QUOTE OF THE DAY
Baltimore Sun: Baltimore spends $585,000 on study of how to save money
Why did Baltimore need to pay outside consultants half a million dollars for a report that says the city's financial future is grim?
Some city residents wondered as much after Mayor Stephanie Rawlings-Blake called for a new trash collection fee, a smaller city workforce and cuts to employee benefits as a way to deal with the projected $750 million, 10-year budget shortfall the consultants projected. For a city as financially strapped as Baltimore, couldn't that work have been done in house?
The answer, according to city budget director Andrew Kleine, is no.
Though the city's finance department makes three-year projections, it lacked both the manpower and the skill set to make long-term actuarial projections and propose reforms, Kleine said. Many of the more than 100 proposed reforms will be detailed Wednesday when Rawlings-Blake releases the full report, officials said.
"We just didn't have the staff or the expertise to do this," Kleine said. "Our core function is to formulate the budget and monitor the budget."
As for the cost, Public Financial Management Inc. of Philadelphia won the contract in 2011 with a proposal to charge the city $460,000, beating two other finalists whose work would have cost taxpayers $500,000 and $507,000, respectively.
But the scope of the needed work grew over the past year, Kleine said, and city officials added another $125,000 to the deal — meaning the consultants were paid $585,000 in all.
Even so, Kleine said, it was money well spent.
Washington Times: Labor unions that pushed Obamacare through want out
Who knew Obamacare was bad for workers? Unions, or rather the professional class of union leaders, were vehement supporters of Obamacare’s federal takeover of health care. Now that they’ve had a chance to actually read the 2,801-page bill and “find out what is in it,” they are upset and want out.
Major unions like the AFL-CIO and the Teamsters are now demanding that they be allowed to stay on their current health care plans and receive government subsidies to cover the increased costs some of Obamacare’s provisions will impose on lower-income workers. They want to eat their government cake and have it too. What else is new? Who would foot the bill? You guessed it: We, the taxpayers.
The rank hypocrisy of Obamacare-backing unions began almost immediately after the passage of the bill three years ago, with hundreds of thousands of union workers being exempted from the law through waivers from the Obama administration.
In total, more than 1,200 entities were granted waivers from President Obama‘s signature legislation, the vast majority of them labor unions. In fact, unions representing 543,812 workers received waivers, while only 69,813 employees at private firms, many of them small businesses, managed to secure a waiver.
The same unions that fought tooth and nail to impose this program on all Americans used million-dollar lobbyists to make sure they didn’t have to play by the same rules as the rest of us. Nice.
Points and Figures: You are going to lose your job
The techies are coming, the techies are coming! Sound the alarm. There is no hope. The middle class is going under and we are going to have a two class system with have and have nots. It’s all the fault of technology.
Moore’s Law is dropping the cost of tech at such a rate, we will all just have to become grape pickers, until they invent machines to do that. Oh, they already have. Wait, we will become taxi drivers and limo drivers, truck drivers. Oh, Google invented the driverless car.
What’s a person to do?
I have seen a lot of doomsday articles on the advancement of technology lately. Paul Krugman characterizes the technologists of this age as “robber barons”. Those greedy bastards. They are inventing to take you down.
But, this has been the trajectory of human development ever since the dawn of time. It’s just happening faster now because technology allows research and development to happen more quickly. When we developed the wheel, people that carried individual items were out of business or had to adapt.
Ask a farmer or a housewife if they hate technology. Technological innovation made them more productive and made their lives easier.
There are several things going on all at once in our economy and technology is bearing the brunt of the blame for the sputtering economy.
Chicago Tribune: The Medicaid Leap
Last May, Illinois lawmakers made a wrenching decision to pare back the state's Medicaid program because the state is dead broke.
We applauded those deep cuts, designed to save the state $1.6 billion a year while preserving the vital core of health care coverage for lower-income Illinoisans.
Just nine months later, Illinois is poised to debate a massive expansion of Medicaid, thanks to Obamacare, the federal health care overhaul that fully kicks in next year.
The federal government dangles this lure: If states agree to expand their Medicaid coverage for hundreds of thousands of previously ineligible lower-income people, the feds will pick up 100 percent of the costs for the first three years and at least 90 percent through 2020.
Illinois would reap an estimated $12 billion in federal funds over those years. The cost to the state: about $573 million over the same period.
But the state is also expected to get hit with an additional $2.3 billion in health care costs through 2020 for people who are eligible but not now enrolled in Medicaid. Some 171,000 people are expected to sign up because of an Obamacare marketing push. The state will pay roughly half of their costs under the existing Medicaid formula.
U.S. Health and Human Services Secretary Kathleen Sebelius, in a visit to the Tribune editorial board last week, touted the Medicaid expansion match as "the single most generous federal offer ever put on the table."
It is a generous offer ... from a federal government that is groaning under $16.5 trillion in debt.
The U.S. Supreme Court gave the states the option of walking away from this Medicaid expansion. A number of states are doing that because they fear Congress and the White House won't stick to the funding promise. President Barack Obama leaves office in four years. A future Congress, squeezed dry by the powerful pocketbook-emptying forces of Medicare and Social Security, could stick the states with more of the cost of that Medicaid expansion.
A bill moving in the Illinois Senate would carry a trigger: If Congress paid less than 90 percent of the costs, everyone who gained coverage under the Medicaid expansion — expected to be 342,000 people — would automatically be dropped within three months from the Illinois rolls.
There would of course be enormous political pressure for lawmakers to avert that.
Philly.com: Prison inmates collect unemployment
DID YOU KNOW that Philadelphia prison inmates collected unemployment benefits while sitting in their cells?
They did: 1,162 of them got an average of $344 a week for, on average, 18 weeks. That's more than $7 million.
And many of the 25,500 inmates in other county jails in Pennsylvania did the same.
We're talking cash for cons - tens of millions of tax dollars paid by employers and employees fraudulently scammed by incarcerated crooks.
Makes you want to get up every day, go to work and pay your taxes, right?
Well, hold on. Before you pick up torches and pitchforks, you should know that the state says such payments are ending under a program put in place by the Corbett administration, and unemployment-compensation payments to 3,000 inmates have stopped, saving up to $18 million a year.
The Daily Beast: Michelle Rhee: My Break With the Democrats
When I began my stint with the D.C. public schools, I had strong ideas about what education reform should look like and what it shouldn’t look like. I believed wholeheartedly that we had to have a very strong focus on teacher quality. I was also a believer in charter schools. I had seen their value when I served for a couple of years on the board of the St. HOPE Public Schools. I guess that was my first break with Democratic dogma. I knew that charter schools were anathema to teachers' unions. I also knew the best ones could serve children extraordinarily well.
But I drew a very deep line in the sand when it came to vouchers. As a lifelong Democrat I was adamantly against vouchers. Vouchers provide public funds to parents who need help in paying tuition for private or parochial schools. Proponents, mostly Republicans, see vouchers as leveling the field and broadening choice for families. Detractors, usually Democrats, decry the use of public funds to pay for private education. I had bought into the arguments that Democrats and others use in opposition to vouchers: vouchers are a way of taking money away from public school systems and putting them into private schools; vouchers help only a handful of the kids; and vouchers take children and resources away from the schools and districts that need those resources the most.
For all of those reasons, my view on vouchers was set. But soon after I arrived in Washington, D.C., I was in a pickle. The District of Columbia had Opportunity Scholarships, a federally funded voucher program that helped poor families attend private schools. The program was up for reauthorization, and there was a heated debate going on in the city.
CNBC: Why Over 8% Unemployment Could Lie Ahead
Severe fiscal tightening in the U.S. will lead to no growth or a contraction in the first two quarters of 2013 and will push unemployment over the 8 percent level, according to Lombard Street Research.
he knock-on effect will mean pain for the business sector, with corporate profits falling after a hit to consumer spending power, the firm said.
"Our view that unemployment could rise above 8 percent and that profits will be squeezed reflects a forecast of nil to negative 2013 (first quarter) growth, and further stagnation in (the second quarter)," a Lombard Street report released on Friday said.
The view contrasts sharply with that of other analysts who are considerably more bullish on the U.S. economy.
Keith McCullough, CEO of Hedgeye Risk Management told CNBC last week that he thinks employment could actually improve below 7 percent by the fourth quarter, adding that from a housing and employment perspective U.S growth is "pretty solid".
Forbes: Obamacare's Health Exchanges Are Customer Free Zones
Last month, the CEO of the nation’s largest health insurance company warned that he and his peers may balk at participating in Obamacare’s insurance exchanges — online, government-run portals where consumers and small businesses without conventional employer-sponsored coverage may shop for policies starting next year.
“We will only participate in exchanges that we assess to be fair, commercially sustainable and provide a reasonable return on the capital they will require,” UnitedHealth Group Inc. CEO Stephen Hemsley said.
That’s ominous news for Obamacare. If insurers don’t participate in the law’s exchanges, then consumers who had hoped to secure affordable coverage through the new marketplaces will instead find few choices and high prices. Taxpayers could be hit hard, too, as higher premiums in the exchanges will require more public spending on subsidies.
Enrollment in Obamcare’s exchanges is scheduled to begin October 1, and coverage will take effect in 2014. Americans with incomes between 138 percent and 400 percent of the federal poverty level — up to $92,200 for a family of four as of 2012 — will qualify for federal subsidies.
Obamacare’s supporters predicted that insurers would flock to the exchanges, where millions of potential customers would be waiting to buy coverage, per the law’s requirement that they do so.
But participating in government exchanges means playing by the government’s costly rules. Insurers will have to adhere to strict coverage standards that vary by state — and they’ll face restrictions on how they can price their products. Insurance companies will even have to pay a fee to sell insurance on the exchanges. That levy starts at 3.5 percent of every customer’s premium — and could increase from there.
CARTOON OF THE DAY