It’s Wednesday, August 22nd, 2012….and before we begin, another crass commercial announcement asking you to visit our home page at www.thedailygouge.com to view our Cover Story and featured videos. You can also visit us on Facebook….though for how long, only Mark Zuckerberg knows.
Now, here’s The Gouge!
First up, courtesy of the WSJ, proof positive Einstein had Sacramento in mind when he defined insanity:
Another California Brainstorm
Let’s create one more pension scheme the state can’t afford.
The sages of Sacramento have done such a splendid job of not adequately funding California’s public pensions that now they want to do the same for non-government workers. Their latest brainstorm is to establish state-administered retirement plans for workers in the private economy.
This is not a joke. Social Security faces a funding shortfall as the baby boomers retire. The business world long ago began moving toward 401(k) plans from pensions that they couldn’t sustain. (See GM, failure of.) The most far-seeing states have begun to move in the same direction, if the politics allow. But the other-worldly liberals who run the Golden State want to establish a new pension for five to seven million additional workers.
The legislation would require employers that don’t already sponsor retirement plans to enroll their workers in state-administered “individual retirement accounts,” but they are really defined-benefit pensions in disguise. Democrats are calling a spade a club in order to skirt the federal Employee Retirement Income Security Act (Erisa), which imposes fiduciary obligations on private employers that sponsor defined-benefit plans. Trouble is, the retirement plan Democrats have conceived has all the trappings of a cash balance account, a breed of defined benefit that guarantees workers a return on their investments.
Workers would be automatically enrolled (unless they opt out) and have to contribute 3% of their wages. A retirement board consisting of government officials and appointees would invest the money and guarantee a still-to-be determined rate of return. Employers would be required to withhold wages to fund the plan—or pay a $500 penalty per worker. (It’s a tax, not a penalty….or is the other way around?!?)
Democrats insist this is not another pension but merely a “modest supplement” to Social Security. But this is also how government pensions started 80 years ago. Legislative sponsor Kevin de Leon’s office claims that workers would own their retirement plans just as they would IRAs, but there’s nothing in the legislation that guarantees ownership or portability (in case overtaxed workers want to move to Texas or Florida).
The bill’s proponents say taxpayers wouldn’t be on the hook for any shortfalls. But once workers make contributions into any kind of government-administered pot, taxpayers can assume they have been volunteered to guarantee the returns.The legislation even establishes the mechanism by allowing the retirement board to “accept any grants, gifts, legislative appropriation, and other moneys from the state.”
Democrats say that the plans will be “privately insured,” but what financial institution, pray tell, would underwrite indeterminate returns?(Only if one views taxpayers as “private” insurers!) Calculating the liabilities would be a purely metaphysical exercise. The unfunded liability for the California Public Employees’ Retirement System, or Calpers (which implicitly guarantees a 7.5% return), is $290 billion, and this new pension plan would cover about four times as many workers.
As a side note, Calpers, which is dominated by union allies, has expressed interest in managing the investments. Just what the economy needs: More investment dollars influenced by politics.
The California Senate has already passed the bill on a party line vote, and the Assembly is expected to do the same shortly. Democrats seem to believe that offering private workers this fillip will relieve the political pressure to reform government worker pensions.
Governor Jerry Brown hasn’t taken a position, but he ought to veto it on principle as a danger to the public fisc. If nothing else, he ought to have the self-respect to sit on it until the legislature takes up his proposals to reform the state’s bleeding public pensions. Democrats who run the legislature won’t even give him a vote.
The Governor believes (correctly) that voters will be more inclined to approve income and sales tax hikes this November if lawmakers show they’re earnest about getting the state’s fiscal house in order. They’re not, which is clear enough from this latest attempt to make American workers more dependent on politicians.
And when California runs out of money and credit, who do you think will be next in line to bail-out another entity “too big to fail”? That would be us,….as in the good, old “US of A”:
In a related item detailing a government wholly-hooked on spending, Allysia Finley, courtesy of Political Diary, details the latest fiscal follies of….
The Executive Earmarker
The Obama administration announced Friday that it’s freeing up $473 million of unspent earmarks from appropriation bills between 2003 and 2006 for other local transportation projects. All states have to do to get their hands on the dough is identify shovel-ready projects that the President can flog on the stump this fall. When and whether the bridges, roads or bike lanes are completed doesn’t much matter.
What’s important, according to President Obama, is “to put Americans back to work”—before the election. “At a time when one in five construction workers is out of work, these are the jobs we need,” says Transportation Secretary Ray LaHood. “And we need them right now.”States have an Oct. 1 deadline to identify new funding recipients, though the redistribution may not result in any new jobs for at least another year, if at all.
The $473 million is a small fillip for construction workers who haven’t seen much benefit from the some $40 billion that Congress appropriated for “shovel-ready” projects in the 2009 stimulus. A lot of that money, like the unspent earmarks, is still hanging in regulatory limbo. The lesson is that infrastructure projects managed and designed by local governments are rarely shovel-ready.
In any event, the money shuffle is merely another end-run around Congress, which has banned earmarks and shown little interest in the president’s $50 billion infrastructure plan. But the White House is also back-flipping on the president’s stated opposition to earmarks.In his 2011 State of the Union he promised to veto bills that contained the extraneous appropriations.
As the White House would have it, there’s no shame in allowing states to reallocate money that Congress has already earmarked. But unspent funds are perhaps the easiest to recapture and pocket as savings. They’re the so-called waste that the president keeps promising to ferret out. On the other hand, the administration’s new earmark policy dovetails with another of its guiding principles: Never let consistency get in the way of campaigning.
Or, put in terms even Liberals can understand:
Next up, courtesy of the WaPo, Marc Thiessen offers the GOP hope in the face of the Akin-Breakin’ Heart:
Message to the GOP: Maine is not lost!
Here’s a message to the GOP from Vacationland: Maine is not lost!
When Sen. Olympia Snowe announced her retirement last year, many Republicans wrote Maine off — and with it their chances of taking back the U.S. Senate. At the start of July, a Portland Press Herald poll showed independent former governor Angus King with a 28-point lead over his closest rival, Republican Maine Secretary of State Charlie Summers (Democratic state Sen. Cynthia Dill came in third with 7 percent).
But then the Friends of the U.S. Chamber of Commerce got into the race, launching an ad campaign that declared the former governor the “King of Spending” and the “King of Mismanagement.” “When King was governor, state spending skyrocketed to $2.6 billion,” the ad declared to the tune of medieval music. “When King left office, he left Maine with a $1 billion budget shortfall. Declare your independence from this king.”
Result: After just two weeks, King’s lead over Summers dropped 10 points.
The chamber ad was likely a test to see if King’s armor could be pierced. It worked. And the effort revealed several things: First, King is more vulnerable than imagined. The more Mainers learn about how he dramatically increased the size of government and turned the surplus he inherited into a billion-dollar fiscal hole, the less they like him. (Can you spell O-B-A-M-A?!?)
Second, Maine is a cheap state in which to run. This is not California or Florida. It cost the chamber just $400,000 to saturate the airwaves on every network in the state during the Olympic Games and bring the front-runner down 10 points. A small investment can make a huge difference in Maine.
Third, Republicans have an attractive alternative to King. Charlie Summers is a proven winner at the polls with crossover appeal. He was the first Republican ever elected to represent Maine’s Democratic-leaning 31st Senate District, and he won statewide in 2010 when he was elected Maine’s secretary of state. He is a small-business owner and former Small Business Administration official who knows how to create jobs. Moreover, Summers is a veteran who served in Iraq and Afghanistan and worked for the Chairman of the Joint Chiefs of Staff. At the opening of the GOP Victory Center here in Westbrook, Summers told me, “King loves to say ,‘I don’t know who I’m going to caucus with, I don’t know if I’m going to take a committee assignment.’ Well, what about the guy who works at Bath Iron Works and builds Navy ships and may not have somebody on the Armed Services Committee if King is elected?”
The next line of attack will likely center on crony capitalism. As governor, King signed a law requiring Maine utilities to produce at least 30 percent of their energy from renewable sources such as wind — and then, after leaving office, moved quickly to profit from the mandate he enacted by forming a wind energy business.He secured a $102 million taxpayer-backed loan guarantee from the same Obama Energy Department program that backed Solyndra. A House Oversight and Government Reform Committee investigation found that King and his partners should not have gotten the federal loan guarantee because they already had sufficient capital to build the project. So why seek federal money? Summers argues it is because the loan guarantee transferred the risk for the wind project from King and his partners to the American taxpayer. “He got a Solyndra-type loan and put the taxpayers on the hook,” Summers said. He pointed out that Maine taxpayers just had a rate increase to pay for augmented transmission lines to handle King’s wind energy project — this in a state where high energy costs are already deterring businesses from moving and investing here.
Bottom line: King profited from a law he passed as governor, took taxpayer money he did not need from President Obama’s discredited “Green Energy” loan program and personally benefited from Obama’s failed stimulus spending bill.That’s a political trifecta. In addition to being the “King of Spending,” look for Republicans to crown the former governor as the “King of Wind” and the “King of Cronyism.”
Rob Engstrom, the chamber’s political director, says the chamber is all in. “Maine will be a battleground state. It will help determine the majority of the U.S. Senate,” he told me. “Conventional wisdom originally was that this wasn’t a real race. I can tell you from being there — this is a real race. The more we’ve been involved the more the race closes. And the more others get involved, the more the race will continue to close.”
If they don’t get involved, and Republicans come up one seat short of taking back the Senate, they will be kicking themselves in November.
Particularly as the odds of winning Missouri have been significantly diminished.
And in today’s Environmental Moment, as the WSJreports, that’s Taxpayers 6, EPA 0:
EPA Smack-Down Number Six
A federal court cashiers another illegal Obama regulation.
The Environmental Protection Agency has been waging a regulatory war on Texas—and losing in the federal courts. On Tuesday the U.S. Court of Appeals for the D.C. Circuit struck down another misguided EPA rule.
Enacted in August 2011, the Cross-State Air Pollution Rule was supposed to reduce air pollution emitted in one state and carried downwind to another. Under the Clean Air Act, if pollution from the upwind state is causing the downwind neighbor to fail federal air quality tests, then the EPA can order the upwind state to reduce the emissions causing the problem.
But even such expansive authority from Congress is never enough for the Obama EPA. So the agency decided to use the rule-making as a pretext to force down emissions even further—illegally, as it turns out. In Tuesday’s decision, two of the three judges on the appellate panel found that under the rule “upwind States may be required to reduce emissions by more than their own significant contributions to a downwind State’s nonattainment. EPA has used the good neighbor provision to impose massive emissions reduction requirements on upwind States without regard to the limits imposed by the statutory text.”
The court found that the feds also broke the law by dictating the measures to be used to reduce emissions instead of allowing states to design their own plans, as the statute demands. “Congress did not authorize EPA to simply adopt limits on emissions as EPA deemed reasonable,” wrote Judge Brett Kavanaugh.
The flawed rule would have hit coal-fired electric plants in particular, and especially those based in Texas. EPA’s illegal micro-managing of state air-quality plans was so specific that immediately after the rule-making it was clear that coal-powered energy production at Texas-based plants operated by Luminant, a big utility, would have to be cut. Tuesday’s ruling means Luminant will be able to keep 1,300 megawatts of power online in Texas, which needs more electricity because unlike other parts of the U.S. in the Obama era it is growing.
Luminant had announced it would need to lay off roughly 500 workers in mining and electricity production. Now the utility says those jobs have been spared, thanks to the court’s intervention.
According to a scoreboard by the American Action Forum, Tuesday’s rebuke from the D.C. Circuit marks the 15th time that a federal court has struck down an Obama regulation, and the sixth smack-down for the Obama EPA. This tally counts legally flawed rules as well as misguided EPA disapprovals of actions by particular states.
As for this latter category, last week the Fifth Circuit Court of Appeals saved Texas from an arbitrary and capricious EPA rejection of its permitting process for utilities and industrial plants. In that case the court found that “the EPA based its disapproval on demands for language and program features of the EPA’s choosing, without basis in the Clean Air Act or its implementing regulations.”
See a pattern here?(We do, as detailed in today’s Cover Story.) Mitt Romney and House Republicans are making the case that Obama regulators have been punishing U.S. business in violation of the law and beyond what Congress intended. Tuesday’s ruling proves their point and underscores how much more damaging the EPA could be without re-election restraint in a second Obama term.
The court’s decision states it plainly: “Absent a claim of constitutional authority (and there is none here), executive agencies may exercise only the authority conferred by statute, and agencies may not transgress statutory limits on that authority.”
The message is that regulators must follow the laws of the United States. Why do federal judges constantly have to remind EPA Administrator Lisa Jackson of this basic principle?
Perhaps because she’s too busy thinking about food….
….to pay proper attention.What are the chances Jackson’s friend, The First Marxette, would direct her healthy eating initiatives towards those who need it, rather than at those….
….who don’t?!?
In other news painful to the environmentally-sensitive:
Drought Curtails Tornadoes
Without Thunderstorms, the Number of Twisters Plunges; Storm Chasers Lament
….as do all the Environazis who earlier this year claimed more frequent violent weather phenomena such as tornadoes were an inevitable consequence of anthropogenic global warming.
On the Lighter Side….
Yeah….
And in Tales From the Darkside, just when you thought you’d seen it all….
Delaware day care workers accused of running toddler fight club
Three Delaware day care employees have been accused of encouraging toddlers to fight each other while the children were under their care. CBS Philly reported that Tiana Harris, 19, Lisa Parker, 47, and Estefania Myers, 21, employees of the Hands of Our Future Daycare in Dover, were arrested after a cell phone video emerged of them allegedly encouraging two 3-year-olds to fight in an organized battle.
Police said in the video one child is heard yelling, “He’s pinching me!” A day care worker allegedly responded, “No pinching, only punching.” “Clearly one of the children is crying and does not want to continue on and he is pushed back into the fray by one of the adults,” Dover Police Captain Tim Stump told CBS Philly. Stump told Delaware Online that it was “infuriating” to watch the video that he said shows “two children whaling on each other.”
Parents of day care students went to a meeting Monday at the Dover police station and were shown the video of the alleged fight that police said will not be made public, Delaware Online reported. “It’s very disturbing to think anything like that could go on,” Amy Bickerling, whose 4-year-old son enrolled in at the center, told Delaware Online. “I know these teachers. I go on all the field trips.I’ve never seen anything irregular.”
Other than all the field trips were to local gyms, karate studios and boxing matches.
In a related item, we present another sordid story ripped from the pages of the Crime Blotter:
Russian woman kills elderly neighbor with her bra
Russian investigators say a woman in East Siberia has strangled an elderly neighbor to death with her bra. The Investigative Committee in Buryatia said in a statement on Tuesday that the 26-year-old woman from the town of Zakamensk, just miles north off the border with Mongolia, has been charged with murder.
Investigators say the woman was drunk on a July evening when she and her boyfriend called on their 65-year-old neighbor for money to buy drinks. Angry that he refused to lend them money, the woman punched him in the face and tried to strangle him with her hands, before taking off her bra and strangling him with it, they say.
The woman is now in custody awaiting the end of the probe, investigators say. Her name was not released.
Russian authorities would only confirm the woman was a 32DD….and the victim died smiling.
Finally, we’ll call it a wrap with the Medical Section, and another startling success story from the annals of single-payer, socialized healthcare:
Doctors remove 9-inch fork lodged in man’s stomach for 10 years
Doctors discovered a 9-inch fork inside a man who had been admitted to a hospital complaining of stomach pains, BBC News reported. The man said he had swallowed the fork a decade ago, while “messing around.” Lee Gardner, 40, was taken to Barnsley Hospital in the U.K. after vomiting blood and suffering stomach cramps. Gardner said when he accidentally swallowed the fork 10 years ago, a doctor told him the utensil would pass through his system naturally, leading him to forget about the event.
However, he remembered the fork when doctors used a camera to look inside his stomach to find the source of his problems. “While they were looking inside me with the camera, the doctor said, ‘Are you sure you’ve not swallowed anything?’ I said no but when he asked again, ‘Are you sure? I can see prongs of what appears to be a fork,’ I remembered accidentally swallowing one years and years ago,” Gardner told BBC News.
The prongs of the fork had caused an ulcer in his stomach that had led to internal bleeding. Doctors said the surgery to extract the fork took approximately 45 minutes. “Lee is extremely lucky that the fork hasn’t caused more damage, but we are confident he will make a full recovery,” consultant general surgeon Dr. Hanis Shiwani told BBC News.
For Mr. Gardner’s sake, we hope Dr. Shiwani isn’t the same sawbones who initially predicted the fork would find its own way out. Rectum? Hell, might well have killed him!
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