“Are ‘Death Panels’ Coming To Scott Walker’s Wisconsin?”: A Scheme To Make Middle-Class Workers Pay Even More For Health Care
Scott Walker could be on the verge of giving Infowars some great conspiracy theory fodder. A move by Wisconsin’s Group Insurance Board to substantially increase how much state employees pay for their health insurance is drawing unqualified and sharp opposition from labor leaders but could once have drawn criticism from Sarah Palin, as well. That’s because the proposal includes “consultations about end-of-life care, which some called ‘death panels,’” as the Wisconsin State Journal put it.
Death panels?! In the great Badger State? Putting Badger Staters to death? How could this be? One may have asked, as some on the right did during the debate over the Affordable Care Act. But here we are, with the Wisconsin state government overseeing what’s set to be the controversy-free implementation of new policies designed to save the state money through its employees’ end-of-life decisions.
Quick background: The Wisconsin state government is having some tough fiscal times, and Walker’s budget proposal suggested substantial cuts in a number of areas, including to the University of Wisconsin system and to K-12 education. The governor’s budget proposal also called for savings of $81 million on the state employees’ group health insurance program. (Remember that in 2011 the governor oversaw the passage of Act 10, which virtually ended collective bargaining for most of the state’s public sector unions.) But the budget wasn’t too specific about how to save that $81 million. Instead, Walker’s proposal directed the state’s Group Insurance Board to work with Atlanta-based Segal Consulting to figure it out.
The most buzzed-about change, the Wisconsin State Journal reported, will require public sector employees to pay twice as much out of pocket for their health care than they do now. These changes are projected to save the state $85 million over the next two years (Wisconsin passes budgets biennially), and most of the savings “will come from increasing out-of-pocket limits and introducing deductibles for the vast majority of state workers who don’t have them,” according to the paper. Individual employees will have new $250 deductibles, and family deductibles will be $500.
The Group Insurance Board voted for the changes on May 19, and unless the legislature’s Joint Finance Committee moves to require legislative approval for the changes, they will go into effect Jan. 1, 2016, according to Mark Lamkins, communications director for the state’s Department of Employee Trust Funds. The board that approved the changes has 11 members, some of whom are Walker appointees. The majority of the Walker appointees on the board voted in favor.
And the change has labor leaders irate.
“What the group insurance board did today is unconscionable,” said Wisconsin AFSCME executive Marty Beil, according to THOnline. “I’d also call it evil that they’re treating state employees at that level. It’s incredible.”
But Walker’s critics on the left aren’t just going after him for increasing public sector employees’ expenditures for their health care. They’ve also targeted him for a tiny provision the board approved that seeks to save a bit of money through end-of-life care. The memo laying out the cost-cutting health-care proposal doesn’t detail how these changes would work, and the State Journal reported that “[e]nd-of-life care consultations, also called advanced care planning or palliative care, would save $292,500.” That’s hardly a hefty sum. Lamkins said the changes would involve “keeping people out of institutions near the end of life, giving them more opportunities to manage their care-treatment plan.”
He added that the change is designed “to ensure that members facing serious illness and survival of less than six months are informed of care options and are able to make treatment decisions based on their individual values and goals of care.”
Reached for comment, Laurel Patrick, a spokeswoman for the governor, pointed out that the phrase “death panels” is nowhere to be found in any of the health care change proposals. But that hasn’t defused liberal ire about the panel’s move.
That’s because Walker has been one of the most outspoken conservative opponents of the Affordable Care Act.
“When Sarah Palin was trying to derail Obamacare over ‘death panels,’ Scott Walker didn’t say a word defending the need for people to have end-of-life counseling and instead on his first day as governor wasted taxpayer dollars suing the federal government over Obamacare,” said Scot Ross, executive director of One Wisconsin Now. “But wrapped in a scheme that would make cash-strapped middle-class workers in Wisconsin pay even more for health care, Team Walker quietly slides this into the mix. The inclusion of the palliative counseling is critical, but Scott Walker would have saved families a lot of grief if he would have stood up to the Tea Party in 2010 instead of this backdoor deal now.”
Robert Kraig, executive director of Citizen Action of Wisconsin, voiced support for Walker’s so-called death panels but said he was frustrated the governor didn’t do more to defend the Affordable Care Act.
“The right, using Sarah Palin, shamelessly tried to call simple voluntary end-of-life consultation a ‘death panel’ early in the debate over Obamacare,” he said. “There’s obviously a great irony that the Walker administration would now come forward with an end-of-life consultation provision. I still have to say that it’s good policy, most likely, it’s just incredible hypocrisy for them to come out with that after Walker has been one of the most disingenuous critics of the ACA.”
It’s doubtful, of course, that any of this will be a problem for Walker’s 2016 ambitions. Nobody ever did poorly with Iowa Republican caucus-goers because critics on the left were too noisy. But the debate highlights one of the tricky aspects of running for president as a governor: that the tiniest provisions in uncontroversial policies can easily become flashpoints for controversy.
By: Betsy Woodruff, The Daily Beast, May 21, 2015
“The Most Opaque Investment Schemes Ever Devised”: Cities And States Paying Massive Secret Fees To Wall Street
California’s report said $440 million. New Jersey’s said $600 million. In Pennsylvania, the tally is $700 million. Those Wall Street fees paid by public workers’ pension systems have kicked off an intensifying debate over whether such expenses are necessary. Now, a report from an industry-friendly source says those huge levies represent only a fraction of the true amounts being raked in by Wall Street firms from state and local governments.
“Less than one-half of the very substantial [private equity] costs incurred by U.S. pension funds are currently being disclosed,” says the report from CEM, whose website says the financial analysis firm “serve(s) over 350 blue-chip corporate and government clients worldwide.”
Currently, about 9 percent — or $270 billion — of America’s $3 trillion public pension fund assets are invested in private equity firms. With the financial industry’s standard 2 percent management fee, that quarter-trillion dollars generates roughly $5.4 billion in annual management fees for the private equity industry — and that’s not including additional “performance” fees paid on investment returns. If CEM’s calculations are applied uniformly, it could mean taxpayers and retirees may actually be paying double — more than $10 billion a year.
Public officials are overseeing this massive payout to Wall Street at the very moment many of those same officials are demanding big cuts to retirees’ promised pension benefits.
“With billions of public worker and taxpayer dollars put at risk in the highest-cost, most opaque investment schemes ever devised by Wall Street for a decade now, investigations that hold Wall Street profiteers accountable are long, long overdue,” said former Securities and Exchange Commission attorney Ted Siedle.
Private equity firms have argued that their fees are worth the expense, because they supposedly deliver returns for investors that beat low-fee index funds, which track the broader stock market. But those private equity returns are typically self-reported by the firms over the life of those longer-term investments, meaning there are few ways to verify whether the returns are real. Indeed, a recent study from George Washington University argued that private equity firms are using their self-reporting authority to mislead investors into believing their returns are smoother and more consistent than they actually are.
In a 2014 speech, the SEC’s top examiner, Andrew Bowden, sounded the alarm about undisclosed fees in the private equity industry, saying the agency had discovered “violations of law or material weaknesses in controls over 50 percent of the time” at firms it had evaluated.
To date, however, the SEC has taken few actions to crack down on the practices, but some states are starting to step up their oversight.
In New Jersey, for instance, pension trustees announced a formal investigation of Gov. Chris Christie’s administration after evidence surfaced suggesting that the Republican administration has not been disclosing all state pension fees paid to financial firms.
In Rhode Island, the new state treasurer, Seth Magaziner, a Democrat, recently published a review of all the fees that state’s beleaguered pension fund has paid. The analysis revealed that the former financial firm of Democratic Governor Gina Raimondo is charging the state’s pension fund the highest fee rate of any firm in its asset class.
In Pennsylvania, the new Democratic governor, Tom Wolf used his first budget address to call for the state “to stop excessive fees to Wall Street managers.”
These moves are shining a spotlight on one of the most lucrative yet little-noticed Wall Street schemes. With so much money at issue – and with pensioners retirement income on the line — that scrutiny is long overdue.
By: David Sirota, Senior Writer at the International Business Times; The National Memo, April 24, 2015
“Corporate Tax Subsidies Are Out of Control”: Want Jobs Back, Axe Business Tax Subsidies
It’s no secret that state and local government employment has nosedived during the current economic crisis. According to the St. Louis Fed, total local government employment has declined from 14,481,000 when the recession began in December 2007 to 14,033,000 in March. State government employment has fallen from 5,139,000 to 5,050,000 over the same period, for a total loss of 537,000 state and local government jobs.
This starkly illustrates the opportunity cost of out-of-control use of subsidies to business at the state and local level. In my academic work, I estimated these to be $48.8 billion a year in 1996, of which $26.4 billion was for investment attraction, and almost $70 billion in 2005, of which $46.8 billion was aimed specifically at investment attraction.
Many critics of investment incentives, such as Alan Peters and Peter Fisher, argue that the money would generally be better spent on education and infrastructure, policies that benefit businesses generally as well as the entire population. My cost estimates show just how true this is.
Total business subsidies could be used to hire 1.4 million government workers at $50,000 per year in salary and benefits. Instead, what we have seen in state after state is that there have been sharp cuts to these very areas, even extending to such economic development crown jewels as the state university systems in California and North Carolina, among others.
This is doubly short-sighted: It weakens the very factors that make a state or locality attractive to investment in the first place, and the state/local economic development subsidies largely cancel each other out with little net effect on the overall location of investment in the country. From the point of view of the country as a whole, then, most of these subsidies are a waste of money. But changing the way the economic development game is played will require tremendous effort at the local, state, and federal government level.
By: Kenneth Thomas, U. S. News and World Report, April 10, 2013