CBO: Feds Borrowing $4.8 billion Per Day in FY 2013, So Far

(CNSNews.com) – The federal government ran a deficit of $292 billion for the first two months of fiscal year 2013 – October and November 2012 – amounting to $4.8 billion of borrowed money each day.

“The federal budget deficit was $292 billion for the first two months of fiscal year 2013, $57 billion more than the shortfall recorded in October and November of last year,” CBO said in its Monthly Budget Review Friday.

This means that the government borrowed $4.8 billion for each calendar day so far in 2013. If the Treasury Department restricted its borrowing to only weekdays, its per day average would jump to $6.5 billion per day thus far in fiscal year 2013.

READ MORE:  http://cnsnews.com/news/article/cbo-feds-borrowing-48-billion-day-fy-2013-so-far

'Welfare Spending Equates to $168 Per Day for Every Household in Poverty'

The amount of money spent on welfare programs equals, when converted to cash payments, about "$168 per day for every household in poverty," the minority side of the Senate Budget Committee finds. Here's a chart detailing the committee's findings:



According to the Republican side of the Senate Budget Committee, welfare spending per day per household in poverty is $168, which is higher than the $137 median income per day. When broken down per hour, welfare spending per hour per household in poverty is $30.60, which is higher than the $25.03 median income per hour.

"Based on data from the Congressional Research Service, cumulative spending on means-tested federal welfare programs, if converted into cash, would equal $167.65 per day per household living below the poverty level," writes the minority side of the Senate Budget Committee. "By comparison, the median household income in 2011 of $50,054 equals $137.13 per day. Additionally, spending on federal welfare benefits, if converted into cash payments, equals enough to provide $30.60 per hour, 40 hours per week, to each household living below poverty. The median household hourly wage is $25.03. After accounting for federal taxes, the median hourly wage drops to between $21.50 and $23.45, depending on a household’s deductions and filing status. State and local taxes further reduce the median household’s hourly earnings. By contrast, welfare benefits are not taxed."

READ MORE:  http://www.weeklystandard.com/blogs/welfare-spending-equates-168-day-every-household-poverty_665160.html

Yes, This Is an Emergency

If you smelled smoke and saw flames rising from your small business, the first call you’d make would be to your fire department. Well, it’s time to dial Congress’ 911 number. The warning signs are clear—your small business and millions of others could get burned in the Fiscal Cliff negotiations unless you shout for help.

There is no more urgent act you can take today than to personally call your U.S. representatives and senators. Plead with them to answer the bell to protect small businesses from free enterprise opponents who don’t realize that increasing your taxes is like playing with matches.

If the anti-small-business forces in Washington win the fight to let the 2001 and 2003 tax relief measures to expire--if they yank the props from under the estate tax exemption so it falls from $5 million to $1 million and rates skyrocket to 55 percent--if they succeed in raising alternative minimum taxes on 31 million Americans and wiping out many vital small-business tax extenders--the impact on Main Street will be as devastating as a four-alarm fire.

READ MORE:  http://www.nfib.com/insight?roi=echo4-21292200735-18860315-aea72a56db762de4122c5c0eed82dab7&cmsid=61532&utm_campaign=Insight1206&utm_source=Insight&utm_medium=Email

(Reuters) - The U.S. Internal Revenue Service on Wednesday released final rules for a new tax on medical devices, products ranging from surgical sutures to knee replacement implants, that starts next year as part of President Barack Obama's 2010 healthcare law.

The 2.3-percent tax must be paid, effective after December 31, by device-makers on their gross sales. The tax is expected to raise $29 billion in government revenues through 2022.

Companies including Boston Scientific Corp, 3M Co and Kimberly-Clark Corp have been lobbying the U.S. Congress for a repeal of the tax.

A repeal bill passed the Republican-controlled U.S. House of Representatives in June, but it has not been voted on by the Democratic-controlled Senate.

READ MORE:  http://www.reuters.com/article/2012/12/05/us-usa-tax-irs-idUSBRE8B41GW20121205

Why Apple is investing $100 million in U.S. manufacturing

"Those jobs aren't coming back." That's what Steve Jobs said when President Obama asked him whether Apple would ever consider manufacturing its popular products in the U.S. But Jobs' successor, Tim Cook, has other ideas. In interviews with Bloomberg Businessweek and NBC News, Cook has revealed that in 2013, Apple will invest $100 million in manufacturing computers in the U.S. "I don't think we have a responsibility to create a certain kind of job," Cook told Bloomberg. "But I think we do have a responsibility to create jobs."

Cook didn't specify which product would be manufactured in the U.S., though it's been noted that the new iMac already bears the label "Assembled in the U.S.A.," making it a likely contender. Cook acknowledged that Apple won't literally make the products, but would continue its practice of hiring contractors to manufacture various elements. Cook also reminded his interviewers that some components — such as the iPhone's glass screen — are already being made in the U.S.

READ MORE:  http://theweek.com/article/index/237471/why-apple-is-investing-100-million-in-us-manufacturing

S&P downgrades world's oldest bank to junk status

AFP - Standard & Poor's on Wednesday cut its credit rating for troubled Italian bank Monte dei Paschi di Siena -- the world's oldest surviving lender -- to speculative-grade status of BB+ from BBB-.

The ratings agency said it was also placing the bank on negative outlook.

"Deteriorating trends in Banca Monte dei Paschi di Siena's financial position make it unlikely that the bank would restore profitability and improve its capital and funding position in line with our previous expectations.

"The difficult economic and operating environment we anticipate in the Italian market will compound the challenges for MPS to implement successfully its business plan," the agency said in a statement.

READ MORE:  http://www.france24.com/en/20121205-sp-downgrades-worlds-oldest-bank-junk-status

Online sales tax to be added to defense authorization bill

This may be the last Christmas of online shopping without paying sales tax.

A proposed online sales tax has been offered as an amendment to the National Defense Authorization Act, much to the ire of opponents.

The Computer and Communications Industry Association, a group that opposes this move, says that an online sales tax will burden small businesses, “some of the most promising candidates for future economic growth.”

 “This proposal, and other online sales tax collection proposals like it, would allow states to penalize the innovative e-commerce business model by targeting small online businesses as convenient sources (and collectors) of revenue,” said CCIA President and CEO Ed Black.

The Marketplace Fairness Act, and its House counterpart the Marketplace Equity Act, seek to clarify, and arguably overturn, a 1992 Supreme Court ruling that requires retailers to have a physical presence in a state in order to collect sales tax on goods.

Read more: http://dailycaller.com/2012/12/04/online-sales-tax-to-be-added-to-defense-authorization-bill/#ixzz2F2lowxzb

Tax hitmen to track your spending

This comes from England but you can bet it's happening in the U.S. as well.  There is even mention of coordination between England and the U.S. in this article.  - Rich

Up to two million people are to have their credit files secretly checked under a crackdown on tax evasion to be unveiled by George Osborne to help raise another £10 billion. 

 Credit reference agencies will cross-check details of the income people declare on their tax returns against their spending patterns to identify “high” and “medium” risks of both illegal and legal tax avoidance.

People identified to HM Revenue and Customs will then be subject to more detailed investigations. About two million people are expected to be scrutinised under the programme, which may lead to privacy concerns.

HMRC will today unveil the “successful” results of a pilot programme involving about 20,000 people which will now be extended nationally.

Many of those who are expected to be identified are likely to be self-employed workers who have under-declared their income to the authorities.

READ MORE:  http://www.telegraph.co.uk/news/9717894/Tax-hitmen-to-track-your-spending.html

 

Guess Who Really Pays the Taxes

Yes, income in America is skewed toward the rich. But taxes are skewed far, far more. The top 5 percent pay well over half the income taxes. STEPHEN MOORE has the numbers.

1. Are income taxes fair?
 
That depends on who is offering the opinion. Democratic candidates for president certainly don’t think so. John Edwards has said, “It’s time to restore fairness to a tax code that has been driven badly out of whack.” Hillary Clinton laments that “middle-class and working families are paying a much higher percentage of their income [in taxes].” Over the past seven years, however, Americans in general think taxes have become more fair, not less. The Gallup Organization found in an April poll that 60 percent of respondents believe the income taxes that they themselves pay are fair, com­pared with 37 percent who believe the taxes they pay are unfair. In 1997, the figures were 51 percent fair and 43 percent unfair. 

2. What income group pays the most federal income taxes today?

READ MORE:  http://www.american.com/archive/2007/november-december-magazine-contents/guess-who-really-pays-the-taxes

Most News Reports Don't Tell Readers or Viewers How Little Money 'Buffett Rule' or Even Obama's Tax Hikes will Raise

A search at the Associated Press's national website on Warren Buffett's last name at about 5 p.m. ET returned two recent items which are still present there. Each item (here and here) mentions the Obama Fan of Omaha's idea to "impose a minimum tax of 30 percent on income between $1 million and $10 million, and a 35 percent rate for income above that." Neither mentions the pathetically small amount such a tax would raise while seriously impacting the ability of high income earners who own or run businesses to expand them -- or in some cases causing them to shrink.

It's the same at other establishment press outlets. Two recent New York Times items found in a search on Buffett's full name (here and here, the latter item being Buffett's own op-ed on Sunday) fail to note how little money Buffett's proposed tax hikes would raise. So how little is "little"?

Read more: http://newsbusters.org/blogs/tom-blumer/2012/11/29/most-news-reports-dont-tell-readers-or-viewers-how-little-money-buffett-#ixzz2El33D7So

What Ludwig von Mises Taught Gottfried Haberler and Paul Samuelson about Tax Loopholes

Tax loopholes are universally denounced across the political spectrum. Democrats revile them as egregious giveaways to the “rich” that should all be tightly sealed up in the interests of “revenue enhancement” for deficit reduction, infrastructure investment, propping up collapsing entitlement programs, etc. Republicans condemn them as major barriers to the implementation of a more business- and investor-friendly flat tax. Even free market economists oppose tax loopholes as inefficient and “non-neutral” to the market economy’s allocation of resources–as if there existed an optimal pattern of coercive redistribution of income from productive, private taxpayers to parasitic, political tax-consumers that was neutral to the market.
Needless to say Ludwig von Mises, who never took his eye off of the larger politico-economic issue of capitalism versus socialism, freedom versus statism, did not share the modern aversion to tax loopholes founded on baseless economistic concerns about “effiiciency” and “tax neutrality.” He pithily summarized the case in favor of tax loopholes, according to the following anecdote related by Paul Samuelson (“Tribute to Gottfried Haberler for American Enterprise Institute Memorial, 18 September 1995″) :

Some of us at sherry before a Fiscal Policy dinner in the Harvard Faculty Club were beefing about certain tax loopholes in the IRS code. Gotttfried [Haberler] whispered quietly, “Capitalism breathes through those loopholes.” The next day I told him how much I had liked his aphorism. Always the straight-arrow scholar, he said, “Yes, but the words are those of Ludwig von Mises not Gottfried Haberler.

READ MORE:  http://bastiat.mises.org/2012/11/what-ludwig-von-mises-taught-gottfried-haberler-who-taught-paul-samuelson-about-tax-loopholes/

Sticker Shock: New Car Prices Are Going Up

The news from Tesla was long expected. Less than six months after delivering the first Model S, the electric vehicles maker is raising the price of the Model S by $2,500.

The base Model S will sell for $59,900 ($52,400 after the federal tax rebate) for those ordered after January 1st. (Read More: Tesla Delivers the Model S, Will It Live Up to Expectations?)

Tesla has said for some time that it would be raising the price of its first sedan, but it's not the only automaker hiking prices.

"There's no doubt you're going to see sticker prices go up," says John Humphrey, Senior Vice President of J.D. Power. "With the content going into new cars and trucks, the costs will have to be passed along to buyers."

What kind of costs? 

The biggest change is with newer more fuel efficient engines. Automakers are required to move the average fuel economy for their fleet of vehicles to 34.1 MPG by 2016 and 54.5 MPG by 2025 (currently at 29.7 MPG). Getting there will mean major upgrades in the engines and components of vehicles.

READ MORE:  http://www.cnbc.com/id/50014208

What Empty Nest? Weak Economy Means Living at Home

You raise them, you educate them and you expect them to go out into the world. But they keep coming back.

The recession and weak recovery appears to be keeping many adult children from getting a home of their own, and that could have implications for the housing industry's recovery.

A Census Bureau report released Wednesday found that between 2007 and 2011 there was a steady increase in the percentage of adults living in someone else's house – and that increase has mostly been driven by adult children moving in with mom and dad.

In 2011, Census Bureau researchers found that 17.9 percent of people 18 and older, or 41.2 million people, lived in a house in which they weren't the head of the household or that person's spouse or significant other. That's up from 16 percent in 2007, before the nation went into recession.

Read more:  http://www.cnbc.com/id/50010517

Pending Home Sales Surge to Five Year High

Buyers are coming back to the housing market in ever greater numbers, as an industry index measuring contracts to purchase existing homes surged 5.2 percent in October from September.

The monthly gauge of pending home sales from the National Association of Realtors was also revised higher in September and is now up 13.2 percent from October of 2011. This is a forward looking indicator for closed sales one to two months from now.

"We've had very good housing affordability conditions for quite some time, but we're seeing more impact now from steady job creation and rising consumer confidence about home buying now that home prices have clearly turned positive," wrote Lawrence Yun, chief economist for the NAR in a release. (Read More: Could Housing Be the Antidote to the 'Fiscal Cliff'?)

Pending home sales are now at the highest level since March of 2007 and have risen, on a year-over-year basis, for 18 consecutive months. The activity, however, varies from region to region, and the Realtors say the Northeast, which saw a 0.1 percent drop in sales month-to-month- did see some impact from Hurricane 

Sandy.


READ MORE:  http://www.cnbc.com/id/49998877

‘Fiscal Cliff’ Could Put Millions of Taxpayers Into ‘AMT Shock’

One of the key questions lurking in the "fiscal cliff" talks — though well below the public's radar — is what happens to the alternative minimum tax, or AMT.

Diane Macdonald | Stockbyte | Getty Images

 

Implemented in 1969 to make sure upper-income Americans pay their share of taxes, the AMT has increasingly snared more middle-income Americans over the years because it was never indexed for inflation.
During the 2011 tax year for example, the AMT hit single taxpayers with incomes as low as $48,450 and joint filers making only $74,450.

But millions more Americans could be subject to the AMT in their 2012 returns if Congress fails to reach a deal on the fiscal cliff before year-end. That's because the AMT is currently scheduled to hit individuals making as little as $33,750 a year and joint filers making $45,000.

READ MORE:  http://www.cnbc.com/id/49981664

The Economic Deception At The Heart Of The Fiscal Cliff

Truth Testing The Narrative

Among many politicians and much of the media there is an accepted narrative about  deficits, taxes and the so-called "Fiscal Cliff". It goes something like the following:

"The United States is running massive deficits that are bankrupting the country.  These deficits are so high because of the Bush era tax cuts.

So if we just end the tax cuts that caused this deficit in the first place, and make the rich return to paying their fair share of taxes, then much of the deficit problem is solved."

For millions of people in this country this is a compelling narrative, and understandably so. Because if we're so heavily into debt because of tax cuts that were given to the privileged, we need to just end the tax cuts and then the downward spiral ends -- which seems fair enough.

There's only one problem with this narrative – it isn't true.

READ MORE:  http://danielamerman.com/articles/2012/FiscalC.html

Two-thirds of Americans Sit with Less Than $25K in Savings, Investments

~ by Michael Lombardi, MBA

Consumer spending, which is so desperately needed, only increases when consumers are happy—when they are confident about their jobs, savings, investments, and overall wealth.

Right now in the U.S. economy, none of that is present. For consumer spending to increase, you need consumer confidence in the U.S. economy to increase. I don’t see it, even after multiple rounds of quantitative easing and the government adding a significant amount of debt. Consumers are worried about the economy and are hesitant to spend.

A recent survey by Employee Benefit Research Institute proves the point. According to the national survey, Americans are losing confidence in their ability to retire comfortably. Their biggest concerns include job uncertainty and debt, with 42% of the respondents believing that job uncertainty is the biggest hurdle to their financial success. Likewise, 60% of the workers reported that they have total household savings and investments of less than $25,000. (Source: Employee Benefit Research Institute, March 13, 2012.) How can there be consumer spending growth under these circumstances?

The demand for most basic goods by consumers isn’t there either. As an example, the demand for cheese in the U.S. has been softening as we approach the holiday season. The Chicago Mercantile Exchange (CME) spot prices for cheese declined significantly during the week of November 5. Cheddar blocks fell by $0.19 a pound (lb) to $1.92/lb—more than nine percent. (Source: Milk Producer Council, November 9, 2012.) Weak cheese sales are a clear indication that consumer spending is pulling back.

And some 100 California farmers are closing down, because they are facing financial hardships due to weak demand for milk and lower profit margins. (Source: “Milk Price Fight Boils Over,” The Wall Street Journal, November 12, 2012.) What do we make of this pullback in consumer spending on milk?

After looking at all this, how can I possibly believe that consumer confidence is increasing? Just the three above facts are more reason for me to believe there isn’t any consumer confidence. The U.S. economy is still in a dire state, and millions of Americans are still suffering.
After the financial crisis hit in 2008, we saw a brief period of increased consumer spending and consumer confidence. But now, with downward pressure on the global economy, consumer spending, which accounts for 70% of U.S. gross domestic product (GDP), is back on hold.
For this coming “Black Friday,” the biggest shopping day of the year, I expect sales at retailers to pull back from last year’s levels, as consumer spending is tighter this year than in 2011.

Michael’s Personal Notes:
Still not convinced about an economic slowdown in the global economy? A significant number of countries are going through economic slowdowns that are picking up steam. One country after another is getting into financial trouble. Declining exports, stagnant local demand, slow business spending, and rising currency value are just a few of the problems faced by a growing number of countries in the global economy.

Yes, we all know how badly the eurozone has been affected by the economic slowdown and how the U.S. economy is nowhere close to seeing economic growth. These pages are filled daily with such evidence.

But what is worrisome is the pace at which other countries are suffering.
Australia is witnessing an economic slowdown similar to the one it experienced in 2009, if not worse. The National Australia Bank’s index of business conditions has fallen to levels that were last seen when the global economy was almost collapsing in 2008. The index tracks goods orders, employment, and the profitability of companies in Australia. (Source: “Australian business conditions weaken, says NAB,” MarketWatch, November 13, 2012.)

Mexico is also experiencing an economic slowdown, as the overall global economy is flattening. The Mexican economy is expected to grow at only 3.6% next year, its slowest growth rate since 2009. (Source: Bloomberg, November 12, 2012.)

In the global economy, it just takes one region to get into trouble and the world experiences ripple effects. In January of this year, I started talking about the eurozone and how its economic slowdown would eventually reach North American shores—while others said the eurozone’s troubles would be isolated to the eurozone. It’s a global economy; as the eurozone economic slowdown deepens, the global economy will suffer.

Currently, the global economy is on pace to grow 3.2% this year. Next year, the global output is expected to decline almost six percent to three percent. (Source: Conference Board, November 13, 2012.)

As the global economy becomes infested with more crises, what this ultimately means is that the recovery for the U.S. economy will be deferred until further down the road. We still haven’t recovered from the financial crisis of 2008–2009. Now another economic slowdown, this time on a global scale, will send the U.S. further away from its path to economic growth.

Where the Market Stands; Where It’s Headed:
Because of Thanksgiving, not much is happening this week. I see the lack of trading volume in the markets as an indication that many traders have already put this week behind them.
This morning, the Dow Jones Industrial Average sits 6.4% below its 2012 high. Given the sharp correction stocks have taken over the past two weeks, it’s a negative that the usual “snap-back” from oversold levels hasn’t happened.

I continue to be negative on stocks, given that I see very weak U.S. economic growth in 2013, while corporate earnings growth is evaporating, the eurozone’s worst days could still be ahead, and China’s economy continues to deteriorate.

Demand Grows At Framingham Food Pantry

FRAMINGHAM (CBS) – It’s one of the most highly anticipated deliveries of the year, the turkeys at Pearl Street Cupboard and Café in Framingham. But three days before Thanksgiving, the food pantry is coming up short of turkeys for everyone who walks through the door.

It’s the first time Criseida Hernandez has asked for one. “It’s a little hard because I’ve been able to get one myself without going any place to ask for it. But I’ve been unemployed for the last year,” she said.

It’s the busiest time of year for food distribution and at Pearl Street, requests for help are up 400 percent over last year. “These are folks you wouldn’t normally expect to be needing help, on top of those always in need, it’s a big group and a big deal,” said Paul Mina president of United Way Tri-County, which runs the food pantry. 

READ MORE:  http://boston.cbslocal.com/2012/11/19/demand-grows-at-framingham-food-pantry/

Dreaded Yellow Light May Be Trap for Traffic Violations

The National Motorists Association has a warning for the millions of drivers hitting the road for the busy holiday travel season: Beware of the yellow lights.

The timing of yellow lights on traffic signals at many intersections is purposely set to a minimum so more drivers can be ticketed for running red lights, says the 30-year-old activist group based in Waunakee, Wis.
This past summer in New Jersey, the transportation department ordered 21 cities and towns to suspend the use of red-light cameras at 63 intersections because the timing of yellow lights at those locations was below the minimum established by state law.

Other cities—including Dallas; Chattanooga, Tenn.; and Union City, Calif.—have been caught shortening yellow lights in the past decade as red-light cameras have become sources of steady revenue. The cameras snap photos of license plates on any vehicles in an intersection while the light is red, and citations, often carrying fines of $100 or more, are mailed to the registration’s address.

READ MORE:  http://www.nationaljournal.com/domesticpolicy/dreaded-yellow-light-may-be-trap-for-traffic-violations-20121121?mrefid=mostViewed

Does Governor Markell deserve a "D"?

11/9/2012

In their recent “Fiscal Report Card on America’s Governors,” the CATO Institute gave Delaware’s Governor Markell a “D”. The basis for the grade was that over the past four years the Governor has increased taxes (i.e., personal income, gross receipts, corporate franchise, cigarettes) while plunging ahead on state spending. 

 

Is a “D” a fair grade?

 

First, the responsibility for the grade of “D” must be shared equally with the state legislature. The legislature passed all the tax increases and all the state budgets. And other constituencies in Delaware share part of the responsibility as well. The Delaware State Chamber of Commerce, for example, did not oppose any of the tax hikes.

 

Second, is an increase in taxes such a terrible thing? Every credible analysis of the differences among states’ economic growth rates shows that relatively higher taxes deter growth. Analysis of 20 years of Delaware data by the CRI produces the same result.

 

Over the past two decades every increase in Delaware’s top personal income tax rate has subsequently decreased employment and every decrease has spurred employment. Based upon average relationships, the 17% hike in the state’s top personal income tax (from 5.95 to 6.75) will over time reduce employment by 7%, or 28,000 jobs, all other things being constant.

 

Similarly, over the past two decades every increase in Delaware’s gross receipt tax rate for retail trade has subsequently reduced employment throughout the state and every decrease has been followed by gains in employment. Again, based upon average relationships, the 31% increase in the retail trade gross receipts tax rate (from .576 to .7543) will eventually lead to a 15% drop in employment, or over 60,000 jobs, all other things being constant.

 

This is why the CATO Institute looks dimly on states that raise taxes, especially during recessions.

 

Third, can state government be expected to cut spending when so many state services are essential? The reality is that Delaware state government has been on a spending binge. Over the past decade (FY-03 to FY-13) state spending from Delaware General Fund has risen 50%.

 

Over this same decade Delaware personal income has increased 45%, with earned income up only 32% and transfer payments up 116%. Total employment in Delaware has been flat and inflation (prices) is up only 30%. In other words, spending from the General Fund has out-stripped inflation, population (a 10% increase), and the economy.

Wouldn’t it be difficult to identify areas of state services that might be candidates for cuts? Over the decade just four areas of state government have accounted for more than 83% of the absolute dollar rise in General Fund spending.

 

The Department of Health and Social Services led the pack with an increase of $415 million. Especially notable were the 97% increase in General Fund Medicaid spending ($306 million), a 120% jump in spending on facility operations, and a 780% increase in welfare (Temporary Assistance to Needy Families).

 

The $374 million rise in General Fund spending by the Department of Education was accounted for primarily by a 118% jump in personnel costs. This is unusual given that total public school enrollment fell over this decade and inflation was only 30%.

 

State debt service, excluding schools, soared from $3 million to $146 million as Delaware hit the top five among all states in debt per capita.

 

Finally, personnel costs in the Delaware Department of Corrections rose 48% and spending on medical services jumped 117%.

 

While state employees in the Delaware Office of Management and Budget and the Department of Finance are far more qualified to identify specific areas of spending that seem to be substantially out of control, just a cursory examination raises some questions.

 

What about going forward? Has state government learned some lessons? Perhaps.

 

State spending for the current fiscal year is expected to go up slower than the expected tax revenues flowing into the General Fund. Borrowing is projected to ease up. On the other hand, no serious efforts are underway to deal with neither runaway Medicaid costs nor looming health care costs for retirees and a rising pension fund shortfall.

 

At the same time, the Governor and legislature are entertaining delays in the roll backs intended to occur in both the top state personal income tax rate and the gross receipts tax rates. Hopefully, this will just end up being talk.   

 

As the CATO Institute observes, “Intense global economic competition makes it imperative that states improve their investment climates.” This includes broad based tax reform, holding the line on spending, addressing future state employee benefit liabilities, and serious school reform.

 

 

Dr. John E. Stapleford, Director

Center for Economic Policy and Analysis

6,125 Proposed Regulations and Notifications Posted in Last 90 Days--Average 68 per Day

(CNSNews.com) – It’s Friday morning, and so far today, the Obama administration has posted 165 new regulations and notifications on its reguations.gov website.

In the past 90 days, it has posted 6,125 regulations and notices – an average of 68 a day.
The website allows visitors to find and comment on proposed regulations and related documents published by the U.S. federal government. "Help improve Federal regulations by submitting your comments," the website says.

The thousands of entries run the gamut from meeting notifications to fee schedules to actual rules and proposed rule changes.

In recent days, for example, the EPA posted a proposed rule involving volatile organic compound emissions from architectural coatings: “We are approving a local rule that regulates these emission sources under the Clean Air Act (CAA or the Act),” the proposed rule states. “We are taking comments on this proposal and plan to follow with a final action.”

READ MORE:  http://www.readability.com/read?url=http%3A//feedproxy.google.com/~r/DrudgeReportFeed/~3/HKJyS_NJml8/6125-proposed-regulations-and-notifications-posted-last-90-days-average-68-day

Marc Faber: Prepare for a Massive Market Meltdown

The markets are going to go into meltdown soon, so expect stocks to lose 20 percent of their value, Marc Faber, author of the Gloom, Boom and Doom report told CNBC on Tuesday.

“I don’t think markets are going down because of Greece, I don’t think markets are going down because of the ‘fiscal cliff’ — because there won’t be a ‘fiscal cliff,’ ” Faber told CNBC’s “Squawk Box.” “The market is going down because corporate profits will begin to disappoint, the global economy will hardly grow next year or even contract, and that is the reason why stocks, from the highs of September of 1,470 on the S&P, will drop at least 20 percent, in my view.”

Faber, who is known for his bearish views, cited tech giant Apple [AAPL  558.2199    30.5419  (+5.79%)   ], a company whose disappointing earnings have caused its stock to fall 20 percent from its September highs and 14 percent in the past month. 

READ MORE:   http://www.cnbc.com/id/49802535

Special Report: How a vicious circle of self-interest sank a California city

(Reuters) - When this sun-drenched exurb east of Los Angeles filed for bankruptcy protection in August, the city attorney suggested fraudulent accounting was the root of the problem.

 The mayor blamed a dysfunctional city council and greedy police and fire unions. The unions blamed the mayor. Even now, there is little agreement on how the city got into this crisis or how it can extricate itself.
"It's total political chaos," said John Husing, a former San Bernardino resident and regional economist. "There is no solution. They'll never fix anything."

Yet on close examination, the city's decades-long journey from prosperous, middle-class community to bankrupt, crime-ridden, foreclosure-blighted basket case is straightforward — and alarmingly similar to the path traveled by many municipalities around America's largest state. San Bernardino succumbed to a vicious circle of self-interests among city workers, local politicians and state pension overseers.

Little by little, over many years, the salaries and retirement benefits of San Bernardino's city workers — and especially its police and firemen — grew richer and richer, even as the city lost its major employers and gradually got poorer and poorer.

READ MORE:   http://www.reuters.com/article/2012/11/13/us-bernardino-bankrupt-idUSBRE8AC0HP20121113

Anti-austerity strikes sweep Europe

(Reuters) - Police and protesters clashed in Spain on Wednesday as millions of workers went on strike across Europe to protest spending cuts they say have made the economic crisis worse.

 

 Hundreds of flights were cancelled, car factories and ports were at a standstill and trains barely ran in Spain and Portugal where unions held their first ever coordinated general strike.
 

Riot police arrested at least two protesters in Madrid and hit others with batons, witnesses said, and in Rome students pelted police with rocks in a protest over money-saving plans for the school system.

International rail services were disrupted by strikes in Belgium and workers in Greece, Italy and France planned work stoppages or demonstrations as part of a "European Day of Action and Solidarity".

"We're on strike to stop these suicidal policies," said Candido Mendez, head of Spain's second-biggest labor federation, the General Workers' Union, or UGT.

More than 60 people were arrested in Spain and 34 injured, 18 of them security officials after scuffles at picket lines and damage to storefronts.

Protesters jammed cash machines with glue and coins and plastered anti-government stickers on shop windows. Power consumption dropped 16 percent with factories idled.

READ MORE:  http://www.reuters.com/article/2012/11/14/us-spain-portugal-strike-idUSBRE8AD00020121114

Yuan spot price per USD hits record high

BEIJING, Nov. 13 (Xinhua) -- The spot price of the yuan against the U.S. dollar rose to 6.2262 on Tuesday, marking a record high since China's foreign exchange reforms seven years ago.

Tuesday was the second consecutive day that the spot price of the yuan against the U.S. dollar hit a record high since China launched its foreign exchange reforms in 2005.

Enterprises and banks have been selling off foreign currencies in anticipation of the yuan's appreciation, pushing up the price of the currency, said Ding Zhijie, an economics professor at the University of International Business and Economics.

In China's foreign exchange spot market, the yuan is allowed to rise or fall by 1 percent from the central parity rate each trading day.

The People's Bank of China (PBOC), the country's central bank, set the central parity rate of the yuan against the U.S. dollar at 6.2891 on Tuesday, the highest since May 9. The central parity rate of the yuan was 6.2865 on May 9, and even lower, at 6.2804, on May 8.  

READ MORE:  http://news.xinhuanet.com/english/business/2012-11/13/c_131971563.htm 

Treasury Quietly Warns: 'Expect Debt Limit to Be Reached Near End of 2012'

(CNSNews.com) - The U.S. Treasury quietly warned at the end of a statement issued last Wednesday that it expects the federal government to hit its legal debt limit before the end of this year--which means before the new Congress is seated--and that "extraordinary measures" will be needed before then to keep the government fully funded into the early part of 2013.

On Aug. 2, 2011, President Obama signed a deal he had negotiated with congressional leaders to increase the debt limit of the federal government by $2.4 trillion. But, now, after only 15 months, almost all of that additional borrowing authority has been exhausted.

Although Treasury revealed in its statement on Wednesday that it was likely to hit the debt limit by the end of the year, Treasury Secretary Geithner failed to respond to a letter that Senate Finance Ranking Member Orrin Hatch and Senate Budget Ranking Member Jeff Sessions sent to him on Oct. 15 demanding that he notify them by Nov. 1 what he believes to be the exact date Treasury will hit the debt limit and the date he expects to begin using "extraordinary measures" to avoid it.

READ MORE:  http://cnsnews.com/news/article/treasury-quietly-warns-expect-debt-limit-be-reached-near-end-2012

Obama May Levy Carbon Tax to Cut U.S. Deficit, HSBC Says

Barack Obama may consider introducing a tax on carbon emissions to help cut the U.S. budget deficit after winning a second term as president, according to HSBC Holdings Plc.

A tax starting at $20 a metric ton of carbon dioxide equivalent and rising at about 6 percent a year could raise $154 billion by 2021, Nick Robins, an analyst at the bank in London, said today in an e-mailed research note, citing Congressional Research Service estimates. “Applied to the Congressional Budget Office’s 2012 baseline, this would halve the fiscal deficit by 2022,” Robins said.

Hurricane Sandy sparked discussion on climate protection in the election after presidential candidates focused on other debates, HSBC said. A continued Republican majority in the U.S. House of Representatives means Obama’s scope for action will be limited, Robins said. Cap-and-trade legislation stalled in the U.S. Senate after narrowly passing the house in 2009.

North American discharges fell 1.3 percent last year amid slowing economic growth. In China, the world’s biggest emitter, greenhouse gases from fuel use rose more than 9 percent in 2011, according to BP Plc (BP/) statistics published on June 13.

READ MORE:  http://www.bloomberg.com/news/2012-11-07/obama-may-levy-carbon-tax-to-cut-the-u-s-deficit-hsbc-says.html

October Jobs Report Shows Incomes Continuing to Decline

One of the negative features of the current economic recovery has been declining incomes of average Americans.

This trend continued in October.

The Labor Department reported Friday that despite 171,000 jobs being added to nonfarm payrolls in October, average hourly earnings for such employees edged down by 1 cent to $23.58.
Average hourly earnings of private-sector production and nonsupervisory employees also dropped by 1 cent to $19.79.

This continues a trend reported by the Census Bureau in August finding that since the recovery began in June 2009, median household incomes have fallen 4.8 percent adjusted for inflation.

Read more: http://newsbusters.org/blogs/noel-sheppard/2012/11/02/october-jobs-report-shows-incomes-continuing-decline#ixzz2BXz8JhUF

Food Stamp Growth 75X Greater than Job Creation

With the latest jobs report, it is now the case that "Under Obama, Food Stamp Growth [Is] 75 Times Greater Than Job Creation," according to statistics compiled by the Republican side of the Senate Budget Committee. "For Every Person Added to Jobs Rolls Since January 2009, 75 People Added To Food Stamp Rolls."

Here's a chart detailing the growth:  (please follow link:  http://www.weeklystandard.com/blogs/food-stamp-growth-75x-greater-job-creation_660073.html)

Since January 2009, as the chart shows, a net of 194,000 new jobs have been created. During that same time, 14.7 million have been added to the food stamp rolls.

"Simply put, the President’s policies have not produced jobs. During his time in office, 14.7 million people were added to the food stamp rolls. Over that same time, only 194,000 jobs were created—thus 76 people went on food stamps for every one that found a job," says Senator Jeff Sessions, ranking member of the Senate Budget Committee. "This is a product of low growth. Post-recession economic growth in 2010 was 2.4%, and dropped in 2011 to 1.8%. This year it has dropped again to 1.77%. Few, if any, net jobs will be created with growth of less than 2%."  

READ ENTIRE ARTICLE W/GRAPHICS: http://www.weeklystandard.com/blogs/food-stamp-growth-75x-greater-job-creation_660073.html

Don't be Misled: Delaware is Not Number 1 in Education

Let’s be clear, Delaware was Number 1 in line for Race To The Top (RTTT) for money - not performance.

 

A recent television commercial would have us believe Delaware is Number 1 in education. Delaware achieves a C+ and ranks about 22^nd in the country.

 

Proficiency of Delaware pupils in fourth grade English is 35% and math 31%, eighth grade English is 36% and Math 32%, and an average SAT score that is 44^th among states - - plus a very poor showing as a country that ranks17^th  among 30 nations rated for education performance.

 

More disturbing is the lack of conversation about education by both parties in the 2012 Election. At least this particular commercial acknowledges education even though its misguided emphasis is on spending rather than effectiveness.

 

The lack of conversation is beyond disturbing for the over promised Black, Hispanic and a low income communities who consistently underperform by two to three grade levels in all categories. This low performance leads to high dropout rates, unemployment, crime, teen pregnancy, dependency and public assistance.

 

The lack of transparency with how RTTT money will be spent makes it difficult to determine effectiveness just as it has been with any of the others in a long list of  spending programs that have not improved performance but have increased the cost of education. What is clear is that RTTT funds run out in 2014.

 

States that are making progress have strong political leaders willing to confront special interest groups like the union that resist the change from the industrial model to a choice model that gives parents in all income levels the freedom to choose the best education and secure a bright future for their child.

 

The political conversation in Delaware must include transparency and accountability.

 

This fall, you have an opportunity to influence politicians when they not only want but need your support.

 

Ask them:

 

• How much of RTTT money will make it to the classroom?

 

• How will this round of spending improve the performance of my child?

 

• How will we know what isn’t working and how will we know the dollars have stopped flowing to these programs?

 

• How much will RTTT cost taxpayers of Delaware after 2014?

 

It is important to inform yourself and ask questions.

 

It’s your child. If you don’t, ask who will?

 

James E. Hosley

Director, Center for Education Excellence

Download Document Here.

Jim Rogers: "We're All Going To Pay A Horrible Price For This…"

By Money Morning Staff Reports

As the Fed gets ready to launch quantitative easing, dubbed QE3 or QE Forever -- legendary investor Jim Rogers is shaking his head.

In fact, Rogers, a long-time critic of the Feds policies of money printing, said repeating the same program the Fed has already attempted will make policymakers "look like fools again."

Any relief will be temporary, warned Rogers in a gripping interview on CNBC.

The iconic financier also lashed out at the new developments in Europe, implying that their latest plan to save the euro amounts to nothing more than governments abusing their license to print money.

On Europe's move to implement a euro version of QE, Rogers said it affords the Western world "unanimity towards mutual destruction."

"We're all going to pay a horrible price for this in a year or two or three," he said.

How horrible? Worse than Rogers predicts, according to a new investigation.

READ MORE:  http://moneymorning.com/ob/jim-rogers-were-all-going-to-pay-a-horrible-price-for-this/?utm_expid=5485297-10&utm_referrer=http%3A%2F%2Fpaid.outbrain.com%2Fnetwork%2Fredir%3Fkey%3Dae10ebcd61a0c5723bc5fbb0d0cf7282%26rdid%3D399602692%26type%3DPLD_d%2Fg2_prd%26in-site%3Dfalse%26pos%3D4%26pc_id%3D10081501%26req_id%3D20fe635b76097535cf74050e6bf278f1%26agent%3Dblog_JS_rec%26recMode%3D11%26reqType%3D1%26wid%3D124%26imgType%3D2%26adsCats%3D1205%2C-1%2C-1%26refPub%3D368%26prs%3Dtrue%26scp%3Dfalse%26fcapElementId%3D7348

Why 'Fiscal Cliff' May Be Bigger Threat Than You Think

As the deadline for fiscal peril in the U.S. nears, Wall Street is worried that the impact could be much worse than anyone thought—while investors remain nearly oblivious to the danger.

Colin Anderson | Photographer's Choice | Getty Images

Looming tax increases and spending cuts — which Federal Reserve Chairman Ben Bernanke has labeled the "fiscal cliff" — would send the economy into a deeper recession than many have predicted, according to economists at Bank of America Merrill Lynch.

At the same time, fund managers the firm surveyed believe investors are far too optimistic that warring Washington factions can get together to take the steps necessary to prevent the economy from going over the cliff—at least temporarily.

Some 72 percent of respondents believe investors have yet to price in the ramifications—a view that is spreading across Wall Street as time winds down for a solution.

READ MORE:  http://www.cnbc.com/id/49478505

Greece, Spain 'in depression': Nobel winner Stiglitz

AFP - Greece and Spain are in "depression, not recession", Nobel prize-winning economist Joseph Stiglitz said on Wednesday, blaming tough austerity measures for their downward economic spiral.

Stiglitz also maintained that the International Monetary Fund was "a little too optimistic" in its forecast last week that the eurozone economy would shrink by 0.4 percent in 2012 and rise by 0.2 percent next year.

"I'm more pessimistic than they are (about growth)... I see significant risk of continuing turmoil," he said in New Delhi on the sidelines of a conference held by the Organisation for Economic Cooperation and Development.

READ MORE:  http://www.france24.com/en/20121017-greece-spain-depression-nobel-winner-stiglitz

French business erupts in fury against "disastrous" François Hollande

France is sliding into a grave economic crisis and risks a full-blown “hurricane” as investors flee rocketing tax rates, the country’s business federation has warned. 

 

“The situation is very serious. Some business leaders are in a state of quasi-panic,” said Laurence Parisot, head of employers’ group MEDEF.

“The pace of bankruptcies has accelerated over the summer. We are seeing a general loss of confidence by investors. Large foreign investors are shunning France altogether. It’s becoming really dramatic.”

MEDEF, France’s equivalent of the CBI, said the threat has risen from “a storm warning to a hurricane warning”, adding that the Socialist government of François Hollande has yet to understand the “extreme gravity” of the crisis.

The immediate bone of contention is Article 6 of the new tax law, which raises the top rate of capital gains tax from 34.5pc to 62.2pc. This compares with 21pc in Spain, 26.4pc in Germany and 28pc in Britain.

“Let’s be clear, Article 6 is not acceptable, even if modified. We will not be complicit in a disastrous economic mistake,” Mrs Parisot told Le Figaro.


READ MORE:  http://www.telegraph.co.uk/finance/financialcrisis/9610717/French-business-erupts-in-fury-against-disastrous-Francois-Hollande.html

 

Alarm on Wall Street Grows as 'Fiscal Cliff' Nears

The sluggish U.S. economy has been relatively kind to Wall Street’s banks, many of which are flush with profits and stand to gain from the Federal Reserve’s new bond-buying effort.

Photo: Larry Grant | Getty Images

Yet these same financial titans are warning that the government’s inaction in the face of the approaching "fiscal cliff" poses real risks to an economy already saddled by stunted growth and a burgeoning debt load. 

Many Wall Street banks hold interest-rate sensitive products on their books, and stand to lose big if a debt crisis sends safe-haven Treasury yields spiking. 

Thus far, investors have been most preoccupied by the unfolding financial catastrophe in Europe, where debate rages about whether Spain will finally throw in the towel and accept an international bailout. 

READ MORE:  http://www.cnbc.com/id/49392277

Coming Soon From Obamacare: A Single-Payer Nightmare For Delaware

Government provided and controlled health care and punitive taxation on people earning any amount more than the average Congressional representative are obsessions of many modern American liberals, and the Supreme Court’s decision upholding Obamacare seems likely only to push them toward even more extreme measures.  For those who were wondering what liberals might do now that Obamacare is the law, they only need to look at my home, the small state of Delaware.

Like much of America, Delaware has been battered by the long recession.  The state’s unemployment rate is twice that of the early 2000’s.  Family income has declined since 2008, while the value of household assets has plummeted over the same period.  What Delaware needs more than anything else is new, high-paying, private sector jobs.  What a group of liberal Democrats is trying to foist on the state, by contrast, is a complete state takeover of healthcare that will be financed by back-breaking new taxes—taxes that will kill economic growth and drive employers out.
 

On June 14, this group filed Delaware House Bill 392, The Delaware Health Security Act, which would require the State to assume control of all health care spending in Delaware. The creation of this so-called “single-payer” (i.e. government-controlled) system has been a long-time dream of the political left.  The bill’s details, though, make it clear that their dream would become Delaware’s nightmare:

·          Health insurance will be banned. Most people like their health insurance, but liberals know better. Under HB 392, a new state agency with the Orwellian name of the “Authority” will be handling all healthcare spending, and insurers will beforbidden from providing insurance for anything covered by the Authority.  Healthcare will be run by the government, just like the IRS, our state’s department of motor vehicles, and the TSA.  The sponsors apparently look at those and other agencies as unalloyed success stories.

·          The Authority will be a monopoly. Healthcare providers are out of luck, too.  The Authority will pay providers only what it wants to pay them, no competition will be allowed, and if a doctor accepts payment from the Authority, he won’t be allowed to receive payment by any other means.  The Authority must approve all capital expenditures made by healthcare providers that exceed $500,000. Expect hospitals to close and doctors and nurses to leave Delaware in droves.

·          The payroll tax on business will be staggering.Supersized government takes supersized taxes.  Under the bill, employers with fewer than ten employees will pay an additional payroll tax of 4 percent, while those with more than 50 will pay 9 percent.  I run a global service business, and this tax alone will double our company’s healthcare costs.  Delaware is a small state, and few regions are more than 25 miles from the state’s borders.  My own company’s headquarters is located two miles from Pennsylvania.  How many companies are going to put up with healthcare costs doubling when they can simply move a few miles and avoid the whole problem?  Apparently, though, the fog of liberal obsession has rendered the sponsors unable to even ask such obvious questions.

·          The individual taxes are worse. As hefty as those taxes are, they aren’t nearly punitive enough for die-hard liberals, and so tax-paying Delawareans will be hit with eye-popping tax increases on all their taxable income, including capital gains, dividends and interest. People who earn less than $60,000 per year will see their state income taxes increase from between 45 percent and 100 percent, while those earning from $60,000-$250,000 will face a 36 percent increase.  Those who earn over $250,000 per year (the figure at which American liberals seem convinced that people are “millionaires”) will have their Delaware tax rates almost double to close to 12 percent of marginal income—one of the highest rates in the nation.

·          Small businesses will be hammered. Most small businesses are organized as limited liability companies, partnerships and subchapter S corporations.  That means their owners get taxed on “income” that they never see because it has to be reinvested in the business.  With the Authority’s new taxes, many small business owners will find that their taxes come close to or exceed their actual cash income—in other words, they will get to take home nothing for themselves.  Once that starts, we will see a wave of businesses closing up shop and moving elsewhere.

·          But worst of all, our healthcare will no longer be in our control. The Orwellian and non-elected “Authority” will dictate what kind of care Delawareans can and cannot have. Supplemental insurance, which we provide to our employees in other single-payer jurisdictions (i.e. Sweden and the UK), is outlawed by the bill. My employees, mostly medical scientists, will not settle for single-payer care. They will move or commute to a neighboring state to get the best healthcare for their families. Further, employers like me who must compete for the best employees will be forced to move our operations out of the state just to provide healthcare choice for those employees.

·          Supporters will be rewarded. One group will be rewarded, though.  HB 392 specifically pays-off left-wing activists by reserving 1/3 of the seats on the board that runs the Authority to members of “groups . . . that have endorsed a single-payer healthcare system. . .”  Other seats are filled by the Democratic governor and the Democrats in control of the General Assembly. Thus, those who think that the law will be a disaster will be in the distinct minority in the Authority.

This bill is so bad for Delaware that it reads like a parody. The few large corporations that make Delaware their home will be forced out as their employees insist on real insurance. Why would anyone support HB 392 when it would kill job creation in Delaware, penalize all those who work or pay taxes, and take away existing health insurance from most Delawareans?

The answer seems to be that many American liberals are so committed to their dogma that they are unable to see that Delaware’s economic success depends not on big government and punitive taxation but on the energy and creativity of its private sector, or that people in the private sector can and will move to other states if huge new taxes and a colossal state-run health-care system are jammed down their throats. Delaware, like our nation, needs policies that will help jump-start a free economy, not sky-high taxes and government-controlled health-care.

The sponsors withdrew the bill at the end of the session and plan to reintroduce it in January 2013. Representative Jaques stated “a piece of complex legislation dealing with such a complex issue deserves to be thoroughly scrutinized and examined by the public, our colleagues and all with a vested interest in controlling medical costs in an efficient way…so that in January we will be prepared to move forward responsibly and rapidly.” Perhaps we would be forgiven for thinking that the sponsors preferred to run the bill after the election.

But why is single-payer healthcare premiering in Delaware? Delaware’s demographics, voting patterns, and electoral composition are nearly identical to other Northeastern blue states. Given these similarities and its small size, Delaware is the perfect laboratory for liberal projects. A successful pilot program for the government takeover of healthcare in Delaware offers a replicable model for use in New Jersey, New York, and other liberal strongholds in the Northeast. If HB 392 passes in Delaware, look for a similar bill to come to a state near you.

Ellen Barrosse is on the board of American Principles Project and CEO of Synchrogenix, a global group of regulatory services firms.

PICKET: New book shows U.S. top earners pay larger share of taxes than any other industrialized nation Read more: PICKET: New book shows U.S. top earners pay larger share of taxes than any other industrialized nation

The Wall Street Journal's Stephen Moore has just come out with a new book titled Who's the Fairest of Them All?: The Truth about Opportunity, Taxes, and Wealth in America and he reveals some interesting information about how much the top ten percent of income earners in the United States pay in federal income taxes as opposed to any other industrialized nation in the world.

According to Moore, these earners pay almost half (45 percent) of the country's total taxes. This conclusion flies in the face of the liberal concept that top earners in the U.S. are not paying their "fair share" in taxes. The National Tax Foundation created the chart below to which Moore explains:

"The United States is actually more dependent on rich people to pay taxes than even many of the more socialized economies of Europe. According to the Tax Foundation, the United States gets 45 percent of its total taxes from the top 10 percent of tax filers, whereas the international average in industrialized nations is 32 percent. America’s rich carry a larger share of the tax burden than do the rich in Belgium (25 percent), Germany (31 percent), France (28 percent), and even Sweden (27 percent)." 

Read more:  http://www.washingtontimes.com/blog/watercooler/2012/oct/9/picket-new-book-shows-us-top-earners-pay-larger-sh/#ixzz29NBu8RxT

Proposal for Higher Workers' Compensation Rates Sparking Concern, Controversy

A proposed hike in workers' compensation insurance rates is generating fear among small business owners.

Workers' compensation insurance is intended to safeguard employees that suffer an injury or illness resulting from their job-related duties.  Coverage includes medical and rehabilitation costs and lost wages for employees injured on-the-job.  Businesses in Delaware must buy the insurance.

The Delaware Compensation Rating Bureau (DCRB) filed papers with the Delaware Department of Insurance in August requesting a rate hike for workers' compensation coverage.  If approved in its current form, rates would increase by about 40-percent for nearly all businesses starting December 1st.

On Tuesday, Insurance Commissioner Karen Weldin Stewart issued a terse press release indicating her agency will hold a public hearing on the request the Friday before the general election in which she is seeking a second term.

At a press conference the following day, Stewart's opponent, Republican Insurance Commissioner candidate Ben Mobley, had sharp words of criticism for his rival.  "I am disappointed in our current Insurance Commissioner's apparent lack of commitment to taking control of the situation and helping to resolve this issue for the sake of our small businesses," he said.  "It wasn't until after I notified the press on Monday about today's media briefing that we heard anything from the Insurance Commissioner's office on this issue.  Her one-page press release setting the date for a November 2nd public hearing on the proposed rate hike falls terribly short."

Workers' compensation insurance rates vary by occupation, with higher rates charged for those workers deemed to be performing tasks that place them at higher risk of injury.  For instance, rates paid by an employer for a clerical staffer would be less than those paid for an electrician or a maintenance worker.

For many small business owners, the proposed rate increase represents a troubling threat to their viability.  "This wave of unexpected costs 60 days from now will cost jobs," said Carrie Leishman, executive director of the Delaware Restaurant Association.  "A business now paying ... $70,000 will be paying over $100,000.  Companies, including the hundreds of restaurants I represent in Delaware, will either have to make the hard decision to ... not fill positions or, worse yet, lay off employees."

Mr. Mobley said he wants the Insurance Commissioner to delay the rate filing until more facts can be gathered on the impact the increase could have on Delaware's state and local economies.          

The Department of Insurance hearing on the filing is currently set for November 2nd at 10:00 a.m. at the Department of Justice, 820 North French Street, 6th Floor in Wilmington.