Newt Against Right Wing Social Engineering

Newt Gingrich went on Meet the Press today and gave a qualified endorsement to the individual mandate, indicating that people need to take responsibility for paying for their own health care. He also rejected, in pretty stark terms, the proposal made by Rep. Paul Ryan to change Medicare to a “premium support” model.

“I don’t think right-wing social engineering is any more desirable than left-wing social engineering,” Gingrich said on NBC’s “Meet The Press.”

The former House speaker and candidate for the GOP presidential nomination called it “radical change” and “too big a jump.” Instead, he pushed for creating a system that allows people to pick other options than government-run coverage, so that they “voluntarily migrate to better outcomes, better solutions, better options.”

Newt was burned by the Clinton troops the last time he moved, as Speaker in 1995, to modify the Medicare program, suffering as Clinton launched an assault on that issue. He apparently does not wish to stick his hand in that fire again.

Newt is a deeply flawed candidate who lacks discipline, but I do believe he will bring some freewheeling debate to the Republican nominating process. We now await the arrival of Donald Trump to bring freewheeling to a new plateau!

http://www.msnbc.msn.com/id/32545640

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Mitt Swims Against Republican Tide

Mitt Romney, seeking to extricate himself from conservative ire over his support for Massachusetts health care reform, gave a speech in Michigan to talk about that effort and what he sees as the differences with the federal health care effort supported by President Obama. Romney is stuck, amongst many things, on the individual mandate, which has become a source of bitter opposition to conservatives. In his speech Romney defended the individual mandate, pointing to the “free ride” that the pre-mandate system was providing. But his “friends” over at the Wall Street Journal editorial page beg to differ:

In the name of personal responsibility, Mr. Romney also introduced the individual mandate, first in the nation, requiring everyone to buy coverage or else pay a penalty. Free riders, he said, transferred their own costs to others, either through higher premiums or taxes. This is the same argument the Obama Administration is now using to justify the coercion of the individual mandate in the federal courts. Because the states have police powers under the Constitution, Mr. Romney’s plan posed no legal problems. His blunder was his philosophy of government.

The people who don’t buy coverage though they can afford it aren’t really a major fiscal problem—unless the goal of the individual mandate is to force them to subsidize others. People who are priced out of coverage require subsidies—so in practice the logic of the individual mandate is that it is a government mandate too. Entitlements automatically grow and grow, and then the political class begins to make decisions that used to be left to markets and individuals.

Mitt sent a post speech letter to the Journal rebutting their claims.

One, the editorial asserts that people in Massachusetts who wouldn’t buy coverage, even though they could afford it, was not a major fiscal problem. But as a state we were spending almost $1 billion on free care for the uninsured. What we did was convert that money into premium support for those who needed help buying a policy, and require those uninsured who could afford to buy coverage to take personal responsibility for their own health care.

The Wall Street Journal editorial hits at another point that seems to bother Republicans about Romney, that he is more “management consultant” than a “principled conservative”.

Presidents lead by offering a vision for the country rooted in certain principles, not by promising a technocracy that runs on “data.” Mr. Romney’s highest principle seems to be faith in his own expertise.

Ouch! Romney at heart is a technocrat who believes that data crunching and deep analysis can solve problems, but that model has long been abandoned by the Republican Party (and in the last election cycle by Romney himself). When the “data” fail to corroborate Republican policy claims the rebuttal is that the Republicans will stand on principle, notwithstanding the data.

Romney’s tete-a-tete with the Journal editorial page did not stop with the editorial and rebuttal letter. The Journal felt compelled to write a second editorial slamming Romney for his “daredevil act.”

I understand and actually think it is commendable that Romney defend his actions as Governor (reportedly tired of being painted as a serial flip-flopper)but I am not so sure that having a major dust up with the Wall Street Journal editorial board is going to help him in the Republican nomination fight. It looks to me like Romney is still the smartest guy in the room on the Republican side, but adult management consultant types tend to be red-meat averse, not a winning trait these days for Republicans.

Romney has received plenty of media coverage, including some favorable words from the Globe:

When discussing his Massachusetts plan, and later outlining his ideas on how to bring market forces to bear on health care costs, Romney offered realistic assessments and some useful, pragmatic solutions: more group purchasing of insurance, the use of tax-free savings accounts to cover premiums, “alternative dispute resolution’’ rather than malpractice courts — all are smart proposals that could do some measurable good.

At those moments, one could see the gifted businessman at work. If Romney were free to use his incisive mind to craft pragmatic solutions to national problems, the country would benefit. He’s a talented public servant.

Romney also was piled on by Mike Huckabee, who seems to take delight in tormenting the Mittster. Governor Patrick joined in the hit parade, calling out Romney for trying to “have it both ways” on health care.

Romney has made an effort, but he is still a Republican apostate on health care. His political strategy appears to be looking towards the general election, and not the Republican primary process. That is a gutsy call, but I am not so sure it will bring him the nomination. Those thirty second health care ads linking him to “socialized medicine” are certainly on the horizon, dead ahead!

http://c.brightcove.com/services/viewer/federated_f9?isVid=1

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New Mass Taxpayers Foundation Report

The Massachusetts Taxpayers Foundation issued a new report today detailing a ten year health care cost comparision of actual spending on municipal health care vs costs that would have been incurred if municipalities had health care plan design authority. The MTF broke down the costs by community, and by Senate District. Over that period Methuen had actual health care expenditures of $76,340,069, which compares with costs that would have been incurred had the annual increases been limited to 6.4%. (Still a healthy rate of increase, and what the GIC went up during that period). If Methuen had simply gone up at that rate taxpayers would have paid $59,604,050, a savings of $16,736,019 for municipal taxpayers. That is an annual savings of $1,673,602, which represents about 33 municipal jobs. The MMA press release talks about the statewide savings lost during that period, which represents about $3 billion. Great work by Michael Widmer and the MTF. The MMA Press Release on the MTF report is below.

Report: Communities could have saved $3B with health insurance reform

May 10, 2011

A report released today by the Massachusetts Taxpayers Foundation concludes that cities and towns have sacrificed hundreds of millions of dollars and thousands of jobs in the last decade because local officials have had limited authority to manage their exploding growth in health insurance costs.

The community-by-community analysis quantifies the dramatic impact of municipal health care reform on municipal budgets and jobs.

By comparing each community’s actual health insurance spending to what it would have been if it matched the annual growth of the state’s Group Insurance Commission – which can adjust plan design outside of collective bargaining – the foundation determined that cities and towns statewide could have saved more than $3 billion had they been granted plan design authority in 2001.

The savings, according to the report, translates to approximately 6,500 municipal jobs statewide (at $50,000 per job per year).

More than 90 percent of Massachusetts cities and towns saw health insurance costs grow at much faster rates than the GIC’s average increase of 6.4 percent per year between fiscal 2001 and 2010. Every Senate district would have realized at least $10 million in savings over that period.

“With cities and towns facing another year of cuts in local aid, it is critical that municipalities be given the same powers as the state to manage their unaffordable health care costs,” said Massachusetts Taxpayers Foundation President Michael Widmer. “Without this modest reform, cities and towns across the state will suffer irreparable damage as they are forced to lay off more and more teachers, police officers, firefighters, and other local employees who provide critical public services.”

Last month, the House approved municipal health reform legislation that would give local officials the ability to make modest changes in health insurance outside of collective bargaining, bringing critical relief so municipalities can preserve jobs and services. Under the House plan, municipal employees would retain more bargaining power than state employees have.

The data contained in the Massachusetts Taxpayers Foundation’s report can be viewed by municipality and by state Senate district. Information is available for all but one of the state’s 351 municipalities – data was not available for New Ashford – and for each of the state’s 40 Senate districts.

The analysis covers the following five data points:

• Actual total spending: The total expenditures of each community on health insurance between fiscal 2001 and 2010. (This data is reported by each municipality annually to the Division of Local Services.)

• Total spending if increased by 6.4 percent annually: The amount each community would have spent if health insurance increased at the GIC’s rate of 6.4 percent annually between fiscal 2001 and 2010.

• Total potential savings: The difference between a community’s actual total spending and what it would have spent if its health insurance costs grew at 6.4 percent annually.

• Average annual savings

• Estimated jobs lost per year: The average annual savings divided by $50,000.

Posted in Municipal Finance, State News | Tagged | 4 Comments

Newt Takes the Plunge

Former Speaker Newt Gingrich announced his presidential candidacy yesterday and I have to admit that I am delighted. Newt has been the type of Republican that tends to roll all over the deck, eschewing discipline and firing from all angles, with little regard for prior statements or positions. We had Newt condemning President Obama for lack of action in Libya, and then condemning him for taking action in Libya. We had Newt condemning Speaker Wright for ethical lapses, and then being reprimanded himself (as Speaker)by the full House for ethical violations. His hypocrisy on the Clinton impeachment was stunning, even by Washington standards.

Newt has sold himself as an “ideas man”, making a living by talking a lot on a host of different subjects, and pushing out policy ideas that never seem to go anywhere. He has toyed with the idea of bi-partisanship, appearing with then Speaker Pelosi in a global warming ad that he has struggled to explain. You can always count on Newt to gather some headlines and to throw out things that will stir outrage and controversy. How about the doozy about Obama having a “Kenyan, anti-colonial” worldview? Newt has been somewhat eclipsed by Donald Trump, but give him time. He will step up to the plate soon enough (again).

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Mayor Setti Warren to Visit Methuen

Newly announced Senate candidate Setti Warren will be visiting Methuen on Tuesday May 17th at 8:00 a.m. at the Irish Cottage. All are welcome to attend. This is not a fundraiser but a chance to hear Mayor Warren talk about his candidacy and the critical issues facing the country. Mayor Warren will take questions as well. Hope that you can make the event!

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Setti Warren for U.S. Senate

Newton Mayor Setti Warren announced his candidacy for U.S. Senate today, releasing a video giving voters some background on him, as well as what he see as differences in philosophy between him and Senator Scott Brown. Mayor Warren has compiled an impressive resume, including a military stint in Iraq as an intelligence officer. Mayor Warren has been to Methuen to learn firsthand what the impacts would be to our City from cuts to the CDBG program, and has been a national leader on this issue through his prominent position within the U.S. Conference of Mayors. This will be an interesting campaign, and Mayor Warren will bring a strong and respected voice to the Democratic primary. Setti Warren is a candidate that starts with low statewide name recognition and the need to raise some serious money quickly, but I think he is a candidate to watch.

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The No Solutions Agenda

The House budget section dealing with municipal health care has drawn some serious flak from different quarters, with plenty of media and blog coverage The hand wringing centers around comparisons to Governor Walker’s legislation in Wisconsin, with cries of labor bashing in the air.

One constant that I have noticed in the criticism is the persistent failure of the critics to propose solutions, or to delve too deeply into the policy issues involved. Better to deal in generalities, and use sloganeering as a substitute when the fact sets do not support your argument.

So what are the arguments against the Deleo-Dempsey House bill?

1) It is wrong to modify collective bargaining rights, even when a policy goal of great importance will be achieved. The critics generally go on to give a wonderful historical perspective on the long history of collective bargaining in the United States. Quite frankly it is their strongest and best argument, but it stills falls woefully short. Usually the fact that the modification of collective bargaining rights brings municipal workers to where state employees are with regards to health care bargaining rights is not mentioned. And critics NEVER want to talk about the underlying economics.

2) The sanctity of the contract issue. Both management and labor periodically petition the Legislature for changes in the rules governing collective bargaining. Labor is currently petitioning the Legislature to change, outside of collective bargaining with management, their rights with regards to extending expired contracts beyond the statutorily allowed three years via so called evergreen clauses. Such a petition would modify management’s existing contractual rights under statute, and would be done outside of collective bargaining. The Legislature, as part of Transportation Reform, unilaterally modified the contracts of MBTA employees with regards to health care, and ending the 23 and out provision. Where were the critics on that one? Aside from the MBTA employees I did not hear the criticism that is being made today, although the contractual issues are identical.

The critics generally admit that the House proposal will save big money for taxpayers, but say that those savings should not be achieved outside of collective bargaining. What they do not seem to want to talk about are the following issues.

1) Collective Bargaining has been in place and Unions have generally refused to make modifications through that process to adjust plans that are totally out of whack with economic realities. Yes, there are exceptions (Methuen being one of them) but by and large unions have lost this political fight in the House because of their own reluctance to modify health care provisions in bargaining agreements that are not sustainable in the current economy. The provisions of 150E, the State Law governing collective bargaining, makes it almost impossible to modify a benefit once it exists. Want to make changes through collective bargaining? Modify 150E to give management some additional rights to make changes AFTER the expiration of existing contracts. The Collective Bargaining deck is rigged currently to favor employees over management, and some changes that balance that out a bit would make the bargaining process more palatable.

2) Critics almost always avoid talking about the consequences for union employees that sticking to the status quo brings. The layoffs and decimation of local services to citizens are just shrugged off or not spoken about. Solutions offered? Almost never. The union amendment to the Dempsey budget proposal did not offer any real solutions. Why do such amendments fail to offer the financing necessary to fund the status quo? Why not simply fund the escalating costs of these benefits through the State budget if change to the benefit packages through legislation is anathema? Instead cuts to local aid are offered.

3) The legislation establishes a health care floor underneath which municipalities cannot go in municipal health care. That standard is the State GIC, which insures thousands of state employees. It is quality health care at prices that are appreciating at about half the rate of municipal plans. So when you see the misdirection offered that some regional plans are better than the GIC, or that the GIC should not be forced on employees simply remind those critics that the Legislation allows for local plans to stay in place, but that costs cannot exceed the GIC benchmarks.

Don’t be fooled by the arguments that try to shift our attention away from the important issues involved. The Dempsey legislation provides for first rate health care for municipal employees while allowing for cost reductions to taxpayers that will save union jobs and preserve local services to our citizens. Yes we should ALL be looking for ways to stop the unsustainable rise in overall health care costs, but until that day everyone must share in the sacrifices that we need to make to preserve government services and union jobs.

Posted in Methuen, Municipal Finance, State News | Tagged | 1 Comment

Buffoonery Lampooned

President Obama did a great job having a little fun at “the Donald’s” expense at the Correspondent’s dinner. Trump was a bit stone faced as his continuing buffoonery was lampooned by the President and Seth Meyers. Great job by both.

http://specials.washingtonpost.com/mv/embed/?title=Obama's%20White%20House%20Correspondents'%20Dinner%20speech&stillURL=http%3A%2F%2Fwww.washingtonpost.com%2Frf%2Fimage_480x270%2F2010-2019%2FWashingtonPost%2F2011%2F05%2F01%2FNational-Politics%2FVideos%2F04302011-19v%2F04302011-19v.jpg&flvURL=%2Fmedia%2F2011%2F04%2F30%2F04302011-19v.m4v&width=480&height=270&autoStart=1&clickThru=

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Justice Served

The death of Osama Bin Laden in a daring and courageous military operation presents the American people a unifying victory over an enemy who was the face of the terrorists who killed so many Americans on September 11th, 2001. With all of our difficulty in the political arena this operation shows the world, and the American people, that the United States can still do great things when we set our minds to it. President Obama and the military, as well as our intelligence community, deserve great praise for their hard work and determination to bring Osama Bin Laden to justice. It is a great day for America, and we should celebrate our success while realizing that we will be involved in this fight for some time to come.

The statement from President George W. Bush:

Earlier this evening, President Obama called to inform me that American forces killed Osama bin Laden, the leader of the al Qaeda network that attacked America on September 11, 2001. I congratulated him and the men and women of our military and intelligence communities who devoted their lives to this mission. They have our everlasting gratitude. This momentous achievement marks a victory for America, for people who seek peace around the world, and for all those who lost loved ones on September 11, 2001. The fight against terror goes on, but tonight America has sent an unmistakable message: No matter how long it takes, justice will be done.

The statement of President Bill Clinton:

“This is a profoundly important moment not just for the families of those who lost their lives on 9/11 and in al-Qaida’s other attacks but for people all over the world who want to build a common future of peace, freedom, and cooperation for our children.

I congratulate the President, the National Security team and the members of our armed forces on bringing Osama bin Laden to justice after more than a decade of murderous al-Qaida attacks.”

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Tax Expenditures for Oil Companies

We often hear from Republicans that federal tax subsidies for so called “green power” should be eliminated. A multitude of reasons are given for such positions, including the often heard “the government should not be distorting the market in favor of one form of energy.” I don’t agree, but fair enough. But when you bring this viewpoint to the tax breaks enjoyed by big oil all of a sudden the conversation changes, lots of stammering and foot shuffling ensues, and you end up with someone saying something like “the oil companies are gonna pay their fair share of taxes.” I guess that is what happened to Speaker John Boehner, who appeared to be in favor of getting rid of some of the tax breaks enjoyed by big oil, until he shifted gears and was against it. (That was the foot shuffling part).

President Obama, with gas prices surging, used his weekly address to talk about getting rid of these expensive “tax expenditures” while we are talking about huge cuts to Medicare to balance the budget. They may actually have served a useful purpose at some point, but with big oil recording record profits lets just do away them and make the types of choices that are necessary in today’s budget climate. Shared sacrifice does not just mean cuts for the poor. It means everybody.

Rep. Paul Ryan apparently agrees, although it appeared that Speaker Boehner agreed as well. Interesting exercise to see who will take positions at variance with their own orthodoxy in order to make progress on the deficit. Looking at the political landscape today you would have to say that progress on that front is a long way off.

http://c.brightcove.com/services/viewer/federated_f9?isVid=1

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