Unsilent Generation

Entries categorized as ‘economy’

Conservative Agenda Plays Out Through Health Care Reform

July 20, 2010 · 2 Comments

Conservatives may complain bitterly about “Obamacare,” but they “are winning more than even they may realize in the current health care equation.” That’s the point made by Drew Altman, president of the Kaiser Family Foundation, in a recent column.

[F]or all of the frustration and even anger within the conservative movement about where health care is headed, the fact of the matter is that they are winning more than even they may realize in the current health care equation. That’s because the nature of health insurance itself is being redefined and moving gradually but seemingly inexorably in the direction conservatives have long advocated: more consumer “skin in the game” through higher patient deductibles.

Item: In our recent survey of people in the non-group insurance market, we found that the average deductible for an individual policy is now $2,498, and for families it’s $5,149. These are very high thresholds by any standard. Consider, for example, that a family with median income facing such a deductible would be spending almost 10% of their annual income just for their deductible before their insurance kicked in.

Item: The percentage of workers facing high deductibles — $1,000 or more for single coverage –  has been growing rapidly. It doubled from 10 percent to 22 percent between 2006 and 2009, and increased from 16 percent to 40 percent in small firms.

Item: Indications are that the share of workers with high deductibles is continuing to grow, a trend I expect our 2010 employer survey to confirm when we release it in September as we have every year for more than a decade now. And a substantial number of these high deductible plans are paired with tax-advantaged savings accounts, which conservatives have long advocated. Facing cost pressures without alternative answers, employers are moving to plans with less comprehensive coverage to reduce their expenses for employee benefits.

Item: Health reform is unlikely to reverse these trends. Large employers will continue to look for ways to address the rising cost of health care. And, for the basic “bronze” insurance plan that people will be required to buy, deductibles could run several thousand dollars for individuals and double that for families. To be sure, other aspects of health reform cut the other way. For example, there will be no cost sharing for preventive services in newly-purchased plans, and insurers will be required to cap consumer out-of-pocket costs at defined levels. And, of course, there are substantial subsidies to reduce premium and out-of-pocket costs for lower-income people. But, for the first time, the government will be defining the threshold that decent insurance must meet, and that minimum coverage will have the kind of high deductibles that conservatives favor.

There’s still another facet to all of this: While many of the effects of health care reform may actually suit a conservative agenda, Republicans will use this self-same health care reform as a “socialistic” bogeyman to help them win the 2010 Congressional elections.

Categories: 2010 elections · Congressional Republicans · Obama Administration · financial crisis / recession · health care · health insurance industry · right wing
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Blame It On the Geezers: Matt Bai’s Generational Theory of Politics

July 18, 2010 · 8 Comments

In Sunday’s New York Times, Matt Bai argues that it’s old people who are disproportionately driving the Tea Party Movement, and especially its anti-government venom and its strong racist element. “According to a survey by the Pew Research Center in June, 34 percent of Americans between the ages of 50 and 64 — and 29 percent of voters 65 and older — say they agree with the movement’s philosophy; among Americans 49 and younger, that percentage drops precipitously,” he writes. ”A New York Times/CBS News poll in April found that fully three-quarters of self-identified Tea Party advocates were older than 45, and 29 percent were older than 64.”
 
Based on this data, and on the history of the last 70-odd years, Bai constructs a theory that divides American politics largely along generational lines:  
[A] sizable percentage of the Tea Party types were born into a segregated America, many of them in the South or in the new working-class suburbs of the North, and lived through the marches and riots that punctuated the cultural and political upheaval of the 1960s. Their racial attitudes, like their philosophies of governance, reflect their complicated journeys…
 
In other words, we are living at an unusual moment when the rate of progress has been dizzying from one generation to the next, such that Americans older than 60, say, are rooted in a radically different sense of society from those younger than 40. And this generational tension — perhaps even more than race or wealth or demography — tends to fracture our politics.
 
These numbers probably do reflect some profound racial differences among the generations, but they are more indicative of how young and old Americans approach the issues of the day, generally. Older Americans now — no longer the New Deal generation, but the generation that remembers Vietnam, gas lines and court-ordered busing — are less enamored of expansive government than their parents were. They fear changes to their entitlement programs, even as they denounce the explosion in federal spending. They are less optimistic about the high-tech economy, more fearful of the impact of immigration and free trade.
So what’s wrong with this picture? Mostly, what’s wrong with it is what’s left out. Bai (who is 41) mentions that todays old folks ”lived through the marches and riots that punctuated the cultural and political upheaval of the 1960s.” But who, exactly, does he think was carrying out the marches and riots? The exact same age group, of course–made up of my own generation and that of the Baby Boomers.
 
These people are today, for the most part, over the age of 60–the precise age that places our roots, Bai says, in a “radically different society.” Despite these apparently rotten roots, the generations that Bai criticizes (with a hint of oh-so-condescending compassion) managed to accomplish the following:
 
1. Launched and fought the Civil Right Movement, in which several dozen African Americans and a handful of white lost their lives, and hundreds more were beaten and arrested. Compared to this, the accomplishment of younger generations–voting for a black president–was a cakewalk.
 
2. Protested against and eventually shortened the Vietnam war. These protests were large, fierce, and widespread, and went on for years. Unless I somehow missed it, I’ve yet to see a comparable antiwar movement mounted today, among the young people Bai celebrates.
 
3. Supported the War on Poverty–not only with our rhetoric, but with our paychecks. (The top marginal tax rate in 1965 was 70 percent; now it’s 35 percent). In contrast, today’s Democratic party, starting with Clinton and continuing through Obama, has pretty much abandoned the poor to their fate. So today’s bourgeoise youth can declare themselves “progressive” without having to give up a thing.
 
The gist of Bai’s article is that our society will improve as we bigoted old geezers to die off, and make way for more broad-minded generations. But I wonder: Are there any among the younger generations who are going to fight the kind of fights we fought in this brave new world? If there are, they’d better stand up now. 

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Categories: Baby Boomers · Obama Administration · Silent Generation · age discrimination · budget / tax policy · generations / intergenerational issues · media · radical geezers
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Hey,You Liberal Dummies. It’s the Tenth Amendment

July 16, 2010 · 1 Comment

The mainstream press has been gushing on for months about the jobless economic recovery, when in fact, the recession never ended–just ask the people who have been on unemployment for well over a year and still can’t find jobs. The press and the pols say they’re just recalcitrant bums,too lazy to work, and all we’ve got to do is throw out the Mexicans and force our guys to pick up the broom. Maybe we can motivate the slugs by removing unemployment insurance.

  Of course, the government, in the manner of the socialist New Deal,could hire all these bums and put them to work rebuilding the nation’s infrastructure– for example, a nationwide rail system like they have in the French nanny state.God help us if that happened.Socialism would collapse into anarchism and lead to return of the unions.

  The right wing Republican solution to all this is states rights.Naturally they don’t call it states rights. It’s the tenth amendment, stupid.Can’t you read? In which case, this latest report from the liberal-minded (that is `socialist’) Center on Budget and Policy Priorities might be of interest. Here is a summary:

At least 46 states struggled to close shortfalls that totaled $121 billion when adopting budgets for the current fiscal year (FY 2011, which began July 1 in most states). These came on top of the large shortfalls that 48 states faced in fiscal years 2009 and 2010.

Federal assistance has reduced the extent of state spending cuts and state tax and fee increases needed to close the shortfalls. But it now appears likely the assistance will end before state budget gaps have abated. If states get no further federal assistance, the steps they will have to take to eliminate deficits will reduce aggregate demand and weaken the economy at a critical moment in its recovery. Such measures likely will take a full percentage point off the Gross Domestic Product. That, in turn, could cost the economy 900,000 jobs next year.

At least 46 states struggled to close shortfalls that totaled $121 billion when adopting budgets for the current fiscal year (FY 2011, which began July 1 in most states). These came on top of the large shortfalls that 48 states faced in fiscal years 2009 and 2010.

Federal assistance has reduced the extent of state spending cuts and state tax and fee increases needed to close the shortfalls. But it now appears likely the assistance will end before state budget gaps have abated. If states get no further federal assistance, the steps they will have to take to eliminate deficits will reduce aggregate demand and weaken the economy at a critical moment in its recovery. Such measures likely will take a full percentage point off the Gross Domestic Product. That, in turn, could cost the economy 900,000 jobs next year.

You can read the full report here http://www.cbpp.org/cms/index.cfm?fa=view&id=711
or here http://www.cbpp.org/files/9-8-08sfp.pdf 11pp.

Well, as the Tea Party would say, it’s their own fault.

Categories: 2010 elections · budget / tax policy · economy · financial crisis / recession · poverty
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Meet the Real Death Panels: The Truth About Age-Based Health Care Rationing

July 12, 2010 · 3 Comments

The latest issue of Mother Jones includes an article by me about the controversy over age-based health care rationing, which got transformed by the right into government “death panels.” Unfortunately, liberals have fallen into a different trap, because they refuse to take on the real enemies of affordable health care for all: the insurance companies, drug manufacturers, and other profiteers of our private health care system.

As a result, old people are being asked if we would be willing to give up some expensive, life-sustaining treatment so that our grandchildren can have health care. This is a bogus question, and a bogus “choice.” The real question, as I say in the article, is whether we should give up the treatment “so some WellPoint executive can take another expensive vacation, so Pfizer can book $3 billion in annual profits instead of $2 billion, or so private hospitals can make another campaign contribution to some gutless politician.”

It’s a long article, and I’m including just the opening here, with a link at the end to continue reading at the Mother Jones web site. Or you can read the whole thing at MotherJones.com by clicking here. And if you’re one of those geezers who still likes reading print and turning pages, the July/August issue is on newsstands now.

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From Mother Jones, July/August 2010

There’s a certain age at which you cease to regard your own death as a distant hypothetical and start to view it as a coming event. For me, it was 67—the age at which my father died. For many Americans, I suspect it’s 70—the age that puts you within striking distance of our average national life expectancy of 78.1 years. Even if you still feel pretty spry, you suddenly find that your roster of doctor’s appointments has expanded, along with your collection of daily medications. You grow accustomed to hearing that yet another person you once knew has dropped off the twig. And you feel more and more like a walking ghost yourself, invisible to the younger people who push past you on the subway escalator. Like it or not, death becomes something you think about, often on a daily basis.

Actually, you don’t think about death, per se, as much as you do about dying—about when and where and especially how you’re going to die. Will you have to deal with a long illness? With pain, immobility, or dementia? Will you be able to get the care you need, and will you have enough money to pay for it? Most of all, will you lose control over what life you have left, as well as over the circumstances of your death?

These are precisely the preoccupations that the right so cynically exploited in the debate over health care reform, with that ominous talk of Washington bean counters deciding who lives and dies. It was all nonsense, of course—the worst kind of political scare tactic. But at the same time, supporters of health care reform seemed to me too quick to dismiss old people’s fears as just so much paranoid foolishness. There are reasons why the death-panel myth found fertile ground—and those reasons go beyond the gullibility of half-senile old farts.

While politicians of all stripes shun the idea of health care rationing as the political third rail that it is, most of them accept a premise that leads, one way or another, to that end. Here’s what I mean: Nearly every other industrialized country recognizes health care as a human right, whose costs and benefits are shared among all citizens. But in the United States, the leaders of both political parties along with most of the “experts” persist in treating health care as a commodity that is purchased, in one way or another, by those who can afford it. Conservatives embrace this notion as the perfect expression of the all-powerful market; though they make a great show of recoiling from the term, in practice they are endorsing rationing on the basis of wealth. Liberals, including supporters of President Obama’s health care reform, advocate subsidies, regulation, and other modest measures to give the less fortunate a little more buying power. But as long as health care is viewed as a product to be bought and sold, even the most well-intentioned reformers will someday soon have to come to grips with health care rationing, if not by wealth then by some other criteria.

In a country that already spends more than 16 percent of each GDP dollar on health care (PDF), it’s easy to see why so many people believe there’s simply not enough of it to go around. But keep in mind that the rest of the industrialized world manages to spend between 20 and 90 percent less per capita and still rank higher than the US in overall health care performance. In 2004, a team of researchers including Princeton’s Uwe Reinhardt, one of the nation’s best known experts on health economics, found that while the US spends 134 percent more than the median of the world’s most developed nations, we get less for our money—fewer physician visits and hospital days per capita, for example—than our counterparts in countries like Germany, Canada, and Australia. (We do, however, have more MRI machines and more cesarean sections.)

Where does the money go instead? By some estimates, administration and insurance profits alone eat up at least 30 percent of our total health care bill (and most of that is in the private sector—Medicare’s overhead is around 2 percent). In other words, we don’t have too little to go around—we overpay for what we get, and we don’t allocate our spending where it does us the most good. “In most [medical] resources we have a surplus,” says Dr. David Himmelstein, cofounder of Physicians for a National Health Program. “People get large amounts of care that don’t do them any good and might cause them harm [while] others don’t get the necessary amount.”

Looking at the numbers, it’s pretty safe to say that with an efficient health care system, we could spend a little less than we do now and provide all Americans with the most spectacular care the world has ever known. But in the absence of any serious challenge to the health-care-as-commodity system, we are doomed to a battlefield scenario where Americans must fight to secure their share of a “scarce” resource in a life-and-death struggle that pits the rich against the poor, the insured against the uninsured—and increasingly, the old against the young.

For years, any push to improve the nation’s finances—balance the budget, pay for the bailout, or help stimulate the economy—has been accompanied by rumblings about the greedy geezers who resist entitlement “reforms” (read: cuts) with their unconscionable demands for basic health care and a hedge against destitution. So, too, today: Already, President Obama’s newly convened deficit commission looks to be blaming the nation’s fiscal woes not on tax cuts, wars, or bank bailouts, but on the burden of Social Security and Medicare. (The commission’s co-chair, former Republican senator Alan Simpson, has declared, “This country is gonna go to the bow-wows unless we deal with entitlements.”)

Old people’s anxiety in the face of such hostile attitudes has provided fertile ground for Republican disinformation and fearmongering. But so has the vacuum left by Democratic reformers. Too often, in their zeal to prove themselves tough on “waste,” they’ve allowed connections to be drawn between two things that, to my mind, should never be spoken of in the same breath: death and cost.

Click here to the rest at MotherJones.com.

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Categories: Congressional Democrats · Congressional Republicans · Medicare · Obama Administration · Social Security · budget / tax policy · corporations · death / end of life care and choices · drug industry · financial crisis / recession · generations / intergenerational issues · health care · health insurance industry · lobbying · media · right wing
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Petition to Stop the Entitlement-Cutting “Catfood Commission”

July 12, 2010 · 5 Comments

Readers of Unsilent Generation may be interested in a new online petition directed at members of Congress, concerning the work of the National Commission on Fiscal Responsibility of Reform, which I’ve written about here many times before. Here is the introduction to the petition, which was started by Alternet. You can read the text of the petition, and sign it, here at Change.org. 

Right-Wing “Deficit Hawks” and their enablers are on a march to destroy the social safety net we built for our seniors and retirees. Shockingly, some of the most notorious advocates are actually in charge of the presidential commission that will soon determine the future of Social Security and Medicare. We need to stop them in their tracks! Join us in calling on Congress to Stop the Catfood Commission.

The National Commission on Fiscal Responsibility and Reform has been dubbed by progressives the “Catfood Commission” because its goal appears to be cutting benefits so drastically that retirees will only be able to afford to eat pet food. It’s hard to tell exactly what the commission is planning because its meetings are closed to the public and the press. Based on past statements and the background of its members the proposals are likely to include raising the retirement age to 70, turning large portions of Social Security over to Wall Street, and cutting Medicare benefits.

The commission’s co-chairman Alan Simpson, a former Republican senator from Wyoming, has stated he believes the founders of the Social Security program never expected anyone to actually live to 65 and collect. “People just died,” he has said. “Social Security was never [for] retirement.” Erskine Bowles, the other co-chairman, negotiated a secret but ultimately unsuccessful deal between Bill Clinton and Newt Gingrich to cut Social Security benefits. Any chances that the commission would make cuts to the US defense budget in its pursuit of fiscal responsibility seem slim owing to the fact that the CEO of Honeywell, a major defense contractor, is a member of the panel.

We can’t sit back and count on a Democratic-controlled Congress to protect our social safety net. Just a day before the July 4th holiday weekend, the House of Representatives passed a measure that would guarantee an up-or-down vote on the Catfood Commission’s recommendations in the current session of Congress if they pass the Senate. With this measure House Speaker Nancy Pelosi relinquished her power to prevent the vote from coming to the floor.

Your representatives need to hear from you NOW.  Let’s stop the Catfood Commission from raiding the Social Security trust fund and slashing medical benefits for current and future retirees.

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Categories: Congress · Congressional Democrats · Congressional Republicans · Medicare · Obama Administration · Social Security · Wall Street / financial industry · age discrimination · budget / tax policy · financial crisis / recession · generations / intergenerational issues · poverty · right wing
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New York City Is Abandoning Its Elders

July 11, 2010 · 1 Comment

Last week, Clyde Haberman of the New York Times  wrote about aging in his column, celebrating all that New York City is doing for its older residents:

 [I]t was interesting to come across a bit of news the other day that drew few headlines. The World Health Organization added New York to its “global network of age-friendly cities.” It was an international tip of the hat to the city for trying to make itself a better place for growing old. “It makes us members of a club of people who are struggling, in their own and perhaps much different ways, with learning about and thinking about and approaching this issue,” said Linda I. Gibbs, the deputy mayor for health and human services. “It’s really a lovely recognition.” In some respects, New York is a great place in which to grow old. A decade ago, the Department for the Aging banged that drum, promoting this as “the ultimate retirement city.” It listed advantages like reduced mass-transit fares, splendid parks and limitless cultural opportunities to keep the mind active… 

New York ranked No. 7, based on considerations like available medical care, living space for the elderly and the relative ease of getting around on subways and buses. Portland, Ore., had top billing, a decision that surely had nothing to do with the fact that Sperling’s is based in Portland. “We’re a retirement destination,” Ms. Gibbs said. “A lot of retirees come with their bank accounts.” In recent years, the Department of City Planning says, about 11,500 people 65 and older have moved into New York each year.

Unfortunately, this presents a distorted picture of what’s going on.  In the same week that Haberman’s column was being celebrated for its “age-friendliness,” I received an email regarding cuts to New York’s services for the aging from Bobbie Sackman. She is a leading advocate in the City for the elderly, and runs the Center for Senior Community Services (CSCS), a non-profit that serves 300,000 older New Yorkers through a network of 363 senior centers, housing, adult day care, services for the homebound, mental health and other programs. Sackman wrote:

The New York City Department of Aging DFTA is a very small city agency and was just cut by $22 million – vulnerable seniors were hurt as social adult day services for people with Alzheimer’s lost all its funding which is devastating to both the individual with Alzheimer’s and their family caregivers being ripped apart by this disease, a 40 percent cut to a home care program for people above the Medicaid level (with incomes mostly $15,000-$20,000 a year in NYC), and other cuts.

The cuts affect New York’s most vulnerable elders–those who are poor, seriously ill, or suffering from Alzheimer’s Disease. These older people were living on the edge as it was. With these deep cuts, there’s cause to wonder how they will even survive, much less enjoy New York’s “age-friendly” attractions.

Categories: age discrimination · budget / tax policy · financial crisis / recession · health care · media · poverty
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Young and Old Starve in Niger Amidst Markets Filled With Food

June 21, 2010 · 1 Comment

Photo: Oxfam

International aid agencies have issued emergency appeals about the rising famine in the West African nations of Niger and Chad, which could eventually threaten millions. The Guardian reports today: 

Starving people in drought-stricken west Africa are being forced to eat leaves and collect grain from ant hills, say aid agencies, warning that 10 million people face starvation across the region.

With food prices soaring and malnourished livestock dying, villagers were turning to any sources of food to stay alive, said Charles Bambara, Oxfam officer for the west African region. “People are eating wild fruit and leaves, and building ant hills just to capture the tiny amount of grain that the ants collect inside…

In Niger, which the United Nations classifies as the world’s least developed country, starving families are eating flour mixed with wild leaves and boiled plants. More than 7 million people – almost half the population – currently face food insecurity in the country, making it the hardest hit by the crisis. According to UN agencies, 200,000 children need treatment for malnutrition in Niger alone. “Niger is at crisis point now and we need to act quickly before this crisis becomes a full-blown humanitarian disaster,” said Caroline Gluck, an Oxfam representative in the country.

The real tragedy–and travesty–lies in the fact that there is food available in Niger, but starving people cannot afford to buy it.

With food prices spiralling, people are being forced to slaughter malnourished livestock, traditionally the only form of income. “When you walk through the markets, you can see that there is food here. The problem is that the ability to buy it has disappeared. People here depend on livestock to support themselves, but animals are being killed on the edge of exhaustion, and that means they are being sold for far less money. And on top of that, the cost of food basics has risen,” explained Gluck. Compounding the crisis, thousands of animals have starved to death as villagers use animal fodder to feed themselves…

“This is just the beginning of the traditional hunger period, and people have already been forced to sell their livestock. This is very early for the alarm bells to be ringing, before Niger has even reached the start of the most critical part of the food calendar. You can imagine three to four months down the line how shocking the situation will be,” said Gluck…”West Africa has traditionally not been very high on the developed world’s priority list. The question now is how many people do we have to see die before the world will act?” she said.

In “Freemarkets and Famine in Niger,” the Guardian‘s Jeevan Vasagar writes that during the most recent famine in Niger, in 2005, ”free market dogma stopped the government giving out free food to the starving.” He warns that this disaster could easily be repeated. Other analysts blamed the 2005 famine in large part on the economic policies of the IMF and EU, which contributed to a precipitous rise in the prices of staple grains.

This year, global economic factors, combined with a recent coup in Niger, are once again compounding a crisis caused by drought, and the toll in lives will be high. Just how high depends upon what the international community and Niger’s government do next.  One aid official told the Guardian that if relief does not come quickly, the crisis could reach the proportions of the 1984 famine in Ethiopia, “during which an estimated 1 million people died due to drought and a slow response to the crisis both within the country and internationally.”

Photo: Rachel Palmer/Save the Children

The photographs already making their way out of Niger are heartbreaking and horrifying. Like the news reports, they tend to focus on children, who make up half of Niger’s population. Nearly 380,000 children are at risk of starvation in the next few months, according to Save the Children. 

In the 2005 Niger famine, the UN identified the elderly and the sick, along with children, as the “most vulnerable groups,” who would be “on the brink of being wiped out” without substantial aid. The Guardian reported that older people were often the last to be fed even when help arrived: “As aid agencies focus their scant resources on saving malnourished babies and children, the elderly are the forgotten victims of the crisis in Niger.” Older women, in particular, usually fell at the end of the line.

Oxfam is taking donations for its emergency response in West Africa here. Save the Children’s emergency appeal for Niger is here. To support emergency aid programs specifically targeting the needs of old people, donations can be made to HelpAge International.

Categories: age discrimination · international · media · poverty · women elders
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After BP’s Disaster and Obama’s “Malaise,” Coal Is the Big Winner

June 21, 2010 · 3 Comments

No sooner had Obama made his Oval Office energy speech last week  than the pundits were comparing him to Jimmy Carter, saying his Debby Downer message was just like the so-called ”malaise speech” in which Carter tried to wise up the populace to the energy mess. The Sunday morning pontificators were falling over each other to make the comparison yesterday, and even Der Spiegel ran an article asking “Will Obama Be the ‘Jimmy Carter of the 21st Century’?”

I’m not even going to try to weigh in on that question. But I am old enough to remember the “malaise speech,” which was not quite the speech that’s now being depicted by the pundits. Carter’s speech in July 1979 decried American reliance on foreign oil and proposed fresh departures into alternative energy. One of its main points was to seek creation of a new energy corporation to back alternatives fuels. There were some nods to solar energy and other renewable sources, but the real push was toward the oxymoronic “clean coal” in the form of coal gasification and liquefaction, along with the mining of oil shale, which is one of the most environmentally destructive energy extraction methods ever invented.

Carter’s speech followed the Three Mile Island nuclear accident, and as much as anything else was occasioned by the pressure he was under from the public outcry which followed that near-catastrophe. In addition, the OPEC oil embargo of the early 1970s was still a not-too-distant memory. So nuclear energy was effectively shelved, oil held more or less steady, and the biggest winner was the cheap and plentiful homegrown energy source: coal. Once scorned for its destructive strip-mining and filthy emissions, coal suddenly didn’t look so bad when compared with the risk of radiation poisoning–especially if it could be greenwashed and rebranded as a “clean” energy source.

The upshot of it all was hardly an energy “malaise’,” nor did it result in a major change in energy policy. Instead, it was a slight shift in strategy–a reshuffling of the cards. And in the end, it was the same old same old: The fossil fuel solution in a slightly different package. 

There, most likely, is where we’ll see a real parallel between Carter and Obama: If the BP spill is Obama’s Three Mile Island and the Iraq War his OPEC embargo, his reaction to these crises will probably echo Carter’s: coal, coal, and more coal. The president has long declared himself a fan of  coal, and back in February–before BP’s well exploded–he issued a presidential memorandum ordering a special task force to move forward with the questionable technologies that are supposed to render coal ”clean.” As David Sassoon wrote at the time on SolveClimate:

Obama’s executive office memorandum looks like a big victory for the coal industry, which was already handed $3.8 billion in last year’s stimulus act for carbon capture and storage (CCS) research and development and deployment. He did not simultaneously order a similar plan for a big roll-out of solar or wind energy to level the playing field.

Making good on campaign promises, the president is throwing the full weight of his administration behind a moonshot effort to make coal the “clean” energy technology of choice and open a federal pathway to a profitable future for one of the nation’s most polluting industries.

Three factors have cemented Obama’s support for carbon capture and sequestration technology: political necessity, economic opportunity and the backing of some of the most powerful mainstream environmental organizations operating inside the Beltway.

If Obama’s support for coal was “cemented” before the BP disaster, I’d be willing to bet he loves it even more after spending some time with the dead birds and tar balls on the Gulf Coast.

Categories: Obama Administration · corporations · economy · energy · environment · media · public safety
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Ripping Off Workers’ Pay to Increase Executive Pensions

June 17, 2010 · Leave a Comment

You just can’t win. Here’s news from the always helpful Pension Rights Center on how executives deliberately structure pension plans in in a way that shortchanges rank-and-file workers, so that high riding executives get more money. In other words: stealing from the poor to give (even more) to the rich.

Certain rules in the Internal Revenue Code are designed to prevent employers from discriminating against non-highly paid employees in their pension plans. Unfortunately for the retirement security of their employees, some employers look for ways to get around the nondiscrimination rules.

Instead of sponsoring pension plans that treat all participants equally, some employers circumvent the rules by creating “carve-out” pension plans. These plans often provide rich benefits for senior, well paid employees-often the company’s owners and officers-while covering only a relatively small percentage (or in some cases none) of the non-highly paid employees. While these plans may comply technically with the tax rules as they are now interpreted they are fundamentally unfair. 

Case in point: An article in Physicians News Digest promotes the use of carve-out plans, noting that they allow doctors to “focus the majority of an employer’s contribution to a select group of employees, usually key or highly compensated employees.” In other words, a medical practice can save big bucks by providing one plan for its doctors, while offering many of its lower-paid employees a different, less valuable plan:

By including the key or highly-compensated employees in a defined benefit plan and the remaining employees in a more affordable 401(k) plan, you can keep your retirement plan in compliance with non-discrimination regulations, while keeping expenses at a minimum.

We have discussed the merits of a traditional pension over a 401(k) plan several times in the past. The truly insidious aspect of carve-outs is the fact that the higher-paid employees – the ones who are more likely to be able to save for retirement on their own – are given the better plan, while the lower-paid workers – the ones who can least afford to save for retirement – are stuck with an inferior one. 

Have these employers forgotten that the success of their business is not just a one-(wo)man show?  Or do they just not care?

Moreover, the IRS could probably limit somewhat the discriminatory impact of these plans by issuing new regulations on the technical rules that employers exploit to make carve-outs possible. 

Categories: budget / tax policy · corporations · legal issues · pensions / retirement funds · unions / labor
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Reverse Mortgage Reality Check

June 14, 2010 · Leave a Comment

As Congress debates its tepid “reforms” of the financial industry, Wall Street has invaded Capitol Hill in what CNN described as a “lobbyists swarm.” What I know about the legislation gives me absolutely no confidence that it will make the market a safe place to put my retirement savings–or what’s left of them, after the recession. Seniors have already suffered most from the 401K long con, and the thought of getting anywhere near Wall Street makes me sick to my stomach.

Given how much money many elders have lost, I suspect those of us lucky enough to own homes that aren’t already mortgaged to the hilt are thinking about a “reverse mortgage” as a means toward future security. I know I’m seeing more and more ads where smiling oldsters talk about how their reverse mortgage took a load off their minds. This, of course, makes me highly suspicious; it all sounds too much like yet another con, replete with hidden fees and rip-offs, just like everything else the banking industry has come up with.

Fortunately, Saul Friedman recently wrote a comprehensive report on reverse mortgages. A former reporter for the Detroit Free Press, Friedman writes the ”Gray Matters” column that used to run in Newsday and now appears on the excellent blog about aging called Time Goes By. Friedman, whose judgement I trust completely, has a reverse mortgage himself; he has investigated the hidden pitfalls of this type of financing, and also knows that it matter what kind of reverse mortgage you get.

For anyone even considering this move in their financial futures, Friedman’s article on reverse mortgages is most definitely worth reading.

So here’s some welcome news for older Americans who own their homes and can use some extra income and cash. The up-front costs for many FHA-guaranteed reverse mortgages have gone down, which means the possible proceeds will go up by as much as $10,000.

I’m referring to the most popular and safest reverse mortgage, the Home Equity Conversion Mortgage, fondly known as the HECM. It is the safest for the lender as well as the homeowner-borrower because it is backed, insured by the Federal Housing Administration which has never defaulted on a mortgage that it has guaranteed.

Indeed, of all the mortgages that have fallen on hard times, or have been the subject of scandalous behavior by bankers and investors, the HECM has been largely untouched by these troubles. Last year, the Department of Housing and Urban Development raised to $625,000 the value of a home that could qualify for a HECM.

There’s much, much more to Friedman’s piece, which needs to be read in full. But here’s his summing up:

All in all, then, HECMs are a good deal if you intend to remain in your home for at least five years; otherwise you’ll be saddled with the closing costs that will eat up the proceeds you get.

To sum up HUD’s guide to HECMs:

  • You must occupy your home (condo, or co-op) as your principal residence
  • There are no income, credit or health requirements
  • Social Security and Medicare benefits are not affected
  • You keep title and may sell it at any time
  • You may use HECM proceeds to buy a second, vacation home as long as the loan on the first home is paid
  • And of course, no repayments as long as you occupy the home.

Still it would be wise to shop for a provider who may be able to arrange the loan and lead you through the process. HUD requires that each borrower undergo counseling by an approved agency (cost is $125). The counseling of the National Council on Aging, is even better and free. Call 800-510-0301.

Categories: Congress · Wall Street / financial industry · economy · financial crisis / recession · lobbying · pensions / retirement funds
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