Croom Station Signal

Obamanomics Hurts the American Working Man-- Bad

As President Barack Obama puts together yet another “new” jobs plan, he is up against a powerful and dangerous trend:  A smaller share of men have jobs today than at any time since World War II.**

If that sounds bleak, it is. The portion of men who work and their median wages have been eroding since the early 1970s. For decades the impact of this fact was softened in many families by the number of women going back to work. The housing bubble helped mask it by artificially stoking the male-dominated construction trades. But when real estate crashed, the portion of men holding a job—any job, full- or part-time—fell to 63.5 percent in July 2011— just a hair above the December 2009 low point of 63.3 percent.

These are the worst numbers since 1948. Among the critical category of prime working-age men between 25 and 54, only 81.2 percent held jobs. In the current recession, 80 percent of all jobs lost were held by men. In perspective, in 1969 95 percent of men in their prime working years had a job.

Men who do have jobs are getting paid less. Adjusted for inflation, median wages for men aged 30 to 50 dropped 27 percent—to $33K a year— from 1969 to 2009, according to an analysis by MIT economics professor Michael Greenstone, who was chief economist for Obama's Council of Economic Advisers. "That takes men and puts them back at their earnings capacity of the 1950s. That has staggering implications."

Moderately skilled men without a college education have taken direct hits to their employment prospects.  But even those with bachelor's degrees from less selective schools are seeing their economic worth erode. The middle is crumbling, with elites doing better while more male citizens are being pushed down the compensation scale.

What is wrong?

Looting the Transportation Trust... Again

In my rather lonely campaign for Delegate in 2010, I identified the looting of the Maryland state trust funds by O’Malley and his Dixiecrat machine at the statehouse as one of the top threats–-along with massive underfunding of state pension funds – to any hope for future state fiscal solvency.  At O’Malley’s urging, the General Assembly in 2009 had looted more than 57 trust funds to “balance” the 2011 budget, a blatantly sleazy accounting trick remniscent of the “securitization” of mortgage debt by Fannie and Freddie Monster over the past decade.

These funds, covering everything from the environment to public health to highway construction, set aside specific sources of tax revenue for continuing public projects of wide public benefit. 

Throughout the last decade, the General Assembly raised taxes based on the assurance that the taxes would fund these public trusts.

Here we go again.  O’Malley has just moved to transfer massive amounts of tax revenue out of the Maryland Transportation Trust Fund to “balance” the 2012 budget, taking $60 million for the general fund and $40 million  for the rainy day fund. As the Gazette reports, the Transportation Trust was created in 1971 as a dedicated source of support for MDOT and is required by statute to maintain a $100 million reserve.  The Transportation Trust funds critical projects such as highway and bridge maintenance and construction, as well as operating the MVA, the Port of Baltimore, BWI and our regional airports, and the Baltimore and Washington Metropolitan transit authorities. Funding comes primarily from the gas tax, vehicle title taxes, and vehicle registration charges.

But that’s just the law, before it gets greased by the good old boys who run the machine: O’Malley, Miller, and Busch. Reality is that between 1984 and 2004, the Dixiecrats diverted a total of $571 million to non-transportation related programs, with more than one-quarter never reimbursed. Under O’Malley, trust funds transfers metastasized:  In the past three years alone, more than $2 billion has been transferred for other budgetary purposes.

The sleight-of-hand proposed to fix this mess is a boost in the gas tax.  Now, as far as taxes go, a gas tax spreads the pain about as evenly as possible; it’s among the milder of modern instruments of fiscal torture.  But only a fool or a fellow greaser would trust this administration or the Tweeders in the General Assembly to really use gas tax revenues for highway maintenance.

Lowlights of Maryland Budget Deficit Crisis from our State Budget Analyst

The General Assembly’s own Office of Policy Analysis has now pegged the 2011 state budget deficit at a crushing $1.6 BILLION.  Senate President-for-Life Mike “V.” Miller says addressing the budget black hole “is going to be very, very, difficult.”  Of course the “non-partisan” OPA was considerate enough to wait until AFTER November 2 to release the bad news, presumably with the humanitarian intention of avoiding fear-mongering among the peasants.  In Naptown, “V” stands for Venal. 

But a read though the charts prepared by OPA Director Warren Deschenaux show the fiscal outlook is much worse than the MSM have reported.

The OPA “Spending Affordability Briefing” is a shocking data-dump for the numerate. 

 

 I’ll try to share some of the most appalling “lowlights” here on the mighty Signal.

But you can also download the charts and tables and see for yourself at:

http://mlis.state.md.us/other/spending_affordability/briefing_111010.pdf . 

Lowlight:  The Dixiecrats claim that the last thing to be cut will be state aid for public education. But the biggest percentage increase in public education support between 2011 and 2012 will be subsidies for the schools with the highest numbers of illegal aliens, where state subsides for “limited English proficiency” payments will go up a hefty 7.7%.  The relative increase from 2010 is even higher, 9.5%, but OPC chief Warren Deschenaux conveniently omitted that figure from the briefing, which you have to calculate for yourself.  See Briefing page 14.

By contrast, funding for community colleges will rise a measley 1.9%, and supplemental state education grants, designed to improve programs for the poorest American public school students, will drop by 9.2% from 2010 to 2012.  Again, the budget analyst only provides the percent for the 2011-12 projected change, to make it look like there is no real drop at all.

Lowlight:   The worst fiscal situation in Maryland’s history since the end of federal occupation after the Civil War is barely reflected in the Dixiecrats’ suicidal entitlements for votes agenda.  Projected general fund spending on direct welfare payments is projected to metastasize 113.3 % between FY 2011 and 2012, while state medical assistance programs, which include massive subsidies for uncompensated medical care for illegal aliens, will surge 66% next fiscal year, an increase of  $1.15 BILLION DOLLARS in just 12 months!  See Briefing page 39. 

Lowlight:   While the “magic” press conference budget deficit is pegged at $1.6 BILLION, the structural deficit – that’s the “real” 2012 budget deficit of ongoing revenues less operating costs—is a staggering $2.1 BILLION.  See Briefing page 16. 

Lowlight:   The General Assembly spent like drunken sailors and stole grandma’s savings to fool the public with the 2011 budget.  Buried on the last page of the briefing is a chart innocently labeled the “Fund Transfers and Multiyear General Obligations Bond Repayment Plan.”  An inquiring taxpayer will see that the Dixiecrats “transferred” $444 MILLION for 18 key special trust funds (a total of 57 funds in all were raided) to pay the bills this year.

The “repayment plan,” to be spread over the coming four years, is of course a fantasy. Briefing page 51. Even more shocking is the $350 MILLION taken in 2011 from the Local Income Tax Reserve— income taxes collected by the state for county governments— and used instead to paper over the shortfall in funding for the soon-to-be bankrupt state teachers pension funds.  Briefing page 11. 

Lowlight:  In 2012, the state will somehow have to come up with $1.21 BILLION in new state taxes to replace one-time federal stimulus funds used to paper over the 2011 deficit.  Briefing page 11. 

Lowlight:  We're starting to pay out-of pocket for Obamacare madness in 2012.  Since BS&N (Barak, Steney and Nancy) slashed reimbursement for over-the-counter medications from the federal health savings programs starting on January 1, 2011, the state will have to pay $5.1 million just to fund the difference for state Medicaid recipients.  Briefing page 8. 

Lowlight:  The state is planning on a nearly 450% increase in video lottery terminal revenues between now and 2015 just to keep the “magic” deficit figure below its unsustainable 2011 level.  This “stupid poor people’s tax” scheme is a fiscal fantasy and a social abomination.  Briefing page 22. 

Lowlight:  Maryland has reached its maximum sustainable level for general obligation bond borrowing, which is calculated as a ceiling of 8% on state general revenues used to pay GO bond interest payments. Briefing page 26.  

The outlook for the Transportation Trust Fund is even worse.  They apparently have exceeded their sustainable borrowing limits by projecting unreal revenue levels over the next five years from vehicle titling and fuel taxes.  BOTTOM LINE:  Even if O’Malley imposes draconian taxes, Maryland’s capital spending programs, particularly for roads and public transportation, are going to take a massive hit.  Crumbling infrastructure will then takes its inevitable toll on state economic activity and the tax base it can generate.  It’s called the race to the bottom. Briefing page 23-24.

Obamacare Strips OTC Medications from Taxpayers' Health Savings Plans

Here it comes... 

In one of the first cuts in what will soon become a healthcare massacre, the Washington Examiner, in an Oct. 28, 2010 story, reports that, beginning on January 1, 2011, our flexible savings plans (FSPs) and health savings plans (HSPs) can no longer be used to claim reimbursement for over-the-counter medications, unless you get a doctor's prescription! 

Yes, I know it's nuts. 

A national law that supposedly reforms our healthcare system instead forces you to go to the doctor to get a prescription for cold medicine, band aids, or poison ivy cream before you can use the money you saved to pay for these basic healthcare items. 

The Examiner cites an online provider that says it will no longer allow you to use your FSA savings to pay for, "acid controllers, allergy and sinus medication... anti-gas... baby rash creams... respiratory treatments, cough, cold and flu remedies... stomach remedies.... feminine anti-fungal treatments.... or pain relief."

According to the Examiner:

"The new provision guarantees that patients will either pay more for the same drugs, clog doctors' offices with expensive and unneeded appointments, or a combination of both, defeating the entire stated purpose of Obamacare." 

"With each new revelation, it looks less like a fix for the health care system, and more like a recipe for increased state control of Americans' financial and health choices."

 

 

Maryland's Silent Tsunami

I never thought I had much in common with the Washington Post editorial board until I read "Maryland's Silent Tsunami," the lead editorial in its October 4, 2010 edition. 

It is frighteningly on-point about the crisis facing the Old Line State:

"Neither O'Malley or Erhlich have cared to publicly discuss the most daunting threat to Maryland's fiscal health:

 Billions of dollars in pension and healthcare bills coming due for retired teachers and former state employees, and no plan in place to pay for them."

 

This wakeup call could have been lifted directly from my Clean House in Annapolis District 27A Delegate 2010 campaign website.

The Post explains better than I:

"Having shortchanged--for almost a decade-- its contributions to the pension fund that covers more than 100,000 former employees, the state faces unfunded pension liabilities of more than $18 billion and unfunded health-care obligation projected at $15 billion.  That's $33 billion in bills coming due, a sum equal to an entire year of state spending.  And no one knows where the money will come from."

The Post editorial writers seem to agree with my analysis of the source of the problem:

"The numbers reflect a sorry record of political avoidance, cowardice, and pandering by decisionmakers in Annapolis, often in thrall to public employee unions.  Starting in 2003, lawmakers allowed the state to trim its annual payments -- a decision akin to with holding part of your mortgage payment....   

Vallario: DUI not a conflict with my interests!

At nine in the evening on the last night of the 2010 General Assembly session, House Judiciary Committee Chairman and Head Weasel Joe Vallario convened the Committee to inform them that he was killing legislation that would have required an ignition interlock device be installed on vehicles owned by motorists convicted of drunk driving. 

The bill had passed the Senate unanimously weeks before-- but Vallario permitted no vote on the measure. He bluntly informed the Committee that advocates like MADD had rejected his demands to water down the bill, and he provided members and the media with a chart to help explain his decision.

 

Even the flabby liberal Baltimore Sun described that chart as “fundamentally flawed.”  Vallario dishonestly used non-comparable data to misrepresent studies from New Mexico and Virginia, states which do not have comparable interlock device legislation.

Vallario was once again weaseling on behalf of private interests—in this case the state liquor lobby—true to his sleazy MO for the last 30 years in Annapolis.  (See my July  2009 post on this topic).

The chart did not use authoritative data from the National Highway Traffic Safety Administration:  Records of drunk driving fatalities based on the national standard of .08 percent blood alcohol. Like a brazen ambulance chaser, Vallario took data from a advocacy group called AlcoholAlert recording all fatalities in which the driver  had any alcohol in the bloodstream--down to the non-intoxicated level of .01—and compared this with records from non-interlock states, using liquor lobby preferred standards of .15 or higher.

As one commentator on the Sun blog puts it:

“Vallario is a walking conflict of interest. His constituency is not in Prince George's County but among the defense bar, of which he is an active member.  He reminds me of the tavern-owning state senator from Baltimore decades ago who, asked why he voted on a bill affecting his bar, answered, 'It doesn't conflict with my interest'."

“Speaker Busch should be ashamed at condoning this grossly unethical behavior.”

Source:  Michael Dresser, Baltimore Sun 4-19-2010

After 57 Special Fund Raids, Annapolis Leaves Nothing for the 2012 Budget

The 2010 Maryland General Assembly included the good, the bad and the ugly, as it does every year. Unfortunately, the fiscal year 2011 budget it approved was pretty bad and ugly.

The Governor and the machine leaders of America's most intrenched one-party state legislature produced a crass election year budget that failed to address the long-term deficit problems confronting our state. The TWO BILLION dollar deficit was "fixed" by $300 million in one-time transfers, by raiding forty trust funds,and blowing $1.3 billion in federal stimulus money. 

 

None of these gimmicks address the $8 billion in future deficits predicted for the next four years.  More importantly, this dishonest budget will guarantee a significant tax increase in 2011, after the election year. 

 

Bottom line is that the 2011 budget ended up the same as last year's, which itself was bloated and in need for prudent cutting. 

 

The major difference is that the 2011 budget was funded by raiding numerous special funds and by blowing one-time income for Barak Obama. There were a reported total of 56 funds raided, including Highway User Revenue, Bay Restoration Fund, University System of Maryland, Injured Workers' Insurance Fund, Waterway Improvement Fund, Injured Workers' Insurance Fund (State Liability Reserve), Ocean Beach Replenishment Fund (Local), Board of Physicians Fund, Injured Workers' Insurance Fund (State Administrative Costs), and the Board of Nursing Fund.

 

In a typical maneuver, funding from the flush tax, which was intended to improve the Bay, was stolen to balance the budget, and no meaningful legislation to prevent polluting runoff from major cities like Baltimore was passed.

This means that next year whoever is Governor will have a tough job. The special funds will be gone and the federal money will be nonexistent.  In short, all this will result in higher taxes.   Source: Delegates Pat McDonough and Rick Impallaria.

Steny Hoyer and the Tax Tsunami

The House Ways and Means Committee has released the list of $670.3 BILLON DOLLARS in tax increases that have been signed into law by President Obama. That's a staggering $2,100 per year in additional federal taxes for every man, woman, and child in America. 

 

Those new taxes include at least 14 violations of President Obama’s campaign "pledge" not to increase taxes on middle-income Americans, which he defined as families making less than $250,000.

 

Here are some ripples from the GIANT TSUNAMI of NEW TAXES that has flooded over the citizenry in the 14 months of one-party control of Washington:

 

*  Tax on individuals who do not purchase government-approved health insurance.

*  Tax on employers who fail to buy government approved health insurance.

*  40% tax on high cost health plans, but with an exemption for union members.

*  .9% increase in Medicare tax on wages and self-employment income.

*  A new 3.8% surtax on certain investment income.

*  Increase from 7.5% to 10% of income the threshold for deducting medical expenses.

*  A new $2,500 annual cap on Flexible Spending Account contributions.

*  Excise taxes on brand name pharmaceuticals.

*  Excise taxes on medical devices including wheelchairs.

*  A 10% federal tax on indoor UV tanning services.

*  New tax on insured and self‐insured health plans.

*  Double the penalty for non‐qualified HSA distributions.

*  Tobacco tax increase.

 

But that’s not all.  Unless Congress takes action, here is a sample of EVEN MORE tax increases that are scheduled to kick in automatically in the immediate future:

Killer Drunk Driver's Best Friend in Annapolis

Aristotle believed that drunkeness never excuses crime, but actually increases guilt, because the drunken lawbreaker has willingly deprived himself of the ability to reason that alone can distinguish right from wrong, and separates men from beasts.

A different view is held by creepy Maryland State Delegate Joseph F. Vallario, Jr. (D-Prince George's and Calvert).  Vallario thinks drunks should always get another chance to kill and injure behind the wheel, just so long as their DUI defense attorney (that would be Joe) gets his "fee."

According to the Washington Post, all but three states and the District now have some form of interlock law for drunk drivers. Virginia for example mandates their use for two-time offenders who want to keep driving.

But Maryland law merely says they “may” be used.  2009 legislation that would have changed "may" to "must" in many cases once again died in a House committee chaired by Vallario, well-known among the trial bar, insurance companies, and surviving relatives of citizens killed by drunk drivers as the drunk drivers best friend in the Statehouse.

"If you take the test and blow a 1.5 blood-alcohol level and you want an interlock, you can get it," Vallario told the Washington Post.  Vallario said mandating their use could cause problems for people convicted of drunken driving who "don't have a car because we can't compel them to buy a car and put one of these in it."  

The Joker Agenda Spotted in College Park

On July 21, the Prince George's County Council adopted Resolution CR-12-2009, entitled "Spending of Federal Economic Renewal Grants."  

CR-12-2009 finds that "the economic downturn is having a critical impact on everyday Americans who are struggling to maintain or find jobs"  and that "our taxpayer dollars should be spent to maximize the creation of American jobs and restore the economic vitality of our communities."

The resolution urges the County to spend Obama stimulus funds "wherever possible on products made in the United States or"  -- now get this-- "services performed in the United States."

The resolution reeks of hypocrisy.  PG County has gone out of its way to give hundreds of thousands of dollars to fund illegal alien day labor and unauthorized alien worker  service centers, while our American youth 16-30 unemployment rate is at  Depression-era levels. 

PG County's shameful cheap labor santuary laws are premised on the assertion that there are thousands of jobs in Maryland that "Americans won't do."

Please, show me a single elected county official who gives a rats' ass about saving the American worker.  Just try and file a complaint about immigration-related employment discrimination with the County Human Relations Commission or complain about illegal alien crime to the PG Police, or the illegal labor coolie centers in Langley Park and Oxon Hill. 

If you are a citizen, you can forget it.  You're on your own.

What was Council Member Eric Olsen, the author of this loopy protectionist drivel, thinking? 

Seems the Joker Agenda is apparently thriving in College Park.