Archives for February 5, 2013

Jean Belinski Not Running for Reelection for Bethlehem Council

Everybody was expecting this but now it’s official. Jean Belinski was one of the Council members I disagreed with most over the past two years, in third place after Dave DiGi and Eric Evans, so I’m glad this will be an open seat race.

Hoping 4 young progressives manage to take the seats now held by DiGi, Evans, Belinski, and whoever wins the Reynolds/ Donchez primary.

We Need to Increase Social Security Benefits By 20%

Duncan Black nails it in USA Today:

We need an across the board increase in Social Security retirement benefits of 20% or more. We need it to happen right now, even if that means raising taxes on high incomes or removing the salary cap in Social Security taxes.

The 401(k) experiment has been a disaster, a disaster which threatens to doom millions to economic misery during the later years of their lives. Proposals to improve our system of private retirement savings — even good ones — will offer little to no help for the baby boomers who are currently nearing retirement, and are also unlikely to be of sufficient help for current younger workers. We need to increase Social Security benefits, now and in the future. It’s the only realistic way to provide people with guaranteed economic security and comfort post-retirement.

Corbett’s Rejection of Federal Medicaid Dollars Will Deny Insurance to 700,000 Pennsylvanians

Pennsylvania Health Access Network says Tom Corbett and the Teahadists’ rejection of $43 billion in free federal money over 10 years will deprive 700,000 people of health insurance:

Today Governor Corbett did not appropriate federal funds in his proposed budget that have already been allotted to Pennsylvania to offer health care coverage to approximately 700,000 working families.

Pennsylvania has the opportunity to accept new federal funding to extend health insurance coverage to hundreds of thousands of hardworking Pennsylvanians and reduce the state’s uninsured population by more than half. This opportunity would enable Pennsylvania to cover working adults making up to $15,415 for an individual or a family of four making $31,809.

Antoinette Kraus, Director of the Pennsylvania Health Access Network made the follwoing statement in resposne to Governor Corbett not moving forward with Medicaid expansion at this time:

“Governor Corbett has the chance to bring coverage and health care security for hundreds of thousands of working Moms and Dads, all while stimulating our local economy, creating local jobs and saving Pennsylvania taxpayers hundreds of millions of dollars currently spent each year to treat the uninsured emergency rooms. This is an opportunity the Commonwealth cannot afford to pass up. We urge our legislators make sure Pennsylvania doesn’t leave these new funds, the jobs they would create and the secure coverage they would provide, on the table.”

Pennsylvania will be able to bring in $43.3 billion in new Medicaid funds over the next ten years — money that will be injected directly into Pennsylvania’s economy and used to create jobs, relieve the burden on local hospitals and build our health care workforce.

Lowlights of the Corbett Budget

Here’s my first pass. Feel free to point out important stuff I missed in the comments.

The Bad News:

– Turning down $43 billion in federal Medicaid money, denying insurance to 700,000 PA residents

– Transportation Funding Plan Of Wusses – comes up a billion dollars short of panel recommendations, ignores multiple decent recommendations

– Flat liquid fuels tax cut over 2 years, gives away $179 million in revenue. WTF is a tax cut doing in a revenue plan?

– No new local transportation revenue option like value capture or payroll tax. County match requirement raised to 20% from 3% for capital, up to 20% from 15% for operating

– $85m for Turnpike “expansion” projects – likely boondoggles

– $80m total for bike/ped, ports, airports and rail

– Level-funding higher education

– Reduces state contribution to pensions, increases pension debt

– No mention of municipal pension reform

– 10-year 30% reduction in corporate net income tax from 9.99% to 6.99%, off-set by nothing

– Phases out the Capital Stock and Franchise tax, off-set by nothing

– Does nothing to cut $2.9 billion annual spending on fossil fuel subsidies

– Does nothing to cut tax expenditures

The Less-Bad News:

– Oil company franchise tax uncapped over 5 years, will raise $1.8 billion

– Only $250 million for transit, despite billions required for state-of-good-repair. This is less bad because it could’ve been lower
or totally cleaved from the regular transportation budget like some rural GOoPers wanted

– $90 million in Basic Education Funding – increase of 1.7% over last year, for total of $5.5 billion

– $348 million for early childhood education programs

– Future state employees get 401(a) defined contribution plan, forced to save 6.25% of salary

– Pointlessly kludgey alcohol reform

– $1 billion 4-year block grant to school districts contingent on alcohol reform. Seeing a lot of people complaining about this because the grant ends. Why? Take the money and then top up Basic Education. We can do both!

– Maintains funding for Green Future Fund open space preservation program

No, Social Security Does Not Add to the Debt

Robert Stoker:

Of course, the idea of a trust fund “asset” is controversial, since this is money the government owes itself. Trust funds are not assets to the federal government because the assets of any given fund are offset by liabilities owed by the Treasury Department; their net value to the federal government is zero.  However, the Social Security Trust Fund is an asset for the Social Security Administration.  That is, it represents a legitimate claim on the treasury backed by the full faith and credit of the U.S. government.  Beyond this, if you believe that the nation’s debt is $16.3 trillion and counting, it is inconsistent to deny that trust fund balances (which compose about 30% of the debt) are real.

When the Social Security program has a cash deficit, the Social Security Trustees request repayment for some of the Treasury securities they purchased when the program was in surplus (when payroll tax revenues were greater than the cost of benefits).  Since the government is currently in deficit, the Treasury Department must borrow money to finance these payments.  However, the new borrowing does not increase total debt because this transaction is more akin to refinancing existing debt than accumulating new debt.

If you owe a $5,000 credit card bill and you take a home equity loan to pay off the credit card, your total debt has not changed; you have refinanced the debt, transferring it from one financial instrument (and one creditor) to another.  Much the same can be said about repaying the OASDI Trust Fund.  The fund’s assets are composed of debts already accounted for as part of the nation’s total debt.  When the Treasury borrows to pay current Social Security benefits, the debt owed to the Social Security Trust Fund is repaid, refinanced, and transferred to whoever purchases Treasury securities.

Of course, the cost of refinancing the debt is a key concern.  However, the only scenario in which repaying the Social Security Trust Fund can increase the nation’s debt is if interest rates are higher now than they were when the original debt was incurred.  Given current market conditions (nominal interest rates are presently quite low, the rate on 10 year Treasury Bonds is around 2%), the more plausible claim is that refinancing the Social Security Trust Fund’s debt has reduced the nation’s debt slightly by reducing interest costs.

The Callahan Fundraising Juggernaut

Bernie O’Hare has the John Callahan finance report and it turns out he’s been raising money like he’s running for Congress:

Bethlehem Mayor and NorCo Exec hopeful John Callahan has filed his 2012 campaign finance report, and it’s a doozy. He raised a whopping $197,289 last year, and after payments to political consultant and Finance Director Rachel Doran, still finished the year with nearly $118,000 in his till.

Shock and awe baby. After seeing how much money Callahan raises, potential opponents think twice about taking him on.

Callahan has nearly three times what rival Glenn Reibman has set aside, and is ahead of potential opponent Lamont McClure by 8 to 1.