Obama proposes two-year pay freeze for federal workers

By Lisa Rein and Perry Bacon Jr.
Washington Post Staff Writers
Tuesday, November 30, 2010; 12:46 AM

President Obama on Monday announced a two-year pay freeze for most of the 1.9 million civilians who work for the federal government, as he tried to address concerns over a mushrooming deficit and placate Republicans who have targeted the workforce for big cuts.

“Getting this deficit under control is going to require some broad sacrifices, and that sacrifice must be shared by the employees of the federal government,” Obama said in a White House speech. He called federal workers “patriots who love their country” and said the cut is not just “a line item on a federal ledger.” But he said he is asking federal workers to sacrifice for the country as “they’ve always done.”

The president’s proposal comes just before a fiscal commission he appointed is scheduled to issue a final report Wednesday on how to staunch deficit spending. The panel’s leadership has recommended a three-year pay freeze for most federal workers.

The freeze, which must be approved by Congress, would be the first two-year halt to federal raises in modern history. With health insurance premiums for civil servants set to jump 7.2 percent on average next year and a federal transit subsidy to be cut by half Dec. 31, the plan will amount to a pay cut for many workers.

But the freeze is a largely symbolic move to address a federal deficit that will top $1 trillion next year. It is estimated to save just $2 billion over the next year.

“You could always count on your increase,” said Danielle Swain of Manassas, an analyst for the foreign export service of the Agriculture Department who is nervous about the cut to her commuter-rail subsidy. “If you don’t get a bonus, this is all you get. They’re picking on the government because they assume we sit around and don’t do anything. Well, it’s not true.”

The last freeze to federal pay came in 1986, and it was for one year. President Bill Clinton proposed skipping the 1994 raise but was rebuffed by Congress.

Obama’s proposal would apply to nearly all federal civilian workers, including 600,000 in the Washington area, for 2011 and 2012. Defense Department civilians would be included but uniformed military personnel exempted. The government would save $5 billion over the two years, White House officials said; the savings would grow to $28 billion over five years because future salary increases would be set from a lower base, said Jeffrey Zients, deputy budget director and the government’s chief performance officer.

Civil servants still will be eligible for bonuses and promotions to higher pay grades. However, John Berry, the government’s personnel chief, said the White House has told federal managers to ensure that bonuses are “truly performance based” amid what he expects to be a declining pool to reward good workers.

Federal employees were scheduled to receive a 1.4 percent across-the-board raise in 2011.

Rochelle Diamond, a program analyst for the Agriculture Department, said that raise would have been insignificant anyway. But on principle, she’s mad that Republicans have, in her view, pushed the president to take aim at federal workers. “I look at those Republicans who are forcing his hand, and I think, ‘We should be looking at what they make and start there,’ ” Diamond said.

The move comes amid a festering debate over pay and benefits of federal workers that became an issue on the campaign trail this fall. Congressional Republicans and other critics have said the workforce is being shielded from an economic downturn that has left millions of Americans at private companies facing layoffs and pay cuts.

For months, administration officials and critics have battled over whether federal workers, on average, make more than their private sector counterparts. Government officials defend public-sector pay and say that the way critics have calculated averages is misleading.

Obama froze senior White House officials’ pay for a second year and froze all political appointee pay in 2010. Congress voted itself a pay freeze for members in 2011.

Zients said the president announced the salary freeze onMonday ahead of a Tuesday deadline for submitting pay plans to Congress. Obama hopes to avoid a potential fight with the GOP next year on federal pay by promoting the move as a sign of his willingness to work with Republicans, who will take over the House and gain more power in the Senate in January.

The GOP and the leaders of the bipartisan deficit panel have pledged deeper cuts, including furloughs, reductions to bonuses and the size of the workforce, and scaling back retirement pay and the use of contractors.

“It will be hollow if we see a net increase in the federal payroll,” Rep. Jason Chaffetz (R-Utah) said of the pay freeze, noting that the government’s plans to continue hiring and to hand out bonuses “are not going to reduce the costs to the taxpayers.” But Chaffetz, who is slated to head the House subcommittee that oversees federal pay, called the plan “a good start.”

White House officials frame the initiative as part of a broader series of moves to reduce the budget deficit. Officials said other strategies, including some that might affect federal workers, would be rolled out when the administration releases its budget proposal next year. “We will evaluate other proposals beyond federal workers, all the different various proposals from the fiscal commission and others, as part of our 2012 budget process and be rolling that out across the next couple of months,” Zients said. He called the freeze “the first of many difficult steps ahead.”

Federal unions and employee groups criticized Obama, a serious break between organized labor and an administration that has relied heavily its support. Unions cited data from the Bureau of Labor Statistics that suggest the pay gap between federal and private salaries grew last year in favor of the private sector. John Gage, president of the American Federation of Government Employees, called the plan a “superficial, panicked reaction to the deficit commission report.”

With rare exceptions, executive branch employees can’t bargain over pay. The freeze would not affect Postal Service workers, whose salary is set by contract.

White House officials played down any concern that the proposal would reduce agencies’ ability to recruit new talent. “I’m confident . . . that this freeze will not get in the way of our efforts to bring in the best and brightest,” Zients said.

Some liberal groups said the freeze won’t reduce the deficit or gain Obama the GOP’s cooperation. “This is another example of the administration’s tendency to bargain with itself rather than Republicans, and in the process reinforces . . . the myth that federal workers are overpaid,” said Lawrence Mishel, president of the Economic Policy Institute, a liberal think tank, said.

According to a Washington Post poll last month, 52 percent of Americans say they think federal workers are overpaid, a view held by nearly six in 10 Republicans and about seven in 10 conservatives. Far fewer Democrats, independents, liberals and moderates agreed. Among Americans, one in 10 of those polled say federal workers should be better compensated. Still, of those who have interacted with a federal agency employee, three in four report that the experience was positive.

TELL CONGRESS: Don’t Cut Social Security & Medicare Mass National Call-In Day: Tuesday, November 30th

Leaders of the National Commission on Fiscal Responsibility and Reform (the “Deficit Reduction Commission”) in Washington are proposing deep cuts to Social Security and Medicare, even though neither program had anything to do with causing the current budget deficit. Congress can reject them.

The Deficit Reduction Commission leaders propose to:

· Raise the Social Security retirement age to 69

· Cut lifetime benefits up to 35% for middle-income workers

· Cut Social Security’s COLA (which does not pay enough as it is now)

Social Security and Medicare belong to all of us.

You contribute to them with every paycheck.

Don’t let Congress cut them!



On Tues. Nov. 30th, call Senators Schumer and Gillibrand at:
866-529-7630

Tell them: “No to Social Security and Medicare benefit cuts.”
“Hands off Social Security and Medicare!”

Social Security: The Urgent Need for Delay

by Dean Baker
Center for Economic and Policy Research

November 2010

Note: All references to tables and graphs can be found in the original document:
http://www.cepr.net/documents/publications/ss-2010-11-1.pdf

Introduction

Many policymakers and analysts are arguing that there is an urgent need to make changes to Social Security. They point out that the projections from the Congressional Budget Office and the Social Security Trustees show the program to be out of balance in the long-term, therefore we would be best advised to make changes as soon as possible. It is argued that this will both make the necessary changes easier and also will provide confidence to financial markets that the country can deal with major problems.

While it is understandable that those seeking to cut Social Security benefits and/or privatize the program would push for quick action, it is difficult to understand why supporters of the existing Social Security system would take this view. There is enormous public confusion (much of it deliberately cultivated) about the extent of the program’s projected shortfall. This makes it far more likely that any changes to the program in the current environment will involve more cuts than would take place among a better-informed electorate.

This paper argues that supporters of the existing Social Security system should try to ensure that no major changes to the core program are implemented in the immediate future. It points out that:

1) There is good reason for believing that the public will be better informed about the financial state of Social Security in the future, in part because of the weakening of some of the main sources of misinformation;

2) Many more people will be directly dependent on Social Security in the near future. These people and their families will likely be strong defenders of the program;

3) The group of near retirees, who may be the victims of early action, will desperately need their Social Security since they have seen much of their wealth eliminated with the collapse of the housing bubble; and

4) The concern over “maintaining the confidence of financial markets” is an empty claim that can be used to justify almost any policy.

Keeping Fear Alive: The Effort to Undermine Confidence in Social Security

Polls consistently show that a large majority of working age people does not expect to be able to collect Social Security benefits.1 They have been led to believe that the program is hugely out of balance and will soon run out of money. Of course this is clearly not the case. The projections that are derived from the Social Security Trustees’ intermediate assumptions show that the program could pay all scheduled benefits for the next 27 years even if nothing is done. After 2037, the projections show that Social Security would still be able pay a benefit that is larger in real terms than what current retirees receive, even though it would be just 75 percent of the scheduled benefit. The payable benefit would continue to rise through time, so that even if
nothing is ever done to change the program, a retiree in 2100 could anticipate a benefit that is more than twice as high as what current retirees receive today.

Presumably Congress will not allow the payable benefit to fall below the scheduled benefit. If a shortfall really was imminent, it is likely that Congress would make the necessary adjustments to keep the program paying full benefits. This is exactly what happened in 1982-83, when the program literally did run out of money. Congress took steps to ensure that benefits were paid each month. It then established the Greenspan Commission whose reforms laid the basis for another 54 years of solvency. Adjustments of the size put in place in 1983 could keep Social Security fully solvent into the 22nd century even if we waited until 2030 to act.

These are the basic facts about the state of the program, yet only a small share of the public knows them. This matters hugely in terms of the willingness to accept cuts in the Social Security. People are far more likely to accept cuts in the program if they never expected to see their benefits anyhow. On the other hand, if there were widespread awareness of the fact that the program was fully funded for the near-term future and largely funded for the indefinite
future then there would likely be more objections to proposals that substantially reduce benefits.

The public’s ignorance of Social Security only matters if there is reason to believe that it will be better informed in the future. This is the case, primarily because of recent trends in the media.

Traditional news outlets are mostly owned and controlled by individuals who are deeply hostile to Social Security. The best example of such an outlet is the Washington Post, which regularly uses both its opinion and news pages to promote the view that the program is in crisis, that benefits are far too generous, and that large cuts are essential. As result of having one of the largest circulations in the country and also being located in Washington, the Post is enormously influential in public debate.

However, the Post’s circulation is falling rapidly. Figure 1 shows data on the Washington Post’s average daily circulation from 2002 through 2010 and projects it forward until 2040. Daily circulation has already fallen from close to 800,000 in 2002 to less than 600,000 in 2010. If the Post’s circulation continues its 3.7 percent annual rate of decline, then it will be under 400,000 by 2020 and less than 300,000 by 2030. It can be assumed that the paper’s
influence in national debates will experience a corresponding decline.

By contrast, many of the new media outlets that are growing have a more informed and nuanced view of the program. For example, the Huffington Post, one of the largest of the exclusively webbased news sources, has many reporters and columnists who take a more balanced view of Social Security’s finances.2 While circulation at the Washington Post has been shrinking, the number of web viewers of the Huffington Post has been growing rapidly. The number of viewers of the Huffington Post first began to regularly exceed the viewers of the Washington Post in the second hal of 2009. By the second half of 2010 the Huffington Post was drawing almost twice as many viewers as the Washington Post, as shown in Figure 2.

These two news outlets are representative of a larger trend of new media sources supplanting the traditional media outlets. While not all new media outlets can be expected to give the same treatment to Social Security as the Huffington Post, and not all traditional news outlets are as hostile as
the Washington Post, it is likely that the mix of rising new media outlets will be substantially more balanced in their treatment than the declining old media outlets. For this reason, it is likely that the public will be much more knowledgeable about the true state of Social Security in 10 or 20 years than it is today.

The Growing Dependency on Social Security

The baby boom generation is now reaching the age of eligibility for Social Security. As a result, the number of people who are receiving benefits is projected to rise rapidly over the next two decades. The strongest supporters of Social Security are the people who are dependent on the program. This is not only out of self-interest. Beneficiaries appreciate the program more than the rest of the population. They know how important it is for sustaining
their standard of living and they also know that Social Security is there for them, as opposed to the tens of millions of younger people who think that the program is about to evaporate.

Seniors consistently oppose cuts not just to their own benefits, but also to benefits for their children and grandchildren. They want future generations to be able to benefit from the program just as they have. For this reason, the greater the share of the population that is actually dependent on Social Security, the harder it will be for politicians to implement large cuts.

Figure 3 shows the percentage of the adult population that is projected to be dependent on Social Security. The percentage of beneficiaries rises from 23.5 percent in 2010, to 27.8 percent in 2020, and to 31.0 percent in 2030. By 2030, the share of the voting age population that will actually be receiving benefits from Social Security will be nearly one-third higher than it is today. Given the age skewing among actual voters (the elderly turn out in higher
percentages), the growth in the share of beneficiaries among voters may be even larger. This will mean that it will be far more difficult for politicians to support benefit cuts in 2020 or 2030 than in 2010.

Protecting the Victims of the Housing Crash from Another Attack

One of the main arguments of proponents of early action on Social Security is that eliminating the shortfall will be easier if we move quickly. This usually means that if we make the current generation of near retirees receive lower benefits, then the future tax increases and/or benefit cuts that will be required to balance the program’s funding will be less. While this is logically true, it raises the question of whether it is desirable to make near retirees
accept lower benefits.

The current cohort of near retirees (people between the ages of 50 and 65 in 2010) has been the victim of a uniquely bad period in American economic history. Most of the members of this age cohort saw little by way of wage gains during their working lifetime as a hugely disproportionate share of the
benefits of productivity growth went to those at the top of the income scale.

In addition, the limited wealth that they were able to accumulate during their working years was largely destroyed by the collapse of the housing bubble. As a result, the vast majority of these workers are approaching retirement with little other than their Social Security to support them. The median net worth (including home equity) of older baby boomers (between the ages of 55 and 64) is just $170,000.3 This would leave the median household with roughly enough money to pay off the mortgage on the median house and then be entirely dependent on Social Security for all their expenses. The median late baby boomer has roughly $80,000 in net worth including their home equity, roughly enough to pay off half the mortgage on the median house.

Figure 4 shows the median real hourly wage for 1979 and 2009. As can be seen, the median hourly wage rose by just 14.6 percent over this 30-year period even though productivity grew by more than 50 percent. By contrast, median wages rose more or less in step with the rapid productivity growth that the U.S. economy experienced over the years 1947 to 1973. By 1973, the median real wage was almost twice as high as it was at the end of World War II The Social Security trustees projections assume that there will be little increase in inequality in future years. If this is the case, then median wages will rise pretty much in step with average wages. Figures 5 show projections for the real median hourly wage over the next four decades under this assumption.

In this scenario, median wages will be more than 25 percent higher in 2030 than they are today and more than 60 percent higher in 2050. There is no guarantee that the Trustees’ projections will prove accurate on either wage growth or distribution, but if they are, then they imply that young workers just entering the labor force will see substantial improvements in living standards over their working lifetime. Such gains will far outpace the gains of their
parents’ or grandparents’ generations. This would suggest that an approach to Social Security that was concerned with generational equity would more likely turn to these younger generations for tax increases and/or benefit cuts rather than imposing a further burden on the cohort than has been the primary victim of the economic policy and mismanagement of the last three decades.4

The Con Game: Reassuring Financial Markets

One of the arguments often given for cutting Social Security benefits is that – even though we know the economy can easily bear the additional costs that Social Security will impose in coming decade – it is necessary to make cuts to the program to reassure financial markets. This is perhaps the most cynical rationale of all.

The reality is that no one knows exactly what will reassure financial markets. Furthermore, reassurance is not a yes/no proposition. The relevant question would be exactly how much reassurance would be bought with cuts of what magnitude? No one has attempted to answer this question, probably because
it would expose the absurdity of the whole effort.

Guessing what financial markets will do in response to various policies and/or events is a difficult task. There are a small number of people who do this well and are highly rewarded. None of the people who make the argument that we need to cut Social Security to reassure financial markets are prominent members of this group of knowledgeable market forecasters. (Taking a saying from a different context, this appears to be a case where those who tell don’t know, and those who know don’t tell.)

It is a common political tactic to claim that a policy that cannot be supported on other grounds must be pursued to appease financial markets.5 Even if there may be a short-term movement in financial markets that follows a particular policy change, it does not follow that this movement will be lasting. In other words, it could be the case that the stock market will jump by 10 percent if large cuts to Social Security are put in place. However, this could just be the result of the fact that market actors are expecting the market to rise in response to the cuts. The movement may not reflect their actual assessment of the economy or future corporate profits and therefore may not be enduring.

Furthermore, it is not clear that the movement in the market would even be desirable from the standpoint of the economy as a whole. Suppose that a cut to Social Security benefits led to the further inflation of a stock bubble. This would have the effect of leading to a stock-wealth-induced rise in consumption and decline in national saving. This would be undesirable from the perspective of everyone except the small group of people who hold large amounts of stock. If a bubble-inflating rise in stock prices is the predicted effect of a cut in Social Security benefits, then it would be a strong argument against cutting benefits, not an argument for cuts.

As a practical matter, anyone wishing to argue that cuts to Social Security are necessary to assuage financial markets should be expected to lay out specifically what they expect the impact of a particular set of cuts to be on markets. That way, both the validity of the claim and the expected benefits of the outcome can be assessed. In the absence of such specifics, arguments for cuts to Social Security based on their impact on financial markets do not deserve to be taken seriously.

Conclusion: Social Security Can Wait and So Should We

There is no good reason for rushing forward with changes to Social Security. The official projections show that the program will be fully solvent for nearly three decades with no changes whatsoever. The necessary changes that are projected to be needed to keep the program fully solvent in subsequent decades are not especially large compared to budgetary changes made in prior decades, such as the military build-up in the 80s or cost of the wars in the last decade.

Given the extraordinary degree of misinformation surrounding the program, the country would be well advised to wait until the public is better informed before making major policy changes. Recent trends in the media suggest that this is likely. Similarly, the growing percentage of the population that receives Social Security will also increase knowledge of and appreciation for the program. It is understandable that the proponents of large cuts and/or privatization would like to rush action in order to take advantage of the public’s ignorance, but it is difficult to see why the program’s supporters would go along.
____________________________________________________

Notes:

1 For example, a CNN poll conducted in the summer of 2010
found that 60 percent of adults under the age of 60 did not
believe that Social Security would be able to provide them
with any benefit when they retired. Seventy percent of those
under the age of 50 did not believe that Social Security
would be able to provide them a benefit when they retire.
(Results viewed at Pollingreport.com on 11-2-10, “Social
Security,” at http://www.pollingreport.com/social.htm.)

2 The author’s columns occasionally appear in the Huffington
Post.

3 These estimates are taken from Rosnick, David and Dean
Baker,.2009. “The Wealth of the Baby Boom Cohorts After the
Collapse of the Housing Bubble.” Washington, DC: Center for
Economic and Policy Research. Available at

http://www.cepr.net/documents/publications/baby-boomer-wealth-2009-02.pdf.

4 See Schmitt, John. 2009. “Inequality as Policy: The United
States Since 1979.” Washington, DC: Center for Economic and
Policy Research. Available at

http://www.cepr.net/documents/publications/inequality-policy-2009-10.pdf.

5 In the fall of 2008, when the TARP was originally voted
down by the House of Representatives, proponents of the
program seized on the plunge in the stock market that day as
evidence of the need for approval of the program. None of
these TARP advocates took the much steeper plunge in the
market that followed the approval of the TARP as a signal
that the program was a failure.

BALCONY Urges U.S. Senate to Pass the James Zadroga 9/11 Health and Compensation Act

For Immediate Release: November 18, 2010

For more information contact:
Lou Gordon,
Director, BALCONY
212-219-7777
loug@balconynewyork.com

BALCONY, the Business and Labor Coalition of New York, today, Thursday, urged the United States Senate to pass the James Zadroga 9/11 Health and Compensation Act (H.R. 847, S. 1334). The bill, sponsored by New York Representative Carolyn Maloney (D-NY), Representative Jerrold Nadler (D-NY), Representative Peter King (R-NY), and Representative Michael McMahon (D-NY), passed the House of Representatives in September. Now a Senate version of the bill, S. 1334, sponsored by Senator Kirsten Gillibrand (D-NY) and Senator Charles Schumer (D-NY), must be voted on.

BALCONY applauds the House of Representatives and in particular the New York Delegation for passing this critical legislation and now urges the Senate to follow suit by approving this long overdue measure. BALCONY has long been an advocate of 9/11 responders and others whose health was negatively affected by their proximity to Ground Zero. BALCONY will continue to advocate on behalf of individuals affected by 9/11 and support legislation that seeks to provide them with the medical and financial assistance they need and deserve.

The James Zadroga 9/11 Health Compensation Act would provide medical monitoring and treatment to World Trade Center responders and survivors (area workers, residents, volunteers, and students) who were exposed to the toxins at Ground Zero on 9/11 and in the aftermath. Additionally it would reopen the 9/11 Victim Compensation Fund (VCF) to provide compensation for economic losses and harm as an alternative to the current litigation system. Finally it would provide liability protections for the WTC contractors and the City of New York from the more than 11,000 lawsuits filed by individuals exposed to toxins.

The serious impact of 9/11 on the health of New Yorkers was both immediate and long-term. Those affected include not only first responders and emergency personnel, but also schoolchildren and residents of the entire lower Manhattan region. Over 13,000 WTC responders are sick and receiving treatment. Nearly 53,000 responders are enrolled in medical monitoring, and approximately 71,000 individuals are enrolled in the WTC Health Registry, indicating that they were exposed to the toxins and that their health could be negatively impacted.

The toxins these individuals were exposed to have resulted in serious health complications including respiratory, gastrointestinal, and mental health conditions.

The Zadroga Act’s $7.4 billion cost is fully paid-for through revenue offsets.

BALCONY urges its members to call or write their Senator and voice their support for H.R. 847, S. 1334.



BALCONY, the Business and Labor Coalition of New York, represents more than 1,000 New York businesses, labor unions, and trade associations. BALCONY seeks common ground in the public policy debate in New York to spur economic development through the adoption of business/union friendly, socially responsible common sense laws that maintain and improve the quality of life for working New Yorkers.

Posted under News from BALCONY

DiNAPOLI: WALL STREET PROFITS COULD TOP $19 BILLION IN 2010

November 16th, 2010

Wall Street rebounded quickly from record losses in 2007 and 2008 and is on pace to earn $19 billion in 2010, according to a report released today by New York State Comptroller Thomas P. DiNapoli. While the pace of job losses has slowed, the industry is still downsizing as it adjusts to new regulatory and economic conditions. DiNapoli’s report notes that while last year’s record $61.4 billion profits are not likely to be repeated anytime soon, New York’s securities industry is still likely to record its fourth best year ever.

“Wall Street is adjusting to regulatory reforms and learning how to do business in the new financial reality,” DiNapoli said. “These actions may trim profits and cash bonuses in the near term, but they are necessary in order to encourage long-term stability and profitability. As long as other international financial centers play by similar rules, Wall Street should retain its leadership position.

“New York needs Wall Street to do well, but the securities industry is still losing jobs. The state can’t rely on a full recovery of Wall Street to resolve its budget shortfall.”

DiNapoli’s report noted that the first quarter of 2010 was among the most profitable on record ($10.3 billion), but second quarter profits were more in line with pre-crisis levels, falling to $3.8 billion. Wall Street lost a record $54 billion during 2007 and 2008, but with the help of federal bailouts the industry quickly returned to profitability. In 2009, Wall Street earned $61.4 billion – nearly three times more than in 2006.

While Wall Street’s bonus pool may decline from last year’s level, DiNapoli’s report estimates that the average cash bonus may be larger because the pool will be shared among fewer workers. DiNapoli will release his report on Wall Street bonuses early next year.

The report also found that:

* While 2010 profits could be 69 percent below last year’s extraordinary record, this year’s profits could be the fourth highest in absolute dollars and the sixth best year (in at least 30 years) on an inflation-adjusted basis;
*Wages paid to securities industry employees who work in New York City declined by 28.5 percent in 2009, the largest decline in at least 30 years. The decline reflects job losses but also a sharp drop in bonuses that were paid at the beginning of the calendar year for work performed in 2008, which registered record losses. The decline in wages paid to the securities industry accounted for nearly two thirds of the wages lost in all of New York City in 2009;
*Nearly one in six jobs lost in New York City during the recession were in the securities industry. Job losses could reach 38,000 jobs if the industry contracts by 20 percent as it did during the past two downturns. Securities firms are likely to continue restructuring as they adapt to the new federal and international regulatory environment;
*The average wage in the securities industry in New York City fell by a record 20.5 percent in 2009 to $311,330 – still 4.9 times higher than the average in the rest of the private sector ($63,650);
*The Office of the State Comptroller estimated that cash bonuses paid to security industry employees located in New York City for work performed in 2009 grew by 17 percent to $20.3 billion, following a 47 percent decline in 2008;
*Wall Street’s share of city tax revenues fell from 13 percent before the financial crisis to about 7 percent in city fiscal year 2010. Wall Street’s share of state tax revenues fell from 20 percent before the financial crisis to nearly 15 percent in State fiscal year 2009-2010;
*Household wealth in the nation fell from $65.8 trillion before the recession to $48.8 trillion in the first quarter of 2009. It has since grown to $53.5 trillion in the second quarter of 2010;
*The national delinquency rate for residential mortgages exceeded 11 percent in the first half of 2010, compared with 2 percent before the recession, and;
*Consumers are paying down debt and saving more as they repair their personal finances. The national savings rate rose to about 6 percent of disposable income in the spring of 2010 – triple the rate in the summer of 2007.

Click here to read the full report, or visit the Comptroller’s Web site at www.osc.state.ny.us.

Posted under BALCONY Issues in the News, Economic Development

PEF launches statewide ad campaign to fight work force reductions

November 15th, 2010

Albany – The New York State Public Employees Federation (PEF) has launched a statewide television, print and Web advertising campaign to educate the public and legislative leaders on the devastating impact of further cuts to state services.

“PEF recognizes the seriousness of the current economic crisis, but Gov. David Paterson’s plan to lay off nearly 1,000 state employees has the potential to seriously hamper services on which New York taxpayers rely,” said PEF President Kenneth Brynien. “The ads point out the state work force has already been cut by 11,500 jobs since 2008. It’s time for the governor to ask himself which state services he is willing to tell taxpayers they must do without,” Brynien said.

The ads, which feature an empty desk, began running Monday, November 15, on broadcast and cable television statewide. Print advertisements have been placed in targeted newspapers across the state and will be supported by ads on newspaper websites including The New York Times, New York Post and NY Daily News.

The television, Web and print ads can be viewed at www.pef.org/stopthecuts

This latest ad campaign directs the public and legislative leaders to the PEF website for more information on which services will be effected. The PEF website also offers solutions on how to achieve savings without adding to the unemployment rolls.

PEF is the state’s second-largest state-employee union, representing 58,000 professional, scientific and technical employees.

Posted under News From our Members, State Budget

Bloomberg abused power with Cathie Black appointment to schools chancellor, UFT boss says

November 15th, 2010

by Meredith Kolodner

The teachers union president ripped into the mayor Sunday for naming Cathie Black schools chancellor, calling it “irresponsible” and an abuse of power.

“It’s my opinion that the mayor has abused his authority under the mayoral control law,” United Federation of Teachers President Michael Mulgrew told more than 200 parents gathered for workshops on how to better navigate the school system.

“This is not about Ms. Black,” Mulgrew said to applause. “I do not believe that anyone thought the mayor would speak to no one, hide it, keep it a secret, not consult any educational experts and then name someone with no qualifications to be the chancellor of the New York City school system.”

Mulgrew said he would not pass judgment on Black until their meeting, which is scheduled for Wednesday, but he did tell parents, “I would be appalled if a teacher was named the head of the Fire Department of New York City.”

Mayor Bloomberg has come under increasing attack for his choice of Black, a media executive with no education experience and no connection to the public school system, after Joel Klein resigned last Tuesday.

“Under the law, the mayor appoints the chancellor,” said Education Department press secretary Natalie Ravitz.

Of the critics, she added, “These are individuals who have fought almost every reform we’ve put in place, so this is unsurprising.”

Civil rights attorney Norman Siegel raised the possibility of legal action, saying the process raised “the specter of cronyism” and was “exclusionary.”

“Some of us who go back 40 years as civil rights lawyers remember the process in, let’s say, the ’50s, when government officials would choose their cronies to be in public positions,” he said at a news conference.

“We challenged that, we created the equal Opportunity Act … what we’re saying here today is that Bloomberg did not follow those principles.”

Black will need a waiver from state Education Commissioner David Steiner before becoming chancellor because she is not a licensed superintendent. Steiner will convene a panel of experts to make a recommendation as soon as the city applies for the waiver.

City Councilman Robert Jackson (D-Harlem), who is chairman of the Council’s Education Committee, called the mayor’s claim that he engaged in a public process a “lie” and said he would hold hearings on the appointment before the state panel meets.

A group of City Council members also is planning to introduce a resolution against the needed state waiver on Wednesday.

Further opposition is expected at Tuesday’s meeting of the Panel on Education Policy.

Manhattan representative Patrick Sullivan wants the panel to decide on whether to request the waiver. Parents who oppose Black have said they plan to make their voices heard.

Click here to share this BALCONY web page with others.

Posted under Education, News From our Members

MagnaCare Partners with Coventry Health Care, Expands Workers’ Compensation Access to Network in New York State

November 12th, 2010

NEW YORK, N.Y./Franklin, Tenn. – November 12, 2010 – An agreement announced between MagnaCare, a national health plan services company, and Coventry Workers’ Comp Services, a division of Coventry Health Care, Inc., will make the MagnaCare provider network available to new and existing Coventry clients in the State of New York beginning in November 2010. This relationship expands the Coventry Recommendation of Care (ROC) offering in New York, bringing greater depth and breadth to this voluntary option that allows injured workers to seek care with network providers and enables payers to reimburse providers based upon contractual rates.

“We are confident that this partnership will provide expanded access to care along with optimal savings opportunities for Coventry clients and their workers who experience on-the-job injuries,” says Steven Kokulak, vice president of workers’ compensation and no-fault at MagnaCare. “The ROC Network is an ideal alternative for employers and carriers that do not want to utilize a Certified PPO, or who do not have access to a Certified PPO, in all counties”.

MagnaCare and Coventry, which offers its Certified PPO through its wholly-owned subsidiary MetraComp, will both continue to offer their Certified PPO products independent of each other.

Bruce Singleton, senior vice president of provider network product development at Coventry, adds, “While we have long offered our ROC Network, we wanted to provide the most comprehensive network in terms of access and reimbursement rates. The addition of the MagnaCare network to our offering means that Coventry clients will have a broader network for referring their injured workers, while achieving the best possible savings. This translates into real value.”

MagnaCare began contracting with providers, more than fifteen years ago, requiring them to accept the same rate of payment from all payers, regardless of the reason for the care. The Network is designed to provide the same quality care, at the same price, whether the medical condition was personal, auto-related, or work-related. This allows MagnaCare to offer significant discounts, below state fee schedule on services provided to their No-Fault and Workers’ Compensation customers.

About MagnaCare
MagnaCare is a health plan management company that touches millions of lives nationwide. For over 20 years MagnaCare has provided solutions to Taft Hartley funds, self-insured companies, commercial insurers such as health, workers compensation, or no fault, TPA’s, and government entities. Whether it’s access to a broad provider network, predictive modeling analyses, member outreach programs or an integrated solution that includes full plan management services including claims adjudication, eligibility management, client/customer service, and a full suite of products, MagnaCare understands its customer needs and develops cost effective, comprehensive solutions. Visit www.magnacare.com, www.facebook.com/magnacare, www.twitter.com/magnacare

About Coventry Workers’ Comp Services
Coventry Workers’ Comp Services, a division of Coventry Health Care, Inc., is the leading provider of cost and care management solutions for property and casualty insurance carriers, (workers’ compensation and auto insurers), third-party administrators and self-insured employers. We design best-in-class products and services to help our partners restore the health and productivity of injured workers and insureds as quickly and as cost effectively as possible. We accomplish this by developing and maintaining consultative, trusting partnerships with our clients and stakeholders, built on a foundation of innovative and customized solutions that support the claims management process. Go to www.coventrywcs.com for more information.

Posted under Health Care, News From our Members

BALCONY Questions Proposed Changes to Social Security

November 11th, 2010

11/11/10 – New York, NY – BALCONY, the Business and Labor Coalition of New York, today questioned proposals set forth by National Commission for Fiscal Responsibility and Reform chairs Alan Simpson and Erskine Bowles to reform Social Security in a first draft of their highly anticipated report on resolving the nation’s growing deficit. The draft includes a section paradoxically titled “Strengthening Social Security,” wherein the co-chairs recommend significant cuts and changes to the Social Security program including cutting benefits by nearly two-thirds, increasing revenue (taxes) by one-third, and raising the retirement age to 68 by 2050. The steps proposed by Simpson and Bowles would cut benefits for tens of millions of middle class retirees who are overwhelmingly dependent on Social Security for their income (without Social Security over half of the nation’s seniors would sink below the poverty line) and raise the retirement age for lower income workers despite little change in life expectancy.

Today, Social Security runs a large surplus. And while that surplus will exhaust itself by 2035, that shortfall has nothing to do with the federal budget. In fact, because Social Security is prohibited by law from ever spending more than it collects in taxes it cannot contribute to the federal deficit. Nevertheless, co-chairs Simpson and Bowles have used the deficit commission as an opportunity to attack Social Security at a time when Americans are struggling and in desperate need of the relief provided by this critical program – at a time when BALCONY believes Social Security should be bolstered not watered down.

To view the full report click here

10 Reasons why the Fiscal Commission Co-Chairs’ Social Security proposals are an equal opportunity disaster (click here)

To learn more about the threats to Social Security posed by the deficit commission as well as what you can do to protect and strengthen Social Security click here

Posted under News from BALCONY, Social Security

New FALL 2010 BALCONY Member Directory Posted

November 3rd, 2010

The latest (Fall 2010) directory of BALCONY members has been posted as an eBook.  To view, please click the map above or on the right or click here: eBook

Posted under News from BALCONY

 

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