UFT Ad Slams Bloomberg’s Record on Education

UFT Blasts Bloomberg On Teacher Evaluations

BY Celeste Katz

The city teachers union is blasting Mayor Bloomberg’s education record in a television attack ad that’s airing amid the tense standoff over teacher evaluations.

(Click HERE for the Ad)

Our Ben Chapman reports:

More than eight million viewers are expected to see the union’s 30-second spot, which pulls no punches in its critique of the mayor’s education reforms.

“Ten years as Mayor, and Mike Bloomberg still doesn’t get it,” begins the narrator’s criticism of Bloomberg’s record on schools, starting with his appointment of Cathie Black as schools chancellor.

“Fudged education test scores, closing schools, parents shut out of the process,” the somber voice continues, over a montage of photos of city students.

The ad — which doesn’t specifically mention the evaluation controversy — finishes with a harsh message to the mayor, who hasn’t been on speaking terms with the teachers union since Dec. 30, when city officials walked away from talks on instructor evaluations.

“If you really want to do right by our kids, you’ll work with teachers and parents and stop playing politics with our schools,” the voice says.

City officials hit back at the union’s $1 million ad, calling it a “political stunt” that distracts the public from the real issue of teacher evaluations.

“The Mayor, Governor, and State Education Department are working collaboratively to implement a rigorous teacher evaluation system,” said Bloomberg spokeswoman Lauren Passalacqua, adding: “It’s a shame that the UFT continues to block accountability measures that will help students.”

The city stands to lose nearly $60 million in federal aid for 33 failing schools because city officials and the union were unable to reach a deal on instructor evaluations.

At the state level, the lack of a comprehensive evaluation system for teachers and principals threatens nearly $1 billion in federal education money.

Despite signs of a thaw at Monday’s legislative hearing on Gov. Cuomo’s education budget, on Tuesday city union and education officials said they still had not met to discuss the issue.

Public Pensions Are Not the Enemy by NYAFL-CIO President Mario Cilento

Public pensions are not the enemy
So why does Gov. Cuomo’s plan vilify middle class retirement security?

By Mario Cilento / NEW YORK DAILY NEWS
Published: Wednesday, January 25 2012, 4:24 AM

We hear all the time about exorbitant public-sector pensions, which leads many to believe mistakenly that retired nurses, firefighters, teachers and others are wealthy. We don’t hear that the average benefit for a member in the largest plan in New York — the New York State and Local Retirement System — is $19,000 a year, or that 76% of these pensions are less than $30,000 a year.

There is no doubt that state and local governments face difficult budgetary decisions, which has fairly brought all spending under greater scrutiny. But some corporations and their messengers have tried to capitalize on the pressure created by the short-term economic crisis to advocate for the permanent decimation of benefits in the public sector. They seek to complete the rollback of pensions and the shift to insufficient 401(k)s that has already taken place in the private sector — driving a stake in the heart of the defined benefit pension as we know it.

This is audacious, considering that corporate greed and misconduct caused the collapse of the economy, the budget crisis and billions in pension losses in the first place.

Now, even though it will not produce any savings to help address the current budget deficit, Gov. Cuomo’s executive budget includes a new pension tier with an “optional” 401(k).

In reality, there is no option in this plan, as the new tier would obliterate the defined benefit plan, slashing payouts and making employee contributions unaffordable. The new defined benefit “option” would require employees to work longer, pay up to double in base employee contributions and pay even more if the stock market declines — all to get less in their pension. What sense does that make?

The 90 years that the state has been providing pension benefits demonstrate that the system works. Pensions are long-term vehicles that should not be overhauled with every change in the political wind.

It’s not as though public employee unions are resisting any and all change. They did their part and agreed to a new pension tier just two years ago that is projected to save $35 billion over 30 years. This is on top of wage freezes, furloughs, increased health contributions and layoffs.

But where they draw the line — as well they should — is in eviscerating retirement security entirely.

Far too many workers have learned the hard way that a 401(k) is not the answer to long-term economic security. Such retirement plans place all the risk on the shoulders of workers. If Wall Street collapses when they retire, they’re simply out of luck.

There’s another problem: cost. I don’t doubt the ability of working men and women to decide how to successfully invest their retirement savings — provided they can afford professional assistance. They’ll have to add that burden to the cost of rent, utilities and prescriptions.

A financially secure retirement is slipping away from the American worker. According to the National Retirement Risk Index, a project of the Center for Retirement Research at Boston College, more than half of American workers are at risk of not being able to maintain their standard of living in retirement. This retirement insecurity comes at a time when the number of people with pensions has declined, particularly in the private sector, with 401(k)s becoming many workers’ sole retirement savings vehicle.

Yet, although data from multiple sources indicate that 401(k)s are inadequate, their stranglehold continues in the private sector — and that dominance is used as the rationale for reducing public-sector pensions. It’s a race to the bottom that’s inappropriate and unconscionable.

Cilento is president of the New York State AFL-CIO, the largest state labor movement in the country, representing 2.5 million workers in 3,000 union affiliates throughout the state.

Read more: http://www.nydailynews.com/opinion/public-pensions-enemy-article-1.1011290#ixzz1kV7jn7pL

RWDSU Living Wage Gets Support From Business

Wage Heat on Quinn

By SALLY GOLDENBERG (NY POST)

Pressure is mounting on City Council Speaker Christine Quinn — a 2013 mayoral hopeful — to take a stand on a living-wage bill that would mandate higher pay for employees of companies receiving major city subsidies.

A politically connected small-business owner with close ties to Mayor Bloomberg plans to announce his support for the bill today, while operatives working on the measure are engineering a ramped-up campaign to begin after Martin Luther King Day.

Steve Hindy, president of Brooklyn Brewery, will endorse a bill before the council that requires developers receiving at least $1 million in city subsidies to pay retail employees $11.50 an hour, or $10 with benefits. State minimum wage is $7.25 per hour.

Quinn has not allowed the contentious legislation to come before the council for a vote since its introduction in May 2010 and refuses to state her position.

She fears angering business owners and allies of Bloomberg, a staunch opponent of the measure. She also wants to maintain a good relationship with union leaders, who support it.

Read more: http://www.nypost.com/p/news/local/wage_heat_on_quinn_jkwONLW4sscheguu1DzXmK#ixzz1iiBfmxLZ

Final Report on Mandate Relief

Originally posted on December 26, 2011 by Jimmy Vielkind

Jim Odato devoted his column this morning to the final report of the Mandate Relief Redesign Team, which issued its 70-page document, it seems, without all of the team members even knowing it was coming out.

Business and local government groups, in part bubbling through the regional economic development councils, will be making a major push on the subject this year. Lawmakers enacted a property tax cap last year without a corresponding mandate relief package, and it’s thought to be at the top of the list come January.

CLICK HERE FOR THE REPORT

Democrats May Say No Dice to New York Casinos, Sheldon Silver Warns

Democrats may say no dice to New York casinos, Sheldon Silver warns
Assembly Speaker supports idea, but can’t guarantee bill will fly with Dems

BY Kenneth Lovett

ALBANY — The push to legalize casinos in New York is no sure bet to pass in the Assembly, the Daily News has learned.

Assembly Speaker Sheldon Silver (D-Manhattan) supports the idea, but he told the Daily News on Monday that he can’t guarantee such a bill would fly with his Democratic conference, which holds a majority in the chamber.

“I just don’t know,” Silver said.

Gov. Cuomo has said he will call on the Legislature in 2012 to make the first of two needed approvals of a constitutional amendment to legalize casino gambling, which would then require a referendum, no earlier than 2013, before it becomes law.

“The last time it came up in the late 1990s, it was a close vote in the conference,” Silver recalled.

In particular, the speaker said he does not know if there is support in his New York City-dominated conference for a casino specifically within the five boroughs.

The News reported in Monday’s editions that Cuomo opposes a casino in densely populated parts of the city, but is open to one at a place like Aqueduct Racetrack in Queens, which already has a virtual casino. Silver’s views are the same on both points.

But much has changed since the Legislature took up the issue in the 1990s, Silver acknowledged.

Not only is the deficit-plagued state desperately in need of new revenue and job creation, but casinos have sprouted up in surrounding states and even on Indian reservations within New York.

“There may be an attitude of ‘Let’s take some of the revenue and keep it [at\] home,’” Silver said.

In addition, there are now nine virtual casinos at New York racetracks, including at Aqueduct, and their existence may help generate support for full-blown casinos.

Senate Republican Majority Leader Dean Skelos, of Nassau County, has said he supports a constitutional amendment to legalize casinos. But a Skelos spokesman said Monday that the chamber has not taken a position on where casinos should be located.

Assemblyman Karim Camara, a Brooklyn Democrat who chairs the Black, Puerto Rican, Hispanic and Asian Legislative Caucus, says the group has not taken an official position on casinos. But while Camara opposes the idea of casinos in areas with high concentrations of poverty, he is open to legalizing them at existing racetrack “racinos” like Aqueduct.

Silver and Skelos recently promised Cuomo that they would pursue within their respective chambers the first of two needed legislative votes on the constitutional amendment.

Some insiders took that to mean the approvals would be automatic. But Silver and Cuomo both told The News that the speaker promised the governor he would raise the issue with his members, but couldn’t ensure the measure would meet with success.

Cuomo wants the constitutional amendment to legalize casinos in the state, but not necessarily spell out how many casinos would be allowed or where they would be located. Those matters would be decided later on by the governor and Legislature before the needed public referendum.

Silver said it is possible that his members will want the constitutional amendment to be more specifically defined than the one Cuomo has talked about.

klovett@nydailynews.com

A Living Wage, Long Overdue (NYT Editorial)

A Living Wage, Long Overdue

New York City provides hundreds of millions of dollars a year in taxpayer-financed subsidies to private developers. It is only right that the jobs created by those projects pay a decent wage. The Fair Wages for New Yorkers Act, widely known as the living-wage bill, would nudge these employers in the right direction.

The bill now before the City Council would require future development projects that receive $1 million or more in discretionary financial assistance from the city to pay $10 an hour plus benefits for full-time workers and $11.50 an hour without benefits for at least 10 years. That may not be much, but it is an improvement over the minimum wage of $7. 25 an hour.

Mayor Michael Bloomberg is fighting this change, arguing that a wage increase might scare off new developments and cost the city thousands of lower-paying jobs. That has not been the experience elsewhere.

A similar law enacted in 2003 in Los Angeles requires companies receiving city subsidies to pay workers $10.42 an hour or $11.67 without benefits. Despite warnings that the city would lose projects, Donald Spivack, a development official in Los Angeles, said at a Council hearing last month that those predictions were wrong and that he was unaware of any project that was canceled because of the wage requirement. The Center for American Progress found that 15 cities with living wage laws, including Los Angeles, Philadelphia, Cleveland and San Francisco, “had the same levels of employment growth” as other similar cities without the requirements.

Mayor Bloomberg’s arguments against this modest wage increase contrast with his endorsement of a 2002 city law that now sets a minimum of $10 an hour for about 60,000 workers employed by service contractors hired by the city, many of them home health care workers. Home care workers got a similar increase as part of Gov. Andrew Cuomo’s Medicaid redesign this year.

The City Council has revised the bill after earlier criticisms that it was confusing and too restrictive. It now has clear exemptions for manufacturers and smaller businesses with revenues of less than $5 million. The bill’s sponsors should also consider exempting grocery stores in areas that need fresh food markets. That said, this bill makes sense. A wage of $10 an hour would help lift thousands of New Yorkers above the poverty line.

Gov. Cuomo Puts Full-tilt Casino in City on Table

Gov. Cuomo puts full-tilt casino in city on table

EXCLUSIVE: In wide-ranging interview, Andy reflects on successes in his first year, and the “eye-catching” moves he wants to make in 2012

BY Kenneth Lovett

Updated: Monday, December 26 2011, 2:00 AM

ALBANY — Looking back on a successful first year in office, Gov. Cuomo vowed to make “eye-catching” moves in 2012 — and for the first time said he is open to rolling the dice on a casino in New York City.

“Do I support casino gaming at a New York City location? . . . Yes,” the governor told the Daily News in a year-end chat.

Like Assembly Speaker Sheldon Silver, Cuomo said he doesn’t want to see a casino in a densely populated part of the city, but would be open to putting one at a place like Aqueduct Racetrack in Queens, which already has a virtual casino.

Cuomo expects to call on the Legislature in his Jan. 4 State of the State address to give the first of two needed votes to a state constitutional amendment to legalize casino gambling in the state.

He stressed he is not “preselecting” New York City or any other area for possible casinos.

“I’m not excluding any locations at this time,” he said, adding that establishing a casino in a part of the city “certainly can” make sense because the operation would capitalize on the massive population.

“New York City is a real location,” he said. “Albany is a real location. Buffalo is a real location.”

Cuomo wants the Legislature in 2012 to pass the amendment without specifying how many casinos would be authorized or where they would be located.

He would spend the year coming up with a casino plan, then finalize details in 2013 — the earliest the issue could go before the voters for a required public referendum.

He argued that the economic boost from casino gambling far outweighs the increase in crime and compulsive gambling and other social ills that critics say the industry fosters.

During the wide-ranging interview, Cuomo reflected proudly on his accomplishments in his freshman year as governor — legalization of gay marriage, the creation of the state’s first property tax cap, a new ethics reform law and an on-time budget that cut state spending.

And while he went back on a no-new-taxes pledge earlier this month by supporting a hike on the rich, he coupled it with a modest tax cut for the middle class.

The freshman Democrat spoke of a newfound spirit of bipartisanship in the Legislature, something he has repeatedly contrasted with the gridlock in Washington. His powerful performance this past year has fueled speculation of a 2016 White House campaign, but Cuomo insisted he never even thinks about running for President.

“Not at all,” he said. “I’ve been around too long. I’ve heard too much talk. I’ve seen the movie too many times.”

Of course, his father, former Gov. Mario Cuomo, was dubbed Hamlet on the Hudson for agonizing about a waging a presidential run — and keeping a plane waiting on the tarmac as he mulled over a last-minute entry into the 1992 New Hampshire primary.

Brushing off his clashes with Mayor Bloomberg, most recently over a compromise on a bill to approve street hails for livery cabs, Cuomo described the flareups as normal “stressors in the relationship” between a governor and New York City mayor.

“We get along well; we communicate well; we communicate often,” he said.

But Cuomo warned that Hizzoner may have trouble getting one of his major priorities done in Albany next year: pension reform.

While the governor has listed it is a priority, he said its fate will ultimately come down to whether the Legislature wants to buck the powerful labor unions in an election year.

“I don’t think the unions are ever going to agree to pension reform,” he said.

And with the state having reached multiyear contracts this year with the two largest unions of state government workers, Cuomo admitted he has very little leverage to get them on board with a pension reform plan.

In his upcoming State of the State address, Cuomo is expected to focus on the need for job creation and the importance of rebuilding the state’s roads and bridges and of reorganizing state agencies and public authorities.

Cuomo said years of budget cuts and neglect have left the agencies in far worse shape than he imagined before taking office.

“The economy is not going to come rebounding back in a way that you can buy your way out of this problem,” he said. “And by the way, you shouldn’t buy your way out of the problem — you’re going to have to manage your way out of the problem.”

That said, Cuomo said not to bet on him having a sophomore slump.

“There are going to be eye-catching things next year,” he vowed, playing his cards close to his vest.

klovett@nydailynews.com

Seeking a Cure for Troubled Hospitals in Brooklyn

by Nina Bernstein

When the pain in his groin was too great to bear, Ralph Hutchins, who works as a mover, headed to the crowded emergency room at the nearest hospital one recent Tuesday, his life at risk. Tanya Boynton, a mother of four who works 12-hour shifts, hobbled into another emergency room from a homeless shelter, afraid illness would end her job.

They needed care in the heart of Brooklyn, not far from the world’s richest concentration of premier hospitals. Only a few private hospitals have survived in neighborhoods like Bedford-Stuyvesant, Brownsville and Bushwick to serve poor patients like them. Now all are in such dire financial shape that a small group of veteran health care planners appointed by Gov. Andrew M. Cuomo is debating last-ditch measures to save them.

For decades, the fallback solution in American cities has been to close such hospitals.

But one of the actions being considered by the group may be even more radical: expunge the hospitals’ debt of more than $1 billion, partly at taxpayer expense, and then let large for-profit companies take over the facilities and restructure patients’ care. Experts say what ultimately becomes of the hospitals could make them a model, or a disastrous experiment, in the delivery of health care to the poor.

The proposals are still being drafted but are already generating concern among public health advocates, who worry that the changes would shred a frayed medical safety net and send the poorest and uninsured patients to other overwhelmed hospitals, especially to three public hospitals that are at capacity and facing new budget cuts.

Proponents say this fear is unfounded. But it runs deep in New York State, which added a right to health care to its constitution during the Great Depression, and is the only state that still prevents large companies and their stockholders from owning hospitals.

“If we don’t figure out a way to redesign the system, we’re going to have free-fall bankruptcies not only in Brooklyn, but all over the state,” said Stephen Berger, chairman of Mr. Cuomo’s Brooklyn Work Group. Its recommendations are due this month.

Brooklyn shows the acute stage of a problem that has vexed the nation for years: how to sustain delivery of major medical care to the poor. After the crack and H.I.V. epidemics of the 1980s, either shrinking hospitals with empty beds or letting them fail was seen as a way to make the system more efficient. But as big cities lost more than half their hospitals, closings were concentrated in places like central Brooklyn, where the bed-to-population ratio is now below state and national averages and busy hospitals are struggling financially despite high occupancy rates.

Kings County Hospital Center, Woodhull Medical and Mental Health Center and the State University of New York Downstate Medical Center, the three public hospitals in the area, could shoot up to as much as 130 percent of capacity and face a third more emergency room visits if even one or two of the most vulnerable private hospitals closed, according to a study submitted to the Berger group by the union representing interns and residents at public and private hospitals.

Alan Aviles, the president of New York City’s public hospital system, said it was making contingency plans for such a flood but could not go it alone, particularly since the collapse of the city’s Roman Catholic hospital network.

“We have to make sure that we still have voluntary safety net hospitals that are capable of sharing in that effort,” he said, noting that city hospitals already provided 75 percent of all outpatient care to the uninsured.

To stay healthy, experts say, even nonprofit private hospitals need a 3 percent profit margin. Only two of Brooklyn’s 10 private hospitals are doing that well, and of the five considered endangered — Interfaith Medical Center, Wyckoff Heights Medical Center, Brookdale University Hospital and Medical Center, Kingsbrook Jewish Medical Center and Brooklyn Hospital Center — some are hemorrhaging money.

Questions about mismanagement hang over some of these institutions, but analysts agree on the basic problem: Most of their patients rely on Medicaid, the government insurance program for the needy, which has been repeatedly cut as eligibility expanded.

There is no confidence that the national health care overhaul will help. Indeed, federal cuts expected through 2013 will disproportionately hurt the same hospitals. In neighborhoods with mainly black and Latino residents, in a borough of 2.5 million where more than one in five residents live below the poverty line and two in five receive Medicaid, the five endangered hospitals account for 83,000 admissions, 325,000 emergency room visits and 760,000 clinic visits a year.

The case of Mr. Hutchins, who showed up at Wyckoff, illustrates the strain. It was the third time in two months he sought help, he said. This time, at his insistence, the hospital admitted him.

Surgery revealed a strangulated hernia so far gone that cutting out life-threatening infected tissue left an open wound, he said.

Cost efficiency demanded speedy discharge; last year, Medicaid cut by 31 percent what it would pay for a case like his. But before Mr. Hutchins could be released, the hospital had to get him a portable wound pump.

At hospitals that pay suppliers promptly, administrators say, the device typically gets same-day delivery. At Wyckoff, it took a week.

Wyckoff’s general counsel, David Hoffman, said the hospital was like a homeowner with an underwater mortgage. Its buildings are worth a fraction of the $88 million it owes on a $140 million state loan, used in 1994 to rebuild. Its reserves are gone.

Such hospitals have not benefited from recent gentrification in Brooklyn. Affluent newcomers typically keep ties with their Manhattan doctors, who send them to hospitals there with the prestige to get top dollar from private insurance plans.

In 1980, Brooklyn had 26 hospitals; now it has 15, and 41 percent fewer acute-care beds — 2.3 beds per 1,000 residents, compared with Manhattan’s 4.7, the state’s 3.1 and the nation’s 2.6.

That pattern has played out nationwide, said Alan Sager, a professor of health policy and management at Boston University who has analyzed decades of hospital closings in 52 cities.

Professor Sager found that what best predicted that a hospital would be closed was not inefficiency, but location in a minority neighborhood, and for-profit hospitals were likeliest to close.

Proposals to save the Brooklyn survivors include a federal waiver that could redirect state Medicaid savings to so-called safety net hospitals, and a push for additional mergers. Another idea is making one or more of the hospitals a free-standing emergency department, a concept being tried at the defunct St. Vincent’s Hospital in Greenwich Village.

The proposal requiring the most salesmanship, and possibly a change in law, would leave taxpayers, bondholders and other creditors to absorb the hospitals’ net debt and then invite investors into a reformulated health care network.

Steven Moore, an executive with PricewaterhouseCoopers, the consultants invited by Mr. Berger to sketch out this proposal, likened Brooklyn’s indebted hospitals to banks with toxic assets, and suggested a bailout first. “Our premise is you have to design a system that will attract private capital,” Mr. Moore said. “Private capital is more efficient, it demands productivity, it demands creativity, it demands innovation.”

It also demands profits. Many experts doubted the proposal’s contention that 20 percent to 30 percent waste could be safely carved from Medicaid spending in Brooklyn to yield a reliable return of about 7 percent.

At the Greater New York Hospital Association, the lobbying group for hospitals, board members worried about people without insurance, particularly the city’s many illegal immigrants. Getting rid of toxic assets — hospitals’ debt — would not solve the problem of patient mix and revenue, said Kathleen Shure, an association executive, and “the board fears that it will end up in for-profit entities getting rid of ‘toxic populations.’ ”

Mr. Berger, an investment banker and veteran of health commissions, is impatient with such objections. “Health care is not hospitals,” he said. “Health care is an integrated system, a network,” one that requires new patterns of investment.

By law, hospitals must provide emergency care. But it is unclear what that might mean in a reformulated for-profit system, particularly for people in pain who damage the bottom line, like Ms. Boynton, 40, who limped into Interfaith with what turned out to be an acute attack of gout the same day Mr. Hutchins went to Wyckoff.

She would have preferred the Bronx clinic in her Medicaid managed-care plan, but her family had been evicted from its Bronx apartment after the landlord failed to make repairs required for a housing subsidy. At Interfaith, she got a three-day prescription that put her back on her feet and commuting, from a Brooklyn homeless shelter to her $300-a-week job at a home goods store on the Upper West Side of Manhattan.

Mr. Hutchins, 50, now discharged, is also on the mend. The hospital’s prognosis is more guarded.

“We stay open at the grace and generosity of our vendors,” said Mr. Hoffman, Wyckoff’s general counsel. “They know it will eventually get better, because we have to have hospitals. Otherwise, we’ll have sick and dying people lying in the streets, and nobody wants that.”

AFL-CIO Pledges Campaign to Stop Cuts to Medicare, Medicaid, Social Security

By John Reichard, CQ HealthBeat Editor

AFL-CIO President Richard Trumka told reporters Monday that “we will run the campaign necessary” to defeat any Medicare, Medicaid, and Social Security reductions proposed by joint deficit reduction panel. But he stopped short of saying the labor group won’t endorse members of Congress who vote for such cuts.

Trumka did say in the telephone briefing that opposition to potential cuts would be among the factors considered when it comes to making endorsements in the 2012 elections.
Trumka said he “would have a tough time envisioning us endorsing people who actually voted for major cuts to Social Security, Medicare or Medicaid. That would have a dampening effect on any candidate even if they were endorsed,” he added.

Trumka said the labor organization’s executive council would meet later Monday to flesh out the campaign against the cuts, which will involve coordinating with other left-leaning organizations.

“Today we’re asking 700,000 activists to start calling their members of Congress to oppose them,” he said. “We’ll be talking about the type of program or the type of campaign that we issue. It could be — everything from ads, leafletting at the work site, phone banking — a number of different things to let people know who stood with them and who stood against them.”

Trumka said that with the rise of the Occupy Wall Street movement, the public is closely watching lawmakers to see how they respond to the deficit panel.

“This marks the beginning of a critically important time for Congress where our elected leaders are faced with a defining choice: to stand up for the 99 percent of America or to continue the business-as-usual approach of the top 1 percent.”

Whether through added funding to repair infrastructure or aid to state governments to keep teachers and fire fighters on the job, “now is the time for decisive leadership on Capitol Hill,” he said.

“We’re deeply troubled about the possible direction” of the debt panel, he said. “Any person even loosely connected to reality can see that working people and working families have already given up too much while Wall Street and the wealthiest Americans have done all the taking. Inequality is at historic levels.

“It should be a no-brainer that we will finally ask Wall Street and the super rich to pay their fair share. Every politician should look at the occupy movement to know that working families across the nation will make their voices heard to protect core American programs and to hold Wall Street accountable for the mess that they created.”

Trumka denied that he was advocating an uneven approach to deficit reduction. A reporter suggested that was the case, given Trumka’s call for no reductions in benefits but “substantial action on the tax side,” in the reporter’s words. Trumka had suggested earlier in the call that ending the 2001 and 2003 tax cuts for high earners, taxing capital gains as ordinary income, and a surtax on the wealthy were ways to reduce the debt.

“First of all, if you’ve looked at what’s happened so far, there’s been substantial action on the middle income and low income families of this country,” he said. “They’ve already given a lot. They’ve given their homes, they’ve given their jobs, they’ve given back in wages while the rich have done as well as ever. Better than ever.”

John Reichard can be reached at jreichard@cq.com

DiNapoli Forecasts Weaker Wall Street Outlook

Economic uncertainty due to the European sovereign debt crisis, a sluggish domestic economy, volatile stock markets, and regulatory changes are among the chief contributors to a weakened outlook for Wall Street profits, jobs and bonuses for 2011, according to an annual report on the securities industry released today by New York State Comptroller Thomas P. DiNapoli.

“The securities industry had a strong start to 2011, but its prospects have cooled considerably for the second half of this year,” DiNapoli said. “It now seems likely that profits will fall sharply, job losses will continue, and bonuses will be smaller than last year. These developments will have a rippling effect through the economy and adversely impact State and City tax collections. As we know, when Wall Street slows, New York City and New York State’s budgets feel the impact and that is a concern.”

The economies and budgets of New York City and New York State are very dependent on the securities industry. According to the Office of the State Comptroller, last year securities-related activities accounted for 14 percent of New York State’s tax revenues and almost 7 percent of New York City’s. In addition, one in 8 jobs in New York City and 1 in 13 jobs in New York State are linked to the securities industry. Given the current weakness, tax collections are likely to fall short of City and State targets in their current fiscal years and may decline by more the following year.

DiNapoli’s analysis also found that:

• The member firms of the New York Stock Exchange earned $9.3 billion in the first quarter of 2011 (almost half of the City’s $20 billion target for the entire year), but profits declined sharply in the second quarter. The Office of the State Comptroller forecasts that profits are unlikely to reach $18 billion for all of 2011, which is one-third less than in 2010.

• After adding 9,900 jobs between January 2010 and April 2011, the securities industry has lost 4,100 jobs through August 2011. Job losses are likely to continue given declines in profitability and recent layoff announcements. OSC estimates that the securities industry could lose nearly 10,000 additional jobs by the end of 2012, which would bring total industry job losses to 32,000 since January 2008.

• Cash bonuses are likely to be smaller in 2011, the second year in a row in which they have declined.

• The average salary in the securities industry in 2010 grew by 16.1 percent to $361,330, 5.5 times higher than the average salary in the private sector of $66,120. The disparity between average salaries in the securities industry and the rest of the private sector narrowed in 2008 and 2009, but widened in 2010.

• In 2010, the securities industry accounted for 23.5 percent of all wages paid in the private sector despite accounting for only 5.3 percent of all private sector jobs.

• The State Comptroller’s Office estimates that each job gained (or lost) in the securities industry leads to the creation (or loss) of almost two additional jobs in other industries in the New York City and another job elsewhere in New York State.

“Excessive risk-taking on Wall Street was a major factor leading to the financial crisis and the recession,” DiNapoli said. “Regulatory changes that reduce risk and focus attention on long-term profitability rather than short-term gains will enhance stability. Despite the weaknesses we are seeing, the securities industry remains profitable and is a key component of the economies of New York City and New York State.”

Click here for a copy of the report.