“Social Security is structurally sound.”

I have a lot of problems with the current state of Presidential debates, including the fact that other parties’ legitimate candidates are effectively barred from stirring the pot.

Because let’s be honest — these events are really just a chance for the candidates to look good, repeat rehearsed sound bites, and continually redirect to their major talking points no matter what question was originally asked.

Still, I like to watch because you just never know what might be said. Take President Obama’s response to Jim Lehrer’s question on Social Security, which went like this …

“You know, I suspect that on Social Security, [Mitt Romney and I have] a somewhat similar position. Social Security is structurally sound. It’s going to have to be tweaked the way it was by Ronald Reagan and Speaker — Democratic Speaker Tip O’Neill. But it is — the basic structure is sound. 

READ MORE:  http://www.moneyandmarkets.com/social-security-is-structurally-sound-50659?FIELD9=1

You are not allowed to know where your tax dollars are going

You are not allowed to know where your tax dollars are going

9/28/2012

 

As a public service and to boost government transparency, the Caesar Rodney website includes payroll data for every state government employee and all vendor transactions. While recently updating this information through June of 2011, CRI ran into a roadblock with regard to adding pension data for retired state workers.

 

The general assembly has written a statute into the state code that requires all pension data on individuals to be kept confidential (29 Del C &8308 (d)). In other words, the taxpayers of Delaware are not allowed to know where their contributions to the pension pot are going.

 

Is this a problem? Yes.

 

First, under Governor Markell the state pension fund has gone from being 103% funded to only 94% funded currently. The “urban legend” is that 80% funded is a sufficient standard. 80% fully funded is like owning a $400,000 house with a $500,000 mortgage. Your balance sheet is upside down and you can only continue to live in the house as long as you keep making the monthly payments. To survive recessions a pension fund should be 125% funded. Anything less leaves the taxpayers on the hook.

 

Second, neither the politicians nor the unions are willing to take serious remedial action. Our elected officials and the unions, together with pension fund trustees and accountants, have been giving away benefits while passing the buck to future generations. They used unrealistic double digit returns on assets; allowed retroactive pension increases; multiple promotions just prior to retirement; amortized unfunded liabilities; and, shifted toward ever riskier investments.

 

While the majority of Delaware’s pension fund consists of contributions directly from state employees, it is not sufficient to cover all that is promised, especially the unfunded $5.7 billion of retiree health care liabilities. The Administration, General Assembly and unions are willing to dance at the fringes by changing the rules for new hires, but real change must involve incumbent employees.

 

Third, public pensions are very generous compared to private pensions and publication of the data will result in considerable outrage among taxpayers. As an example, the average pension for state of California 30-year service retirees is $68,000.  Currently, over 4% of California state retirees receive pensions of $100,000 or more. When adjusted for inflation, the present value of these pensions makes the recipients millionaires.

 

Although our elected official have been unwilling to  seriously address the liabilities to state retirees,  the publication of the individual pension data would provide a rallying point for taxpayers…allowing all of us to see that we have been allowing our public service retirees to “live large” beyond the taxpayer’s ability to  sustain this practice into the future.

 

Hopefully, access to the pension records can be achieved without litigation. Please contact your state senator and representative if you believe taxpayers have the right to know where their money is going and to what future liabilities they are being obligated.

 

 

Dr. John E. Stapleford, Director

Center for Economic Policy and Analysis

 

http://www.caesarrodney.org/pdfs/Pension_data.pdf

Why is the State stonewalling on pension data?

Why is the State stonewalling on pension data?

10/2/2012

 

When the Caesar Rodney Institute launched its Transparent Delaware website in March of this year, the intent was to include with the individual state payroll and vendor data, the most recent state pension data. The request for the pension data was denied on the basis of statute 29 Del c 8308 (d). That statute requires that all records relating to pensions and other post-employment benefits “shall be confidential.”

 

Although this statute is unlikely to withstand a court challenge, CRI simply requested the most recent pension data without the names of individuals. After a long pause, the state again denied the request because it “may be possible to identify an individual from the data requested.”

 

After being forthcoming with individual payroll and vendor data, why is the state stonewalling on pension data? There are three obvious reasons.

 

First, as clearly shown by analysis of the payroll data, all state employees are clearly not equal. In the case of supplemental pay (overtime and “other” pay) 40% of state employees receive no supplemental pay while 10% receive over half of all the supplemental pay. Either there are substantial differences in job requirements, or some state employees know how to “game” the supplemental pay system.

 

In every state where transparency websites have been established, it is the disparities and extremes in the pension data that have fueled public outrage. Certainly, based upon the 2010 payroll data, this would also be the case in Delaware.

 

Orlando George, for example, the highest paid state employee in 2010, would have received an annual pension of $273,000 if he had 30 years of state employment (including time in the legislature) and retired in 2011. This compares to an average annual pension for retirees with 30 to almost 35 years of employment of $31,632 in 2011. The pensions received by the top 10% of state employees by payroll, again assuming 30 years of employment, would equal 63% of all the pension benefits paid in 2011.  

 

Second, many workers in the private sector would have been stunned by the size of the pensions for longer serving state employees. The pension of state employees retired with 30-34 years of service as of 2011 averaged 60% of their final salaries. For state employees retired with 35 years of service or more, it jumped to 66% of their final salaries.

 

Finally, it behooves the state to not have the spotlight put on its retirement pension system. Using data from the pension system’s annual reports, the trends of the last ten years appear unsustainable. From 2001 through 2011 the total pension benefit payments increased 133%. Simultaneously, the value of the pension fund’s investment portfolio rose only 34%.

Over the same time period, the number of persons receiving state pension benefits increased 41% while the number of active employees rose only 18%.

 

To compound matters, the state has been short-changing the fund with respect to the required annual employer’s contribution. The unfunded liability has gone from a surplus of $527 million in 2001 to a deficit of at least $456 million in 2011. The 2011 deficit will be substantially larger if the fund doesn’t earn the assumed return on assets of 7.5% per annum.

 

The burning question is when are state employees going to wake up? The state government has been short changing the pension fund in order to sustain government spending without raising taxes. Clearly, a day of reckoning will come…especially considering that private pension funds assume a return on assets of just 3.5% per annum (the 10 year Treasury bond rate).

 

State employees have consistently met 100% of their necessary obligation to the pension fund each year. They should ask themselves that when push comes to shove, will the politicians increase taxes to make the pension solvent, or will they reduce pension benefits?

 

Dr. John E. Stapleford, Director

Center for Economic Policy & Analysis

Montana governor sees big savings with new state health clinic

* State to save $20 million over five years - governor
* Aim is to reduce duplicate testing for patients
* Doctors paid by the hour rather than by procedure
* Employees pay neither a co-pay nor a deductible

HELENA, Mont., Sept 29 (Reuters) - Montana, looking to cut down on state healthcare costs, has opened the nation's first government-run clinic for state employees in a program the Rocky Mountain state's governor says could ultimately cover a much broader range of people.

Democratic Governor Brian Schweitzer says the primary care clinic in the state capital Helena will keep the area's 11,000 state workers and their dependents healthier while saving the state $20 million over five years.
The move coincides with a national debate over the role of government in healthcare and over President Barack Obama's Affordable Care Act, under which more than 30 million people would become eligible to buy subsidized private insurance or get coverage through Medicaid, the government program for the poor, in 2014.

Republican opponents of that law better known to the public as "Obamacare," which also requires most Americans to have some form of health insurance, say it amounts to government intrusion in the private lives of individuals.   

READ MORE:  http://www.reuters.com/article/2012/09/29/usa-montana-health-idUSL2E8K59RF20120929

US Crude Tumbles Below $90 as Europe Spooks Market

Crude oil prices fell on Wednesday as the euro zone debt crisis escalated and reinforced concerns about slowing economic growth, while U.S. gasoline futures jumped more than 3 percent due to depressed inventories and supply uncertainty.

The continuing dispute between the West and Iran over Tehran's nuclear program limited losses for Brent crude, which is more sensitive to supply disruptions in the Middle East and Africa. 

Europe's debt problems deepened as Spain's economy slowed further and anti-austerity demonstrators and police clashed in Athens and Madrid. The euro [EUR=  1.2984    0.008  (+0.62%)   ] slumped to a two-week low against the dollar and the dollar index [.DXY  79.56    -0.41  (-0.51%)   ] strengthened, pressuring dollar-denominated industrial commodities like oil and copper.

"It is 'risk off' today," said Olivier Jakob, energy analyst at Petromatrix in Zug, Switzerland. "The Greek strike and Spanish demonstrations are getting a lot of coverage." 

READ MORE:  http://www.cnbc.com/id/49172775

Low-wage work force grows 30% as the number of jobs shrinks

Low-wage workers in Chicago are better educated, older and rely more on that income these days to meet basic needs than 10 years ago.

And there are substantially more of them. 

That’s according to a new report released by Chicago-based Women Employed and Action Now Institute that shows nearly one in six low-wage workers here last year held a college degree.

The report, authored by Marc Doussard, assistant professor in the University of Illinois at Urbana-Champaign’s Department of Urban and Regional Planning, defines low-wage workers as those making $12 an hour or less.

The report revealed the share of payroll employees ages 18 to 64 working in low-wage jobs rose from 23.8 percent in 2001 to 31.2 percent last year. That’s a more than a 30 percent rise in the proportion of such workers.

Meanwhile the share of households with a low-wage earner that got all income from low-wage earnings rose from 45.7 percent to 56.7 percent. That’s evidence more people are relying more on those dollars to meet basic needs rather than for disposable income.  READ MORE:  http://www.suntimes.com/15379932-761/low-wage-work-force-grows-30-as-the-number-of-jobs-shrinks.html

Americans’ Incomes Have Fallen $3,040 During the Obama ‘Recovery’

Americans must be wondering how much more of this “recovery” they can afford.  New figures from the Census Bureau’s Current Population Survey, compiled by Sentier Research, show that the typical American household’s real (inflation-adjusted) income has actually dropped 5.7 percent during the Obama “recovery.”  Using constant 2012 dollars (to adjust for inflation), the median annual income of American households was $53,718 as of June 2009, the last month of the recession.  Now, after 38 months of this “recovery,” it has fallen to $50,678 — a drop of $3,040 per household.

Yet it gets worse.  Amazingly, incomes have dropped even more during the “recovery” than they did during the recession.  In fact, they’ve dropped more than twice as much as they did during the recession.  From the start to the end of the recession, the real median income of American households fell $1,413, or 2.6 percent.  From the end of the recession to the present day, it has dropped $3,040, or 5.7 percent.  This begs the question:  What kind of “recovery” compares unfavorably with the recession from which it’s ostensibly recovering?

READ MORE: http://www.weeklystandard.com/blogs/americans-incomes-have-fallen-3040-during-obama-recovery_653116.html