California has the Budget Blues... Again

Ah, to think California almost made it five whole months before diving back into the depths of a budget crisis. Yup, it’s true. Cleverly though, the Legislative Analyst’s Office (LAO) released their report over the long weekend (or maybe just before, it’s not entirely clear from where I’m sitting) so… you know… maybe nobody will see that we’re $20.7 billion in the hole through 2011. Yea, I’m sure nobody will notice. In fact, according to said report, we’re likely to continue to see tens of billions of dollars in deficits until 2014 when revenues are projected to rebound (I think I’ll still keep my fingers crossed on this one, you know, just in case!). Read the LAO’s report here: http://www.lao.ca.gov/laoapp/PubDetails.aspx?id=2143.

So where is the money going to come from this time? Nobody knows for sure, but likely sources are health and human services, education (oi), and corrections. The only possible silver lining to this hurricane of a disaster is the possibility of a lessening of regulations on small businesses (I’m giving that a preemptive “yay”!).

The scary thing (at least for me) about this upcoming budget crisis is that, “Legislators have expressed concerns that approving a balanced state budget will be harder this time around, as some of the easier cuts have already been made.” (http://www.vvdailypress.com/news/billion-15872-california-deficit.html) Um, excuse me, did you say “easier cuts”? Am I the only one who recalls how long it took to resolve the last budget crisis? When we made those “easier cuts”? When people were getting I.O.U.s instead of cash for the tax refunds? Anyone? Anyone?

Why is it that the only people who seem to understand the problem and offer real, realistic solutions are not our elected officials? A letter to the editor published in the Ventura County Star gives some great ideas, check them out at this link: http://www.vcstar.com/news/2009/nov/26/ob9budgetletts27/?partner=yahoo_feeds.

When will the legislature start to work on closing the new budget gap? Well, your guess is pretty much as good as mine, but if you want to follow what the legislature is up to, check out their website: http://www.legislature.ca.gov/.

Since we haven't talked about healthcare in almost a whole month...

The healthcare monster is officially open for debate on the Senate floor. With barely enough votes to even get to the debate part of the process (the motion to debate passed 60-39, with 60 being the minimum amount of votes to pass), the Democrats are in for what could turn into unrestrained debate next month. Did I mention that not a single Republican voted to begin debate and more than likely will not vote for any healthcare reform bill?

The latest argument over the bill: the cost. The U.S. currently has the largest debt we’ve ever had. If we don’t raise the current legal debt ceiling, we will actually default on some of our debt. The healthcare bill as it stands now will cost approximately $979 billion over 10 years. It will also reduce the deficit over the same 10 years, i.e. the bill will NOT add to our current debt. (http://news.yahoo.com/s/ap/20091122/ap_on_go_co/us_health_care_overhaul) Supposedly the bill will save 3.5 million jobs and $800 billion over the next 20 years. Republicans however, don’t buy it and are saying things like, “I don't want to fix the problems in our health care system in a way that creates more of an economic crisis.” (Joe Lieberman, I-CT). Kit Bond (R-MI) even called the whole bill a, “scam”. (http://news.yahoo.com/s/ap/20091122/ap_on_go_co/us_health_care_democrats)

To find out who exactly is full of it, I went straight to the source: The Congressional Budget Office (CBO), the entity in charge of estimating the fiscal impact of bills introduced by congress. Per a CBO report published on November 20th, the federal budget deficit will have a net reduction of approximately $138 billion. ($979 billion cost over 10 years less the $800 billion in savings over 10 years… not exactly $138 billion in net savings, but close enough for our purposes here.) If you’d like to read the whole report, click on the link: http://www.cbo.gov/ftpdocs/107xx/doc10741/hr3962Revised.pdf.

For those of us who are skeptical of the CBO (or any governmental entity), here are the facts:

1. The director is jointly appointed for a four year term by the Speaker of the House and the President Pro Tempore of the Senate.
2. Director and Deputy Director compensation is set by law
3. Approximately 70% of the professional staff hold advanced degrees in either economics or public policy.

For more info in the CBO: http://www.cbo.gov/

Former Director Robert Reischauer, who served from 1989-1995, recently noted, “CBO is there to score savings for which we have a high degree of confidence that they will materialize… There are many promising approaches [in these reform ideas] but you...can't deposit them in the bank.” Hmm, I think I might be sold on this whole billions of dollars in net savings thing…

For an extremely in-depth well-written article on the specifics of the healthcare bill, check this out: http://politics.theatlantic.com/2009/11/a_milestone_in_the_health_care_journey.php

U.C. Tuition Increase.. Because of COURSE students should pay for our budget crisis!

In the midst of the great California budget crisis, at a time when all Californians young and old are feeling the squeeze, last Thursday the University of California regents voted to raise tuition by 32%. DANG! Starting in January, half the hike will kick in, raising tuition to $8,373. The rest of the increase will take effect next fall and will raise tuition to $10,302. To give you an idea of the obscenity of the hike, the average annual tuition increase nation-wide is 6.5%.

I am glad to say that the students are not just rolling over and taking the news lying down. Students at Cal took over an English building, which led to three arrests. Over 2,000 students protested at U.C.L.A., and at least 50 students and one professor were arrested following protests at U.C. Davis. And we certainly can’t leave out those crazy U.C. Santa Cruz kids (you know who you are!) who took over Kerr Hall and demanded, not only the repeal of the tuition increase, but the impeachment of Mark Yudof, President of the University System and the altogether elimination of the regents. We could all take a few good negotiation lessons from those crazy U.C.S.C. kids: First, aim high in negotiating so you can always compromise down, but second, you need to have something to negotiate with in order to get anything you want. Taking over a building will only get you arrested. Unless you can get everyone (and I mean everyone… like on the planet) to agree to stop going to school (i.e. stop paying tuition), you have very little bargaining power.

In case that wasn’t depressing enough for you, here are some interesting statistics: Even though California can’t find the money to fund its education system, we still find the money to maintain all those prisons, check out this chart: http://www.good.is/post/prison-and-college-californias-ridiculous-priorities/. In my article perusing of this topic it seems that California is either #1 or #5 in spending on our prison system (which I think we can all agree is… well… up there), while we are a dim #48 in spending on education. Yikes.

Ever wonder who these so-called “regents” are? Well, I’m glad you asked. Of the 26 board members, 18 are appointed by the Governor to serve 12 year terms, 1 is a student appointed by the Regents to serve a 1 year term (you know, in case they get too uppity), and 7 are ex officio members including the Governor, Lieutenant Governor and several other political cronies. (See their official website here: http://www.universityofcalifornia.edu/regents/) While regents themselves do not earn a salary for their position, they are in charge of setting compensation for all UC executives, administrators, and faculty. Check out some of the (rather disgusting if I may say so) increases in executive and administrative salaries at UC’s this year: http://www.upte.org/about/press/2009-07-23.pdf.

The only regent to vote against the increase was the student regent. I’m shocked.

A Second Stimulus?

This week in the House of Representatives (it’s a soap opera, not unlike As the World Turns), Democrats started discussing a possible jobs bill. Now that the U.S. unemployment rate is officially greater than 10% clearly something must be done (before it was obviously under control, but now that we’ve reached the magical 10%, Congress must act to save us all).

Of course, let’s be clear, this will not be a second stimulus bill (or at least we definitely wouldn’t want to call it that because the public probably wouldn’t like it), the bill will be clearly focused (because Congress is great on focusing) on jobs. So will Congress just throw more money at the problem? Supposedly the main focuses of the bill will be:

* A transportation bill that could cost up to $500 billion
* A tax credit for businesses that create jobs
* Assistance to state governments, which otherwise would lay off teachers, police and other employees as they cope with plunging tax revenues and rising social spending
* Low-interest loans for small businesses
* Another extension of unemployment benefits, which otherwise could run out for millions of jobless workers
* An extension of health-insurance subsidies for the jobless
* A transaction tax on over-the-counter trades in unregulated "dark markets"

On the one hand, our deficit is already over $1 trillion, and this bill certainly won’t be paying for itself in the short run. As House Republican leader John Boehner (heh heh) put it, “Americans are asking, 'Where are the jobs?' But all they are getting from out-of-touch Washington Democrats is more spending and more debt piled on our kids and grandkids. Instead of doubling down with more spending and borrowing, the American people want fiscally responsible solutions to get the economy back on track.” http://news.yahoo.com/s/ap/20091118/ap_on_go_co/us_congress_jobs_bill

On the other hand though, how else are we going to create jobs if we don’t spend any money? According to economist Robert Reich, “The Administration's biggest economic mistake so far was to badly underestimate last January how bad the employment situation would become by Fall. As a result, it low-balled the stimulus -- settling for a plan that, while avoiding even worse job losses, didn't go nearly far enough.” http://www.robertreich.blogspot.com/

Congress Cares! Right?

Yesterday as I perused the headlines to see what the big Congressional news of the week was, here are some of the headlines I saw:

“Bill Clinton spurs US Senate Democrats on health care” (Really? We have to bring back Bill Clinton to get the Democrats to actually do anything useful?)

“Abortion foe seeks curbs in Senate health bill” (Ah yes, apparently abortion is now the big health care bill issue. We don’t want the government to dictate what procedures we can and cannot get – can we say the ‘death panels’ scare – but NO ABORTIONS ALLOWED!)

“US seeks climate framework, not legal pact: experts” (Because when we want our government or businesses to do something, all we have to do is ‘suggest’ it and they’ll get right on it – HA! Hello people, Windows 7 was not really your idea.)

“House passes historic health care bill, with one GOP vote” (Therefore it’s ‘bipartisan’! Boy am I proud.)

“Opponents say they have votes to block U.S. tourism to Cuba” (Two things, one: of all the things happening in this country, we’re concerned about lifting the ban on tourism to Cuba? But two: why are there so many people blocking the lifting of the ban on tourism to Cuba?! Are we still that concerned about Fidel Castro and Communism? Seriously?? I mean, first of all, if I was the U.S., Cuba would be my pinky finger! Secondly, maybe if we opened up Cuba to tourism, the actual people of Cuba wouldn’t be quite so poor, and they would stop trying to invade Florida.)

Ugh, that was all so uplifting that I had to laugh when I saw this headline: “AP-GfK poll: Country in a funk” http://news.yahoo.com/s/ap/20091110/ap_on_go_pr_wh/us_obama_ap_poll

Yes! I am in a funk! Thanks for noticing AP-GfK! The article cites lots of interesting statistics including the fact that only one third of the country approves of how Congress is doing. I’m not surprised, those guys clearly can’t get their act together. Then, I went and looked at the original poll which includes congresses approval rating over time. http://surveys.ap.org/data/GfK/AP-GfK%20Poll%20Final%20November%20Topline%20111009_political.pdf

Ok, so Congress’s approval rating was about 30% in November 2009, but it was 21% in November 2008! Now I’m surprised. You’re telling me that Congress’s approval rating has actually improved by nine percentage points in the last year?! Ok, forget surprised, I’m downright shocked! Or at least I was until I revisited what Congress was doing last year around this time: http://clerk.house.gov/evs/2008/index.asp Enter the Emergency Economic Stabilization Act of 2008 and the Auto Industry Financing and Restructuring Act. Ah, mystery solved.

In fact, looking back on last year at about this time, between the multitude of bailouts, the Dow Jones diving to under 8,000, and the hundreds of thousands of jobs lost, things were looking pretty bleak. At least now, Congress is doing something to try and help me instead of just throwing money at corporate America. Thanks for at least pretending to care Congress! Things are looking up already!

California's U.S. Senate Race: Carly Fiorina Makes it Official!

This week, former HP CEO Carly Fiorina announced her candidacy for one of California’s U.S. Senate seats. Sen. Barbara Boxer is up for reelection in November 2010 and the Republican primary will be held in June.

In the primaries, Fiorina will run against Chuck DeVore, a California State Assemblyman from Orange County a position he has held since 2004. Mr. DeVore has clearly had his feet firmly planted in the political arena since age 19 when he began actively volunteering for the Republican Party. Since then he has been a Reagan White House appointee to the Pentagon, been an aide to former Congressman Christopher Cox, was the City Commissioner for the City of Irvine and has been elected to the Orange County Republican Party Central Committee four times. To read where Mr. DeVore stands on the issues, visit his Chuckdevore.com for U.S. Senate website at http://www.chuckdevore.com/issues/

Given Chucks long political record, compared to the fact that Fiorina has voted in six of the fourteen elections held in California since 2000 and did not vote once in the ten years she lived in New Jersey prior to moving to California, I am surprised that she is already spending her time attacking Sen. Boxer, rather than her primary opponent that she will have to defeat in June.
In fact, I found the video of her campaign announcement absolutely fascinating! Take a look: http://www.youtube.com/watch?v=DIYREAUpkeM

I agree, job creation should definitely be a top priority for Washington. What about those 28,000 HP jobs that went away when you were CEO Carly? What about all those jobs that went overseas?

Fiorina cut her political teeth as top economic advisor to the McCain Presidential Campaign in 2008 (and we all saw how well that went). Although it went particularly badly for Carly, after saying that none of the candidates were qualified to run a major corporation like HP, she was more or less blackballed from the campaign. http://features.csmonitor.com/politics/2008/09/16/is-fiorina-finished-two-big-mistakes-get-carly-in-trouble/

Ok, maybe I’m being a little harsh here, but it seems like she hasn’t done much of anything that anyone has liked. First, she was ousted from HP, then she was ousted from the McCain campaign. What exactly does she think she can bring to the party this time??

Job creation! (I think this should be the new definition of “creationism”.) Focusing on small businesses and entrepreneurs is the way to go. Make it easier to start a new business, she says! But how? The systems are so different depending on which state you’re in (clearly since Delaware is THE state to incorporate your business in while incorporating in California would subject you to expensive laws, regulations, and other terrible things). Maybe she and Meg Whitman should switch races…

Oh, and as a recent breast cancer survivor you better believe that the woman has some serious opinions on healthcare. Although, her problems seem to be more centered on leaving decisions in the hands of the patients and their doctors, ensuring better communication throughout the system, and lowering costs. Not that I have a problem with that, I think all of those things are important. However, lowering costs is never going to happen until you get the uninsured out of emergency rooms, and make preventative care more available. I also have a small problem with someone who received a $21 million severance package from HP telling me that she just had a typical experience in the healthcare system. Money may not be able to buy happiness, but it can certainly buy a better healthcare experience.
For more Carly info, check out her website: http://carlyforcalifornia.com/

Election 2009: Did We Really Care?

I never know how to feel the day after an election. Nothing ever completely goes your way, something will go exactly how you wanted it to, but something else can just wipe that smile right off your face. The two most important races in yesterday’s election were: Proposition 1 in Maine and the Congressional seat in New York’s 23rd district.

Maine voters decided to reject a gay marriage bill signed into law only six months ago, once again outlawing same-sex marriage in yet another state. Gay marriage activists are officially 0 for 30 in these types of votes. http://www.time.com/time/nation/article/0,8599,1934432,00.html?xid=rss-topstories

In better news, New York’s 23rd district is officially out of the woods. (For now.) For me what makes New York’s 23rd district election interesting are two things:

1. A brand new party called “The Conservative Party of New York State” decided to insert their own candidate into the election even though The Republican Party already had a candidate Dede Scozzafava on the ballot. And,

2. The Conservative Party candidate Doug Hoffman took so much of Scozzafava’s base away from her that she actually dropped out of the race three days before the election (drama!!)!

So who is this “Conservative Party of New York State” (CPNYS) anyway? http://www.cpnys.org/ Not to be confused with the American Conservative Party http://www.theamericanconservatives.org/cms/ (Yup, I just figured that out the long way.) To make a long story short, the CPNYS wants to:
* Do away with most taxes
* “Reform” of Medicaid so it looks more like a private health insurance plan
* Have more charter schools
* Restore the death penalty in New York State
* Ban stem cell research
* Constitutionally define marriage as between one man and one woman
* Oppose any government mandate on health care
* Opposes casino gambling (how boring for them)
* And the public property that New York transferred to the United Nations? They would like that property back… please.

All this among other things, of course. Apparently, the problem with the Republican Party candidate, chosen by the Republican Party, was that she just wasn’t conservative enough. In fact, the American Conservative party called her, “an embarrassing, self-serving, union-supporting liberal… She is of questionable fitness to hold a seat in the House of Representatives, and definitely unfit to hold the line against government growth, spending, and abuse of power.” Actually the Conservative Party secretary Charlie Domino (was he a mob boss in his last life?) said that about her. Interesting since he worked for City of Houston Public Works department for twenty years and now has a rather nice pension (provided by the government) that many of us will never even get to dream of having. If you’re interested in how much his pension might be, Houston has a really nifty pension benefits calculator that you can play with here: https://login.hmeps.org/WebBenefitCalc/

Who else was proud to stump for the new Conservative Party candidate, Doug Hoffman? The likes of Sarah Palin, former Presidential Primary Candidate Fred Thompson, and Glenn Beck who Hoffman actually referred to as his “mentor” on Beck’s Fox News show. (Does anyone else find that terrifying?)

But I digress, yesterday the Conservative Party of New York found out if they have a leg to stand on. Can they actually compete with the Grand Old Party? So far it appears to be so. The Conservative Party candidate officially conceded to the Democratic Party candidate Bill Owens with 88% of precincts reporting, however Owens had 49% of the vote, Hoffman had 46% (still a respectable amount), and Scozzafava (who, yes you recalled correctly, isn’t even technically in the race anymore) had 6%. Sounds to me like even though they lost this one, the Conservative Party has a fighting chance, and given how they seem very excited about the right to bear arms, I won’t be surprised if they come out a fightin’ again.

Gavin Newsom: Over and Out

Less than a month after an endorsement from former President Bill Clinton, Gavin Newsom officially dropped out of the California Governor's race on Friday. Mr. Newsom became a father (awww!) last month at age 42, and has cited his young family as well as his responsibilities at city hall as reasons he will not continue in the election. Forget the fact that Newsom had $1.2 million in his election fund at the end of the last reporting period to opponent Jerry Brown's $7.4 million, and I'm sure the twenty percent lead Brown had over him did not help either.

If you're uber curious to read his full statement: http://www.gavinnewsom.com/releases/statement_by_mayor_gavin_newsom, knock yourself out.

So who does that leave the Democrats to vote for in the primary? Jerry Brown or.... nobody. Sounds like June 8th is going to be a super exciting day to be a Democrat.

Although really, with all the problems facing California, I'm not really surprised that people seem to be shying away from running in the upcoming election. I mean, no sooner did we fix (hmmm... maybe "band aid" is a more appropriate term) the budget deficit, than we had another shortfall. That's right folks, only three months later we are already billions of dollars in the hole. By the time the fiscal year ends on June 30th, the new budget deficit for the current year will be approximately $7 billion. State Treasurer Bill Lockyer recently called the budget, "a train wreck" (http://www.nytimes.com/2009/11/01/us/01calif.html), a phrase that I personally believe should be reserved for anything that Michael Scott does.

Oh, but don't worry, there is a plan for shoring up at least part of the budget shortfall. The state is getting an interest free loan! I know what you're thinking: Who on earth would give a state who's bond rating is in the tank an interest free loan? Obama? Nope, we are! The California taxpayer! Darn, that's awfully nice of us. Funny how I don't remember anyone asking if that was ok with me though. Starting today, anyone who has taxes withheld from their paycheck (presumably anyone who gets a paycheck) is going to find that their net pay is just a little bit smaller. Starting this week, the withholding tax rate is increased to ten percent. http://www.latimes.com/business/la-fi-state-tax31-2009oct31,0,2028140.story?track=rss But don't worry, it's not technically an income tax increase, it's just a loan, so you'll get your money back after you file your taxes. That is, unless we have no cash again, in which case good luck with that I.O.U.

With issues like this, I'm not surprised that we seem to be lacking candidates for Governor of California, I'm actually surprised that anyone is running at all.