Obama needs to get out of the middle of the road.

As the saying goes; a man in the middle of the road is more likely to be the one hit! This is exactly what is happening to Barack Obama and it is really the first time I am seriously questioning his leadership.

The recent fall of the stock market because of the S&P downgrade of the U.S. credit worthiness is directly related the handling of the debt crisis by the President. Obama can cry foul all he wants, but he had the opportunity to make sure that did not happen no matter what Congress eventually did.

Obama should have stepped up as Bill Clinton suggested and used his authority to put congress in its place. Obama should have used the 14Th amendment to the Constitution. What does the 14Th amendment say? "The validity of the public debt of the United States, authorized by law, ..... shall not be questioned." The 14Th amendment goes on to say that Congress should police this article.

Obama chose the wimp approach - the middle road - and simply waited for Congress to do its job. A job which Congress new it had to do regardless of what the President said. A month before the default date, Obama should have come out strong and told the world that America will never default on its debts as it is not permitted in our Constitution. He should have gone on to say that if Congress does not do its job which they are sworn to do, then he will do his job under the Constitution to which he has sworn allegiance. President Obama should have used his office to ensure that U.S. debt will be honored and if Congress failed in its duties, he will extend the debt ceiling by executive order.

Obama failed the American people on this one and he needs to realize that the Republican Congress will do every thing it can to see him out of the White House. It's time Obama stood tall and fought back. It's time Obama gets out of the middle of the road. He is going to get rolled over and may never recover.

I'm a fiscally conservative liberal Democrat and I'm mad as hell!

Tomtoak

Republicans are killing democracy

OK: I admit, that is a pretty strong statement in the title of this post. With the recent Supreme Court decision that treats corporations as individuals, moneyed interests will buy the future and buy the votes. It is so hard for me to believe that 48% of Republicans are Republican. Walk into any trailer park and I'll bet you will find significant majorities voting Republican. Why? I understand the top 2% of the Republican party voting Republican, but don't tea party folks realize that the Republican leadership wants to strip them of social security and their medicare benefits.

For you middle class Republicans, you have to realize that it is the Democrats that have fought for better lives for all citizens. The private sector has some great people providing jobs throughout this country (people of both parties), but in the end, every American needs to be worried about their future. Social Security and Medicare are easily fixed by raising taxes only slightly on the rich in this nation. Hell - During the Eisenhower administration, citizens making over $1 million per year were taxed at a 91% rate. World War II had to be paid for. All Obama is asking is for the wealthiest in our society to pay 39% instead of 36% of income (Clinton level taxation). Bush pushed the tax cuts for the middle class and the rich but this long ugly experiment simply has failed. Government needs to raise revenue just like any business. Our wars need to be paid for and with the wealthiest calling the shots, they need to pony up.

I would ask Republicans to join "Patriotic Millionaires For Fiscal Strength" and I would also urge everyone to read "Bush era tax cuts the largest contributor to the public debt."

I could never be more eloquent on this issue than a former Supreme Court Justice:

"We can have democracy..... or we can have great wealth concentrated in the hands of a few, but we can't have both". Justice Louis D. Brandeis

With the current Republican intransigence, I ask you; are Republicans killing democracy?

tomtoak

Donald Carcieri and his Tax on us all!!!!!

Sitting on the deck of a popular East Greenwich restaurant with East Greenwich Bay in the background, I look out over a "sea" of recreational boats. The toys of the rich. Our proud Governor smiles at the thought that these great folks deserve no taxes, sales tax or excise tax, on these "very necessary" cornerstones of our society. I don't fault the wealthy for playing in Narragansett Bay, if I had the money, I would proudly own one of those 42 footers. Why in the world should taxes be excused on these toys when the middle class citizens in this state have to pay all applicable taxes on their camping vehicles. Is not camping a viable component of our economy?

I'm sick and tired of the Republican mantra - "fight for the rich". The rich are not paying their fair share in this country and I can't point to one f____g job created in this state with that strategy. Somebody please explain to me why the Rhode Island budget grew 9% last year ($7 billion to $7.8 billion) at a time when our state is bleeding? Please explain to me how this can be when the state has eliminated 3000 workers, slashed pensions, and furloughed remaining state workers? Please explain to me why aid to cities and towns have been cut by millions of dollars when the budget for the state has grown by 9%? Please explain to me why the wealthiest among us are seeing their taxes slashed yet again; when the last time Carcieri did it, our unemployment rate continued to spiral out of control? Please explain to me why anyone buys the argument that the only way to job growth is to cut taxes on the wealthy? Somebody please explain to me why Donald Carcieri is still governor? Also, somebody explain to me why the conservative "nut job" radio commentators support this idiot and his idiotic financial policies?

Most of all; somebody explain to me why middle class, well meaning citizens don't get it? Why are so many supportive of such destructive fiscal policy? Can't the middle class draw the obvious conclusion when they see their vehicle excise taxes skyrocket across the state?

Four more months of this tragedy of leadership in our state; and as he's going out the door, he's giving away another sweet heart deal to a political pal, Curt Schilling. That's a $75 million dollar sweet heart deal that won't change a thing.

I have answers to all of the questions I posed; however, I think asking the questions is more important. If people of Rhode Island want some thought put into how this government is run, they need to vote for a person who thinks with his brain and not his bank account! Linc Chafee is the candidate of choice from my perspective. He has not been afraid to call outrageous public policy, "outrageous". Donald Carcieri and the Republican philosophy in this nation is outrageous.

I think it is finally time for the "Big Audit"! Rhode Islanders will know what I'm talking about.

tomtoak

Governor Donald Carcieri is the Deficit King

There was a recent mention in a Providence Journal column regarding the budget deficit that Governor Donald Carcieri's own office is running in this recession. Seems like the Republican that is more than willing to jump all over the Democrats for deficit spending has been leading the way. It sort of reminds me of all of the deficit spending during the Bush years. Mark Sanford of South Carolina, the nation's leading hypocrite is also called to mind.

What has gone on in our own Governor's office is no joke. First of all; I can't believe for the life of me, why the Governor's office needs $4.7 million per year. Rhode Island is such a small state that no Governor needs more than a handful of employees to get the job done. This much money in Rhode Island today translates into over 50 employees. Are you kidding me? I can see the office employing 15 employees and a few interns. Under no circumstances, should that office be costing citizens more than $1.5 million per year.

Now our business minded governor is suppose to have some sense when it comes to managing the people's money. He certainly has gone out of his way to take what he can away from the dedicated state employees that are not part of his office. Carcieri's office running a projected $589,218 deficit for the current fiscal year is about the most outrageous news I've heard emanating from the State House. I think it's criminal!

Let me put a little perspective on this. Multiple divisions within the Department of Environmental Management (DEM) operated on far less than this. A good example is the Environmental Police. Last I knew, the number of officers covering the entire state is in the vicinity of 35. That's 35 employees to handle duties on the Bay and throughout Rhode Island, 24 hours a day, 365 days a year. Environmental Police play a key role in keeping our food supply safe. Heck, the DEM Environmental Police force is only half the size of my town's Police Department.

The Governor's Office has become so bloated under Carcieri's leadership that the Legislature really needs to step up to the plate here. Carcieri is very reluctant to entertain hiring anybody outside of his immediate circle; however, when it is something that he personally wants, he will pursue it at the expense of everyone else. We don't need a Steve Cass employed, Mr. Carcieri. His job is meaningless.

I urge the Legislature to start cutting the 2010 budget by reducing the Governor's Office by $3.2 million to a more respectable and adequate $1.5 million. I would suggest privatizing the Governor's Office because Mr. Carcieri likes that strategy, but we all know that it would end up costing us more.

tomtoak

Carcieri's Budget Slammed by Republicans

You heard it here first. I could not understand how any reasonable person could except the future vision of Rhode Island as presented by our Governor. Today we learn that Democrats and Republicans alike slammed Carcieri's proposed budget (Providence Journal Article) for the next fiscal year. The budget was so bad that no Republican would carry the bill forward in the state legislature. Carcieri was put in the awkward position of having no sponsor. This must be a first for Rhode Island government. Amen.

Here is what the minority leader, Bob Watson had to say; "I am disappointed that this budget apparently is reliant upon raising taxes in order to balance it". Bob Watson was concerned about the impacts to the middle class. Understand that the Governor pitched his budget under the cloak of cutting taxes. Even Republicans recognized that the vast middle-class was going to suffer the consequences of cutting the taxes for the wealthy. I truly believe that our Governor envisions himself as the "great tax eliminator". How the hell does he think government is going to work in the future. His vision is to lay the burden squarely upon the middle class. We, the vast majority don't have our 30 foot yachts, which pay no annual excise tax, lined up along the shores of Narragansett Bay. I'm sure he enjoys his yacht and I know he enjoys his annual pension that exceeds $500 thousand.

Rhode Islanders will have to endure this dearth of leadership for the next year and a half. I hope that the leadership vacuum will lead to a truly great transforming figure for our State. So far, I think this has been the case on the national level. Our Country has gone through a period of reawakening during the last hellacious eight years. I hope Rhode Island can find true leadership as our Nation did.

Thank you, Rhode Island Republicans for bolstering my case.

tomtoak

Tax and Spend and the Cult that is Republican

Governor Carcieri released the State budget on Tuesday and I'm almost speechless. If any of you radio talk show cultists think that Carcieri is for the common man, then you need to get an immediate appointment at Butler Hospital. This proposed budget lays the groundwork for economic ruin in Rhode Island. I know that "cult" is a strong word here and I do not wish to offend any of my Republican friends. A cult can be defined as a small group that venerates a person or ideal. Seems like most cults are always after your money. I know it sounds funny because we're used to hearing Democrats accused of this behavior; but in this case, it's the Republican after our money. I hope I make my case below.

Let's go to the bottom line. A proposed $7.62 billion budget compared to last year's $6.92 billion is a 10% increase. While there is a need to budget for the economic stimulus, this budget reflects this and then some. His budget will force over 1000 additional state employees into retirement which will seriously impact the operation of government for a decade. I want to remind folks that state employee costs in this year's budget were approximately 20% of the total. State employee salaries, benefits and pensions only cost approximately $1.4 billion now. In the new budget, the state employee burden will decline to approximately 17% of the bottom line.

When this proposed budget runs into huge deficits, Carcieri will scapegoat employees again. This is what he likes to do. He will lay the blame for future deficits squarely on the backs of working people. Last year's budget costs every man, woman and child in Rhode Island $7000 annually (Federal dollars are considered here because our state also budgets Federal dollars; but that is another stupid story to tell). Next year's budget will cost $7,600 for each person.

Now; how does Carcieri's plan get to the bottom line? Let's take a close look and keep in mind how each decision will affect you, your family and your children.

The plan to lower taxes: Reduce the corporate income tax and phase out by 2014. Gee; who's going to make up the difference? Top personal income tax will drop from 9.9% to 5.5%. Gee; who's going to make up the difference? The estate tax bottom will increase to $1 million. Gee; who's going to make up the difference?

The plan to raise revenue: Increase the cigarette tax. Gee; who buys cigarettes? Raise the fee to reinstate a suspended license. Gee; what demographic does this go after? Impose a 2% tax on health care insurers. Gee; who's going to be paying for this?

The plan to lower expenditures (which is an oxymoron because expenditures increase 10%): End the 3% COLA on July 1 for all retirees. Gee; sounds like more scapegoating of public employees here and how will the State be able to function with a seriously depleted workforce? Eliminate all revenue-sharing monies for the State's cities and towns. Gee; I wonder who's going to pay for this reduction? Abolish the Pharmaceutical Assistance to the Elderly program. Gee; I wonder what's going to happen to all of these elderly people? Gee; I wonder why he's lowering any expenditure when he's proposing to raise the budget by 10%?

You know why? He has to have mechanisms to pay for all of the tax breaks to his wealthy friends and to the corporations in this State. So who is Carcieri trying to impoverish? The answer is clear; the common man, middle income citizens, the poor, you and me.

Are people going to let him get away with this? This to me embodies the sick ugly cult that is today's Republican. Republicans tend not to be about "we the people", their more about personal greed. Nothing speaks to this better than the proposed budget of Donald Carcieri.

To the cultists that follow Rhode Island talk radio. Wake up! Carcieri is not for the common man. If you need a ride to Butler Hospital, let me know.

Blog On

Scapegoating of Public Employees Continues

A scapegoat is defined as a person or group made to bear the blame for others or suffer in their place. That's right, scapegoat. It's a strong word, but if you don't think that public employees are being demonized because of their benefits, you have been living in a bunker. The vitriol being thrown at public employees is everywhere. It starts right at the top with our inept Governor and follows through to newspapers, talk radio and now another biased study from the Rhode Island Public Expenditure Council (RIPEC).

As discussed in the Providence Journal yesterday, RIPEC has concluded that major changes are needed in the RI pension plan. I'm not opposed to changes, I'm opposed to the main conclusions that the plan needs to move from the defined-benefit plan to a defined-contribution plan. You can define contributions all you want, but I know that the only folks that will be required to contribute will be the public employees. Government will always play with their contributions to balance budgets. Why do you think the pension plan has problems now? Public employees have not missed a contribution.

Let me throw some things out and understand that I'm just going to be talking about the state employee side of the equation. State employees currently cost the state somewhere between $1.3 - $1.5 billion each year (salary, health, pensions and other fringe). The state's budget is approximately $7 billion. The cost of running the employee portion of our state is approximately 20% of the entire budget. This year, employees contributed approximately $90 million to the pension fund and the state matched with $133 million according to the RIPEC study. Now the state's share is more than dollar for dollar, but this is only because they have been stealing from the system to balance budgets for years. Is this the fault of the employees?

If dollar for dollar contributions were made every year, the state would be saving $43 million in this year's budget, the system would be sound and cost-averaging principles would be at work in the system. It's probably a good thing that the state is forced to overpay now because the stock market is so low (buy low, sell high).

The $133 million in state payment to the fund is around 1.9% of the entire state budget. If you roll in the cost of teachers, this grows to approximately 3.2% of the state's budget. Do you brickbats think that the state's fiscal crisis will be solved by attacking a budget area that is so tiny? Really, 3.2% is like the average family turning off the lights to save electricity.

Of course the Governor wants the state to go one step further and evolve into a 401K system for employees. This is so his cronies that work for the state a few years can get some kind of interest on their forced contributions. There is no dedication to public service here. Carcieri's folks have no intention of making public service a career. Hell, there's no money in it. And, imagine what state we would be in if there were no pension plan. The pension plan is a state asset that is a powerful economic tool if managed appropriately.

Do private workforce employees feel that when an employer matches their 401k money, that the money is all theirs? Yes, because it is. If the state matches employees dollar for dollar, is it the employees? What I'm trying to say is that the pension system is not taxpayer money. Maybe it's taxpayer money once removed, but the pension system belongs to the employees just like your 401K and the state employees earned it.

Also, in a study of states the U.S. Census Bureau reported in 2003 that Rhode Island ranked 21 nationwide in state employees per capita, the lowest by far in New England. I'm sure with the recent cuts to the ranks, Rhode Island has slipped further. We are not overwhelmed with state employees, in fact the opposite may be true.

State employees do have a healthy retirement, especially because they pay into Social Security in addition to the state retirement system. Yes they can retire and maintain a comparable income if they put in the time. This is great for the state because most will retire here. If you reduce their retirement, many more will move to states without an income tax and Rhode Island will be paying out but not taking in. This is the future that RIPEC proposes.

Stop scapegoating the public workforce. You will never solve the state's money problems here.

Blog On

What I Would Tell Governor Carcieri

In previous posts I've been quite harsh on Rhode Island's governor. I met the man and he is really personable. He seems to be a quite, likable guy with a corporate raider mentality. I just learned yesterday that he was not one of the nineteen Republican governors that signed the letter in support of the President's stimulus plan. In fact, he wrote a letter opposing the approach used in the plan. How unfortunate for Rhode Island. Instead of support, he continues to espouse the old Reaganomics's trickle-down philosophy as the only way to deal with the crisis. He may be nice, but he's wrong.

Instead of continually throwing bricks, I've decided to outline what I think should be done in this state. Before doing so, I want everyone to know that I know a lot about cutting the costs in government. When first appointed to my leadership role, my agency had 65 full time employees (FTE). When I departed 20 years later the agency had 29 FTE. Four years later, the agency has less than 20 FTE. Downsizing was appropriate in 1986, but not today.

What follows is my 8 point plan to help turn the state around and this is what I would offer to the governor.

1. Rightsize state government. Downsizing continually is not the answer, rightsizing is. Government can do many things better than the private sector at a huge savings. A case in point; a construction project that hires an engineering firm to watch over the contractors. In a case that I'm aware of, a very small project paid out close to $45,000 for one person to watch over the project. He may have shown up on site a dozen times. If the state filled their old positions, this one employee could watch over a dozen projects at tremendous savings. Contractors watching over contractors is simply a bad policy.

2. Decentralize purchasing with controls. If purchasing were somehow decentralized with the appropriate checks and balances, almost every purchase off of the state's master price agreements could be made for less money. Better deals can almost always be found. As an example, I'm aware of a project to put a new roof on a very small building. The price off of the master price agreement I'm told is $10,000. The actual cost if I contracted the job privately would be in the range of $5,000 (more on this in a future post).

3. I would limit government borrowing. I would seek a 5 year plan that would restrict the borrowing power of the state. I would cap any borrowing at 80% of the level of bonds that retired in that period. So, if the state had retired $100 million in spending during the period, the state could only move forward with $80 million in new borrowing. Any exception would require the vote of the people. This would be a short term program to slow down the growing government debt. Rhode Island should not be building a new state police barracks at this time.

4. Establish a commission or commissions to oversee and monitor contracts. Performance on state contracts or lack thereof is costing taxpayers millions. I would look to private citizens to assist the state with this, not public employees or legislators (more on contracting issues in a future post).

5. The Office of Personnel Management must develop a minimum staffing level plan. The personnel office should develop this plan to assist with rightsizing efforts in government. The plan could establish a base line so government can ensure that jobs get done. There is Federal money out there at risk that citizens know nothing about. While past plans have been done, a new approach here is needed. Under no circumstances should the plan be prepared by consultants. We pay state employees, they can develop a plan.

6. Strengthen the public employee pension system. I would recommend working with the unions and ask for some sacrifice without demeaning the workforce. As an example, I would allow options for the employees. I would ask all new hires upon entering the workforce to increase their contribution level to 10.5% if they want the 3% COLA upon retirement. I would ask state employees, who already pay the highest contribution levels in the country to increase contributions from 8.75% to 9%. I would keep teachers at their current contribution levels. I would establish by law that the state must always match contribution levels dollar for dollar capped at 9.5%. I'm aware that state contribution levels today far exceed the 9.5% cap because of the past practice of stealing from the fund to pay for budget balancing. I would seek additional ways to deal with unfunded liability (more on this in a future post).

7. I would make sure that state money goes to state infrastructure. No taxpayer money should be used to build, or maintain any private business. A revolving loan fund is fine, but it needs to be a loan. I would never use taxpayer dollars to fix the Civic Center (this should be a going concern with appropriate resources derived from events - How many times do we have to fix this?), no more building of Westin Hotels and shopping malls. These are all fine things but this is not the responsibility of taxpayers. I know this requires a change in the culture in this state, but enough is enough.

8. I would repeal the tax relief for those making over $250,000 that the governor signed into law at the beginning of his administration. I would give strong consideration to establishing personal property taxes on the large boats around Narragansett Bay. I would lower the sales tax to 5% and broaden its base. I would oppose 5% sales tax on car repairs and home repairs.

I'm sure that the governor would laugh at some of these ideas as well as many of our Democratic legislators, so this is not a Democratic or Republican thing. I just feel that there are many other ways to deal with our problems in this state. As Barack Obama has said: "They just have it wrong". Trickle-down Reaganomics has gotten us into this mess, it will not get us out of it.

Blog On

Carcieri Continues His Crusade to Destroy RI

Last night on Rachael Madow's show, Paul Krugman the Nobel prize winning economist commented on the decline of the Security and Exchange Commission (SEC). He stated emphatically that the decline began during the Reagan administration as the SEC was viewed as too powerful. After all, government "is the problem".

Today, our Reagan loving governor outlined proposals to drastically cut taxes to the wealthy and powerful in Rhode Island in addition to totally eliminating corporate income taxes. Guess what? CEO's are thrilled. Only 4 states have no corporate income tax; however, those states may well tax businesses in other ways. To be fair, the report did say that those making over $1 million would pay a slightly higher tax. Taxpayers will save $125 million. There seems to be no speculation on how this might affect middle income taxpayers. I think it's: screwed again.

For how long will we live with such idiotic economics. Guess what folks? The government will lose $125 million on top of a projected deficit of $450 million. Even if there is a slight incentive to grow, the return will be lucky to approach 10 cents on the dollar. You have to be kidding me! In this economy do you really feel that small business is going to jump out there and start doing great things. There's no demand out there, stupid. Carcieri continues to propose digging a deeper hole with the dirt coming out of the hole thrown on the public employees.

Any economic stimulus money from the Obama administration will be watered down in the state of Rhode Island because of this ancient thinking. Look forward to 10% unemployment for 5 years and 15% unemployment is not out of the question. Rhode Island was the first to feel this economic slowdown and we will be the last to climb out of it. Thank you very much Governor Carcieri.

One more thought; remember when our people loving governor lowered the income tax on those folks making over $250,000 annually in this state. The promise was that it would improve our business climate and create jobs. Where are they? Ya, that worked! Of course the legislature must share in the blame. Most legislators probably make more than $250,000. God forbid you think about establishing a personal property tax on all those boats surrounding Narragansett Bay.

Blog On

Fiscal Problems and a Governor's Approach

The following post is a letter to the editor of the Providence Journal that the paper never printed. It outlines in a few words my disgust with the Republican administration's approach to handling a state's fiscal problems. Since the letter was written, over 1100 state employees were forced to retire because of disincentives forced upon the employees by changes to the retirement system. The fiscal deficit skyrocketed following the employees departure. The Governor at present is trying to repeat this feat with further changes to the retirement system.

To the Providence Journal:

I need to take a moment to comment on Governor Carcieri’s latest attempt to solve the states fiscal problems (“Governor’s planned cuts raise concern” Oct. 5, 2007). Let’s step back to look at the big picture. The state’s annual budget is $7 billion. There are 15,000 state employees and as reported in the Providence Journal, each position costs approximately $90,000 for salary and benefits. I’ll be conservative and use $100,000 as the cost for each employee. State employee costs therefore are $1.5 billion annually, or approximately 20% of the state’s budget.

Where is the other $5.5 billion? Mr. “Big Audit” Carcieri continues to target state employees and he continues to demonize them as being the problem. Well, they are a very small part of the problem yet they are always asked to solve the state’s fiscal crisis.

Fact of the matter is privatization practices have been killing the state. Exorbitant contracting costs and contractors watching over contractors are tolerated because it is viewed as “business friendly”. Everyone needs to remember that there are a lot of people getting very rich off of taxpayer dollars but those folks are not state employees.

It’s not about “downsizing” state government, Mr. Carcieri; why don’t you try “rightsizing” state government and find your savings from the $5.5 billion that is left over after paying your state employees?

Blog on