You're Doing A Bad Job.....Here's My Vote

Last week's release of a Field Poll shows that 16% of Californians approve of the job our State Assembly and Senate are doing. Sixteen percent. Who are these people and why is the number so high? Despite several years now of structural deficits and cash shortages the fiscal policy of the majority has not changed: expand government, protect state employees at all costs to taxpayers, raise taxes.

In late June both Gallup and Rasmussen released polls gauging the American confidence in Congress. According to Rasmussen only 12% of those polled felt Congress is doing either an "excellent" or "good" job. Gallup's numbers reflect this by asking merely if respondents "approve" of how our Washington legislatures are doing. Twenty percent said they approve. Approve of passing the $800 billion stimulus bill, approve of passing Obamacare without reading it or knowing what we are now finding out was in it, approve of passing the massive financial reform bill that will stifle economic growth and job creation as small businesses are burdened with costs and taxes.

So how will voters react to this dismal performance by their representatives? Evidently it is the other guy's representatives we disapprove of in Southern California because our elected officials keep getting recycled and re-elected. The integrity of the voter is abysmal. I am not sure if it is because our region is so incredibly partisan or so incredibly ignorant as to the correlation to our votes and our outcomes.

Case in point are the teachers. Teachers have been furloughed and laid off this past year because of the lack of funds from Sacramento to the school districts. Teachers, almost unanimously, donate about $6 per pay period locally to their Political Action Committee and an additional amount to the statewide PAC at the California Teachers Association. Keeping in mind that teachers are being laid off because of the poor fiscal management and decisions made by our California Legislature over the past decade or more, the teachers are continuing to fund the campaigns of the same politicians who have caused the furloughs and lay-offs.

Chances are after the November 2010 election our Assembly and Senate will look identical to how it looks now because of gerrymandered districts, ignorant voters and ignorant public employee union members who continue to donate to PACs that support the status quo. Next spring our school districts will go through the lay off procedures once again as the same politicians in the same jobs will continue to produce the same results: less money for local education and the perpetuation of structural deficits. Don't believe me? Here is the California Teachers Association endorsement page for the coming election. This is a real diverse group isn't it?

As for Republicans they have already shown their rewarding bad behavior by nominating Mike Villines for Insurance Commissioner in the primaries. Villines is one of a few Republicans that crossed the aisle to vote for the biggest tax increase in history last year. A vote made after he signed a "No Tax Pledge" and vociferously defended the No Tax Pledge publicly. He did not and will not get my vote, not only for his vote that allowed the tax hikes to go through last year but for his lack of integrity and honesty.

Speaking of integrity, in my local Congressional District that went approximately 70% for Obama in 2008 my Congressional Representative is running for re-election. On a record that has been with the Democratic Majority in virtually every single vote, Laura Richardson has shown the District she is nothing if not loyal to the Democratic National Committee, that plays well politically but what about her integrity? In a District that has unemployment near 20% she has supported legislation that hinders small businesses and economic growth. Not that she cares since she has her job and for Richardson that is all that matters. But this is only part of the Richardson iceberg.

A woman driven to climb the political ladder, Richardson bought off union support for her run for the Assembly by introducing legislation in Long Beach that would require hotels on city leases to unionize, thankfully the legislation was vetoed but Richardson got her support, won her primary and in the district was a shoe in for Assembly. In the Assembly she voted to require the California Indian Tribes to unionize their casinos. This guaranteed her support in the race to win the Congressional seat of Juanita Millander-MacDonald who had passed away while in office. Richardson won this race as well and promptly quit making payments on the home she purchase in Sacramento barely a year before.

This past month Richardson was cleared by the Ethics Committee in Congress. She was before the committee because of the dealings with her home in Sacramento that was foreclosed upon, sold by the bank (WAMU) at auction and then bought back from the buyer by WAMU and given back to Richardson. Seems there was some "mistake" in the foreclosure, of all the foreclosures in California the past few years hers was the "mistake" and the bank paid a premium to re-acquire the home to give to her. Evidently, according to the Ethics Committee, the transaction that resulted after Richardson personally contacted WAMU's lobbyist in Sacramento to re-purchase the home well above the foreclosure auction price and deed it back to Richardson was "normal business." Maybe for a member of Congress but I'm not sure too many families in California have experienced such "normal business." Further the committee bought that Richardson was a victim of "loan fraud." Richardson was as much a victim of loan fraud as President Clinton was a victim of sexual harassment and assault.

But to the super-majority in the California 37th Congressional District it does not matter that the incumbent is not intelligent enough, or has enough integrity, to know her personal finances and whether she can afford to support three homes on a public salary. It does not matter that she has received special favors from a now defunct bank that others going through foreclosure will never receive. It does not matter that her loyalty is to herself and to her PAC contributors. What matters is they don't have to think, don't have to look at the character of the candidate, don't have to see any connection between her votes and their conditions. Just look inside the parenthesis and make your vote.

Eighty percent of Americans do not approve of the job Congress is doing, but fifty percent of the registered voters approve of the job their Representative is doing?

Hard to believe that any group that is comprised of individuals selected by a series of majorities could have a lower approval rating than Congress, but the California Legislature manages to succeed. Even more challenging in California than upsetting a Congressional incumbent is upsetting an incumbent in either the Assembly or Senate due to the incredibly partisan districts. That and again the ignorance of the voters to connect their condition and that of the state with their own voting patterns. Despite the almost criminal sell outs to state employees at the expense of the rest of the budget the champion of sell outs, Warren Furutani's district will re-elect him. Rarely is there a SEIU or other labor rally where Furutani is not present. He led a march in Long Beach against immigration policies in which many members of the union were interviewed for a story in the Press-Telegram but did not give their names as they were illegal immigrants. A union with as much power as SEIU that control many in the legislative majority having protests about immigration that are populated by their own members who are illegal immigrants. And the voters will punch Furutani's ticket again in November, and other candidates supported by the SEIU, CTA and other unions reaping billions in the state budgets.

Do voters make the same decisions in their lives that do not include voting? Do they buy the car they have the 80% disapproval for? Do they date the person who they have only a 16% feeling of "excellent" or "good?" Of course not, but that is because they can make the immediate connection between action and resulting impact on their condition.

Across the nation Americans are waking up to the power of their vote, the most powerful right in our Constitution, to select our representatives in government. Reinforcing the studies that have shown for some time the poor performance of our statewide education system, the lesson is yet to be learned by California voters.

I am hoping that come November the majorities in districts across the state will have done their homework and pass their tests in the voting booth. Especially in the CA 37th Congressional District.

DCS07192010

Do The Math: We Can But Congress Can't

Politics is about ideology, horse trading, vote buying, and majorities. The only math a member of Congress needs to know is either 218 for the House of Representatives or 60 for the Senate, these are the number of votes needed to move legislation through their bodies.

As the 111th Congress controlled by Democrats and the White House under President Obama push through yet another massive bill, 1440 pages and counting, that will not be read but will be deemed "necessary" and "urgent" to solve a crisis that is not, it is prudent to understand how little those in control of our government understand about economics and especially basic math.

For the past sixteen months Washington has looked no further than the next days headlines and the elections of 2012. Ask the numerous Congressional and Senate Democrats up for re-election in 2010 how much the White House and Democratic leadership cared about their re-election campaigns in 2010 when they passed Obamacare.

A recent change in events however has shown that perhaps some of the messages have gotten through to the Obama Administration regarding the 2010 elections with his Security and Exchange Commission, the SEC, filing charges against Goldman Sachs the same week the Senate takes up in earnest the massive, 1440 page, financial services reform bill. Very authoritarianesque to use the power of the Executive right at the time the Legislative Branch is taking up major reforms for an industry that has pretty much righted its ship, is shedding weaklings and financing a slowly recovering economy. But if using the SEC can push through financial reforms that concentrate even more power inside Obama's White House then use the SEC they must.

But back to math.

Our Gross Domestic Product is $14.343 Trillion

Currently Federal income ($924 billion) and payroll tax (887 billion) revenue total $1.81 Trillion, total Federal revenue is $2.12 Trillion. Income and payroll taxes are about 12.6% of GDP.

Our current government spending is $3.55 Trillion. $3.55 less $2.13 leaves a deficit for the Federal Government of $1.42 Trillion for the current fiscal year---current fiscal year.

To close the current deficit total Federal Revenue must increase 33%, of Congress plans to close the deficit on tax payers alone Federal income tax revenues must increase 54% from current levels. Again that is just to pay for the current year's deficit.

Outstanding Federal debt is $12.85 Trillion and climbing. At 89.6% of GDP the Federal debt is quickly heading to 90% of GDP with a current deficit of almost 10% of GDP and future projected deficits at 30%.

Currently each worker in America is the equivalent of $103,000 of the GDP, this is because of the economic principle of the velocity of the dollar. The U.S. workforce is at 139 million workers with over 15 million workers not working. To reach zero growth in unemployment the economy needs to add approximately 125,000 jobs to absorb new workers entering the marketplace due to population growth and immigration. To cut the number of unemployed by 10% in one year the economy needs to add 3 million jobs, or about 250,000 jobs per month. This level of job growth has never occurred over a sustained period with the exception of the period during World War II.

Under the current sliding income tax levels approximately 1% of Americans pay between 35-40% of total Federal income taxes, the top 10% pay 70% of income tax and the top 50% pay 97% of the federal income taxes. There are currently 100 million taxpayers.

Of the taxes that are paid $193 billion goes to paying interest on the Federal debt (about 7% of which goes to China who holds almost $900 billion in U.S. Treasuries). That means that 21% of Federal income tax revenue goes to paying the interest on the debt.

The stated objective of the Obama Administration is to "tax the rich" to pay for his policy agendas including Obamacare. Obama defines "rich" on income earnings not on wealth--the "Henry's" (High Earner Not Rich Yet) bear the brunt of his tax policies.

If we consider the top 10% of tax payers the "rich" they are paying 70% of the current income tax revenue, or $647 billion. Currently we need to add an additional $1.42 Trillion to these income earners, meaning their tax liability must double just to pay for this year's spending deficit. Add in spending deficit proposals in the Administration budget of another $3 Trillion and the Administration will call upon the top 10% of income earners to quadruple their income tax burden to reach zero deficit spending. Why work?

The budget proposed by the Obama Administration adds another $3+ Trillion to the current deficit. Because of the sentiment across the country that is against the massive amounts of spending in Washington, extremely high unemployment, added government bureaucracy and control of individual liberty and freedoms through Obamacare, House Speaker Nancy Pelosi knows that any debate on the Administration's budget proposal will only help the Republicans and further hurt Democrats at the polls in November.

Her solution? The House will not take up and pass a budget. Meaning there will be no guidelines for spending and appropriations. Each bill will be passed not within the frame work of what American can afford, but rather what the majority desires. Not having a budget will not reduce the Federal deficit but will allow it to rise uncontrollably.

Government math: we need to add 125,000 jobs per month just to keep unemployment at current levels. The current debt stands at $128,000 per tax payer, however the balance is skewed heavily to the top 10% of income earners. Fifteen million Americans are out of work today, another five to ten million are working part time or are considerably underemployed.

With these figures in the equation Congress and President Obama feel we need to further increase not only the tax burden on current American workers but also future American workers to pay a debt that they continue to grow.

Does this seem anything like the creation of the housing bubble to anyone else? Cheap money, free spending, no limits?

Here are some links:

U.S. National Debt Clock

National Taxpayers Union

U.S. Treasury Major Foreign Debt Holders (you will see that seeing where we are going China has been selling U.S. Treasuries at about $10 billion per month)

DCS 04192010

Health Care Reform Questions That Linger

Questions continue in the health care debate across the country. While every weekend I ask "Just Some Questions" for readers, here are some questions on unresolved issues that face Congress when it reconvenes in September.

The 111th Congress reconvenes in a few weeks, gathering its members from across the country as they return to Washington from visiting their Districts and their constituents. This summer has been different than any summer in recent memory as traditional summer townhall meetings and meet and greets staged by members of both the House and Senate have been the focal point of the health care reform debate. At the center is HR 3200, a proposed bill that runs 1,017 pages as currently offered by the government printing office. Typical summer vacation meet and greets and townhall meetings with members of Congress attract thirty or forty people at most, this summer's meetings have seen overflow crowds and Americans speaking directly to their elected representatives for the first time in generations. With almost 24/7 coverage of the health care reform debate, okay argument, in this country, there are many questions and issues that I feel Congress must address when its summer hiatus is over.

Former Alaskan Governor Sarah Palin created a mini-storm within the storm when she wrote on her Facebook page about "death panels" staffed by government officials who would determine which citizens would be approved to receive which treatments. Mocked, scorned and scoffed at by many, Palin stood her ground and wrote a follow up post on her Facebook page that provided more details and connecting of the dots from HR 3200 that outlined coverage by government insurance of family doctors having end of life consultations with patients, and ability to introduce no extreme measures authorizations among other issues that could be discussed. President Obama reacted by saying, "we won't be pulling the plug on Grandma." Palin and others countered that the intent and attitude of HR 3200 is to use cost-benefit analysis in determining what care can be administered; between cost-benefit analysis of keeping Grandma alive and her consultation with her doctor whom she trusts she may pull the plug on herself. When looked at rationally the argument makes sense. So much sense that members of the Senate Finance Committee have already stated they are pulling any end-of-life consultations out of any bill before them, "it's too confusing" said one member.

Against this background with the House change, modify or delete the end-of-life language in its current version?

With its new name, or new to me, Pharma, Pharmaceutical companies have long been the bad guy in any health care discussion. The number one argument made about Pharma is the huge profits they make and the incredibly expensive costs of their products--particularly products that are mostly consumed by senior citizens on fixed retirement incomes. Not presented in any of those arguments are how Research and Development costs impact those profits. As outlined in a Congressional Budget Office report Pharma's R&D costs and the number of drugs approved for market have a big impact on their profit numbers. "Adjusted for the value of its R&D assets, the drug industry's actual profitability still appears to be somewhat higher than the average for all U.S. industries, but not two to three times higher, as standard measures of profitability indicate." Pharma pays taxes on its profits and then puts money into the approximately $800 million per drug in R&D for new products. Obviously drug companies make money, otherwise they would not be in business. As obviously the profits they make that allow them to stay in business is beneficial not only for the American public but is a global benefit as Pharma has developed drugs that cure cancer, prevent pregnancies, prevent major illnesses like polio, cure our hangovers and allow better performance in certain parts of our lives. With the long and protracted process of getting a drug from laboratory to pharmacy shelf the overall cost of drug development climbs every year. For many years Pharma has been one of the go to whipping dogs of the Democrats when they jumped on the health care soap box. A few weeks ago it was leaked that the White House made a deal with Pharma without bringing in any members of Congress--yes a secret, backroom deal from the Obama Administration with the Pharma lobbyists. In exchange for $150 million in support for advertising and public relations for the Democrats health care reform, the reform would include caps on drug costs that Pharma could accept to maintain their profitability.

How will the majority in Congress deal with the deal made between the President and Pharma? Will they compromise their desire to cap drug costs at a higher level and respect the President's deal and $150 million cost for the deal to Pharma?

Currently hospitals must treat all who enter their facilities for service. The financial problems often begin after treatment has started or ended. In California if a patient comes into a hospital that is not contracted with MediCal, once the patient is stable for transport the hospital must contact hospitals in the region to see if any have beds available to accept the patient. For both MediCal/Medicaid and Medicare, once a patient leaves a hospital a bill is presented to the appropriate government bureaucracy for payment. The bureaucracy then replies back, often at a much reduced payment and multiple denials of coverage for days in the hospital, treatment, etc. After the patient has been stabilized and sent home or to another hospital, in other words once the sick patient is cured, the government entity responsible for payment denies payment to the hospital for some of the treatment provided. This post-treatment denial of coverage, decisions made by government employees without medical degrees or training, costs hospitals, doctors, laboratories, technicians, billions of dollars every year.

In HR 3200 is a lot of language about cost-benefit decisions on care. Currently those decisions are being made by government health insurance programs after care has been provided and costing our health care system billions of dollars. Expanding this process to even more patients across the country will lead to even more treatment of patients with even less payment. How will you balance the cost-benefit treatment analysis with keeping hospitals open?

HR 3200 is over 1,000 pages in length. It is incredibly detailed and complicated. This has been one of the biggest arguments against HR 3200, because of its length and complexity almost no one who reads it can understand all of it. Of all I have read and seen, the public's questions of their Representatives, the one most often repeated is, "How can you vote for something you do not understand?"

Will members of the House and Senate work to simplify HR 3200 so that most Americans, let's even say most Americans with a college degree, can read and understand the bill? Will members of Congress read the final bill before voting to pass it?

One of the biggest arguments in favor of health care reform is health insurance companies denying coverage because of pre-existing conditions. This pre-existing condition denial happens most often when an individual or family moves from one insurance company to another, which happens most often when the primary beneficiary changes employment. With the average American being much more mobile in employment between companies over his/her career than in the past, with the growing number of self-employed or independent contractors in American, more and more Americans every year are in a position where they do not qualify for a company based insurance program, or must go through the expensive COBRA option. Our health care system has evolved, through government encouragement and directive, so that employers have become responsible for the health insurance of their workers and their families. This costs employers, including public entities, billions of dollars every year in costs and at the same time limits the insurance choices now and in the future of its workers--many Americans stay in jobs they hate because of the insurance coverage for their family, especially if they have a child with a specific condition that would prevent them from getting insured from a new company should they change employers.

Will Congress create a plan that would make it more beneficial for Americans to purchase and maintain their health insurance coverage as individuals instead of their having to purchase their insurance through their employers--or the government? Will Congress changes the rules so that insurance companies can offer coverage across state lines without being subject to multiple state rules and allow a family to stay with the same carrier through many jobs, many moves and changes in their conditions?

Many have used the argument for the end of July push to get HR 3200 passed in a couple of weeks that, "we have had over 40 years to fix this, hasn't it been enough time." Or, "the Republicans had eight years to fix the health care system and didn't do it." Well yes, the Republicans had the White House for 8 years under George W. Bush and there was no health care reform, and before that the Democrats had the White House under Bill Clinton with no health care reform, and before that the Republicans had the White House for 12 years between George H.W. Bush and Ronald Reagan, and....during this time the Congress was at various times controlled by one party or the other. Just because several Administrations and Congresses have not addressed health care reform seems to be a reason for pushing through lengthy and complex legislation that has been read nor understood by almost no members of Congress, unless you just want reform of any kind without concern as to the consequences of the reform.

Will Congress take a measured approach to health care reform and divide the reform into manageable segments with the agreement of both parties? Will Congress enable thoughtful discussion and debate on a piece by piece basis addressing the current private and public insurance options, reimbursement of health care providers giving care to uninsured, ability to continue insurance with the same carrier and doctors throughout ones career/life, simplifying billing an reimbursement processes, government involvement in health care delivery and approvals?

Finally, can members of Congress, particularly those in leadership positions, quit with the divisive politics and name calling? Can members of Congress accept that most Americans consider government involvement in their health care to be somewhat scary, very unknown as to what it will mean to their future and the future of their families and very personal and as such they do not want political rhetoric, name calling and dismissive remarks and behavior? Can members of Congress do what they have been selected by the American people to do, which is to lead with the consent of their constituents?

Most Americans want our current health care system to undergo some changes and reform, our disagreements are over how those come about and what the total reform needs to be. Can members of Congress understand they can achieve national unity with a clear stated final objectives and then work together for common ground on how to achieve those objectives?

In about fifteen months every member of the House of Representatives and about one-third of the members of the Senate are facing re-election. How these members of Congress perform in the coming months on the health care reform issue will matter greatly in November 2010, for there has not been an issue in the past few decades that has gained the attention of so many Americans with disparate views. Not wars, not economies, not political scandal. Not since the Civil Rights movement of the 1960s have so many Americans who are usually silent raised their voices on an issue. Do members of Congress hear those voices? Are they all listening?

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