Wednesday, November 27, 201

By Nancy Thorner – 

Having already examined the farm subsidy measure of the farm bill in an Illinois Review article published Tuesday, November 26 , it is necessary to bring understanding to the other part of the farm bill, the food stamp measure, which amount to a whopping $750 billion of the trillion dollar farm bill and where waste and fraud are rampant.

Research quickly uncovered six fairly recent noteworthy and eye-opening accounts that tell of a SNAP program (food stamps) badly out-of-control and in desperate need of reform.

  • August 13:  Ted Dabrowski, Vice President of Policy at the Illinois Policy Institute:  Reported how more than 2 million Illinoisans — 16.7% of the state’s population — are on food stamps.  These figures represent data taken from the May, 2013, U.S. Department of Agriculture information.  Illinois is better at putting residents on food stamps than it is at creating jobs!   
  • August 15:  The USDA (United States Department of Agriculture) is soliciting people to receive food stamps in the manner of a drug dealer on a grade school playground, such as:  “Psst – hey you!  I’ve got something for you… it’s free…come on, try it. You’ll like it!”  In many locations outreach programs are taking place.  The USDA are effectively hunting people down and talking them into accepting benefits that folks never realized they needed or were qualified to receive.
  • Sept. 10:   “Almost one in six, or 47.5 million, Americans now receive food stamps.  Over 13 million more people receive the food subsidies today than when Obama took office. .  . Despite spending a whopping $80 billion on food stamps last year, the Department of Agriculture (USDA) argues the program needs more funding. . . Documents obtained by Judicial Watch revealed that the USDA works with the Mexican government to promote participation by illegal immigrants.”
  • Sept. 17:  Households on Food Stamps (SNAP) during the month of June outnumbered all households in the Northeast U.S.– a record 23,116,928 American households.  This June figure represented 52% more households on Food Stamps than there were in the average month of the first year President Obama took office.
  • Sept. 26:  Even as the economy improves, food stamp enrollment continues to hit record highs.  In the second-quarter of this year, despite household wealth increasing $1.3 trillion within the same time period, enrollment in the program jumped up by 211,708 people.
Many officials in government, and those who manage feeding program, are paying close attention to the final out come of the farm bill, which could see cuts in the program in addition to the cuts that have already occurred naturally on Nov. 1, when benefits, increased under the 2009 American Recovery and Reinvestment Act (commonly known as the “stimulus package”), and originally meant as a temporary boost, were reduced with the expiration of the 2009 law.   A massive 47 million people are enrolled in the $80 billion program.

Food for thought by Dawen Bakst and Rachel Shefield of The Heritage Foundation, which merits serious consideration by House and Senate legislation:

Congress continues to treat agriculture as if it were 1933 instead of 2013. . . Yet every five years when the farm bill is up for renewal, many legislators, including those who claim to be pro-free market and limited government, push a farm bill that is a model of central planning.  Agriculture policy continues to emphasize price supports, supply restrictions, import quotas government-subsidized international marketing programs for major corporation, and much more.  Quite simply, almost any subsidy that can be dreamed of exists in one form or another in the current farm bill.

Further, food stamps should be reformed to promote self-sufficiency among able-bodied adults.  Adults who are able should be required to work, prepare for work, or at least look for work in exchange for receiving food stamp assistance.  This principle of reciprocal obligation does not currently exist in the program.  Additionally, loopholes that have led to an increase in the food stamp rolls should be closed. 

The administration of Indiana’s Gov. John Kasich rightly believes that able-bodied adults should work for food stamps.  Starting on January 1st, food stamps will be limited for more than 130,000 adults in all but a few economically depressed area.  To qualify for benefits all able-bodied adults without children will be required to spend a least 20 hours a week working, training for a job, etc., unless they live in one of 16 counties exempt because of high unemployment.

With Pat Quinn as governor, there isn’t a ghost of a chance that Illinois would ever echo the reform restrictions imposed by Kasich in Indians on food stamp recipients, of which there are 2 million here in Illinois!

Politically speaking, the political ruse of combining food stamps and agriculture policy into one bill has been successful in passing prior farm bills.  Combining the two unrelated entities allowed urban legislators (supporter of food stamps) and rural legislators (supporters of farm programs) to form coalitions to pass farm bills lacking proper scrutiny of their merits.

According to The Heritage Foundation, substantive reform will only occur if the agriculture policy and food stamps are separated into different bills now and in the future, so each bill can be addressed independently.  It is not acceptable to raise another bumper crop of agriculture subsidies and to offer food stamps recklessly and often without means testing.

After all, have legislators forgotten that it is taxpayer’s money that is being wasted and spent like there is no tomorrow.

Wednesday, November 27, 2013 at 07:05 AM | Permalink

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By Nancy Thorner and Edward Ingold – 

As reported by Fox News on November 22, President Obama postponed the 2014 sign-up date for Obamacare until two weeks after the mid-term elections: Obamacare enrollment for 2015 to reportedly be delayed until after midterms.

On the same day, November 22, David Martosko, U.S. Political Editor at the Daily Mail, United Kingdom, reported Obama’s arbitrary change of the Obamacare sign-up date in far more strident and honest terms with this headline than were found in U.S. media account with this headline:  ‘How nakedly political can you get?’:  Obamacare year-two signups delayed until after 2014 election .

Following were these statements made by Martosko:

1. Voters in the insurance exchanges won’t know 11 days after the 2014 election just how much they’ll pay for coverage in 2015.

2. The Treasury department has already delayed implementation of the employer mandate, and its fines, until Election Day has come and gone.

3. Millions of Americans are receiving private-insurance cancellation letters, with many experiencing sticker shock when they learn their options.

4.  One poll released Wednesday [November 20] shows that 48 per cent of taxpayers now want the Obamacare law repealed.

As was conveyed in the UK Mail headline, there was no plausible reason to postpone the 2014 sign-up date for Obamacare other than to keep bad news from reaching voters until after the General Election in November. What could they be?

As set forth in terms that put the cheese on the cracker:

  • Insurance mandates for employee benefit plans were previously deferred until 2014. At that time, all insurance plans must include the ten mandates specified in the Affordable Care Act of 2010. These same mandates resulted in the cancellation of about 6 million private insurance policies, and doubled the cost of insurance of policies offered in their place. Most of the added cost comes from two popular mandates – coverage for pre-existing conditions, and the elimination of lifetime benefit limits.
  • The huge price increase is concealed in two ways. Nearly half of those affected will receive subsidized health care, and the maximum out-of-pocket expense (deductible) have been doubled or tripled for most policies. Cost of these subsidies are supposed to come from higher premiums for those can afford it, resulting in a charges of up to 4 times the pre-Obamacare costs. In other words, income will be redistributed from those who have to those to do not. It is such a politically toxic term, that the term “redistribution” has been banned from the White House lexicon.
  • Many insurance companies wishing to participate in state and federal insurance exchanges were required to cancel all non-conforming policies as a condition of doing business with the government

But the other shoe is yet to drop.

  • Pricing for insurance offered through the exchanges is based on young, healthy participants in the insurance pool. The strategy behind the millions of cancellations this fall was to force those people into participation. However, the unemployment among this age group is very high, as much as 25% for college graduates. They simply can’t afford health insurance, and will probably either pay the fines do nothing at all. The “fines” for failing to secure health insurance are imposed on income tax refunds (the Democrats were not willing to impose them directly, or call them a “tax.”) If you aren’t working, or working at minimum wage, you probably don’t owe taxes, hence no refund, hence no Obamafines.
  • The early adopters of Obamacare fall mainly in two categories – those who couldn’t get insurance due to pre-existing conditions, and those who couldn’t afford insurance without subsidies. The majority of early adopters were, in fact, seeking Medicaid at no cost to themselves. The Affordable Care Act doubled  the maximum allowed income to qualify for Medicaid to $32,000, which is twice the presumed poverty level. Subsidies will be granted to those making up to $62,000, four times the “poverty level,” and nearly twice the median wage ($35,000) for working citizens. Somebody has to pay for those shortfalls and subsidies.
  • Finally, the deeply flawed www.healthcare.com software has greatly delayed applications through the exchanges, and unresolved security questions will keep many from even trying. This further skews the risk pool and increases the deficit.

The facts so far presented offer a grim picture.  It is little wonder why so many Americans are duped, confused and running scared?  With such a scenario present, Steven Hayward who writes for Forbes, made this prediction on Monday, November 11th: 

Even if HealthCare.gov is fixed by the end of the month (unlikely), Obamacare is going to be repealed well in advance of next year’s election.  And if the website continues to fail, the push for repeal — from endangered Democrats — will occur very rapidly.  The website is a sideshow:  the real action is the number of people and businesses who are losing their health plans or having to pay a lot more.  Fixing the website will only delay the inevitable.

It remains to be seen, as predicted by Haywood, whether endangered Senate Democrat up for re-election will lead the charge for repeal perhaps as soon as this January after getting an earful over the Christmas break  Unclear also is whether the delay to sign-up for Obamacare until after the November election will mask the bad news the American people will receive regarding sticker price, etc., that will follow in the election’s aftermath.

If Obamacare should remain in place and limping along, Insurance rates for 2015 will be based on a more realistic risk pool, which is weighted to those who will use a lot of health care. As a result, as many as 160 million people, including those now covered by employee benefit plans, will see those plans greatly increased in cost or cancelled altogether. This will drive up the cost of both private policies and of employer benefit plans.

If these plans exceed $10,200 for individuals or $27,500 for a family, they will be deemed a “Cadillac” plan, and subjected to a 40% tax on the difference. Unless the quality of coverage is reduced, for example, by greatly increasing the out-of-pocket deductions, nearly all of these plans will fall victim to this surcharge. The more likely outcome is that the benefit plans will be dropped, and employees sent involuntarily to the government exchanges.

By 2016, Obama will have applied a wrecking ball to the health care industry, our lives and our fortunes. The only way out is for Republicans to gain a majority in both houses of Congress in 2014, and the White House in 2016.

Friday, November 29, 2013 at 07:00 AM | Permalink

Technorati Tags: Edward Ingold, Illinois Review, Nancy Thorner, ObamaCare, repeal

 

 

Thorner

By Nancy Thorner –

House Agriculture Committee Chairman Frank Lucas (R-Okla.) initially announced on November 17 that bipartisan progress was being made on the farm bill. Lucas further desired that a framework be set up when legislators met again on November 21 for the purpose of passing a House farm bill conference agreement before Congress adjourned for the year on December 13. The current 2008 farm bill expired on October 1st. The bill is up for renewal every five years. Debbie Stabenow (D-Mich.) is the Senate Agriculture Committee Chairwoman.

Hopes, however, were dashed that a  framework agreement be reached after leaders of the House-Senate farm bill conference committee, having met twice on November 21, hit a wall over food stamps cuts and other things.

About the farm bill, it consists of two separate and diverse measures — farm subsidies and food stamps.  Together they represent $1 trillion dollars in government spending, with a whopping $750 billion of the trillion going for the food stamp program now know as SNAP (Supplemental Nutrition Assistance Program).  http://thehill.com/blogs/on-the-money/agricuture/191103-farm-bill-tal...

The U.S. House did rebel earlier in the year when it managed to pass a version of the farm bill which separated food stamps from the agriculture program.  It was the first time in nearly 40 years that the House had voted on and passed separate and substantive reform bills governing farm and food stamps.  At the first meeting of the Farm Bill Conference Committee on October 30, U.S. Congressman Marlin Stutzman lead a group of 27 House members with its message to keep farm policy and food stamp policy separate.  http://www.hoosieragtoday.com/stuztman-and-colleagues-urge-continued-farm-bill-separation/

According to Ed Feulner, past president of the Heritage Foundation, in a November 18th commentary:  http://cnsnews.com/commentary/ed-feulner/farm-bill-name-only  `

Separation isn’t the only issue.  The entire purpose of separating food stamps from agriculture program is to achieve real reform.  While there’s a lively debate going on regarding food stamp reform, that’s not the case when it comes to other troubling provisions of the farm bill.  As had been the case since FDR was president, agriculture policy is a government-run behemoth that would make a Soviet central planner blush.
Agriculture Program Examined:
Mr. Feulner goes on to say:
The most expensive single farm program subsidizes about 62 percent of the premiums that farmers pay for crop insurance.  Yet instead of finding ways to reduce the load on taxpayers, the House and Senate versions would expand this program. . . moreover, The bulk of agriculture subsidies go not to the small, struggling farmers that most Americans envision, but to huge ‘agri-businesses’ with annual incomes well in excess of $1 million.

It is not surprising that disagreement exists between the House and Senate version of the farm policy measure on how to deliver the safety net to producers.  After all, insurance is the most expensive subsidy in the farm program.

Disagreement centered on whether to give producers (as does the House bill) the choice between a revenue-based coverage program (RLC) or a  price-based coverage (PLC); the Senate bill offers both types of coverage.  It is thought that going to an all-inclusive system would mean less money within each type of coverage.   http://thehill.com/blogs/on-the-money/agriculture/190469-rep-lucas-ca...
Another fly-in-the-ointment for the farm policy measure is the language added by House Agriculture Committee to its version of the farm bill earlier this year.  Authored by Rep. Steve King, R-Iowa, the language says that  a state cannot impose certain production standards on agricultural products sold on interstate commerce.
There is concern that King’s language has the potential to threaten the entire farm bill; the language is not in the Senate bill.  The origin of the amendment stems from a longtime fight between agriculture and the Humane Society which has been pushing states to pass animal welfare laws.   http://www.sfgate.com/news/science/article/Farm-bill-takes-aim-at-state-animal-welfare-laws-4992673.php
Troubling, according to the Government Accountability Office (GAO), is that between 2008 and 2013 the U.S. Department of Agriculture disbursed more than $36 million to some 6,300 dead farmers or to the bereaved relatives or business partners of the intended recipients.  http://blog.heritage.org/2013/08/09/usda-dead-wrong-on-farm-subsidie...
While there is much to question about the the agriculture measure of the farm bill, it is the $750 billion food stamp program (SNAP) that  remains the thorniest issue in the farm talks.   A $33 billion difference in food stamp cuts exist  between the House and Senate farm bills.
It is now essential to examine the SNAP program (food stamps) which is often abused by food stamp recipients and mismanaged by government.
The facts speak for themselves and point unconditionally to the need for reform in the way food stamps are handed out by government, many time without any sort of means testing.  I’m sure all have experienced a person in line cavalierly using food stamps in a grocery store when it’s evident their purchases do not qualify as necessity items.
Part 2:  Food Stamp Program examined, with a way to reform the proposed Farm Bill with its existing two out-of-control measures.

Tuesday, November 26, 2013 at 06:00 AM | Permalink

 

Obama-budget-battle

By Nancy Thorner and Ed Ingold –

The concept of “grandfathered” insurance plans has always been a complete myth, touted for strictly political reasons. The plans to overturn the current insurance system and create a single-payer plan were formulated by HHS (and Sebelius) in 2010, within a month of the ACA (Affordable Care Act) passage.

In a stunning report by Andrew McCarthy on November 18th, he cites evidence that between 50% and 80% of Americans will lose their current health care plans in 2014, including employer provided benefits. This is based on the Administration’s own estimates, documented in a court brief filed by the DOJ in Federal court in opposition to a suit to preserve religious freedom of choice.

With such facts available to the public, how does President Obama have the audacity to continue to repeat that the current rash of insurance cancellations apply to only 5% of the population?  In fact, nearly 8% of the population has individual insurance plans which are being systematically canceled (“trasitioned” in Obama-speak).  The same standards, however, will apply immediately to small business and group plans and to major corporations by the end of 2014 after Obama arbitrarily changed the healthcare law to grant businesses a year’s extension.

In a spirit of generosity, might it be that Obama doesn’t want to know the details (or pretends he doesn’t know?), for reasons of “plausible deniability?”  Even Obama’s mea culpa lasted no longer than a day or so until before he started to blame the start up problems on Republicans and their lack of cooperation.

The official line is that once the software is fixed all will be well.  But the same talking points will continue to be used by Democrats, even though Republicans had nothing to do with the implementation of Healthcare.com nor any other facet of the policy or the website.

Republicans would rather not have the American people endure this dystopian program.  As the past has taught us to expect from the Obama administration, it is the messenger, not the message, that is to blame.

Consistent with President Obama’s standards, he sets the general goals and rewards those who put out the most punitive regulations consistent with those goals. If anything hits the fan, Obama “heard about it in the news, just like everyone else.” If anyone brings forth bad news, or contradicts the official line in any way, that person is summarily fired or publicly disgraced, as was the insurance official for the District of Columbia just a day after he questioned a decision by President Obama to reverse a provision of the Affordable Care Act.   This way of doing business permeates the Democrat’s establishment at all levels.  

The insurance debacle is a prime example of the Obama business plan which President Obama was able to sell to many Americans because they were asleep at the switch with only one thought in mind, what’s in it for me.  Destruction of 80% of existing insurance plans while doubling the cost is not exactly a ‘”glitch” in the startup!

So President Obama plan of operation took hold and evolved. Let us construct a timeline for the Obamacare debacle:

  • Announce at every opportunity that “If you like your …, you can keep it. Period!’  Pass this script to every Democrat in public office, to be repeated without variation. By inference, the Republicans would deny this right.
  • Behind the scenes, conspire with HHS to establish regulations that keep nearly all existing policies from being “grandfathered” as promised.
  • Count on the web service to work on time, or reasonably close to schedule (More important to be on schedule than functional), without assuming constructive leadership, nor monitoring the actual progress.
  • As a result of this policy, millions of policies are canceled, forcing their owners to the exchanges to purchase Cadillac insurance plans which meet the mandated standards.
  • Postpone the same regulations by executive fiat as they apply to company benefit plans until after the 2014 elections. Then repeat the cancellation debacle twenty or thirty fold.
  • When the web service fails, unilaterally announce that the rules are temporarily suspended, and old policies can be sold (Thank you, Valerie Jarrett, for this strategy.).
  • Do so knowing that this is impossible without months of planning, but shifting blame to insurance companies rather than the Administration. If the state regulatory agencies don’t cooperate, they will share the blame. (In breaking news, the President invited state insurance regulators to the White House, and issued a thinly veiled threat that if they impede his latest fiat, they will be pushed aside in the national interest.)
  • Continue to blame the web service rather than a defective policy, until it is no longer newsworthy to the main stream media, hence falls out of the public view. This is commonly known as “bunkering.”
  • Refuse to allow Congress to codify the same actions (in case Obama changes his mind later).

Obamacare Exchange facts:

1.  The mandated benefits under the Obamacare Exchange roughly double the cost of insurance, primarily through the high risk of covering pre-existing conditions and unlimited benefit ceilings. These same mandates are touted as the reason “the majority of people like” Obamacare.

2.  Obamacare also provides substantial discounts for those with incomes up to $62M. To pay for those discounts, those making more than $62M are expected to pay three to four times as much for the same insurance. Those enrolled in  Medicaid continue to pay nothing, while income limits for qualification were doubled in 2014 to roughly $32M. As a result, roughly half of the population will receive subsidies, ingratiating them to the party which delivers this largess.

3.  Insurance companies are required to cancel non-conforming policies in order to participate in the exchanges. In return, Obamacare indemnifies insurance companies for risk losses for a two year transition period, if those losses exceed 3% of revenue.  Losses over 8% are fully indemnified for that period.  In return, insurance executives are warned to remain silent about any problems, nor to blame the policy or Administration for any SNAFUs.

The next shoe to drop will be backlash over another Obamacare broken promise,  “You can keep your own doctor.”  How will President Obama deal with this broken promise?  In his usual and predictable way, he will blame the doctors for sabotaging Obamacare, and not on the over reaching and unaffordable healthcare act itself which will have a negative impact on every American.

Obamacare has always been about control and not about healthcare, in keeping with the progressive redistribution of wealth mantra.

It is a given that the longer Obama is allowed to skirt Congress to get polices he deems necessary without congressional approval, the easier it will be for him to claim executive privilege and get away with it. The constitutionality of these actions will never be successfully challenged as long as Democrats control the Senate. It will take citizen involvement all over this nation to let our elected officials know that we have had enough.  The status quo is no longer acceptable, and that includes re-electing the same individuals who have participated in the screw up of this nation.

Saturday, November 23, 2013 at 12:01 PM | Permalink

Thursday, November 21, 2013

Th-7By Nancy Thorner – 

Things continue to happen under the radar while this nation and its people are immersed in headlines about Obamacare and the tussle in Congress over the delays fostered by the disastrous October 1st roll out of the Obamacare Government Exchange. But juggling lots of balls in the air at any one time is part and parcel of the Obama administration, so confusion reigns and measures that greatly affect this nation and its people get lost in the tumult and confusion of other events. Check out #8 of Saul Alinsky’s 12 Rules for Radicals used by Barack Obama’s as his guide when a community organizer in Chicago.

Such is the under-the-radar situation as the Obama administration is moving stealthily toward unprecedented control over private property under a massive expansion of its Environmental Protection Agency’s Clean Water Act authority.

Since 1972, the Clean Water Act has protected our health and environment by reducing the pollution in streams, lakes, rivers, wetlands, and other waterways.  According to the EPA website, a court ruling since the 1974 passage of the Clean Water Act has caused confusion about which waters and wetlands remain protected, making improvements to the Clean Water Act essential to clarify the jurisdiction necessary to reduce costs and minimize delays in the permit process.  The achieved result will be to protect water that is so vital to public health, the environment, and the economy.

In other words, the parameters of the CWA are currently quite muddled.  The proposed rule to expand the EPA’s authority under the Clean Water Act was prompted by a decision reached in March of 2013, Decker v. Northwest Environmental Defense Center.  The nearly unanimous decision re-affirmed that federal agencies are granted a wide berth in interpretations of their own rules.

Last month Lou Dobbs and Andrew Napolitano of Fox Business and Fox News respectively, along with  Republican lawmakers, accused the EPA of a “Power Grab.”  Lou Dobbs on Fox Business claimed that the clarified parameters represented “unprecedented control over private property”  — “maybe” extending to “mud puddles.”  Legal analyst Andrew Napolitano branded the EPA’s Science Board study as “bogus” – merely a rationalization to “regulate all bodies of waste” and “control more behavior.”

The EPA’s Science Board study referred to above by Judge Andrew Napolitano — based on the extent to which small streams and wetlands connect to larger bodies of water downstream — claims that small streams, even those that only flow at certain times, “are connected to and have important effects on downstream waters.  The wetlands are likewise similarly integrate, making them also subject to CWA protection.

The study, Connectivity of Streams and Wetlands to Downstream Waters, contains more than 1,000 pieces of relevant peer reviewed Scientific literature.  Regarding this draft study of the EPA’s Science Advisory Board, procedure calls for public comments to be submitted and public peer review meetings held before the end of this year.

Procedure, however, is being thrown overboard according to Chair of the House Science, Space and Technology Committee, Representative Larmar Smith (R-Texas).  For on the same day (November 12) the EPA submitted the proposed water rule to the White House for approval, the EPA provided Smith with the draft scientific assessment for peer review.   This was but two day before November 14 when EPA Administrator Gina McCarthy testified before Rep. Smith’s House Science Committee.

As noted by Rep. Smith, an open peer review of the scientific basis for the new Water Rule should have happened  before sending the EPA’s water rule to the White House for approval.  After all, the proposed water rule would have a potential impact of more that $500 million in any one year on either the public or private sector.

A letter sent the first week of November by Rep. Smith, and his colleague, Subcommittee Chairman Chris Steward (R-Utah), to the Office of Management and Budget, expressed concerns that the EPA was “rushing forward, regardless of whether the science actually supports the rules.”

As expressed in the letter by Smith and Steward:

This rule could represent a dramatic expansion of EPA’s authority to include isolated wetlands, streams and ditches.  Such unrestrained federal intrusion poses a serious threat to private property rights, state sovereignty and economic growth.

Just what can be done to stop this and other power grabs by the President and his administration?   Not being a constitutional scholar the remedy must be left to others.

Notwithstanding, if the out-of-control EPA is allowed to get its way unchecked in rule-making by rubber stamping their predetermined regulatory agenda, its flouting of power will continue and will further violate this nation’s Constitution by ignoring its commitment to Congress and the American people.

Thursday, November 21, 2013 at 11:30 AM | Permalink

 

Thorner: Retail tax touted by author as income tax replacement

Th-1By Nancy Thorner –

Taxes loom large in the minds of the American people. How much is too much in taxes to pay? Would those who pay no income tax be better off, having more skin in the game, if a different sort of tax required them to divvy up financially to help support running the government?

Author Dan Pilla’s booklet, Ten Principles of Federal Tax Policy, as discussed at a Heartland Institute Author Event on Thursday, November 14th, was written by Pilla to pull back the covers to show how our present Federal Income Tax system falls far short of what should be the template for a federal tax policy that is fair, efficient, and easily understood.

See Part 1: Author says Federal Income tax unfair; ignores sound economic policies

Pilla’s ten principles can be applied to all tax systems at any level of government, but because income taxes collect by far the most revenue and affects the most people in the U.S., it is the income tax that most often violates what Pilla considers sound tax policy as set forth in his booklet, Ten Principles of Federal Tax Policy. Download for free at www.heartland.org. Print copies are available at a cost and can be ordered online at heartland.org or call 312-377-4000.

Pilla’s comments, directed at seven of his ten principles of Federal tax policy, follow:
1.  Simplicity  –  Citizens have a fundamental right to know what tax laws require, and compliance should be easy and inexpensive.
A tax code must be such so that people are able to understand the law.  The scope of our present tax law contains four million words.  It is so vast that not even the IRS knows what is going on.  Being that the tax code is so broad, it’s impossible for the administration to do its job.  There are 140 individual tax penalties in the current tax code.  Difficulty in understanding the tax code breeds non-compliance by the public.  Many individuals are subject to tax penalties (punished) based on lacking an understanding of the tax code.
2.  Noninvasiveness – A minimally invasive tax code encourages voluntary compliance and reduces the need for enforcement.  so many burdens.
3.  Efficiency – The total cost of collecting taxes can be reduced by lowering the number of collection points
Some have called the IRS the most efficient agency funded by government.  How could this be so?   Operational costs in the federal budget total $2 billion a year. There are 93,000 employees, soon to be 100,000 with Obamacare.  The IRS collects $2.4 to $2.5 trillion in taxes every year, but four out of every five dollars are not collected by the IRS.  98% of individuals “voluntarily” pay what they owe to the IRS, while only 2% of IRS revenue is received through IRS enforcement.  A broad-based retail tax is needed to reduce the 250 million collection ports to 50 (number of states).  It is not uncommon for businesses to be required to file 5 different tax forms.
4.  Stability –  The tax code should be stable and reliable from year to year and generation to generation.
Don’t individuals and businesses have the right to know that the language today is the same as the law will be tomorrow and will likewise serve us in the future?  How is it that numerous tax preparers can arrive at different amounts owed by the same taxpayer and with such a variance of the amounts owed?  From 2001 – 2008 over 3,250 tax change regulations were put in place.  Changing laws with such frequency breeds confusion and results in the the assessment of penalties by the IRS, which leads to zero stability. The federal income tax affects every area of our lives and the most personal ones such as marriage, children, home ownership, personal investment, charitable giving, etc., giving rise to such questions as whether or not to save money or whether or not to get married.
5.  Visibility – The cost of government should be readily apparent to taxpayers.
It is important for the American people to know what the tax is on a product or a service to foster understanding about the cost of government.  Government costs money, but many times the taxes we pay are invisible. This results in the American people having no idea of what their tax liability is.  For people not having skin in the game — and there are entire segments of the population who meet this qualification — it doesn’t matter what government costs.  One example of this lack of understanding as noted by DanPilla:  An individual, having received an income tax refund of $1,000, never realized that his W2 form showed he had paid $5,000 in wage withholding taxes.  Not looking at the top line of his pay check, the individual didn’t see the hidden Social Security tax that had been taken directly out his pay check, having noted only the bottom line which showed his take home pay.
6.  Neutrality – Taxes should not fall more heavily on one industry or class of individuals than on others.
7.  Economic Growth –  Taxes should not impede the investment and consumption decisions that make economic growth possible. 
Any tax system must not burden the engine of growth.  Although no tax system is a panacea and all taxes result in income distribution, to be considered is where the least amount of damage will be done so economic growth can be encouraged and not stymied.  Our Founding Fathers expressly rejected the idea of imposing direct taxes as a means of funding the economy on income, savings, and investments, but instead favored an indirect tax on consumption. The following sound economic principles must be kept front and center in all discussions regarding taxation:  1)  What you tax you get less of, and 2) what you subsidize you get more of.  The economy can’t grow when the engine of growth is heavily taxed.  For every dollar paid in taxes, businesses have a least one less dollar available for other things.
8.  Broad-Based – Broad tax bases allow rates to be kept low, which in turn encourages voluntary compliance.
This nation is doing the opposite with its federal income tax system where fewer and fewer people are paying into the system.  According to Treasury data:  Tax payers in the top 20% of the income distribution pay 70.6% of all federal taxes, while taxpayers in the bottom 20% pay 0.4 percent.  More than half of federal taxes are paid by taxpayers in the top 10 percent of the income distribution.  Described by Pilla was the “Disney World Syndrome. This syndrome happens when people elect not to pay income taxes, or perhaps mortgage payments, but elect instead to have fun with the money.
9.  Equality – The tax system should treat people equally and fairly.
There is a push for equality across the board except when it come to the federal income tax, but does government have the right to steal from people what they earn and distribute to someone else?  This “stealing” is done on the basis of success standards, reflected by ones social and economic standing, through the fixed arbitrary income rates designated in the Internal Revenue Code.
10.  Constitutionally – Taxes must be imposed solely to fund clearly defined constitutional functions. 
Since the 1930’s Congress has used the federal tax laws for purposes other than raising revenue.  According to Article 1, Section 8 of our Constitution, it authorizes the federal government to 1) pay our debts,  2) provide a national defense, and  3) provide for the “general” welfare of the nation.  General welfare has become the point of contention.  The original intent of providing for the “general welfare” was that the provision had to benefit the nation as a whole and not one business or industry over another.  The Founders were adamant that the taxing authority granted in the Constitution be used only to benefit the nation as a whole, not individual inhabitants or individuals classes of citizens at the expense of others   Our present tax system has evolved into a great transfer system of wealth.   There is no legal or moral authority in a free society that justifies using the power of government to take from some what they have legally and peacefully acquired and give to others who have not earned it.
What might be the best tax model for this nation?  Democrats are fond of saying that all elections are local.  They are local, but they are also personal.  Democrats are able to convey a message to voters that asks them individually to consider what’s in it for me when casting their ballot.  By handing out free things to different classifications or groups of Americans, Democrat party loyalty is bought and thus established.
Republicans must convince the American people why liberty is a better idea than socialism?  Republicans in the past have been inapt in presenting cogent explanations.  To be explained by Republicans:  Why the freedom to make personal decisions wins every time over government control?  How doing for self enriches lives?
It is unrealistic to expect Congress to be up to the task of changing this nation’s tax system unless it is stumbled upon accidentally.  Granted, changing the tax system would also have to depend on what is politically doable.  All considered,  little will happen unless this nation’s tax burden becomes so unbearable that a majority of the American people start to suffer.

Mr. Pilla presented the three tax policy options open to this nation, reminding those assembled how the luxury tax flopped:

1.  Current Federal tax policy.
2.  Flat tax option.
3.  Sales Tax option.
According to Mr. Pilla, we have only one chance to get it right.  Pilla considers the value added tax a bad idea, while  regressive taxes fall more heavily on the poor than the rich.  Regarding a sales tax, Pilla rates it as neither progressive or regressive but proportional to what people buy.  As such all Americans would have some skin in the game, with a dawning realization that what government freely gives isn’t free.
There have been three presidential commissions on taxes — 1995, 1996, and in 2005 under President George W. Bush.  Each report insisted that a sound tax system must be mindful of the profoundly negative consequences taxes can have on the economy, yet none went beyond the paper they were printed on.  http://www.cbpp.org/cms/?fa=view&id=856

The clock is ticking.  Hopefully politics won’t impede the way forward until such a time when this nation can no longer be rescued from it self-imposed downfall, precipitated by an all-powerful, reckless government whose goal it is to please what has become a nation of greedy, government-dependent Americans.
The next Heartland Author Series will be held on Thursday, December 12,  from 11:30 a.m. to 1:00 p.m.  Michael J. Lotus will speak on America 3.0:  Rebooting American Prosperity in the 21st Century–Why America’s Greatest Days Are Yet to Come.  Call 312/377-4000 or visit heartland.org.
Published, November 19, 2013, Illinois Review

Part 1:  Author says Federal Income tax unfair; ignores sound economic policies
http://illinoisreview.typepad.com/illinoisreview/2013/11/author-says-federal-income-tax-unfair-ignores-sound-economic-policies.html#more

 

Wednesday, November 20, 2013 at 09:30 AM | Permalink

 

Thorner: Author says Federal Income tax unfair; ignores sound economic policies

Th-1By Nancy Thorner – 

The book, Ten Principles of Federal Tax Policy, was the topic on Thursday, November 14th, at The Heartland Institute’s Author Series featuring Daniel J. Pilla.

After three decades of being the nation’s leader in taxpayers’ rights defense and IRS abuse, prevention, and cure, Dan Pillas can rightly claim the mantle as one of this country’s premiere experts in IRS procedures. He has helped countless thousands of citizens solve personal and business tax problems they thought might never be solved.

Mr. Pilla is author of eleven books, dozens of research reports, and hundreds of articles. His work is regularly featured on radio and television as well as in major newspapers, leading magazines and trade publications nation-wide. The Wall Street Journal ranked Pilla’s book, The IRS Problem Solver, as the number one tax book in America. As a consultant to the National Commission on Restructuring the IRS, Pillas presented testimony to Congress on several occasions and has been admitted to practice before the United States Tax Court.

Pilla’s association with The Heartland Institute began twenty years ago after writing How to Fire the IRS Published in 1994, the book sets out the premise that despite a doubling of its budget over the past 10 years and a nearly 20 percent increase in enforcement personnel, the IRS is increasingly incapable of administering and enforcing the nations tax law.  Pilla is listed under Heartland experts as a taxpayers’ rights advocate and head of TaxHelpOnline.com.

Standing by itself, Pilla’s Ten Principles of Federal Tax Policy is one in a series of eight other brief guides in Heartland’sLegislative Principles Series, each having its own set of principles central to its topic of debate.  Collectively they represent nine major public policy issues, i.e.:  Chaper 1, 10 Principles of School Choice.

All nine booklets in Heartland’s Legislative Principles Series can be downloaded for free from the Heartland Institute’s Web site at www.heartland.org   Print copies are available for a cost and can be ordered online at www.heartland.org or call 312-377-4000.  

Pilla’s Ten Principles of Federal Tax Policy has been rolled into Chapter 9 of The Patriot Tool Box, an indispensable guide to public policy for those concerned about the direction of their nation.  Although published in 2010 by The Heartland Institute, it is just as relevant today.  Its 10 chapters address important public policy issues not unlike those facing our nation today.  books.heartland.org/the-patriots-toolbox/

Although the ten principles outlined in Pilla’s federal tax policy booklet might be applied to any tax system and at all levels of government, it is income taxes that are more likely to violate the tax system as this tax collects by far the most revenue and affects the most people in the U.S.

Most fitting is this reference noted on Page 2 of Pilla’s Ten Principles of Federal Tax PolicyOf all the powers conferred upon government that of taxation is most liable to abuse. Supreme Court of the United States, Citizens’ Savings & Loan Ass’n v. City of Topeka, 87 U.S. 655 (1874)

After being introduced by Joe Bast, President and CEO of Heartland, Dan Pilla, with energy and enthusiasm, elaborated on 7 of the 10 principle noted in his Ten Principles of Federal Tax Policy.

It was in 1992, upon realizing that the federal tax policy needed to be fixed which bespoke of an alternate tax system, that Dan Pilla’s thoughts turned to writing a book.  How to Fire the IRS was published in 1993.

Contemplated by Pilla back in 1992 was how a new kind of tax policy was needed that embraced liberty.  The present Federal Income Tax, a graduated income tax system, increases the tax rate as the taxable base amount increases.  Historically, Congress enacted the nation’s first income tax law in 1862 in order to support the Civil War effort. it was the forerunner of our modern income tax in that it was based on the principles of graduated (or progressive) taxation and on withholding income at the source

Continuing in his presentation, Mr. Pilla expounded upon the importance of why income taxes represent an important policy issue.  Because, as Pilla indicated, its consequences affect every aspect of everybody’s life.  The Founders never meant for the federal government to have so much control and presence in the lives of the American people, having rejected an income tax even though money was needed to sustain the fledgling republic.

Part 2:  Daniel Pilla’s Principles of Federal Tax Policy are discussed, which point to his preferred tax, the Sales Tax, with a further discussion about changing the present tax code.

Tuesday, November 19, 2013 at 02:51 PM | Permalink

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GazeboNews

News and stuff about Lake Forest and Lake Bluff

North Suburban Symphony Presents 25th Anniversary Celebration

November 11, 2013 by Leave a Comment

Rock group members:  Front Row:  Matt Berger, Guitar; Matt Erickson, Vocals; Aaron Rhoden, Keyboard. Back Row:  Michael Huhard, Drums; Art Bielski, Guitar.  Not pictured, Egon Doppenberg, Bass

Rock group members: Front Row: Matt Berger, Guitar; Matt Erickson, Vocals; Aaron Rhoden, Keyboard. Back Row: Michael Huhard, Drums; Art Bielski, Guitar. Not pictured, Egon Doppenberg, Bass

Sponsored Post: The North Suburban Symphony, based in Lake Forest at Gorton Community Center, invites the community to attend and participate in a celebration of its 25th Anniversary Season on Sunday, November 17th, at 4:00 p.m.

This is Ron Arden’s 7th season as music director and conductor of this fine community orchestra. Musicians travel from as far away as Chicago, McHenry, Morton Grove, and Wisconsin to be part of the orchestra. Two of the symphony’s youngest players are students at Lake Forest High School, Hannah Hart, principal bassist, and Niko Kyriacou, 3rd trombonist. All total, there are four student musicians who perform with the North Suburban Symphony despite their demanding school schedules.

The theme of the North Suburban Symphony 25th Anniversary Season — “Historic Past – Dynamic Future!” — was brought home, in part, at its initial concert of its 2013-2014 Concert Season on October 6th, when the NSS performed the program from its first concert in October of 1988. As firm believers in the positive role of community orchestras, it was a group of former members of the LFS who founded the North Suburban Symphony after the LFS elected to go professional. Several of its founding members are still dedicated and enthusiastic musicians of the North Suburban Symphony.

Expect to be blown away on Nov. 17th with what will be the NSS’s official celebration of its twenty-fifth anniversary year. The title of the concert, “Symphonic Explosion,” is but a hint of what will occur, but it is the substance of the event that will convince both young and age that here is a concert you can’t afford to miss.

A group of seven rock musicians, including two guitarists, a keyboardist, a percussionist, a bassist and a vocalist, will be on stage to perform with the full NSS to provide an afternoon of rock classics from the 80′s. Featured will be rock tunes by the Beatles, Simon and Garfunkel, Chicago, Moody Blues, and much more. Among the selections chosen for your enjoyment are “Bridge Over Troubled Water,” “California Dreaming,” “Stairway to Heaven,” “Horse with no Name,” and “Long Train Running.”

The husband of the NSS’s principal bassoonist, LoriLee Bieski, plays guitar with the group, Art Bieski. The drummer, Michael Hubbard, is the vice president for a Fortune 500 technology company. Egon Doppenberg, bass, is a neurosurgeon by day. Matt Berger is a composer as weill as a Chicago guitarist. Each musician brings to the group his own unique background outside their passion for performing classic rock together.

There is no doubt that your musical appetite will be satisfied, but there is still more to enjoy on November 17th. To satisfy your basic appetite, tasting stations will be set up that are sure to please the gourmet in us all. Participating will be The Grille on Laurel, Authentico, Francesca’s Intimo, Grille No. 43, Market House, and Bent Fork. For those of you who enjoy having “bubbly” with your food, libations will be available.

A live auction will be held during the concert. When you’re not enjoying the music or the food, a silent action will offer items to bid on for your future enjoyment.

Perhaps the most exciting event of the concert for members of the North Suburban Symphony will be the unveiling of our new name, as the new name is unknown to most members. One lucky concert attendee’s ticket will be drawn and the holder will get to unveil our new name.

Due to the popularity of this concert, we encourage you to purchase tickets in advance for what really will amount to a “Symphonic Explosion.” If you wait, we cannot guarantee day-of ticket availability. Tickets are $35.00 each, but the price does grant you access to all of the afternoon’s festivities. Order tickets at our webssite: WWW.NORTHSUBSYMPHONY.ORG or call (847) 295-1035.

We hope to see you on Sunday, November 17th at Gorton Center in Lake Forest, and likewise at our two remaining concerts of our 25th Anniversary Season: “Community Inspiration” on March 16, 2014, when we will partner with orchestra students at Lake Forest High School, and on May 4, 2014 in a concert titled, “Imagining the Next 25 Years.”

Not to be missed is an extra concert, the first after the unveiling of our new name, a Holiday Concert that will be held at Gorton Center in partnership with Gorton Center and what is still known as the North Suburban Symphony on Sunday, December 22nd at 4:00 p.m.

Visit www.northsuburbansymphony.org for more information.

Submitted by Nancy J. Thorner, cellist for the North Suburban Symphony

 

Th-30  By Nancy Thorner – 

It is possible that President Obama was never advised that governing by Executive Order is not the wisest thing to do? It’s definitely not the panacea he may think it is! According to Princeton University professor Julian Zelizer, who teaches history and public affairs:

Administrative actions don’t have the same kind of impact in defining a president as big legislative accomplishments and they are more susceptible to being overturned. The next president can change them. That’s always the problem.

Noted recently in Business Insider, because of Obama’s limited ability to achieve his policy goals through legislation [brought about by his own belligerent attitude], he very well may increase his use of executive power on three of his legislative agenda priorities: 1) the farm bill, 2) immigration reform, and 3) a more lasting budget deal.

Rumblings are even under foot that Obama is seeking to halt insurance cancellations of individual insurance policies resulting from his healthcare law through means that wouldn’t require legislation.

In an Executive Order issued on Friday, November 1st, President Obama appeared to be seeking a chance to obtain a climate legacy as he faces the grim reality that much of his agenda is seemingly falling apart in Congress?  Obama lost on gun legislation earlier in the year.  There is a perception that immigration reform is on life support.  To top off Obama’s obvious frustration over his elusive, floundering agenda, what was to be his signature first-term achievement — Obamacare — suffered a disastrous roll out.  The promise of having the site up and running by Nov. 30th sounds like a pie-in-the-sky dream.

It was through the stroke of a pen that President Obama issued his latest executive order with its goal to prepare the U.S for the impacts of climate change.  Not unexpectedly there has been a mainstream media blackout since the mandate was signed and sealed on November 1st, insuring that Obama’s continued and blatant disregard of the division of power among three set branches of government has resulted in yet another under-the-radar abduction of control by Obama. This takeover concerns our nation’s climate change policy.  While the lack of concern by the mainstream media and others is predictable, inexcusable is why Congress is no where to be found with this latest usurpation by the President of their power?

Obama’s November 1st executive order builds on the Climate Action Plan unveiled in June, whose centerpiece was to be the application of new regulations to power plants.

Obama’s November mandate goes even further by citing facts from the U.S. Global Change Research Program (USGCRP), which basically amounts to a rubber stamp of the highly questionable finding of the UN Intergovernmental Panel on Climate Change (IPCCP).

Following is an excerpt from President Obama’s new executive order, “Preparing the United States for the Impacts of Climate Change”:

The impact of climate change — including an increase in prolonged periods of excessively high temperatures, more heavy downpours, an increase in wildfires, more severe droughts, permafrost thawing, ocean acidification, and sea-level rise — are already affecting communities, natural resources, ecosystems, economics, and public health across the Nation.  These impacts are often most significant for communities that already ace economic or health-related challenges, and for species and habitats that are already facing other pressures.

New rules for power plants regulations mandate that CO2 emission from new coal-fired power plants are to be no more than 1,100 pounds of CO2 per megawatt hours of electricity produced.  The most efficient plant produces about 1,800 pounds.

In common layman language, the mandated rules would require a 40% reduction of CO2 emissions below that of the most efficient coal-fired plants, this despite the absence of surface warming in the past sixteen years and how climate models consistently overestimate global warming.  For all practical purposes, the new CO2 emissions rules would effectively prohibit the construction of new coal-fired power plants.

Also mandated by Obama’s Executive Order was the establishment of a volunteer “Task Force on Climate Preparedness and Resilience” as a venue for suggesting ways in which the federal government can help communities face “the impacts of climate change,” including bracing for longer heat waves, heavier downpours, more severe wildfires and worse droughts.

This task force, to be composed of governors and mayor, must report to the White House within a year to suggest ways the government can best “remove barriers, create incentives and otherwise modernize federal programs to encourage investments, practices and partnerships that facilitate increased resistance to climate impacts, including those associated with extreme weather.”

Recommended suggestions will more than likely include infrastructure projects like bridges and measures to manage floor control. Such projects, however, do come with a hefty price tag, a tall order as no new federal funds were offered to support the task force.

Those who are tasked with carrying out Obama’s Executive Order are EPA Administrator Gina McCarthy and Energy Secretary Ernest Moniz, both dedicated members of Obama’s green team.  McCarthy and Moniz are powerful advocates and defenders of the premise held by those who promote climate change action, “that the artificially contrived climate science debate has  ended.”

Gina McCarthy and Ernest Moniz will be making a series of speeches and media appearances to support and to promote what could provide the basis for a second-term climate legacy for Obama.

But things aren’t full steam ahead for McCarthy or Moniz in that a Pew Research Center poll conducted in mid-October shows that just 44% say believe that human activity causes global warming.  They will have lots of convincing to do on the trail.

As is so often the case, much in the same way Obamacare and the Common Core Curriculum are being sold to the public, executive orders are spun in a way to have the pubic believe that the government knows what is best for us. Here within lies the crux of the problem of Obama’s Executive Order on Climate Change:  It’s government grabbing for control which further involves following the money.

As reported by Fox News on November 1st in a story aired about Obama’s Climate Change mandate:

The federal government will control all of the purse strings  They will make certain that they get their piece of the pie, grabbing more taxes and funds to apply where and to whomever they please.  They will use all of the buzzwords platitudes necessary to lull their acolytes while lining their pockets and those of their cronies.  All the while creating a nation devoid of states’ rights. 

It goes without saying that the climate change mandate will result in crippling the economy and the economic well-being of the American people, all under the false and misguided premise that this nation and its people must be prepared for and made ready for what is only a perceived future climate change without scientific evidence or backing to merit the enactment of what would amount to extreme pain without gain!

Part 2:  Renowned scientists associated with The Heartland Institute bump heads with environmentalists at Chicago’s EPA listening tour, as the EPA prepares to draft new regulations to regulate greenhouse gases under the 40-year-old federal Clean Air Act.

Monday, November 11, 2013 at 10:00 AM | Permalink

 

 

Th-24By Nancy Thorner – 

The morning after Illinois lawmakers met for the final week of their fall veto session, Friday, Nov. 8th, a short report on ABC news stated how Chicago was on the road to becoming another Detroit due to its unfunded pension liability of $100 billion.

Senate President, John Cullerton, would disagree with this assessment. As stated on October 23rd by Cullerton, the state’s staggering $100 billion unfunded pension liability is not a “crisis.”

Perhaps Cullerton isn’t aware of the 2013 Alec-Laffer State Economic Competitiveness report (Rich States Poor States) that places Illinois 47th out of 50 states in Economic Performance and 48th out of 50 states in Economic Outlook.

As if Illinois’ $100 billion pension liability wasn’t enough to make this prediction more of a happening rather than just a mere warning, consider also that by the end of the year Illinois will have a stack of $9 billion in unpaid bills, the state is the least creditworthy state in the nation given its 13 credit rating dips, and the average household in Illinois will be on the hook for $42,000 in pension debt.

With the worst-funded pension system in the nation ($100 billion and rising), with only 39 cents in assets for every $1 of obligations, and with pension reform growing the debt daily by $5 million, it is without doubt that Illinois’ skyrocketing pension costs are squeezing out core services like education,public safety and healthcare.

Tribune editorial on Tuesday, November 5, rightly asked this question, “Where’s pension Fix?”  The Illinois Teacher Retirement Fund (one of five pension funds and the one with the biggest pension liability) had investment gains of 12.8% for this fiscal hear that ended on June 30, but unfunded liabilities still rose by $3.6 billion — $55.7 billion from $52.1 billion — proving that even in a good investment year the TRS pension liability got worse.

The thrust of the final sentence of the Tribune’s November 5th editorial remained unchanged from when the veto session opened on November 5th to its adjournment on Thursday, November 7:  Lawmakers, you keep telling us you’re close to a fix. And yet, here we are.

 The pension reform enacted in the House — applicable only to the Chicago Park District — was nothing to brag about in light of Illinois’ $100 billion pension morass.  Even so some House Republicans considered the House pension action  a piece of good news, showing as it did a House capable of taking a small step toward repairing some of the pension crisis.

According to Jeanne Ives (R-42nd) during a recent email exchange, of important is that Democrats were finally admitting there is a problem.  Then too the bill represented a small step toward fixing this state’s monumental and unsustainable pension debt, something the left side of the aisle has fought against for too long.  Ives does remain adamant in calling for comprehensive and major pension reform to return Illinois to solvency.  Ives likewise assured me that *HB 3303 has not been abandoned in the House.

HB 3303, an Illinois Policy Institute-backed comprehensive pension reform package, was introduced by Rep. Tom Morrison (R-54th) in March of this year.  Jeanne Ives was its co-sponsor.  The bill charts a sensible way to fix Illinois’ pension crisis by getting state politicians out of the pension business and moving them to a private sector-modeled 401 (k)-style retirement plan for all future work.

This question remains: Does the majority party really accept the premise that a problem exists and needs to be solved?  The park district pension is a local pension system, not a state pension system.  As such state money is not involved as with the underwater five state pension funds for teachers, state employees, university workers, General Assembly retirees and judges which together make up the $100 billion in pension liability.  The park district pension liability was addressed when the people responsible for the operation of the Chicago Park District pension fund came to the General Assembly with a plan to restore fiscal solvency.

Ted Dabrowski, Vice President of Policy, had this to say about the Chicago Park District pension bill that requires taxpayers to pay an additional $75 million into the Chicago Park District pension.  “With more than $1.4 billion in official debt, The bill fails to adequately reform the Chicago Park District’s pension system, nor does it fundamentally change the way the pension system is run.”

Some reasons why the General Assembly bill is bad for both taxpayers and workers:

  • Tax and fee hikes for city residents:  Although taxpayers are required to pay an additional $75 million into the Chicago Park District’s pension fund, the annual taxpayer contribution to the fund will also triple under this new legislation.
  • Forces workers to keep paying into a broken system:  Chicago Park District workers will eventually be forced to pay 12% of their paychecks into the system, up from 9%.
  • Keeps retirement age too low:  Private sector workers do not qualify for full Social Security benefits until age 67; the retirement age for the majority of Chicago Park District workers under the bill, would be 58.  Any pension reform  must match the government retirement age to the private sector retirement ago to fix the system.

Mayor Rahm Emanuel has voiced his approval of the bill, commenting that the legislation “delivers an honest solution to a problem that has been decades in the making.”  Emanuel went on to say:

This legislation reflects a balanced approach of reform and revenue, giving employees, retirees, and taxpayers the security and certainty they deserve, but that has long been missing.  Taxpayers can feel confident in a long term play that does not relay on them to shoulder the burden alone.

But can taxpayers really feel confident when their share of pension contributions will jump to almost triple to that of employees by 2019?  Additionally, taxpayers will be making “supplemental” payment of $12.5 million in both 2015 and 2016.  By 2019 the payment will jump to $50 million.

Mayor Emanuel likewise expressed hope that the Chicago Park District pension plan will serve as a template for other larger city pension system.  But not so fast say others, including the president of the Chicago Fraternal Order of P0lice and the Chicago Fire Fighters Union.  For just as healthcare is not one size fits all, so it is with pension reform. Sure to be questioned is the constitutionality of reducing benefits to public pension.

Where is the pension fix?  Illinois lawmakers clearly left Springfield on Thursday, November 7, without a fix to the state’s $100 billion public worker pension debt.  Also missing was a clear time frame for reaching an agreement to rein in the worst-funded retirement system in this nation.

The knowledge that every day without pension reform grows the debt by $5 million should be reason enough for legislators to face thegargantuan pension issue with proposals that would tackle the problem, such as would be possible under HB 3303 supported by Republicans representative, Tom Morrison and Jeanne Ives.

As it is, Democrats who hold majorities in both state houses remain wary to cut pension benefits too deeply because of their deep-pocketed, unionized government workers who faithfully support Democrat candidates with votes and money.

Then too, because the $5 million a day debt increase doesn’t directly affect their own pocketbook, but in the final analysis hits the pocketbooks of Illinois taxpayers, the pressure for Democrats not to act is more intense than the pressure to act.

Saturday, November 09, 2013 at 10:00 AM | Permalink

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