Archive for January, 2009

Good organizational skills

by Daniel Massey

NYC Central Labor Council head will work to protect jobs, bring federal stimulus to city.

Jack Ahern got his first union card while still in high school, mopping floors in New York City public schools.

Earlier this month, he took charge of 1.4 million card-carrying workers, becoming president of the New York City Central Labor Council.

Mr. Ahern grew up in Flatbush, Brooklyn, in an Irish-American family of carpenters and firefighters—one where dinnertime conversation centered on the union.

“It never seemed to me to be a choice that I would be anything but a union member,” he says.

Mr. Ahern dropped out of Brooklyn College in 1973 to become an apprentice with the International Union of Operating Engineers Local 30. As a union member, he worked at Starrett City and Madison Square Garden, but his real education took place at a recycling plant in Hempstead, L.I., where he helped workers organize to win their first union contract.

“Coming from a union job, I could see the difference in working conditions and the way people were treated,” he says.

Over two decades, he worked his way up through Local 30, winning election as business manager and financial secretary, the union’s top position, in 1996.

He has successfully negotiated hundreds of contracts for the 4,000-member Queens-based local, including one for 76 workers at the Plum Island Animal Disease Center off Long Island following a two-year strike earlier this decade. Mr. Ahern got Sen. Hillary Clinton and others to intervene, helping the workers win a new deal.

In 2006, Mr. Ahern became vice president of the CLC, helping the organization regain its footing after the Brian McLaughlin racketeering scandal. He was instrumental in securing the group’s deal with the city for union jobs and good wages at Willets Point. And he cemented his reputation as an even-keeled consensus builder when he brought Buildings Department, labor and elected officials together last year following several high-profile construction accidents.

“He knows people sometimes start from different points or have different perspectives,” says City Council Speaker Christine Quinn, who was involved in the safety discussions. “Instead of saying, ‘Forget about it,’ he says, ‘How can we execute it?’ ”

But now Mr. Ahern faces perhaps his toughest challenge: taking control of the umbrella group for the city’s 400 unions during an unprecedented financial crisis. He replaces Gary La Barbera, who left to head the powerful state Building and Construction Trades Council.

“The economy is the biggest issue in every union hall,” Mr. Ahern says.

Atop the union leader’s agenda is making sure the city gets a fair share of the federal economic stimulus. He’s also working on the city’s congressional delegation, encouraging them to make passage of the Employee Free Choice Act—which would help workers organize—a priority. Shielding New Yorkers from layoffs and working with the city on economic development deals like the one for Willets Point are also part of his plan.

“Whenever there’s an issue, he gets everybody in the room and makes sure all voices are heard,” said James Callahan, president of IUOE Local 15. “You have so many diverse opinions and personalities, and he’s the guy that can get them all together.”

Inaugural Address by President Barack Obama

Click here for a PDF copy of the Inaugural Address by the 44th President of the United States: Address.

Watch the high-resolution video of the Inaugural by clicking here: Inaugural

Jose “Chequi” Torres: Light Heavyweight Champ dead at 72.

(L-R: Jose Torres; Lou Gordon, Jim Simpson, Bruce E. Ventimiglia, Jose Torres, Sigourney Weaver)

A note from Lou Gordon, BALCONY director:

Jose Torres, the former light heavyweight champ, passed away yesterday at his home in Puerto Rico. Jose was a friend of BALCONY and a personal friend. He was an inspiring and humble man who volunteered to help us. When BALCONY in 2006 sought to create a PSA to inform those who volunteered and worked on clean up following 9/11, “Chegui” was there for us. Watch the PSA. Following are two poignant articles by journalists Mike Lupica and Bill Gallo of the New York Daily News. We will all miss Jose Torres … he will always be “The Champ”.

Boxing’s renaissance man Jose Torres commanded ring & respect

by Mike Lupica

Jose Torres was so much more than just a prizefighter, even if that is how the world first knew him. He became the first Latino columnist in town, at least in an English-language paper, when he was put to work at the old New York Post.

Read the full article: Torres

A fine fighter and fellow, Jose Torres won a title and lots of friends

by Bill Gallo

Jose Torres, better known by his friends as “Chegui,” died of a heart attack on Monday. He was 72. The generous and fighting heart of this popular man gave out at his home with his wife of 48 years, Ramonita, by his side.

Read the full article: Torres

Impact of Paterson’s Health Care Plan May Be Limited

by Cara Buckley

It is one of the biggest black holes in the nation’s health care system: vast numbers of young adults between the ages of 19 and 29 with no health insurance.

To plug the gap, Gov. David A. Paterson is preparing a plan that will allow many more young adults to be claimed as dependents on their parents’ health insurance plans, a move he described as a significant step toward achieving universal health care in New York.

The plan was praised by some health care experts as a major step forward, but early evidence from the roughly two dozen other states that have adopted similar programs suggests that their effectiveness in shrinking the ranks of the uninsured has been modest at best.

New York’s road to recovery runs right through its schools

By Nancy Cantor

In his State of the State address, Gov. David Paterson declared, “The road to economic development runs right through our schools.”

Truer words were never spoken. Only knowledge can drive the global economy out of its tumult. We must ensure that every child is prepared by receiving an affordable college education.

Knowing the economic downturn has stretched the boundaries of financial need, the governor seeks to strengthen the state’s partnership with the public and private higher education community through the new Higher Education Loan Program. This initiative will provide access to the critical funding students and families need.

He also rightfully recognizes that our future talent base is increasingly located in our urban centers. Yet these are the students isolated from educational opportunity — stranded in vastly under-resourced schools, without the opportunities that place their middle-class suburban peers on a successful path to college.

As the governor noted, we need to address this challenge, and New York’s higher education community is joining in public-private partnerships to create innovative educational models for the long term.

Collaboration and innovation are the answer, and the governor highlights critical demonstrations of this, whether in CUNY’s Early College High School programs, or the very ambitious Say Yes to Education and Economic Development initiative, which will alter the life course of students and the economic prospects of an entire city — starting in Syracuse.

The Say Yes Foundation has a proven track record –from Philadelphia to Harlem, Hartford to Cambridge –of achieving exactly the results we need in our urban schools. The Syracuse initiative, the first-ever district-wide implementation, will significantly increase the college-attendance rate for an entire urban school district by breaking down the social, emotional, health and financial barriers that keep students from succeeding.

Through the Higher Education Compact, Say Yes will eliminate the most significant financial obstacle: the cost of a high-quality college education. Say Yes and Syracuse University have assembled an unprecedented network of two dozen private institutions that have promised free tuition to qualified, graduating students from Syracuse schools.

We applaud the governor’s support for SUNY and CUNY joining the compact. This will offer students the critical opportunity to attend one of New York’s outstanding public institutions. Importantly, pending legislation authorizes Say Yes to expand to five other Upstate cities.

Syracuse Say Yes is the proof of concept; the road to prosperity must run through all of New York’s under-resourced districts if we are to capitalize on our talent for the future.

The governor rightly pointed out New York faces its greatest fiscal challenge in a century and to restore our competitiveness, we must invest in our children. Say Yes provides a compelling model for urban school district reform, and a road map for stimulating urban economic prosperity. It is a powerful tool to rejuvenate our urban centers by producing dramatically stronger schools, stronger linkages to colleges and universities, a stronger workforce and new economic growth.

The governor said New Yorkers have the greatest human capital anywhere. Programs like Say Yes and the Higher Education Loan Program will help develop that precious asset and rebuild New York’s road to economic prosperity.

Nancy Cantor is chancellor and president of Syracuse University.

Balancing New York State’s 2009-2010 Budget in An Economically Sensible Manner Fiscal Policy Institute

FPI’s annual briefing book presents the “big picture” on the Governor’s proposed 2009-2010 budget, explaining why spending growth is what it is and carefully examines New York’s economic and income trends.

View the entire Briefing Book (PDF file): Briefing Book

The Obama Stimulus: An $825 Billion First Step

by James Parrott

The version of the American Recovery and Reinvestment Plan unveiled on Jan. 15 by House Democrats is breathtaking in its scope and cost. Intended to retain and create 3.7 million jobs over the next two years, the $825 billion package of federal government investments includes dozens of spending measures ranging from $200 billion in fiscal relief to help state and local governments, to $6 billion to extend broadband to rural areas, a 21st century version of Depression-era rural electrification. Two thirds of the total value consists of spending, with one third for tax cuts.

Negotiated with President Barack Obama’s transition team, the plan – a.k.a. Stimulus II or ARRP – is an important first step to halt the downward economic spiral triggered by last fall’s financial meltdown. As large as it is, though-5 percent of gross domestic product-it is not sufficient to create a sustained recovery. Two other steps are essential. First, more dramatic action is needed to put the brakes on the collapsing housing market. Second, making a recovery sustainable will require a set of policies to lift wages and bolster the middle class. Without these two complementary steps, ARRP might provide temporary relief for our economic illness but not a cure.

Helping the States

Whatever its limitations as a long-term solution, ARRP will provide much-welcome short-term budget relief for New York and other states (45 states face budget gaps). The plan will increase the federal share of Medicaid spending and provide billions in education aid to states and school districts. Both of these measures will help to moderate the severe budget cuts proposed by Gov. David Paterson. New York State should receive upward of $10 billion – and possibly as much as $15 billion – over two years — funds that will help close the state’s budget gaps. Such federal relief will help states maintain their spending and prevent spending cuts or tax increases, both of which would have intensified the downward economic spiral.

Help for a Teetering Economy

A year ago, Congress and the Bush administration agreed to a $150 billion stimulus package that consisted largely of tax rebates. Most economists now agree that last year’s stimulus was not up to the task because tax cuts provide less “economic bang for the buck” than most other forms of stimulus. Economic forecaster Mark Zandi, a former advisor to presidential candidate John McCain, estimates that every dollar in tax cuts generates only $1.01 in economic activity, much lower than the spending impact of increasing unemployment compensation ($1.63), state fiscal relief ($1.38) or spending on infrastructure ($1.59). Also, since the tax rebate checks were sent out in May and June, when gasoline prices were skyrocketing, many recipients spent the money to cover their gas costs.

The magnitude of a proposed second stimulus has mounted steadily since last September’s financial market meltdown and the ensuing sharp collapse in the consumer spending that accounts for 70 percent of demand in the economy. The spending collapse was compounded by a credit market freeze as Wall Street firms and banks confronted a mountain of bad debts created by high-risk lending and unregulated gambling. The crash of the housing and stock markets destroyed literally trillions in home equity and retirement savings held by millions of middle class households. Along with steadily mounting job losses, this caused households to sharply reduce spending. The collapse of consumer spending is thought to have pulled GDP down by as much as 5 percent during the fourth quarter of 2008.

It is no exaggeration to say that this is the worst economy since the Great Depression. The 2.6 million jobs lost in 2008 were more than in any year since 1945. Overall unemployment could be 9 percent by the end of the year and 11 percent in 2010 in the absence of the recovery plan, according to economist Zandi. Already, unemployment among adult black men is 13.4 percent. Housing prices have fallen 25 percent on average. There were 2.25 million home mortgage foreclosures last year, and one out of every six homeowners owes more on their mortgage than their house is worth.

What Stimulus II Would Do

The proposed American Recovery and Reinvestment Plan is a 21st century version of a government-led recovery and investment program, combining some of the best elements of the Depression-era Works Progress Administration, the Eisenhower era commitment to build the Interstate Highway System, the Apollo Project, and the Great Society. The plan includes spending that will not only provide some short-term stimulus but will increase the long-term productive capacity or efficiency of the economy.

One of the biggest components is $52 billion for various “green jobs” programs from weatherizing public buildings (see related story) and homes to reduce energy demand, to developing a “smart” electric power grid that is both more reliable and better able to transmit clean, renewable energy.

The package would also create jobs by spending $67 billion for infrastructure. Because of the urgent need to boost jobs as quickly as possible, it emphasizes “shovel ready” projects, including mass transit systems, highways, bridges, airports, national parks, water and sewer systems, flood control, and environmental cleanup. The Metropolitan Transit Authority will be able to use some of these monies to fund some of the construction projects and equipment needs in its capital budget. Governor David Paterson submitted an extensive list of 1,922 “ready-to-go” projects to the Obama transition team.

This second stimulus package provides $12 billion to support forward-looking research and development investments that could be particularly important in the future, including biomedical, climate change and alternative energy research, and funds to modernize and expand government and university research facilities.

The ARRP includes $5 billion for job training and employment services, including $1.2 billion to create 1 million summer jobs for youth. It offers additional — and substantial funds — for worker training and education as part of the education, healthcare, and science and technology initiatives. There is $5 billion for early childhood development, including additional slots in subsidized childcare and Head Start.

A particularly critical part of ARRP is aid to the unemployed. The program includes $36 billion to extend and modestly increase unemployment benefits, and incentives to encourage states to expand unemployment insurance coverage for low-wage and part-time workers. An additional $30 billion would subsidize health coverage for unemployed workers and provide 100 percent federal funding (i.e., dropping the requirement for a state match) for two years for Medicaid-eligible workers who become unemployed.

Nearly $30 billion would go to increase food stamps, low-income heating assistance, assistance provided under federal Supplemental Security Income, aid for the homeless and Temporary Assistance for Needy Families block grants. A total of more than $11 billion would fund repair and modernization of public housing, help communities build and rehabilitate low-income housing using green technologies, and enable communities to purchase and rehabilitate foreclosed and vacant properties.

Stimulus II and New York

New York‘s unemployed workers, their families, the state government and local governments and the broader New York economy will benefit significantly from this much-needed and unprecedented economic recovery plan. New York, though, must make sure that the billions of federal dollars it will receive for infrastructure, energy development and other projects lead to the creation of good jobs that provide decent wages, benefits and career development opportunities. This plan also presents New York with a golden opportunity to develop a strategic plan to revitalize the upstate economy and help the downstate economy adjust to a permanently smaller role for the finance sector.

Stopping the Housing Collapse

The Obama team has suggested ways to use some of the remaining funds from the $700 billion Emergency Economic Stabilization Act, the so-called “bailout” that was passed in early October, to address the housing crisis. In a Jan. 15 to Congress, Larry Summers, who is to be director of the National Economic Council, indicated the new administration would commit $50 billion to $100 billion to “reduce the number of preventable foreclosures,” reform bankruptcy laws, revamp the modest Hope for Homeowners program, and require banks receiving bailout assistance to “implement mortgage foreclosure mitigation” programs.

These measures can only help but may well not be sufficient to ensure that banks renegotiate mortgages on the scale necessary to halt the slide in housing prices. Until that happens, housing prices may fall further and the value of the mortgages and mortgage-backed assets that dominate the balance sheets of the major financial institutions will remain questionable. Investor’s suspicions about the “toxicity” of these assets have paralyzed credit markets for most of the past year.

Originally, the $700 billion financial “bailout” was supposed to take those toxic assets off the hands of the banks, under the Trouble Asset Recovery Program or TARP. Some of the remaining $350 billion could be used for this. Now, though, the incoming Obama administration appears to be considering whether to provide another round of massive funding ($1 trillion or more) to salvage bank portfolios.

Given the magnitude and character of the federal interventions so far, the banking system already has been effectively nationalized and is “private” in name only. While the government has allowed bank executives to remain in control, at some point, Washington leaders will have to decide whether taxpayers might be better served by completing the nationalization of the banking system rather than trying to revive banks that have impaled themselves on massive amounts of toxic assets. To date, the overall magnitude of taxpayer resources pledged to financial market rescue can only be described as “galactic” — $7 trillion to $8 trillion in capital infusions, low-interest loans and federal guarantees.

Boosting the Middle Class

Along with the dual collapse of the housing and financial markets, the middle class squeeze played a major role the current economic precariousness. Wages have not kept pace with productivity or with the health and retirement security costs employers have shifted to workers. As a result, the average working family has been forced to take on substantial home equity or credit card debt in recent years to try to maintain living standards. The absence of a firm foundation for middle class prosperity meant that economic growth from 2003 to 2007 was possible only because of the economy’s bubble tendency and the excessive reliance on borrowing at every level.

Boosting the middle class through higher wages and increased economic security involves such things as passage of the Employee Free Choice Act that will remove barriers imposed by the current labor law system that frustrate workers’ efforts to join unions.

The American Recovery and Reinvestment Program is an essential step for the U.S. to take in pulling the economy out of this historic slump. As the House leadership’s version of ARRP is negotiated in the House and with the Senate, it is critical that the provisions aiding states and low-income populations remain the centerpiece and that any business tax cuts be limited. To achieve a balanced and long-lasting prosperity, however, other actions will be needed to resolve the housing crisis and to rebuild the middle class. Without such policies, the recovery and reinvestment plan might create a short-term rebound but one that will fizzle out after two or three years.

The new administration gives every indication that it is aware of the need for these complementary actions. Time will tell whether it can achieve initial success on the economic recovery front and build the political support to turn recovery into sustained prosperity.

James Parrott is deputy director and chief economist of the Fiscal Policy Institute. He has been studying and writing about the New York economy since he landed in New York City a quarter century ago.

NYSUT Hails Settlement Benefitting Working New Yorkers

ALBANY, N.Y. January 15, 2009 – New York State United Teachers today hailed a $350 million settlement in a lawsuit filed with CSEA and other unions against United Healthcare, calling it an important victory for working New Yorkers in the Empire Plan who were unknowingly overcharged when the health insurance giant schemed to manipulate reimbursement rates downward.

UnitedHealth Group Reaches Agreement to Settle Class Action Lawsuits Related to Out-of-Network Reimbursement

MINNEAPOLIS (January 15, 2009) – UnitedHealth Group (NYSE: UNH) announced today that it has reached an agreement to settle class action litigation related to reimbursement for out-of-network medical services. The agreement resolves class action litigation filed on behalf of the American Medical Association (AMA), health plan members, health care providers and state medical societies.

A stimulus for schools?

Schumer unveils plan to allocate federal bailout cash to local districts

By Rick Karlin

ALBANY — In the past few months, the federal government has engineered massive bailouts of distressed economic institutions from Wall Street to the Big Three automakers.

But for the upcoming stimulus package, politicians want to shore up local governments — from counties beset by Medicaid costs to local school districts forced to deal with cuts to state funding.