Monday, January 14, 2019

The Art of the Deal?

The Art of The Deal – Rauner and Trump?

If you’re an Illinoisan, you should be well aware of what happens when an executive in the leader’s office decides not to allow spending for the state to proceed by blocking a budget.

Ex-governor Rauner’s position, combined with his inability to find consensus and refusals to seek collaboration, left the state’s finances in greater shambles than the desperate balance sheet used by the ersatz Carhart office-seeker to lure a concerned citizenry into considering him for Governor.

His money and blanketing commercials did the rest.  (After Quinn’s using the public sector workers as chum, there was no way he would regain his seat.) 

Back to Rauner:

1.    736 days without a budget.
2.    $14.71 billion in the backlog of bills owed to vendors (with interest).
3.    Services for multitudes of medically needy and other services were unpaid, and unlikely to re-open after being left dry.
4.    People and families in need of state services based upon budgetary amount were left without.
5.    “…some Medicaid providers, human services grant recipients, the Community Care Program and other programs administered by the Illinois Department on Aging.For example, the Chicago Coalition for the Homeless found that 90 percent of homeless service providers were forced to limit their intake of new clients, reduce services for current clients, lay off staff, eliminate programs, and/or close work sites due to the impasse.” 
6.    Many non-profits and medical/health service centers closed without funding.

Back to now:

The current occupant of the White House (45) is cut from the same cloth that gave Illinois Rauner, although even Rauner was awkwardly fearful of complimenting Trump.  Rauner tried desperately to appear as “one of the many” in his motorcycle gear and folksy speakin’.   

As of this writing, the shutdown has become a record-breaker.  Day 24. 

As for the ultimate costs? Those too could become a record-breaker.

According to Fortune Magazine, keeping the government running will be cheaper than shutting it down.  “The partial government shutdown comes with a high price: in the billions, maybe tens of billions of dollars so far, and increasing in scale daily. It costs more to shutter the government than to keep it open, so long as accumulated bills and deferred salaries are eventually paid as they have following all previous temporary closures. And the lack of spending drags down the country’s economy, especially in communities with government workers or those near national parks.”

“In 2017, a government shutdown cost the U.S. economy about $6.5 billion per week.  The Office of Management and Budget estimated a 16 day shutdown in 2013 cost the government $2 billion in lost productivity or about 6.6 million workdays lost.”  

In fact, analysts expect that in another ten days, the cost to the economy will have exceeded the $5.7 billion Trump wanted for his border wall/fence, sleeping policeman, moat, etc. 

And, my friends, watch the markets as the shutdown “could shave off approximately $1.2 billion of real GDP in the quarter for each week that part of the government is closed.

If there is a commonality between Trump and Rauner, it is their uncanny resistance to compassion and unwillingness to use victimization as a part of deal-making.  They thrive on it.  It’s never about the art of a deal; it’s only about making you submit.

According to Indivisible Chicago, switchboards in the offices if the senators of the US Senate are being flooded with calls to support Trump's vanity project of a wall.  We can depend upon our Senators in Illinois, but they might appreciate a call in support of their refusal to submit.

Senator Dick Durbin: 202-244-2152
Senator Tammy Duckworth: 202-224-2854

Please remember to thank the staff who take calls all day long.




Thursday, December 20, 2018

General Mattis' Resignation Letter

General Jim Mattis’ Resignation Letter to a Man Without Military, Political, or Strategic Understanding


“I have been privileged to serve as our country’s 26th Secretary of Defense which has allowed me to serve alongside our men and women of the Department in defense of our citizens and our ideals .

“I am proud of the progress that has been made over the past two years on some of the key goals articulated in our National Defense Strategy: putting the Department on a more sound budgetary footing, improving readiness and lethality in our forces, and reforming the Department’s business practices for greater performance. Our troops continue to provide the capabilities needed to prevail in conflict and sustain strong U.S. global influence.

“One core belief I have always held is that our strength as a nation is inextricably linked to the strength of our unique and comprehensive system of alliance and partnerships. While the US remains the indispensable nation in the free world, we cannot protect our interests or serve that role effectively without maintaining strong alliances and showing respect to those allies. Like you, I have said from the beginning that the armed forces of the United States should not be the policeman of the world. Instead, we must use all tools of American power to provide for the common defense, including proving effective leadership to our alliances. NATO’s 29 democracies demonstrated that strength in their commitment to fighting alongside us following the 9-11 attack on America. The Defeat-ISIS coalition of 74 nations is further proof.

“Similarly, I believe we must be resolute and unambiguous in our approach to those countries whose strategic interests are increasingly in tension with ours: It is clear that China and Russia, for example, want to shape a world consistent with their authoritarian model — gaining veto authority over other nations’ economic, diplomatic, and security decisions — to promote their own interests at the expense of their neighbors, America and our allies. That is why we must use all the tools of American power to provide for the common defense.

“My views on treating allies with respect and also being clear-eyed about both malign actors and strategic competitors are strongly held and informed by over four decades of immersion in these issues. We must do everything possible to advance an international order that is most conducive to our security, prosperity, and values, and we are strengthened in this effort by the solidarity of our alliances.

“Because you have the right to have a Secretary of Defense whose views are better aligned with yours on these and other subjects, I believe it is right for me to step down from my positions. The end date for my tenure is February 28, 2019, a date that should allow sufficient time for a successor to be nominated and confirmed as well as to make sure the Department’s interests are properly articulated and protected at upcoming events to include Congressional posture hearings and the NATO Defense Ministerial meeting in February. Further, that a full transition to a new Secretary of Defense occurs well in advance of the transition of Chairman of the Joint Chiefs of Staff in September in order to ensure stability within the Department.

“I pledge my full effort to a smooth transition that ensure the needs and interests of the 2.15 million Service Members and 732.079 DoD civilians receive undistracted attention of the Department at all times so that they can fulfill their critical, round-the-clock missions to protect the American people.

“I very much appreciate this opportunity to serve the nation and our men and women in uniform.”


Wednesday, December 19, 2018

RESCIND THE 3% CAP ON LOCAL DISTRICT CONTRACT NEGOTIATIONS.

From IEA/NEA:
Sign the petition! The Illinois General Assembly: Protect our Profession
Friend,
I signed a petition on Action Network telling The Illinois General Assembly to protect our profession.
IEA members and all supporters of public education are asked to sign this petition to reverse a harmful piece of legislation that was inserted in the budget passed by the Illinois General Assembly last week. Without warning or discussion of the damage it would do to students and schools, Illinois lawmakers imposed a 3 percent threshold on final average earnings salary increases for any education employees participating in the Teachers’ Retirement System (TRS) or State Universities Retirement System (SURS). 
Please sign this petition to encourage lawmakers to reverse this terrible piece of legislation and show educators that their work is valued and that teachers and professors deserve respect. Tell them to rescind the 3 percent threshold. 
Background: 
In the final 48 hours of the 2018 legislative session, Illinois’s four legislative leaders sneaked into the budget implementation bill a measure making school districts or universities financially liable for any contribution to those employees’ larger than a 3 percent increase in the final 10 years of their careers. Because educators qualify for a pension after five years and can leave at any time, districts and higher ed institutions would likely institute a 3 percent threshold across the entire contract. 
Impact:
 
As a result of this legislation, teachers would likely be denied extra compensation for after-school work that benefits students, such as coaching, directing plays, tutoring in the evenings, taking classes toward master’s degrees and, therefore, devaluing the continuing education of our educators and ultimately harming students. In addition: 
Reducing benefits to educators will make the already serious Illinois teacher shortage even worse. At a time when committees are being formed to try to figure out how to keep graduating seniors from fleeing the state and choosing instead to stay at Illinois higher education institutions, this action will drive professors away from the profession. This would financially harm the teachers of this state who devote their careers to teaching the next generation of students, impacting their salaries now and in the future, by limiting salary growth to no more than 3 percent, when rates of inflation hover around 2.5 to 3 percent each year. Please sign this petition to encourage lawmakers to reverse this terrible piece of legislation and show educators that their work is valued and that teachers and professors deserve respect. 
Tell them to rescind the 3 percent threshold.
Thanks!

JD

Saturday, December 15, 2018

Amending the Pension Protection Clause Is Unnecessary, But It's Great Political Theater

Amending the Pension Protection Clause Is Unnecessary, But It’s Great Political Theater

Recent calls by outgoing Chicago Mayor Rahm Emanuel to “amend” the Illinois State Constitution, specifically the Pension Protection Clause, are getting significant traction in the local press and the city newspapers. The lead in Thursday’s (December 13) Tribune Editorial page opines, “Calling all mayors: Join Emanuel’s pension push.”   

The Tribune, understandably, embraces the exiting mayor’s position: “There’s no question Chicago Mayor Rahm Emanuel can influence public policy with unique firepower.  Even as he leaves the city’s top post, his ideas to address Chicago’s pension challenges can perk the ears of a wide and influential audience.”  

Mayor Emanuel, who has decided not to run again for mayor of the Chicago, is nevertheless quite willing to provide a veteran’s advice to those many who would replace him.  Breaking from a Democratic/progressive position on pensions and liabilities, Emanuel juggled two disparate political concepts:  promotion of a graduated tax system for the state and the overturning of the public pension protection clause for state workers.

Emanuel’s office, like the State, faces an ever-increasing pension liability for public workers, teachers, police, firefighters, etc.  For that, he blames the promise of an annual compounded 3% Cost of Living Agreement.  “Think about it.  What kind of progressive sustainable system guarantees retirees three percent annual pay increases when inflation has been basically at zero and current employees have at times been furloughed, laid off, or received minimum pay increases?”

The Pension Protection Clause of the Illinois Constitution (1970), which the Tribune 
characterizes as “rigid,” states: Membership in any pension or retirement system of the 
State, any  unit of local government or school district, or any agency or instrumentality 
therof, shall be an enforceable contractual relationship, the benefits of which shall not be 
diminished or impaired.”  (Article XIII, Section 5)
 
The annual compounded Cost of Living became a serious concern in the 1970’s.   It was a 
time of rampant inflation.  Inflation rates for the entire decade of the 70’s was 7.25%, and in 1978 and 1979 the numbers were vaulting back again (as in ’74) to over 12%.  People were choosing ridiculous balloon mortgages for housing and essentials were often unavailable or found at the end of a meandering queue.  In Illinois, concerns for the well-being of those on 
fixed income/pensions resulted in an attempt by the General Assembly to find some remedy.  
 The TRS AAI remained unchanged until 1990, when the formula was altered in state law to require subsequent increases to be compounded – calculated from the member’s current pension amount instead of the original amount. Inflation at the beginning of 1990 was 5.4 percent.
The 3 percent compounded AAI is a product of a time when inflation was higher than it is now and had been increasing at a steady pace for many years. Inflation averaged 6.37 percent during the 20 year period prior to 1990, with a high of 13.9 at the beginning of 1990 and a low of 1.46 percent at the beginning of 1987.
Since 1990, the growth in the cost of living from year to year has been slower. In the 29 years since the current TRS AAI was set, inflation has averaged 2.47 percent, with a high of 5.4 percent in 1990 and a low of -0.09 percent in 2015.
 
But now, the 3% compounded COLA has become the villain in our state’s sordid financial 
drama.  Emanuel stated, “The truth is, going back decades too many elected officials, labor 
leaders, and civic leaders – people in positions of responsibility – agreed to a funding and 
benefits system that was not sustainable and therefore not responsible.”  
 
Actually, that’s not the truth.
 
The real truth is going back decades too many elected officials – people in positions of responsibility – shorted the actuarially required contribution to the pension funds while workers 
contributed their required amounts; thus, a shortage that snowballed over the decades to 
become what is now a behemoth of debt for which the departing Mayor of Chicago would 
blame an increase in COLA costs provided 40 years after pensions were provided for Illinois workers and the 40 years after their provision.  
 
Looking back at the truly culpable elements in the increase in unfunded pension liabilities, 
the Center for Tax and Budget Accountability has found that nearly 42% of the increased 
debt is due to inadequate state contributions.  Benefits like the compounded COLA are 1.6%.    
 
Finally, Emanuel’s lame-duck advice to dismantle the Pension Protection Clause through a Constitutional Amendment is unconstitutional, difficult, and unnecessary.  
 
Unconstitutional:  If we learned anything in the unanimous decision of the Illinois Supreme 
Court in May of 2015, it was the antecedent court cases and the careful wording of the 
Illinois Constitution that prevented Lisa Madigan, Pat Quinn, and the General Assembly 
from using a crisis of their own making from undermining the contractual promises to public sector workers.  (Thank you, Henry Green and Helen Kinney).  As Director of the Center for Tax and Budget Accountability Ralph Martire reminded during a recent NPR radio interview: “You cannot reduce a benefit that was a pension benefit that was promised to an employee 
in the state of Illinois that’s a public sector worker as of the date of their employment.  That 
is their benefit for their tenure.  Period.  End of story.”  
 
Unnecessary: Incoming and new hires coming in to the public sector in Illinois do not have access to a compounded COLA in their retirement.  Nearly a decade ago, the legislature in 
the General Assembly passed a bill generating a second Tier for incoming educators which would force them to work longer (age 67 without penalty), for a simple and capped interest COLA based on the CPI, and the same payments to the pensions as Tier One (those who 
have 3% compounded).  The dwindling population of Tier One teachers is now heading 
toward retirement.
 
The General Assembly can (and has) made changes to the COLA as well as other 
requirements and diminishments for public sector workers who are entering the public work 
force.  That is legal and easier to do.  Again, Martire: “Why take away the constitutional 
protection for workers when legislatively, you can create a Tier II, Tier III, Tier IV that has a 
different cost of living adjustment, COLA, for workers going forward? You accomplish the 
same thing in much less time, because passing a piece of legislation through Springfield is 
a much quicker process than getting a constitutional amendment.”    
 
In addition, a Tier III is being added after 2018, if approved by the Internal Revenue System for meeting basic requirements for a state retirement program to be used in lieu of the social security system.   A hybrid plan, the Tier III program in Illinois will also dispense with the 
compounded COLA and provide only a simple interest COLA linked to the CPI or an 
opportunity to move to a 401(k) rather than a defined benefit.
 
Emanuel calls on the incoming Mayor and the General Assembly to combine an amendment for both the progressive tax schedule and the alteration of the Pension Protection Clause.  The latter, as I have tried to explain, is unnecessary as well as unconstitutional.  It is also 
unnecessarily difficult as 3/5th’s of each of the House and the senate of the General 
Assembly must agree to the Amendment and the voters can them approve or disapprove in the next general election (2020).
 
 Summary: The calls by the outgoing Mayor of Chicago identify the critical costs and debt 
the city (as well as the state) have built up over the last 80 years, but to try to blame a single reason (like the compounded COLA) ignores the truth as well as the answers.  
 
The legislature has already addressed those issues through Tier developments even if 
unfairly. 
The Illinois Supreme Court states that such an attempt will not affect current Tier One 
retirees.  Any changes, even those by constitutional amendment, can only be enforced 
“going forward.” 

The refusal to amortize the pension debt and subscribe to an artificial “ramp” that is draining services is undermining the general revenue. By 2030, $6.5 billion in General revenue will 
be required to pay the pension ramp (PA88-593) unless the General Assembly acts.
Tier Two and Three (and other) employees will never be given protection against inflation.
 
What should the departing Mayor advise?  
 
Amortize the unfunded liability to pensions, dispense with the 1995 pension ramp used to 
short pension payments, recalculate the annual required contribution to meet the current 
(not smoothed) needs, create a tax structure which is both progressive and comprehensive 
to the people of our state.   
 
 

Thursday, December 6, 2018

Tribune Resurrects Pension Crisis

The Tribune Resurrects “Pension Crisis” Again…

In the latest Tribune editorial, “Even pension loopholes are protected?  Then amend the Illinois Constitution,” the readers are provided with egregious acts of double dealing and slippery allowances that provide for the very cagey to get away with getting more than they should have in retirement benefits. 

It makes a teacher with 34 consistent years of work and experience cringe.  At first it seems objectionable.  And…maybe it is?


In short, public workers who took leave from their positions to work for the unions representing them sued to be given their pensions for time served in (what was arguably) a not-public, now private position.  Other seemingly malicious examples included an individual who served as a lobbyist but later subbed for one day to receive an eligibility in the Teachers Retirement System.  

The heart of the issue was whether a law written and signed by then-governor Pat Quinn preventing those who sought leaves of absence in lobbying or other union positions could continue operating as if employed by their original public union.  Prior to the law (Act 97-651) enacted in January of 2012, personnel who worked as public employees within a school, labor force, or service provider could request and receive a leave of absence from their position to work within the union leadership – and make continued payments to their retirement pension plan based upon the salary or earnings they were receiving from their employment while on leave.  

In example, Ms. Kendall departs her position of 10 years as a teacher and takes a position as an IEA contract-negotiations advisor in the northern half of the state. Before Act 97-651, she would elect to pay the portion of her earnings to the TRS to secure the promise of her retirement benefits at the end of her career.  This would include the possible return to her teaching position if she so chose.  Act 97-651 disallowed those payments, creating a severance from her union representation and the original promise made in the Pension Contract Clause of the Constitution.  ““Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.” (Article XIII, Section 5)


In writing the Act 97-651, the Justices of the ILSC found that this particular attempt to find a means to blunt earnings without identifying the responsibility for the “questionable employer” created an ambiguity which undermined the constitutionality of the Act at the outset.

¶32 “We find that, regardless of the purpose of the benefit and the merits of the suggested utility of the benefit, it was a matter for the legislature to decide. And, as Kanervanoted, “[w]e may not rewrite the pension protection clause to include restrictions and limitations that the drafters did not express and the citizens of Illinois did not approve.” Id. Accordingly, we hold that the circuit court correctly determined that Public Act 97-651 was unconstitutional to the extent that it eliminated as a pension benefit for current participants the ability to earn union service credit previously bestowed by the legislature.”

And within the opinion’s conclusion by Justice Thomas:

 ¶65 “We find that the circuit court properly held that, with respect to participants who were already members on the effective date of Public Act 97-651, the denial of the future ability to earn service credit on leave of absence for labor organization employment violated the pension clause of the Illinois Constitution. We reverse the circuit court’s judgment dismissing the portions of plaintiffs’ complaint that alleged a violation of the pension clause of the Illinois Constitution related to Public Act 97-651’s change in the law to deny the use of a union salary under section 8-226(c) or 11-215(c)(3) to calculate the “highest average annual salary.” We also reverse the circuit court’s rulings on the parties’ cross-motions for summary judgment that resulted from the circuit court’s construction of section 8-226(c)(3) to include defined contribution plans within the definition of “any pension plan.” 
So, if Ms. Kendall had returned after 12 years of paying dutifully into her pension obligations for her IEA position and then performed another 12 years of work and pension payment, well, what’s wrong with that? Maybe she’d be part of the mass of retired public workers in Illinois earning approximately $10,000 less than the median earnings of workers in the United States ($62,175).

But, the Tribune and its confederate Illinois Policy Institute have begun another assault on the concept of any defined benefits in retirement owed to those who toil for the state of Illinois. 

“The solution to the state’s multifaceted pension crisis should be crystal clear to taxpayers.  The Illinois Supreme Court isn’t going budge.  The pension clause needs to be amended.”

EMPHASIS on pension crisis,labor bosses, and plenty of outlier examples that make a normal pensioner take an unsettled notice.  On the other hand, the Tribune editorial identifies 11 of the more than 200,000 retirees of public labor unions who worked long and industrious careers for the people of the state of Illinois.  Eleven…

And, therefore, the Tribune and IPI rail that we need an amendment, but remember my friend, neighbor and reader: Even with the amending of the pension protection clause, the UNFUNDED PENSION LIABILITY WILL REMAIN.  
In the editorial’s accompanying cartoon by Stantis, a pop-eyed taxpayer is held in a small cage with a behemoth Frankenstein entitled “Pensions.”  It is not really the outliers that bother the Tribune or the IPI: it’s the existence of pensions, collective bargaining, and any benefits at all.    
 "TRS benefits are not responsible for the majority of the unfunded liability at TRS. “TRS actuarial reports show that 66 percent of the unfunded liability over the last 15 years was caused by contributions from state government that failed to meet the “full funding” levels set by actuaries. For instance, between FY 2014 and FY 2017, the state’s total contributions were $7.2 billion short of the actuarial requirement.
“In addition, the chronic lack of proper funding from state government means TRS does not have that money to invest, and those “unrealized” investment returns over time account for 27 percent of the TRS unfunded liability, along with the cost of issuing pension bonds and other miscellaneous factors. Of the $578 million increase in the state’s annual contribution to TRS for fiscal year 2018, only 4.7 percent is attributable to benefit increases. According to the group “Illinois is Broke,” over the last 15 years 50 percent of the TRS unfunded liability is the result of underfunding by state government, 25 percent from pension bond costs and miscellaneous items, 21 percent from unrealized investment profits and only 4 percent from benefit increases.”

As long as the Tribune and the IPI deny the already huge deficit created by the shorting of pension payments from the state of Illinois over decades in order to divert Ms. Kendall’s payments and others to avoid the real costs of running a government, nothing will ever be corrected, not really.

Instead of facing the actual issues and finding a means to correct them, they scapegoat those who have already fully paid into their retirements.  

It’s not just the bizarre and hyperbolic examples that the Tribune and the IPI want to paint broadly across the minds of those willing to be beguiled.  It’s all of us, even those of us who forsook social security and earnings to work for the benefit of students, those in need of services, or in maintaining our state’s infrastructure.  Feel guilty?  That’s what the Tribune wants.  Feel like someone is scapegoating you?  They are.

Saturday, November 17, 2018

The Pace of Trump's Lies is Increasing!

Counting Mendacious Coup?


Trump has been boasting today that he has answered all of the Special Counsel’s questions - "and I did it all by myself,” he smiled like a good little boy who had done his “big boy” task.  But we know that is just one more falsehood from a person so out of touch with himself and reality that he cannot utter words without dissembling or fabrication.  So sad.  So moronic - for none of us would ever have taken pen to paper while under investigation without a lawyer(s) sitting next to us.  

If there is a pattern to Trump’s quantity of lies, it might be discernible, thanks to Daniel Dale from the Toronto Star.  He counts them.  Not an envious job. Like counting the flies gorging on the murdered body of the Presidency.

But his spirit of deceit took a MAGA-jump in the last month.

From the Toronto Star and reporter/statitician Daniel Dale, who is the Washington Bureau Chief:  “815 false claims: The staggering scale of Donald Trump’s re-midterm dishonesty.”  

For the entire article and list of 815 falsehoods, please read the article

“It took Donald Trump until the 286th day of his presidency to make 815 false claims.
“He just made another 815 false claims in a month."
“In the 31 days leading up to the midterm elections on Nov. 6, Trump went on a lying spree like we have never seen before even from him — an outrageous barrage of serial dishonesty in which he obliterated all of his old records.
“How bad have these recent weeks been?
  • Trump made 664 false claims in October. That was double his previous record for a calendar month, 320 in August.
  • Trump averaged 26.3 false claims per day in the month leading up to the midterm on Nov. 6. In 2017, he averaged 2.9 per day.
  • Trump made more false claims in the two months leading up to the midterms (1,176), than he did in all of 2017 (1,011).
  • The three most dishonest single days of Trump’s presidency were the three days leading up to the midterms: 74 on election eve, Nov. 5; 58 on Nov. 3; 54 on Nov. 4.

“As always, Trump was being more frequently dishonest in part because he was simply speaking more. He had three campaign rallies on Nov. 5, the day before he set the record, and eight more rallies over the previous five days.
“But it was not only quantity. Trump packed his rally speeches with big new lies, repeatedly reciting wildly inaccurate claims about migrants, Democrats’ views on immigration and health care, and his own record. Unlike many of his lies, lots of these ones were written into the text of his speeches.
“Trump is now up to 3,749 false claims for the first 661 days of his presidency, an average of 4.4 per day.
“If Trump is a serial liar, why call this a list of “false claims,” not lies? You can read our detailed explanation here. The short answer is that we can’t be sure that each and every one was intentional. In some cases, he may have been confused or ignorant. What we know, objectively, is that he was not telling the truth.”