, the President's consistent promotion of highway infrastructure made his views crystal clear.
"Yet the 2010 budget framework for DOT includes no mention of roads, repeals the 87-year old contracting mechanism that guarantees funds for multi-year projects, and mentions 'road pricing' (tolls) as an option for states to deal with the meager funding levels.
"Given all of the stated support for roads and bridges, The Highway Users are mystified by the treatment of highway funding in the FY10 budget framework," said Greg Cohen, President & CEO of The Highway Users.
The budget framework raises four red flags:
1. The proposal implies that the 87-year old budgetary mechanism known as
"contract authority" be deleted from the budget. Without contract
authority, multi-year highway projects cannot be fully-funded.
2. There is no mention of President Obama's support for roads and bridges
anywhere in DOT's budget framework.
3. "Road pricing" is discussed as an option in the budget framework,
despite Secretary LaHood's opposition to tolling existing roads.
4. There is no room in the budget for any substantial increase in highway
funding, despite the President's recent call for investment levels that
would rival the funding for construction of the Interstate Highway
Cohen stated, "Until these issues are resolved, the American Highway Users Alliance will remain deeply concerned about the FY2010 budget framework. We look forward to improvements in the final budget request and sincerely hope that the President and Secretary of Transportation continue to exhibit leadership in promoting roads, bridges, and mobility in the 2010 budget."
Tony Perkins, President of Family Research Council, released the following statement:
"For President Obama to do this would be a huge blow to religious freedom and First Amendment rights. No one should be forced to have an abortion, and no one should be forced to be an abortionist in violation of their religious or ethical convictions. However, President Obama intends to stop regulations to enforce conscience protection statutes. In doing so, he will open the door to discrimination against the choice of healthcare workers who do not want to be complicit in abortion or other controversial practices. These regulations would have ensured that healthcare workers are not forced to participate in the performance or promotion of abortion against their will.
"Despite current law that has protected conscience rights for over 30 years, the lack of regulations resulted in confusion and a lack of awareness within the health care community, leaving health care personnel vulnerable to discrimination and forcing them to drop their specialties at a crucial time of health care scarcity. Protecting the right of all health care providers to make professional judgments based on moral convictions and ethical standards is foundational to federal law and is necessary to ensure that access to healthcare is not diminished, which will occur if healthcare workers are forced out of their jobs because of their ethical stances. President Obama's intention to change the language of these protections would result in the government becoming the conscience and not the individual. It is a person's right to exercise their moral judgment, not the government's to decide it for them.
"It is unfortunate that President Obama is planning to bow down to pro-abortion forces and stop enforcement of laws enacted to protect the choice of healthcare providers not to participate in abortion or other controversial practices. Family Research Council urges President Obama to change course and defend the conscience laws for healthcare workers by keeping these much-needed regulations in place."
On February 19, the U.S. 10th Circuit Court of Appeals reversed a District Court ruling, thereby upholding an Oklahoma law that gave workers the right to keep guns in their locked vehicles. "This unanimous and clearly worded ruling has broad implications for managers in the several states that have passed laws like Oklahoma's," said Anelli, who is based in the law firm's Newark, N.J. office. "It also could embolden pro-gun lawmakers around the country to draft similar measures."
The aim of the Oklahoma law, introduced with the support of the National Rifle Association, was to stop companies from banning guns in workplace parking lots. The rationale was that such prohibitions violated employees' constitutional rights to possess and carry firearms. In October 2007, however, U.S. District Judge Terence Kern issued an injunction against the enforcement of the state's legislation. The new law, he ruled, created an obstacle to employers charged with maintaining safe workplaces according to requirements issued by the U.S. Occupational Health & Safety Administration (OSHA).
In its 3-0 ruling, the appeals court cited evidence that OSHA does not regard the Oklahoma law as being in conflict with its workplace safety provisions. "The court pointed specifically to a January 16 letter by an acting OSHA official that signified OSHA's neutrality on the matter," Anelli noted. "Essentially, this ruling amounted to a clear invitation to states that have passed these types of provisions to feel free to enforce them. For employers who had hoped to see these types of provisions thrown out in court, this is a dramatic development."
Indeed, several Oklahoma employers, including Weyerhaeuser Corp., Whirlpool Corp., and ConocoPhillips, had challenged the Oklahoma law out of safety concerns. In the wake of the appeals court ruling, Anelli said, human resources and legal teams in states where these pro-gun laws have passed may need to rewrite employee handbooks to include firearms policies specifically crafted to reflect the reality that guns could be present in the parking lot. States that have passed pro-gun laws similar to Oklahoma's include: Georgia, Florida, Alaska, Kentucky, Mississippi, Kansas and Minnesota. Similar measures are under consideration in the statehouses of Alabama, Louisiana, Montana, Tennessee, Utah and Virginia.
"I have never seen an employee handbook that had a firearms policy," said Anelli, who has 20 years of experience representing management in employment discrimination and labor litigation. "It is more than prudent to adopt policies on how firearms should be handled and to explicitly state, for example, that guns must stay locked in vehicles and cannot be brought into the workplace."
Even as they draft such policies, however, employers must still provide a safe workplace and intervene where appropriate. For example, if an employee exhibits violent behavior there may still be a basis to take appropriate action to ensure that the workplace remains safe. In fact, some states allow employers to obtain court orders limiting the possession of firearms in parking lots even when the local law allows them if there is an indication of potential violence.
Still, Anelli said, company executives in states that have passed such laws should remember that they have not been relieved of their obligation to keep the workplace, including its parking lot, safe. It is their responsibility to work with security professionals, attorneys and local law enforcement officials to defuse situations involving potential violence and the possible use of firearms. They can also take other steps to protect both their companies and employees. Some types of businesses, for example, may have been legally exempted from the applicable law and can therefore continue to enforce gun bans. Others might be able to carve out "secured parking areas" that are gun-free but still in compliance with their states' laws.
Importantly, the Court also rejected the employers' arguments that, as a "property owner," they could regulate if firearms were stored in employee vehicles. The appeals court ruled, however, that the Oklahoma law could most accurately be "characterized as a restriction on Plaintiff's use of their property." In short, the appeals court ruled that the employer's property could be regulated in this manner and withstand constitutional "taking" arguments. Part of the ruling is based on the notion Oklahoma was expanding the rights of its citizens, as citizens, to store firearms in their vehicles as opposed to regulating employers or addressing employment, per se.
Anelli added that if OSHA were to reverse course and declare such laws in conflict with its existing safety provisions -- perhaps after a policy review by the Obama administration -- or if other appellate panels were to issue conflicting rulings on the legality of firearms in workplace parking lots, the U.S. Supreme Court might take up the matter.
Thursday, February 26, 2009
CCRKBA Chairman Alan Gottlieb, reacting to yesterday's remarks by Obama's Attorney General Eric Holder that the president will seek to reinstate the ban on semi-automatic firearms, said Obama "knew he was lying to the nation because his own Web site touted his plan to revive the gun ban and make it permanent."
"We warned America that Obama's 'support' for the Second Amendment was empty rhetoric," he stated, "and now Holder's disclosure has confirmed it. Obama was lying, and now gun rights may be dying."
Several times on the campaign trail, Obama told voters "I'm not going to take your guns away." He said it at rallies in Duryea, Pennsylvania and in Boise, Idaho. He also told a news conference that "Lawful gun owners have nothing to fear... I think people can take me at my word."
"Right now," said Gottlieb, "I wouldn't take Obama's word if he said it rains a lot in Seattle. Apparently, law-abiding gun owners have nothing to fear unless they own sport-utility rifles, semiautomatic shotguns, handguns and any other firearm that Obama and his anti-gun attorney general don't like."
"Thanks to Eric Holder, who has been far more honest than his boss about his anti-gun philosophy, it is now clear that the new president doesn't support the Second Amendment at all," he observed. "American gun owners should remind Democrats in Congress that the Second Amendment means what it says, especially when the president doesn't."
With more than 650,000 members and supporters nationwide, the Citizens Committee for the Right to Keep and Bear Arms (www.ccrkba.org) is one of the nation's premier gun rights organizations. As a non-profit organization, the Citizens Committee is dedicated to preserving firearms freedoms through active lobbying of elected officials and facilitating grass-roots organization of gun rights activists in local communities throughout the United States.
While the last eight years saw budgets that catered only to the interests of the wealthy and politically-connected contractors, this budget places the highest priorities on veterans; the elderly and the disabled who rely on Social Security; education; the safety of communities where federal prisons are located; science-based projects to protect the environment; housing assistance; and everyone who buys health insurance and uses health care, to name only a few.
"Although federal employees would prefer to have seen an increase in pay, the equivalent to the military, we recognize the severity of our nation's economic situation, including the crisis for public workers at the state and local level, and understand that only modest steps can be taken this year to close the remaining pay gap between the federal and non-federal salaries," continued Gage. "We also are pleased to see an emphasis on controlling health care costs in the years to come."
"Federal employees are genuinely committed to providing their fellow Americans with the highest quality services and protections. From the Department of Homeland Security's Border Patrol agents' efforts to protect the border to the Department of Labor's OSHA inspectors to the VA nurses and doctors - federal employees are so pleased to see that President Obama recognizes that understaffing is dangerous and self-defeating. They are thrilled at the prospect of additional resources for hiring staff who will be dedicated to serving the public interest," Gage said.
The 2010 budget goes even further, recognizing the harm done by Bush administration's privatization agenda. "Their ideological bias forced agencies to contract out regardless of cost or quality, and at the expense of the integrity of federal programs as well as public accountability. It looks like that may be coming to an end," said Gage.
"AFGE looks forward to this renewed opportunity to serve the American public," concluded Gage. "And we look forward to continuing our work with the Obama administration toward our shared goal of better government."
The leaders wrote: "The switch to natural gas will allow the CPP to dramatically reduce carbon and criteria pollutant emissions, eliminating more than 95 percent of sulfur oxides and at least 50 percent of carbon monoxide...We strongly encourage you to move forward aggressively with us on a comprehensive set of policies for the entire Capitol complex and the entire Legislative Branch to quickly reduce emissions and petroleum consumption through energy efficiency, renewable energy, and clean alternative fuels."
Below is the full text of the letter:
February 26, 2009
Mr. Stephen T. Ayers
Acting Architect of the Capitol
SB-15 U.S. Capitol
Washington, DC 20515
Dear Mr. Ayers:
We want to commend your office for working to implement the Green the Capitol Initiative by increasing energy efficiency and reducing greenhouse gas emissions. However, there is a shadow that hangs over the success of your and our efforts to improve the environmental performance of the Capitol and the entire Legislative Branch. The Capitol Power Plant (CPP) continues to be the number one source of air pollution and carbon emissions in the District of Columbia and the focal point for criticism from local community and national environmental and public health groups.
Since 1910, as you know, the CPP has continuously provided the Capitol, House and Senate office buildings, and other facilities with steam and chilled water for heating and cooling purposes. The plant remains an important component of the facilities master plan and the future of the Capitol complex, and we know your office has taken steps to make the plant cleaner and more efficient. While your progress has been noteworthy, more must be done to dramatically reduce plant emissions and the CPP's impact. Since there are not projected to be any economical or feasible technologies to reduce coal-burning emissions soon, there are several steps you should take in the short term to reduce the amount of coal burned at the plant while preparing for a conversion to cleaner burning natural gas.
We encourage you to take advantage of current excess capacity to burn cleaner fuels and reduce pollution. According to the General Accounting Office (GAO) and an independent analysis from Lawrence Berkeley National Laboratory, the boilers at the CPP are now running with more capacity than has been historically demanded or anticipated. Even with the new Capitol Visitor Center in operation, these analyses show there is sufficient capacity to further increase the burning of natural gas and still meet energy demands at peak hours.
We are also interested in identifying and supporting funding to retrofit CPP if necessary so that it can operate on 100 percent natural gas. Unfortunately, our staff has received conflicting information and cost estimates on what would actually be required to operate the CPP year-round with exclusively natural gas. If a retrofit of two remaining boilers is indeed required, then we encourage you to develop realistic budget numbers to accomplish the retrofit expeditiously including any costs for the purchase of additional quantities of natural gas. In your budget analysis, it is important to take into account that time is of the essence for converting the fuel of the CPP. Therefore it is our desire that your approach focus on retrofitting at least one of the coal boilers as early as this summer, and the remaining boiler by the end of the year.
While the costs associated with purchasing additional natural gas will certainly be higher, the investment will far outweigh its cost. The switch to natural gas will allow the CPP to dramatically reduce carbon and criteria pollutant emissions, eliminating more than 95 percent of sulfur oxides and at least 50 percent of carbon monoxide. The conversion will also reduce the cost of storing and transporting coal as well as the costs associated with cleaning up the fly ash and waste. Eliminating coal from the fuel mixture should also assist the City of Washington, D.C., in meeting and complying with national air quality standards, and demonstrate that Congress can be a good and conscientious neighbor by mitigating health concerns for residents and workers around Capitol Hill.
Taking this major step toward cleaning up the Capitol Power Plant's emissions would be an important demonstration of Congress' willingness to deal with the enormous challenges of global warming, energy independence and our inefficient use of finite fossil fuels. We strongly encourage you to move forward aggressively with us on a comprehensive set of policies for the entire Capitol complex and the entire Legislative Branch to quickly reduce emissions and petroleum consumption through energy efficiency, renewable energy, and clean alternative fuels.
Thank you for your attention to this critical matter.
NANCY PELOSI, HARRY REID
Speaker of the House, Senate Majority Leader
Wednesday, February 25, 2009
“Americans have always bounced back from adversity by exercising the freedoms guaranteed by limited government, which is why Libertarians are so disappointed in the recovery-delaying policies laid out last night by President Obama.
“No nation has ever spent its way out of a recession. In fact, budget-busting policies, like those proposed by President Obama, and our society’s overreliance on debt, are largely what got our economy into this needless situation.
“Obama’s statement that ‘A surplus became an excuse to transfer wealth to the wealthy instead of an opportunity to invest in our future’ was particularly disturbing. He wrongly assumes that tax money belongs to government, not the taxpayer it was taken from, and only government can create prosperity. The private sector’s investment, not government’s, is what is really responsible for the wealth of ordinary Americans.
“The American people know better. They know entrepreneurs, not government, create prosperity for all. That is why they agree with Libertarians that tax relief for employers and taxpayers must be at the center of any stimulus plan.
“Instead of an unceasing focus on ‘jobs’ the government should be creating the conditions for wealth creation for long-term prosperity. Government policies should be changed to stop rewarding debt incurrence and to promote private savings and investment.
“Sadly, President Obama is taking America in a different direction. His promise last night to raise taxes on employers will delay our eventual recovery, prolonging the suffering of the unemployed and underemployed.
“I hope President Obama is serious about ending ineffective programs. We shall see. I was also heartened by his call for Universal Savings Accounts for all Americans as part of Social Security reform, but future details will have to be carefully examined.
“I salute Governor Jindal’s opposition to the large stimulus bill, and his mea culpa on behalf of the Republican Party. Republicans have a well-earned reputation for expanding deficits, bloated budgets and government largesse. The Medicare entitlement expansion, ‘No Child Left Behind’ and TARP bailout are just a few of the Republican proposals responsible for our unsustainable budget. Hopefully, as the current opposition major party, the Republicans can return to the limited government beliefs that the Libertarian Party has never abandoned. President Obama last night simply promised to carry on the Republican legacy of explosive spending and expansive welfare that not only creates a generation of dependents, but also got us into this situation to begin with.
“America is unique in its greatness and the promise it offers it citizens to live their lives as they please, so long as they do no infringe upon the rights of others. The Libertarian Party stands alone as the only party that still believes in the protecting the civil liberties Americans have fought and died to protect, as well as the entrepreneurial spirit that creates prosperity and jobs. The American people agree, and we welcome them to join their friends and neighbors here in ‘the Party of Principle.’”
The Financing Commission will offer specific recommendations for addressing the significant and widening gap between federal investment and the nation's transportation infrastructure needs, while at the same time moving the federal government away from reliance on motor fuel taxes toward more direct fees charged to transportation infrastructure users. Charging vehicle drivers a mileage fee embodies the "user pays" principle and more accurately aligns the costs and benefits of the surface transportation system to those who are using it. More transparent charges for using infrastructure may also spur drivers to use the system more efficiently, reducing the overall investment need.
"With the expected shift to more fuel efficient vehicles," said Robert Atkinson, the chair of the Financing Commission and president of the Information Technology and Innovation Foundation, "it will be increasingly difficult to rely on the gas tax to raise the funds needed to improve, let alone maintain our nation's surface transportation infrastructure."
In addition to a federal mileage-based charge, the Financing Commission calls for the federal government to facilitate state and local governments' ability to raise their share of needed revenues in ways that also spur efficient use of the system and stepped-up investment, including through tolling portions of roads and charging premiums for rush-hour travel in heavily used urban corridors, so-called congestion pricing. The Financing Commission provides detailed recommendations for lawmakers to facilitate the effective use of private investment and to provide government credit support to assist in the financing of transportation infrastructure projects to stretch the federal government's limited resources.
In order to support the transition from the gas tax to a mileage-based charge, the Financing Commission recommends a ten cent per gallon increase in the federal gas tax (15 cents for diesel) and indexing the tax to inflation going forward. The gas tax, which is not currently indexed to inflation, has lost 1/3 of its purchasing power since 1993, the last time the tax was increased. The Financing Commission urges the federal government to act swiftly. While the nearly $40 billion in transportation infrastructure spending included in the stimulus package will be helpful, it will cover only a very small share of the shortfall in highway and transit funding and will not address the systemic crisis the nation faces in its surface transportation infrastructure investment.
"We must start transitioning to a new paradigm now," says Commissioner Mike Krusee "If we don't start, we will never get there."
"While the reaction to the President's speech was mixed, the reaction on Wall Street will be most telling of whether or not the President succeeded in infusing confidence into the nation's faltering economy.
"As President, it is incumbent upon Barack Obama to encourage the American people and help drive our nation's economy forward. That is, however, a difficult feat with one foot on the accelerator and the other on the brake. Despite the hopeful talk designed to nudge the nation forward, the reality of bigger and more costly government is stopping many Americans dead in their tracks on the road to economic recovery.
"The bottom line is bigger government is bigger government regardless of the patriotism that is wrapped around it. The President's pork barrel spending bills and his speech tonight reflect a philosophy that says only massive government spending will cure our economic troubles. The President's call for fiscal responsibility rings hallow when the actions that follow only pile on more massive debt and mortgage away the future of our children and their children.
"We do applaud the President for focusing on reducing the dropout rates in America, for there is little hope for those who cannot enter the workforce with the most basic of skills. However, the key is not doubling the size of the Department of Education it is in restoring parental involvement in education by allowing parents to make the fundamental decisions about their child's education, whether it be charter schools, private schools or home-schooling. All children in America should be treated equally."
Tuesday, February 24, 2009
"We are delighted with the Court's decision to uphold reasonable limits on the possession of firearms," said Sue Else, President of the National Network to End Domestic Violence (NNEDV). "Batterers should not have access to guns. This decision is a major victory for victims of domestic violence and their families."
Sen. Frank Lautenberg (D-NJ), a leader in the fight to reduce gun violence and the author of the domestic violence gun ban, said, "Since it was enacted, my domestic violence gun ban has kept more than 150,000 guns out of the hands of domestic abusers. We know a gun in the home makes it much more likely that domestic abuse results in death and today's decision means we can continue keeping guns out of dangerous hands and saving innocent lives."
The case originated in West Virginia, and the West Virginia Coalition Against Domestic Violence (WVCADV) is also celebrating today's victory. "The U.S. Supreme Court's ruling aligns the Fourth Circuit with the rest of the country; confirms the intention of Congress in responding to the seriousness of domestic violence; and affirms levying real and long term consequences on people who use violence. WVCADV is pleased with the ruling of the U.S. Supreme Court Justices," said Sue Julian and Tonia Thomas, Team Coordinators for WVCADV.
NNEDV, joined by the Domestic Violence Legal Empowerment and Appeals Project (DV LEAP) at George Washington University Law School, filed a brief supporting the sensible ban on gun possession by all offenders convicted of misdemeanor domestic violence. The Court cited the brief in its decision.
Joan Meier, DV LEAP's Director, said, "It is gratifying to see a strong majority of the Court reject the cramped and frankly illogical reading of the statute put forward by the Fourth Circuit and instead endorse the clear purpose of the legislature, not to mention common sense."
"Arming the people who brutally beat their spouses or partners is a recipe for disaster," Else said. "The Supreme Court made the right decision by upholding the domestic violence gun ban, keeping guns out of the hands of batterers and helping victims recovering from abuse to stay safe."
The National Network to End Domestic Violence Fund (NNEDV) is a 501(c)(3) non-profit organization dedicated to providing public education, training and technical assistance to maintain and develop the professional expertise of advocates working to end domestic violence. NNEDV strives to strengthen advocates as organizers and activists in the tradition of social change movements. For more information, please visit www.nnedv.org.
Monday, February 23, 2009
Americans need to know how the health provisions hidden in the recently enacted stimulus package will affect them. To inform the public about these provisions and the dangers, especially for seniors, I wrote an analysis for Bloomberg.com on February 10th. Lori Robertson, an employee of FactCheck.org, challenged the accuracy of my analysis in her February 20 critique posted on Newsweek.com. Readers of Robertson's critique should consider these facts.
Robertson begins by portraying me as a Republican politician out to score partisan points. I am a Democrat and a patient advocate leading a national campaign to prevent hospital infections.
Robertson also states that I am not a journalist and therefore lack the qualifications to analyze the stimulus package. In fact, I am a widely published author who has won three prestigious journalism prizes, including a National Magazine Award, an H.L. Mencken Award, and the 2003 Media Award from the American Association of Anesthesiologists. In addition, I earned a Ph.D. in constitutional history from Columbia University, wrote two books on the U.S. Constitution, and served as Lt. Governor of a large state. What are Robertson's credentials to analyze this legislative document? She holds a B. A. in advertising.
Robertson interviewed me by telephone and writes that "throughout our conversation McCaughey spoke of an 'unprecedented' award of authority to the secretary (of Health and Human Services). That's a matter of opinion on which we won't weigh in."
But that is the most important issue. And it's a matter of fact, not opinion. How much power is given to the HHS Secretary over your health care, and what choices are left to you and your doctor?
The goals of the National Coordinator for Health Information Technology are to ensure that "all individuals in the United States" have their medical treatments entered into an electronic database and to guide physicians "at the time and place of care" so as to reduce costs and eliminate "inappropriate care".
Are these guidelines voluntary? Hardly. Physicians and hospitals that fail to meet the HHS Secretary's standard of "meaningful use" will be subject to financial penalties from Medicare. How much leeway will there be to use experimental treatments and off label drugs? Will doctors be able to meet the needs of the atypical patient or provide more care than the guidelines recommend? It's hard to say, because the HHS Secretary is empowered to determine what "meaningful use" means and to make the definition more "stringent" over time.
"Perhaps so," writes Robertson. "But the fact remains that the law does not impose any federal treatment guidelines or require the government to do so." Robertson concedes that "perhaps" such interference with the doctor-patient relationship "will indeed come to pass some time in the future. Who knows?" she says. "But the law doesn't require it."
Require it? No. Allow it to happen? Absolutely. The point of analyzing legislation is to understand what could happen once the law is passed. In this case, there is a transfer of power from patient to government. Robertson fails to address that.
In the early 1990s, HMOs used a financial penalty called a "withhold." HMOs would withhold as much as 10% of a physicians' reimbursement until the end of the year and give it back only to physicians who met stringent targets for limiting how many diagnostic tests, referrals to specialists, and days in the hospital their patients got. What a doctor ordered for a patient came out of the doctor's own pocket. Patient advocates like me acted quickly to demand that the withhold be outlawed. Now the HHS Secretary would be permitted to do virtually the same thing by withholding Medicare reimbursements.
Robertson also concludes that the creation of a Federal Council on Comparative Effectiveness Research should not alarm seniors. Comparative effectiveness is code for limiting care based on a patient's birth date. Treatments for the elderly, who have fewer years to benefit, are likely to be deemed too costly. This is already happening in England and several European countries. Numerous recent articles in Health Affairs, the inside-the beltway manual for health policy makers, describe comparative effectiveness research as the tool to reduce Medicare spending.
U.S. Senators were so concerned about the meaning of comparative effectiveness that the Senate version of the stimulus replaced that term with "clinical effectiveness". However, the change was overturned when House and Senate conferred on a final version. Representative Charles Boustany Jr. from Louisiana, a heart surgeon, told The New York Times he feared the research would be used to "deny life-saving treatment to seniors and disabled people."
Finally, Robertson fails to explain why these health provisions were slipped into a stimulus package with no expert testimony and no opportunity for input by patient advocates, seniors, or physicians' groups. If these provisions are so good for patients, why avoid public scrutiny and debate? Secretary of HHS nominee Tom Daschle advised the president to do just that, even if it meant "attaching a health plan to the federal budget."
Americans should demand that these health provisions be repealed and offered as separate legislation so their impact can be further assessed.
Betsy McCaughey, Ph.D., is Chairman/Founder of Committee to Reduce Infection Deaths and former Lt. Governor of New York State.
/PRNewswire-USNewswire/ -- In a new letter to National Governors Association (NGA) Chairman Ed Rendell (D-PA) and James Douglas (R-VT), the Coalition to Protect Senior Care (CPSC), a national coalition of front line caregiver advocacy groups, today urged the nation's Governors to ensure new state Medicaid funds disbursed as part of the American Recovery and Reinvestment Act (ARRA) actually go towards meeting poor seniors' care needs, and are not diverted to other state spending priorities that have nothing at all to do with eldercare.
"Now that the American Recovery and Reinvestment Act (ARRA) has been passed into law, and states begin to receive the Medicaid funds that have the capacity to protect seniors' access to quality care, we are concerned there is no guarantee funds will be used for the intended purpose of protecting care access," writes Lori Porter, co-founder of the National Association of Health Care Assistants (NAHCA), and a senior spokesperson for the Coalition to Protect Senior Care, based in Joplin, MO. "Unfortunately, these Medicaid resources can be diverted to other state spending priorities - priorities that have nothing at all to do with eldercare. Doing so would be unwise and unfair."
Later this morning, President Obama announced at a White House meeting with the NGA that in order to bring prompt economic relief, states will be able to access the first two quarters of Federal Medical Assistance Percentage Funding (FMAP) starting this Wednesday, February 25. In making the announcement, the President said that the swift release of these funds would prevent the need for states to make cuts to critical healthcare services, such as eldercare.
The President stated, "This plan will also help ensure that you don't need to make cuts to essential services Americans rely on now more than ever... By the time most of you get home, money will be waiting to help 20 million vulnerable Americans in your states keep their health coverage. Children with asthma will be able to breathe easier, seniors won't need to fear losing their doctors, and pregnant women with limited means won't need to worry about the health of their babies."
In the CPSC letter, Porter urged Governors to use the enhanced federal Medicaid funds provided through ARRA to reverse cuts already made to health care providers, and to prevent new cuts being considered. "Ensuring impoverished seniors in nursing homes continue to receive high quality care is contingent upon the ability of facilities to hire and retain appropriate numbers of registered nurses (RNs), licensed practical nurses (LPNs), and certified nursing assistants (CNAs)," she continued. "When state officials choose to cut Medicaid funding to providers, they are often forced to eliminate critical nursing staff positions - ultimately to the detriment of seniors' care needs."
Porter applauded the Governors for developing strategies for disbursing ARRA funds, and to establish transparency and spending accountability. "Governors are implementing a number of best practices provisions in regard to how these new Medicaid funds will be spent, and the nation's front line care givers support these initiatives, and this approach."
In this context, Porter said every state would benefit from a special task force that would monitor and report to the public specifically where this new federal Medicaid funding is allocated. "Doing so would establish maximum transparency - and enable stakeholders to ascertain what percentage of funds goes towards meeting poor seniors' care needs, and the degree to which these funds are redirected to other priorities unrelated to seniors. Ensuring these Medicaid funds are directed towards seniors and the front line nursing staff who care for them will not only help ensure patients retain access to quality nursing home care, but also protect and help create the key facility staff jobs that make an enormous difference in patient outcomes."
Boehner, House Republican Leaders Call for Federal Spending Freeze to Address Growing Budget Deficit
“President Obama has called for both parties to get serious about fiscal responsibility. With our budget deficit potentially reaching $3 trillion this year, Republicans stand ready to work with him, and we believe we should start right now,” Boehner said. “Democratic congressional leaders should abandon their plans to rush another giant spending increase through Congress without public scrutiny, and instead pass a clean bill that freezes spending at current levels. Republicans stand ready to work with our Democratic colleagues and the President to take this first step toward a new standard of fiscal discipline in Washington.”
“Weeks ago House Republicans asked Speaker Pelosi and Majority Leader Hoyer to put this giant spending bill online so the American people would have adequate time to review it. Unfortunately, they declined. And on Friday, it was revealed that the bill congressional Democrats have been withholding from public view contains the largest discretionary spending increase since the Carter Administration, at a time when the federal budget deficit is already ballooning to dangerous levels,” Boehner said. “Democratic congressional leaders are reportedly rushing this bill to a vote this week, just days after passing a trillion-dollar ‘stimulus’ spending bill that no Member of Congress had even read. This is not fiscal responsibility; it is fiscal negligence, paid for by our children and grandchildren. We must change course, and we must do it in a bipartisan manner.”
NOTE: The giant spending bill kept under wraps by Democratic leaders would fund the nine uncompleted Fiscal Year 2009 appropriations bills that the Democratic Congress did not send to the President last year. Many taxpayer advocates argue that instead of rolling the nine appropriations bills into one giant “omnibus” bill that increases federal spending on an array of programs and projects at a time of growing budget deficits, Congress should simply pass a resolution that holds government spending at current levels.
Friday, February 20, 2009
On February 17, 2009 the nation's economy was saved, or at least that is what we are suppose to believe, given the fact the largest bill in U.S. history was signed into law by President Obama with the intended purpose of spurring consumer spending and creating millions of jobs.
Of course, if merely expending federal government funds - now at historic levels - are all it takes to insure a strong vivacious economy then the U.S. should never again expect to see a recession or even a down turn. Considering the annual federal budget is at nearly three trillion dollars, even without the stimulus package and the financial markets "bailout," economic expansion should be on everyone's lips.
But, all spending (and even more importantly what CBO marks as "costs") are not equal - they do not have equal impacts, timelines, or even returns - and that is at the heart of what went wrong with the stimulus package.
When the leaders of an industry like the design and construction community, represented by the Construction Industry Round Table (CIRT) can go from near universal support of the original stimulus package with its proposed targeting of timely infrastructure expenditures and some measure of tax relief - to a nearly universal concern (84% responding to a CIRT poll that the final package that passed into law is off target and not timely) - something drastic has occurred.
It can be explained in one phrase: "H.R.1" - the massive, unfocused, spend-fest that defines every dollar expended with the same broad brush of being job creating and stimulating to the economy. Such a claim is untenable and unprincipled just by merely perusing the over 1,000 pages of text in the bill. A focused, timely, and restricted expenditure of U.S. taxpayers' money would not require 1,000 pages to explain. Beyond the costs (both spending and tax relief) are the policy and program changes that seek to fundamentally alter aspects of the U.S. economy and life. These provisions are "slipped" into the massive act, which no one read in its entirety before passing (never mind understood) - so as to avoid the scrutiny of an American public that is not likely to be supportive of the drastic proposals and/or their consequences.
Notwithstanding the litany of H.R.1 supporters that like to point to the justifiable and defensible "infrastructure projects" that will be funded by the stimulus package (which even the fiscally conservative IBD editorial noted "almost everyone agrees a little timely infrastructure might help,") - in a best case scenario those dollars represent only about 19 percent of the overall $787 billion in cost for the bill (and about 30 percent of the spending side). A healthy amount for certain - however, only a fraction of it will be spent in a timely manner during the upcoming construction season in 2009. Given this lack of focus and timeliness the expenditures, while welcome, will not have nearly the positive impact hoped for in sopping-up excess capacity and putting people to work in the industry. [Construction industry studies vary as to the exact impact expenditures have on employment, but a USDOT 2008 update entitled: "Employment Impacts of Highway Infrastructure Investment" revising earlier reports puts the latest estimate at 34,779 jobs per billion dollars in new construction].
Initial design/construction industry support was very vocal and strong based on the favorable factors going into the debate. On November 11, 2008 the CIRT Board of Directors adopted a resolution expressing its strong support for a new stimulus package that focuses its expenditures on infrastructure needs across the country as a means to meet the twin goals of increasing economic activity as well as creating meaningful jobs. In addition, the Council voiced its concerns to the Obama transition team "that every effort should be made to constrain, if not eliminate, extraneous issues and provisions from being added-on to the package." Moreover, the Round Table expressed its "strong preference . . . for maximum flexibility and decentralized decision-making in order to move infrastructure related funds quickly into the system to achieve maximum economic activity and job creation."
In the end, what we saw pass was a typical Washington, DC bill - with special interest and inside deals to incorporate provisions and expenditures that would never be able to stand the "light of day" or the scrutiny of the American people. Contrary to this display, the design/construction community can stand tall: we were open in our requests, we were often cited for worthy expenditures, and in the end the portion of the money spent on infrastructure needs will be the most likely to bring true economic return to the nation. Would if they could say that about the rest of the package's costs!
February is the cruelest month - at least for Barack Obama. After the very real sense of hope and renewal that surrounded Obama's inauguration, shared even by many who did not vote for him, came the morning after. First, another scandal over unpaid taxes took down Health and Human Services nominee Tom Daschle. Then came the acrimonious battle over the stimulus bill, with a victory that may or may not turn out to be a Pyrrhic one......
By Cathy Young
Thursday, February 19, 2009
RNC: Trading Positions: After Two Years on the Campaign Trail and a Month in the Oval Office, Do We Finally Know President Obama's Position on NAFTA?
Today, President Obama is travelling to Canada to meet with Canadian Prime Minister Stephen Harper and is expected to reassure Harper of his commitment to trade:
Today, President Obama Will Take His First International Trip To Canada. "Obama will visit Canada Thursday on his first international trip as president, and in an interview with the Canadian Broadcast Company Tuesday morning, the issue of NAFTA came up quickly." (Sam Youngman, "Obama Defends NAFTA Policy Ahead Of Canada Trip," The Hill, 2/17/09)
Foreign Policy Adviser Denis McDonough Said President Obama Will Make It Clear That He Is Interested In More Trade. "'Obviously, given the delicate state of the global economy, [Obama] wants to make clear to Prime Minister Harper and to all of our trading partners that this is no time for anybody to give the impression that somehow we are interested in less - rather than more - trade,' [Obama Foreign Policy Adviser Denis] McDonough said. 'That's the message that he'll underscore.'" (Carrie Budoff Brown, "O, Canada: Plans For Obama's Trip North," The Politico, 2/18/09)
President Obama: "Canada Is One Of Our Most Important Trading Partners ... It Is Not In Anybody's Interest To See That Trade Diminish." "'But what I've also said is that Canada is one of our most important trading partners, we rely on them heavily, there's $1.5 billion worth of trade going back and forth every day between the two countries and that it is not in anybody's interest to see that trade diminish,' Obama said." (Carrie Budoff Brown, "O, Canada: Plans For Obama's Trip North," The Politico, 2/18/09)
But During The Democrat Primary, Then-Sen. Obama Pledged To Amend NAFTA And Even Suggested Opting-Out:
As A Presidential Candidate, Obama Repeatedly Threatened To Quit NAFTA. "As a presidential candidate stumping across the Rust Belt a year ago, Barack Obama drew cheers when he threatened to quit the North American Free Trade Agreement unless Canada and Mexico agreed to tough new worker-friendly standards." (Carrie Budoff Brown, "O, Canada: Plans For Obama's Trip North," The Politico, 2/18/09)
At The AFL-CIO Forum In August 2007, Then-Sen. Obama Pledged To "Immediately Call The President Of Mexico, The President Of Canada To Try To Amend NAFTA..." "I would immediately call the president of Mexico, the president of Canada to try to amend NAFTA because I think that we can get labor agreements in that agreement right now. And it should reflect the basic principle that our trade agreements should not just be good for Wall Street, it should also be good for Main Street." (Sen. Barack Obama, AFL-CIO Presidential Candidates Forum, Chicago, IL, 8/7/07)
At A February 2008 Debate In Ohio, Then-Sen. Obama Pledged To Renegotiate NAFTA With The Threat Of A "Potential Opt-Out." NBC's Tim Russert: "A simple question. Will you as president say to Canada and Mexico, this [NAFTA] has not worked for us, we are out?" Obama: "I will make sure that we renegotiate in the same way that Senator Clinton talked about, and I think actually Senator Clinton's answer on this one is right. I think we should use the hammer of a potential opt-out as leverage to ensure that we actually get labor and environmental standards that are enforced." (Sen. Barack Obama, MSNBC Democrat Presidential Debate, Cleveland, OH, 2/26/08)
Meanwhile, Economic Adviser Austan Goolsbee Told Canadian Officials Obama's Protectionist Rhetoric Was Merely "Political Positioning":
Despite Denials That The Meeting Occurred, The Associated Press Noted A Memo Written By The Canadian Consulate Which Described An Obama Adviser's Visit. "Barack Obama's senior economic policy adviser said Sunday that Canadian government officials wrote an inaccurate portrayal of his private discussion on the campaign's trade policy in a memo obtained by The Associated Press. The memo is the first documentation to emerge publicly out of the meeting between the adviser, Austan Goolsbee..." (Nedra Pickler, "Obama Adviser Denies Trade Remarks," The Associated Press, 3/2/08)
Canadian Consulate Memo: Goolsbee Said Anti-Trade Messaging "Should Be Viewed As More About Political Positioning Than A Clear Articulation Of Policy Plans." "Noting anxiety among many U.S. domestic audiences about the U.S. economic outlook, Goolsbee candidly acknowledged the protectionist sentiment that has emerged, particularly in the Midwest, during the primary campaign. He cautioned that this messaging should not be taken out of context and should be viewed as more about political positioning than a clear articulation of policy plans." (Nedra Pickler, "Obama Adviser Denies Trade Remarks," The Associated Press, 3/2/08)
Obama Senior Adviser Disputed The Memo. Obama Adviser Austan Goolsbee: "This thing about 'it's more about political positioning than a clear articulation of policy plans,' that's this guy's language. ... He's not quoting me. I certainly did not use that phrase in any way." (Nedra Pickler, "Obama Adviser Denies Trade Remarks," The Associated Press, 3/2/08)
Even President Obama's Eventual Chief Of Staff, Rep. Rahm Emanuel (D-IL), Disagreed With Obama's NAFTA Position During The Primary:
Emanuel, Along With Other Democrat House Members, Distanced Himself From Obama's Position On NAFTA. "Three other Democratic House members - Illinois Rep. Rahm Emanuel, New York Rep. Steve Israel, and New Jersey Rep. Robert Andrews - all joined Davis in distancing themselves from the NAFTA position articulated by the Democratic Party's presidential candidates." (Teddy Davis, "NAFTA Renegotiation Questioned By Fellow Dems," ABC News' "Political Radar" Blog, blogs.abcnews.com, 2/29/08)
But Prior To Running For President, Obama Supported NAFTA:
In September 2004, Obama Said The U.S Should "Pursue Deals Such As The North American Free Trade Agreement." "[Obama] said the United State [sic] should continue to work with the World Trade Organization and pursue deals such as the North American Free Trade Agreement, but the country must be more aggressive about protecting American interests." (Christopher Wills, "Senate Candidates Speak On Farm, Trade Issues," The Associated Press, 9/8/04)
And After Winning The Democrat Primary, Obama Shifted His Position On NAFTA Once Again:
After He Wrapped Up The Democrat Nomination, Obama "Tamped Down His Rhetoric" On NAFTA. "The softer tone as president widens the already-gaping distance with Obama's more protectionist pose of the primary. He tamped down his rhetoric after wrapping up the nomination, acknowledging in a June interview with Fortune magazine that the anti-trade talk got 'overheated and amplified.'" (Carrie Budoff Brown, "O, Canada: Plans For Obama's Trip North," The Politico, 2/18/09)
“Canada’s banking system is doing really, really well,” said John Thompson, a professor of history and in Duke’s Center for Canadian Studies. “Canada hasn’t had a single bank failure, and the World Economic Forum ranks their banking system as the healthiest in the world. America’s is number 40.
“Canadians save at much higher rates than people in the U.S., and because they’re not allowed to deduct mortgage payments, they aren’t seeing overheated real estate markets,” said Thompson, author of “Canada and the United States: Ambivalent Allies.”
“Canadians spend nine percent of their GDP on health care -- compared to the U.S.’s 16 percent -- and still get better results overall,” he said. “And because the system is national, you don’t have this problem of businesses losing their competitiveness due to huge health insurance costs.
“In foreign policy, Canada has been pretty wise, too. They’ve fought alongside the U.S. in every major modern war -- except Iraq and Vietnam. That looks like pretty good judgment in hindsight.
“Of course, there’s not really a trend of U.S. presidents taking advice from Canadians,” he added. “There’s a pretty good chance this visit will be no more than a photo op for a rock-star president before his adoring Canadian fans.”
Tuesday, February 17, 2009
I am requesting that MSNBC and Keith Olbermann apologize and issue a correction.
Mr. Olbermann charges that I, Betsy McCaughey, Ph.D. was paid, directly or indirectly, by the pharmaceutical industry, the biotech industry, the Hudson Institute, or Cantel Medical Corp. to write my analysis of the stimulus bill or speak about that issue. All these charges are false.
I have shown all these charges to be false in a previous statement except the new charge regarding my board membership at Cantel Medical Corp. I serve on the board of Cantel Medical Corp. as a patient advocate and infection prevention expert. No one at Cantel Medical has ever asked me about the stimulus bill or requested that I address the issue. I have not discussed the issue with anyone in the company. I urge those who are interested to contact Cantel Medical directly (973-890-7220).
I have purchased no stock in Cantel Medical. Like all board members, I am routinely issued options. The options cited by Keith Olbermann were not issued to me in payment for my work on the stimulus bill. They were issued to all Cantel board members at the same time. They are issued routinely and periodically. Unlike the other board members, I have never exercised any options to purchase stock. I do not use those options to make money. The same is true for other boards on which I have served.
Betsy McCaughey, Ph.D.
1.) The House of Representatives has broken a commitment to posting the legislation online for no less than 48 hours before a vote.
Only a few hours after the U.S. House of Representatives passed a motion to instruct conferees on H.R. 1 mandating that the conference report be posted online in a searchable and downloadable form for no less than 48 hours before it may be voted on, negotiations began under the cover of night behind closed doors with no representatives of the Congressional minority present. Ultimately, the Democratic House leadership did not make the bill's language available until around 11:00 p.m. on Thursday, giving the public a mere 15 hours to scrutinize the bill (mostly overnight hours during which most Members of Congress were no doubt sleeping), of which only 5 hours were working hours. Congressional Record, page H1096.
2.) In signing this bill today, President Obama is violating his own transparency pledge.
Consider his campaign promise: "No more secrecy. ... when there's a bill that ends up on my desk as president, you, the American voter, will have five days to look online and find out what it is before I sign it, so that you know what your government's doing."(1) Manchester, New Hampshire, June 22, 2007 http://tinyurl.com/dl2wog (time: 20:20) Today, the bill will have been posted for only four days - not five.
3.) No Member of Congress voting for the bill confirmed prior to the vote that they had read the bill.
Americans for Tax Reform had asked all Members of Congress intending to vote for the conference report to sign and fax back/email to ATR the following form:
I, _____________________________, commit to the taxpayers of the (___________________ district of the) State of _______________________, that my vote in favor of the conference report on H.R. 1 will be an informed vote, because I will have read the full text of the bill and the conference report by the time I cast my vote.
All Members who voted for the package refused to make this commitment. http://atr.server278.com/even-one-democrat-read-bill-a2887
4.) No Member of Congress voting for the bill confirmed that they were not looking to personally benefit corruptly from the bill with their vote.
Americans for Tax Reform asked all Members of the U.S. House of Representatives who voted in favor of the "American Recovery and Reinvestment Act of 2009" and U.S. Senators planning to support the package to commit to their constituents in writing that they will not accept political contributions from any recipient of "stimulus" funds, nor will seek or accept employment with any recipient.
All Members who voted for the package refused to make this commitment. http://atr.server278.com/atr-challenge-pelosi-obama-reid-spending-a2858
5.) In signing the bill, President Obama also breaks his promise to enact net spending cuts
During a discussion about government spending in the second presidential debate on October 7, 2008, Obama said "So we're going to have to make some investments but we've also got to make spending cuts, and what I've proposed -- you'll hear Senator McCain say 'he's proposing a whole bunch of new spending' --but, actually, I'm cutting more than I'm spending. So that it will be a net spending cut."
6.) The "Stimulus" package will undo much of the progress of the 1996 welfare reform.
The package contains language that would essentially abolish the accomplishments of the 1996 welfare reform which drastically reduced welfare rolls and child poverty. Further, it would add large amounts in new welfare spending over the next decade. http://tinyurl.com/dax6xf
Says ATR president Grover Norquist: "President Obama hasn't even been in office for a full month yet - but, aided by the Democratic majority in Congress, he has already managed to break a series of promises in an effort to burden taxpayers with a massive spending package that will do nothing to promote economic growth, but will permanently grow the size of government undo much of the progress made in the mid-1990s in the area of welfare reform. If this first month is a sign of what's to come, then taxpayers will be in for a rough ride."
(1) Conveniently, that pledge was later massaged to only extend to "non-emergency" bills, however even by that standard, the President has already twice violated that commitment with the Lilly Ledbetter Fair Pay Act and the S-CHIP reauthorization bill that contained a tax increase (and broke another one of his campaign promises not to raise taxes on anyone making less than $250,000).
But just as a predecessor initiative—the $700 billion Troubled Assets Relief Program (TARP) pumped money into banks by letting the U.S. Treasury buy equity stakes in financial institutions—appears to have done little to aid the larger economy, the latest taxpayer-funded program may stall out if it doesn’t pump more cash into businesses that can create jobs, say Emory University faculty and other experts.
Washington Tries to Thaw Credit Freeze
The big question, according to Charles F. Goetz, an adjunct professor of organization and management and a distinguished lecturer in entrepreneurship at Emory University's Goizueta Business School, is whether or not the new stimulus bill will truly thaw the capital freeze that is currently blocking business activity.
“Funding, not consumer spending, is the core issue for small businesses,” he says. “Right now lenders are hesitant to extend money to commercial borrowers even when they have a good track record, and in some cases are actually calling in loans that they have already funded.”
He acknowledges that a falloff in revenue is hurting small businesses and notes that the stimulus package could improve that, but says the bill will only fix a very small part of the problem.
“The freeze in funding is hurting small businesses much more than the shortfall in sales is hurting them,” Goetz says. “Without the necessary cash to grease the gears and keep the business going, companies have had no choice but to reduce costs. And that, unfortunately, results in a cutback on capital expenditures and a need to lay off workers. So cash, in the form of loans, is the mechanism that is most important, but the stimulus bill can do little to help in that regard."
So where will that help come from?
"It's going to have to come from the $350 billion still remaining in the TARP; or possibly even more from a future son-of-TARP,” Goetz says. “Whether the TARP is used for a Good Bank/Bad Bank strategy [similar to the Resolution Trust Corp. created after the Savings and Loan failures of the 1980s], or to put direct investment into troubled banks, the only vehicle that has any real chance of freeing up bank lending and truly helping small business is the TARP or some reincarnation of it.”
Treasury Secretary Timothy F. Geithner appeared to allude to a similar plan in his February 10 comments calling for a $500 billion, Public-Private Investment Fund “targeted to the legacy loans and assets that are now burdening many financial institutions.”
Meanwhile, says Goetz, “When consumers are worried about keeping their jobs, they spend less and save more, which results in lower sales for companies and exacerbates the whole cycle.”
Small businesses in particular are concerned that the stimulus package misses the boat. Small businesses are defined as companies with fewer than 10 employees, and they account for almost 80 percent of all U.S. companies, according to the National Federation of Independent Business (NFIB) lobbying group. Small businesses are credited with generating about 70 percent of all new jobs.
“By increasing the federally guaranteed portion of Small Business Administration (SBA) loans, and giving more power to the SBA to expedite loan approvals, we believe we can turn around the dramatic decline in SBA lending we have seen in recent months,” said Geithner.
But Goetz was not very impressed, since the package calls for only about $500 million for the Small Business Administration’s loan-guarantee programs, which he says "is a drop in the bucket" compared to the total drop-off in bank loans.
“Banks, particularly through the SBA guaranteed loan programs, have the potential to help both existing and new small businesses to expand and hire more employees,” he says.
In a February 6 message to the membership of NFIB, the organization’s chief executive officer Dan Danner asks, “Have you heard anything about what Congress is providing for small businesses in the current economic stimulus package being debated in Washington? Unfortunately, the answer is ‘No.’"
Did TARP Spring a Leak?
In fact, Goetz says, the remaining $350 billion in the federal TARP program could do a lot to spur business activity, if it is designed differently.
“Maybe TARP has not been used in the most effective way to date,” observes Goetz. “It was passed in a hurry, and apparently there were no direct requirements for banks to actually make more loans. Instead, many institutions have tightened lending standards and used the funds for things like purchasing other banks, instead of making more loans.”
Although the U.S. Treasury has invested about $350 billion into financial institutions under TARP, about 70 percent of U.S. banks reported they tightened standards on loans to small firms, according to the most recent Bank Lending Practices survey taken by the Federal Reserve Board.
“Perhaps the creation of a Good Bank/Bad Bank entity like the Resolution Trust Corp. (RTC) would have been a better use of the funds,” says Goetz, referring to a limited-life federal organization, created in the wake of the savings and loan crisis of the late 1980s, which managed and resolved financial institutions placed under conservatorship or receivership from January 1, 1989, through August 9, 1992.
“If my memory is correct, the government actually made money on the RTC and put money back into the banking system that got individuals and business to start spending again,” he says. “And contrary to what most people think, this is actually a good time to start a new business and to expand if you already have a small business. This is because in a recession, competition often shrinks at a pace even faster than demand does.”
Competitors that grew “fat and happy” in an easier time are falling by the wayside as they are unable to adjust in a more difficult environment, Goetz says. “In addition, you can pick up some very good employees that you would not have been able to in a better market. And even if you're not interested in starting a new business, the difficult economic environment means you can often purchase a company that is up and running at a fraction of what it would have cost just six months earlier.”
Some Goizueta faculty members are even more disenchanted with the stimulus proposal.
“In my judgment, this is a very poorly designed package,” says Ray Hill, an adjunct professor of finance. “I believe that only a small portion of the huge debt we will incur will produce any stimulus within any reasonable time frame.”
First, he says, “A big part of the [proposed] package is temporary tax relief directed to individuals. Economic theory and repeated experience—including the tax rebates of the 2008 stimulus package under the Bush administration—tell us that consumers save or pay down debt most of any change in income they perceive to be temporary, including the so-called tax ‘refunds’ to people who don't pay taxes.”
Both versions of the stimulus packages call for billions of dollars to be spent on infrastructure and other “shovel ready” projects that are projected to create jobs. “Although spending on infrastructure is commendable, this spending will take time, even for so-called ‘shovel ready’ projects,” says Hill.
“I believe that the Congressional Budget Office's own projections forecast that most of these funds will be spent in 2010 or later,” he says. By then the economy may already be recovering and the spending will either be inflationary or will take resources from private sector investment.”
Hill also faults proposed investments in alternative energy, noting that “we already have a glut of solar panels so no one is going to start producing a lot more until whole projects are underway, which can take years. Of course, you hear venture capitalists supporting this part of the stimulus package, but that is pure self interest.”
The stimulus package being discussed by Congress may indeed help the economy in some ways, concedes Hill.
“It may provide funds to states and prompt them to maintain spending that would otherwise be cut,” he says. “But it may also have unintended consequences. I have in mind the extension and improvement in unemployment benefits.”
Extending benefits in the weak economy may be good policy, "but we have to recognize that the inevitable result will be a longer duration of high unemployment than would otherwise be the case,” Hill notes.
Some observers argue that permanent tax cuts will provide the most effective and immediate stimulus, Hill notes, adding that “I think experience shows that this probably is the case.”
Car Dealers Suffer as Sales Stall
Automobile dealers, which were hammered by high energy prices and the tight credit market, are one of the economic downturn’s latest casualties.
Based on falling sales, about 5,000 car dealers across the U.S., or nearly 25 percent of the estimated total, would have to close in 2009 to enable average sales per dealer to match 2007's results, according to a study released in January by the accounting firm Grant Thornton LLP.
At least one industry observer who attended a recent National Automobile Dealers Association convention is worried that the stimulus package won’t do much to help those at-risk dealers, many of which are family-owned businesses.
“Banks may be getting TARP financing, but they’re still skittish about providing floor financing [revolving loans that dealers use to finance their inventory],” says Richard Kotzen, a partner in the Dealership Services Group of Crowe Horwath LLP, a Florida-based CPA firm. “Further, some of the TARP money is being diverted to U.S. automobile manufacturers, which encourages them to build more cars and press dealers to take delivery and pay for even more units that may end up sitting on their lots.”
Kotzen says he believes the industry as a whole will eventually recover, but notes that so far, federal stimulus programs have not generated a “trickle down” effect.
“The ‘shovels in the dirt’ approach of the stimulus plan as it stands now will generate jobs down the road, but auto dealers and other retailers need money now,” he says. “Permanent tax relief for consumers and retailers might help. Tax rebates, the ability to depreciate assets faster, and the extension of loss carrybacks [offsetting prior-year profits with current year losses] to five years from the current two, could also help businesses to regain their footing.”
Increased SBA funding in the stimulus package could provide some rapid assistance to small businesses, says Andrea Hershatter, who teaches entrepreneurship and serves as associate dean and director of the BBA program at Goizueta.
“Typically, the propensity for risk taking goes down in a weak economy,” she says. “The typical rounds of early stage financing from friends and family and angel investors depends on excess capital. Reduced wealth means that these usual sources of early venture financing are unavailable to entrepreneurs. Additionally, in the current environment, many banks are not willing or able to provide loans or lines of credit, leaving very few options for entrepreneurs.”
Hershatter points out that the stimulus package must spur the economy on a wide scale basis in order to have a positive long-term impact for entrepreneurs. In the meantime, additional sources of credit for small businesses are needed to help them get off the ground, she adds.
But Hershatter cautions that federal assistance to new and fledgling businesses must employ the same criteria that the private sector would consider, funding only those businesses with the highest likelihood of success.
Additionally, it is crucial to consider the sectors most likely to thrive in the coming years, she says, noting that “funding that flows to businesses whose goals are consistent with the broader ambitions of the federal government have a higher probability of benefitting from the first wave of economic growth.”
The Obama administration “has committed itself to a number of segments, including improvements in healthcare, education and energy efficiency,” says Hershatter. “If economic stimulus funds help to set up or grow businesses that contribute to these agendas, there is good alignment. On the other hand, if the stimulus package simply provides a pool of funds that lend to businesses that are not viable in the long term, it could be a waste of taxpayer money.”
Sunday, February 15, 2009
"While the economic stimulus may provide jobs for some Americans and make available to states an infusion of funds to shore up their budget deficits, by and large, the education portion of the package misses the mark by a wide margin. Student achievement, the purpose of our nation's schools, is not an explicit or implicit requirement of the new stimulus spending for education, which mainly provides an immediate influx of funding for the construction of new school facilities and the preservation of teachers' jobs, even for those who fail our children on a daily basis. While state's bear the primary responsibility of making policy changes that could dramatically improve student achievement -- from performance based compensation to creating new choices for children -- the federal government could have created incentives for states to make necessary changes in law that often fail because of opposition from powerful interest groups. Until Congress and the Administration make a commitment to change more than just the facade of our public schools and to relieve our students of the status quo shackle of ineffective education policies, the economic revival so sorely needed in America will, sadly, be a long time in coming."
"Late Friday night, the United States Department of Justice filed a response to lawsuits filed by the Brady Campaign to Prevent Gun Violence as well as the National Parks Conservation Association and the Coalition of National Park Service Retirees. The suits seek to enjoin and strike down a last-minute rule change by the Bush Administration's Interior Department which overturned sensible restrictions on concealed firearms in our national parks established by the Reagan Administration a quarter century ago. Allowing concealed guns into our historically safe parks was a potentially dangerous and ill-conceived idea. In our suit, we argue that the Bush Administration clearly violated laws, including the National Environmental Policy Act, in promulgating the rule.
"Recently released documents from this case reveal that even senior officials in the Bush Administration recognized that the new rule was unnecessary, potentially dangerous, and promulgated in a way that federal environmental laws did not allow. We are disappointed that the new Administration's initial response has been to defend this rule in court, instead of recognizing that the Bush Administration acted illegally. We are confident that the new rule will be struck down in court."
CEA President and CEO Gary Shapiro issued the following statement in response to the “Buy American” provisions included in the final bill:
“The ‘Buy American’ provisions in the stimulus bill will signal to our trading partners around the world that the United States is returning to the bad old days of protectionism and economic nationalism. Rather than stimulate the American economy, these provisions will lead to retaliation from abroad and cost precious jobs in the United States.*
“The promise that the ‘Buy American’ provisions keep with the letter of World Trade Organization commitments is a meaningless gesture - it contradicts recent statements by both President Obama and G-20 leaders to avoid protectionism, which exacerbate the global economic crisis.
“The lessons of Smoot-Hawley and the Great Depression are clear - if we close our borders to international trade and artificially prop up our own industries, we deepen the global recession and further make ourselves vulnerable to a trade war.”
*The Peterson Institute for International Economics, a nonpartisan think tank, estimated that the "Buy American" provisions could cost as many as 65,000 U.S. jobs, far outweighing the number of jobs that would be created. (“Buy American: Bad for Jobs, Worse for Reputation,” Peterson Institute, February 2009)
Friday, February 13, 2009
In a new column on "The False Hope of Bipartisanship" for the popular "Crystal Ball '09" political analysis web site, Abramowitz says the lack of moderates in both parties will likely make the "ideological gulf" too wide to be overcome in most cases.
"Like it or not, in order to produce the kinds of policy changes for which he campaigned, Mr. Obama is going to have to depend overwhelmingly on the support of his fellow Democrats in the Congress and in the country," says Abramowitz. "So expect more party-line votes in the House and Senate, more complaints from Republican leaders about being ignored, and more strident attacks on the president by conservative pundits and talk-show hosts."
Thursday, February 12, 2009
"NADA is pleased that tax incentives on new-auto sales are included in the economic stimulus package. Allowing consumers to deduct sales and excise taxes paid on new vehicle purchases will help jump-start auto sales. While including interest deductibility on auto loans would have promoted even greater consumer interest in a new automobile, we applaud both House and Senate leadership -- and especially Senators Barbara Mikulski (D-Md.) and Sam Brownback (R-Ks.) and Representatives Bill Pascrell (D-N.J.) and Steve LaTourette (R-Ohio) -- for recognizing the importance of automotive retailing to the nation's economy. Anything that increases auto sales will also provide help for state and local budgets that rely on sales tax revenues, consumers, dealers and the auto industry. New-car dealers generate almost 20 percent of all retail sales in this country. Therefore, anything that can help get consumers back into dealership showrooms can also help stimulate an economic recovery."
The Auto Ownership Tax Assistance bill, as introduced by Sen. Mikulski and Rep. Pascrell, would have allowed consumers to deduct auto loan interest as well as sales/excise taxes on new vehicles. The Senate passed the legislation, in its entirety, by a vote of 71-26. However, to reduce the costs of the overall package, the auto loan interest deduction provision was stripped out in House-Senate Conference negotiations.
"Our elected representatives have fed on the fears of a nation gripped by economic panic to legislate state-enforced euthanasia.
"President Obama's economic stimulus package puts a price tag on each of our heads.
"The package's healthcare provisions threaten the elderly and open the door for euthanasia and nationalized health care.
"Patterned on a plan outlined by Sen. Tom Daschle in his book 'Critical: What We Can Do About the Health Care Crisis,' the plan will have the greatest impact on seniors and places the country a step closer to mandated euthanasia of the elderly, infirm and those deemed undesirable.
"This is a disgusting direct attack on the worth and human dignity of all people, regardless of age. These provisions endanger the life of every single American.
"May God help us as we embark into this 'brave new world' in which government bureaucrats determine the value of our lives."
“Simply pushing money into the economy via infrastructure projects, no matter how well intentioned, is not the answer,” says Brown who joined the Duke faculty after an extensive career on Wall Street at Goldman Sachs, AIG and, most recently, Morgan Stanley, where he was global co-head of listed derivatives.
At a time plagued by slow economic growth, high interest rates and high inflation, ERTA not only reduced tax rates, but established a powerful set of incentives to promote investment in income-producing “capital assets” -- plant, property, and equipment, according to Brown. It resuscitated the Kennedy-era investment tax credit (ITC), which gave business partial reimbursement for the purchase of every new income-producing asset they acquired. And it added to this subsidy by allowing all those assets to be depreciated extremely rapidly under the new Accelerated Cost Recovery System (ACRS).
“ERTA helped break us out of the economic quagmire of the 1970s,” Brown says. “Sure, it lowered tax rates for everybody, but its most important legacy was in getting this country investing in the economy again. The government essentially said to the private sector ‘you think of where our economy needs the money the most, and as long as you put your money there first, we will follow right behind you.’”
The effect was almost immediate, says Brown. “By 1983, the economy was going like gangbusters. And the best thing about it was that the private sector was allocating the money more efficiently than would have been possible had the government been directing the investments. This meant the money got to people who had no ability to lobby Washington to spend money on their businesses.
“President Obama and Congress should step back from the current spending bill and turn it into a stimulus bill. Identify the overriding strategic visions, invest in infrastructure for those visions and then bring back the ITC and ACRS deductions to get the private sector back in the game,” he says. “They could even provide two tiers of ITC and ACRS: one for old industry and a higher level for the most important parts of President Obama’s vision.”
Wednesday, February 11, 2009
While a lot of questions remain about how America got into this economic crisis, the new Congress and Administration quite sensibly have refocused the debate on the key immediate issue: how do we escape the whirlpool of job losses and recession swiftly and effectively? While some fringe-dwelling extremists still hold out for total reliance on the marketplace to sort things out, almost everyone else seems certain that our most immediate goal has to be to use federal interventions to restore demand for goods and services in order to reduce (and eventually reverse) the cascading rate of layoffs as fast as possible.
So it's particularly troubling that support is slipping for counteracting one of the biggest sources of the next round of job losses and spending reductions. Posturing and ideological cant on Capitol Hill are threatening to gut the $40 billion in assistance targeted for America's state and local public sector included in the House of Representatives stimulus package.
Meanwhile, all across the country - in red states and blue - governors and mayors are preparing to fire hundreds of thousands of workers at just the moment when jobs are most needed. While we hear plenty of echoes of yesteryear demanding corporate tax cuts in the far-fetched hope that they'll lead to fewer private sector layoffs, readers of another section of every local paper see vast numbers of middle class jobs poised for elimination. Already, 46 states are reporting collapsing fiscal conditions - the combined deficits of the states could approach $350 billion in the current and next fiscal years combined - and 36 of them are making massive reductions in state employees as well as other budget cuts that will require their localities to do the same. California has furloughed 200,000 workers already. New York City's Mayor Michael Bloomberg plans to drop 23,000 workers. Governor Jon Corzine in New Jersey has reduced the state workforce by 2,000, with more reductions to come. It's the same story in virtually every major state.
State and local governments are in dire need of a federal tourniquet to staunch the bleeding. They are required by law to run balanced budgets -- unlike the federal government or most companies, they can't borrow to pay for workers' salaries - so they have no tools to fight off job cuts when times get tough except to raise taxes, a politically unpalatable option anytime. Worse, state and local taxes are almost always more regressive than federal levies, forcing elected officials to risk voters' wrath just to hike those taxes that impose the greatest relative burdens on those most at risk.
Thus the two options open for governors, county executives and mayors struggling to balance their budgets as their own government's revenues plummet are entirely inconsistent with the thrust of the federal stimulus program.
Massive tax increases are on the table in virtually every state - New York's Governor David Paterson has proposed more than $3 billion in increases while Governor Schwarzenegger of California has his state looking at some $14 billion in revenue actions. Forcing states and localities to raise their own taxes mutes the impact of any federal tax cuts designed to stimulate the economy, while allowing massive numbers of state and local layoffs to offset nationally-funded job creation seems worse than short-sighted - it's just plain crazy.
Federal investments in state and local programs can not only preserve middle class jobs when they are most needed, but they can also meet one other test if handled wisely. There are few infrastructure projects or federal programs that can create jobs immediately while also making the nation structurally stronger for generations to come. Yet retaining teachers who educate children, keeping maintenance workers who preserve decaying infrastructure until replacements arrive, avoiding cuts in preventive health care services, or hiring police officers who take criminals off the streets can be investments in the future just as much as a new exit ramp off an exurban freeway. Yet the Senate stimulus package slashes $40 billion in support for the states at just the moment when it's needed most.
The kinds of crisis managers who are responsible for important facilities anywhere in the world are taught to ask four simple questions at the onset of any emergency, whether it's a fire, hurricane or terrorist attack: What happened? How bad is it? What's being done and by whom? And, how do we keep it from escalating? Today, America is facing an economic crisis much like these more familiar kinds of disasters, and the same four questions deserve to be answered. While we'll eventually sort out the answers to the first three of these, the recently altered Senate version of the stimulus bill shows we're at risk of making a dangerous mistake on the fourth.
Let's treat this like the crisis that it is, and stop the one form of escalating disaster we can be certain of ending. There will be plenty of time for experimentation and ideological point-scoring later. For now, let's just start by making sure the disaster we are confronting does not spread into the states and localities in which we all live.
Richard C. Leone is president of The Century Foundation, a public policy research organization, and former state treasurer of New Jersey. Anthony Shorris is a fellow at The Century Foundation and former Executive Director of the Port Authority of New York and New Jersey.
Tuesday, February 10, 2009
We will not effectively stabilize the nation's banks and financial system until we stop the wave of foreclosures that continues to drive down the economy and harm millions of families. At least 8 million families risk losing their homes to foreclosure in the next four years. These foreclosures drive down the value of all homes, and in turn prevent a recovery of the housing and financial markets. The financial crisis will not end unless these foreclosures are reduced.
This year alone there will be 2.4 million foreclosures. The 75 million families who happen to live near those properties will see their home values drop an additional $435 billion. That amount could more than triple over the next four years to nearly $1.5 trillion. Declining property values means less tax revenue to support schools, police, and other essential local services. The negative effects from foreclosure losses are cascading through the economy and harming us all.
We understand that Treasury Secretary Geithner will soon outline a plan to help prevent foreclosures. We eagerly await this plan. For it to be effective, it must be ambitious and must include a combination of carrots and sticks to stop preventable foreclosures and keep families in their homes.
Several steps are essential:
-- Homeowners facing foreclosure must be allowed access to the court
system to seek reasonable adjustments on their home loans. This
solution will not cost taxpayers a dime, and, conservatively, would
prevent 800,000 foreclosures.
-- Incentives such as the FDIC's loan guarantee program must be adopted
to give industry an incentive to modify more of the unaffordable loans
-- The federal government should obtain clarity on accounting rules and
buy delinquent loans from private-label mortgage-backed securities or
take other direct action that will break through the obstacles that
are currently preventing badly needed home loan modifications; and
-- The full $100 billion of TARP funds targeted by Congress for
foreclosure relief must be used to directly help homeowners.