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Posts Tagged ‘Pat Quinn

What Could Possibly Go Wrong? – Quinn to Try to Take Over Healthcare in Illinois

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Enforcement

When you want to make sure you have access to quality health care, there’s only one place you turn.  The Springfield bureaucracy, right?

Unbelievable.

A task force appointed by Illinois Gov. Pat Quinn wants a state law forcing insurers to spend 80 to 85 cents of every premium dollar on providing health care, or pay rebates to customers.In its initial recommendations released Thursday, the Health Care Reform Implementation Council also recommends legislation giving state regulators the authority to approve or deny health insurance rate increases.

The enforcement would be, pardon my french, a motherfucking catastrophe.  Before we even get to the inevitable corruption of the regulatory process, what qualifies as health care?  Inevitably there would be some unaccountable regulatory board where the insurance companies spend god knows how much time and money challenging every line item claiming it qualifies as health care, which will drive prices through the roof and make providing actual healthcare next to impossible.

And like I said, that’s before we get to the inevitable corruption.  This is Illinois politics, and there are quite literally billions at stake.  Does anyone actually think the appointments to these regulatory positions are going to be apolitical?  Sort of like it’s just a coincidence the Chairman of the Cook County Democratic Party is also the Cook County Assessor?  The political and financial power that would fall on this presumably unelected regulatory board would be massive, and when an insurer is faced with either giving $5 million in political donations or giving a $50 million rebate, what do you think it’ll decide?  Considering it’s damn near impossible to prove quid pro quo, it would be idiotic to think this wouldn’t happen.

These ideas were bad when they were included in Obamacare.  They are infinitely worse when it’s suggested to put enforcement in the hands of political appointees accountable to no one but their political bosses in one of the most corrupt political systems in the United States.

Written by updowndownup

February 4, 2011 at 10:35 am

Quinn to Sign Civil Unions Bill Next Monday

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New Normal

Via CapFax (and subsequently via NowInGayChicago), State Rep Greg Harris posted on his facebook page Saturday:

Governor Pat Quinn will sign the Civil Union Law on Monday, January 31. The signing ceremony will be in the afternoon in the Chicago Loop, and open to the public. Details will be announced early next week.

Personally, I see the gay rights movement similarly to how I view the modern environmental movement, that it’s a legit movement that allowed itself to be co-opted by a bunch of commies, and subsequently  I don’t support it.  If it was just about gays, fine, but it’s never been about that.  It’s always been “So you’re not a homophobe?  The only way you can prove it is voting for these communists.” which means it actually has nothing to do with gay rights.

But I digress.  Politically, there are two aspects to this that I find most interesting.  The first is the idea of shifting baselines, the second is the fundamental differences between the Illinois Democratic Party and the national Democratic Party.

After 2004 gay marriage seemed to the untrained eye to be dead and buried.  Everyone seemed to agree (aside from college students and college-town liberals) that marriage was a union between a man and a woman, and the support was so lopsided that pushing for gay marriage ever again seemed quixotic at best.  After California, one of the bluest of blue states voted down gay marriage immediately following the left wing blowout of 2008, little seemed to change in the conventional wisdom.  Still, gay rights proponents had a plan.

Jumping from no recognition of the legitimacy of gay relationships to seeing them as, for all intents and purposes, identical to straight relationships was clearly a bridge too far.  Still, this was not an across the board rebuke of any recognition of gay relationships.  Polling showed people really weren’t comfortable with gay partners being kept from each other as one died in the hospital.  Polling showed that people didn’t mind the extension of non-child related legal rights (like sharing health insurance) to gay couples.  In other words, the door was cracked open.

Smart political movements know that this meant there is an opportunity.  If they could create an institution where gays got these things, and with it some sort of legal recognition of the legitimacy of their partnerships, the baseline would shift.  In other words, there would be a new normal.  Once this new normal took root in the hearts and minds of the American people, it becomes much easier to chip away at the fringes…what about passing on Social Security?  What happens if a gay cop dies in the line of fire?  Eventually that leads to the question “What happens if a gay cop with two adopted kids dies in the line of fire?  Are you going to send them into foster care over letting them stay with their other dad?”  Once that’s established, both partners are recognized as parents, which means it’d be silly not to let gay couples adopt as couples.  Once they’re doing that, what’s really the point in not letting them marry?

It often feels too slow for the people who believe these are fundamental rights, but it’s also terrifying to people who think that gay marriage is actually a cheapening of the institution of marriage, because it can’t be stopped.  Every time they try to stop it, they wind up delegitimizing themselves (What, you’re actually for sending a dead cops kids to foster care just because he’s gay?  You actually think that gay couples shouldn’t be allowed to spend their final moments on this Earth together?).

So that’s how something goes from gay marriage in 2004 to how gay marriage is eventually going to become politically acceptable.  In short, it’s a done deal (unless the gay rights movement makes a big screw up, opening the door for the evangelicals to do the same thing to them).

So on to the second point.  Isn’t it kind of weird that the Democrat governor in one of the bluest states in the nation even bothered with the “Will I or won’t I?” schtick on the Civil Unions bill?  To people from outside Illinois, or people from the North Shore it does seem weird, but the reality is that the Illinois Democratic Party has a lot more in common with the Democratic Party from the movie “Gangs of New York” than it does with the national Democratic Party.  There are certainly liberals in the Democratic Party, but there is no binding ideology.  It has a lot more to do with ethnic tribalism, with the IDA serving as the arbiter of who gets what.

This is why the Republican Party doesn’t really get anywhere here.  The Republicans make arguments about ideology – illegal immigration, spending cuts, etc., but when you get in and around the city, it’s all about pork (and whether your ethnicity’s neighborhoods get any).  When you try to make an ideological case in this situation, all you’re demonstrating is that you don’t grasp the actual issue at hand.

Feds Trying to Let Illinois Go Bankrupt

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Elevating jigs

I know that treating the Constitution like it was some kind of, ahem, law is not particularly in vogue right now, but let’s think about this one for a minute:

Policymakers are working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers.

Unlike cities, the states are barred from seeking protection in federal bankruptcy court. Any effort to change that status would have to clear high constitutional hurdles because the states are considered sovereign.

But proponents say some states are so burdened that the only feasible way out may be bankruptcy, giving Illinois, for example, the opportunity to do what General Motors did with the federal government’s aid.

So sovereign states would go to a court that would have to be empowered to dictate their current and future asset allocation.  It’s OK, it’s a just a hurdle, right?

Naturally the bond markets are having a shit fit even at the mention of this, which strikes me as kind of silly considering if you’re into bond trading chances are you can do math, at least at the level where it’s fairly obvious some kind of default is coming with most states.

Still, there is some precedent:

The story began, as so many do, with the best of intentions. In 1927, the state of Arkansas took responsibility for $54.8 million in debt sold by hundreds of road districts to prevent its default.

Combined with the state’s own $84 million in highway-system bonds and $7.2 million in toll-bridge securities, the assumption of district bonds pushed Arkansas’ debt to $146 million. Coupons on the bonds were as much as 5 percent.

Fast forward to March 1933 in the depths of the Great Depression — not Senator Reaves’s best of circumstances. The Arkansas General Assembly passed the Ellis Refunding Act, which sought to exchange all outstanding highway debt for state bonds carrying a 3 percent coupon, maturing in 25 years.

“Interest on highway and toll-bridge bonds, amounting to $770,500, due March 1, is in default, and this fact spurred the Governor in his demand for a refunding program that would yield revenue sufficient to meet any emergency and insure stability to outstanding obligations,” the New York Times reported.

Actually, this wasn’t the first state default.  Still, read the piece.  Basically what happened was the bondholders got an injunction against using gas or automobile taxes for anything but highway maintenance, and Arkansas cut a deal with the bondholders where they raised the taxes and eventually paid off the bonds (but not without nearly defaulting several more times).

The issue is that back then Arkansas guaranteed the debt with a specified revenue stream (gas and auto taxes).  Now they’re all general obligation, meaning they’re backed with the full faith and credit/taxing authority of the issuing state.  This could mean there’s no recourse, or it could mean that some random federal judge could use the power of injunction to determine what things a state could legally pay for before paying off its debt, even without bankruptcy.  The state would still be sovereign in a de jure federalist sense, but as a bond issuer who has entered into default they’d be like any corporation that did the same.

So unless I completely misinterpreted GO bonds (which is a definite possibility) the goal of creating a mechanism for bankruptcy would be more about codifying what happens in this situation instead of leaving it entirely up to the whims of whatever judge gets this turd dropped at his/her doorstep than it is a federal power grab.  That said, it would still be a massive federal power grab, because granting states the ability to declare bankruptcy means they give up their sovereignty regardless of whether they ever use this ability, as federal sovereignty is a necessary premise of the ability even existing.

Obviously, any lawyer input on this would be greatly appreciated.

Illinois Horse Trading – Your Money for More of Your Money

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Deals

No one should be surprised.  Remember, this is the governor who, in the heat of a campaign, promised not to fire any AFSCME public employees in exchange for their support.  Illinois voters need to learn that you get what you pay for.

Although former Governor Rod Blagojevich is a little unbalanced and did not deserve the office, when he speaks of old school politicos wanting him out of their way so they could make deals, that particular rant makes sense at times.

This particular Blagojevich rant made sense on Thursday when Governor Quinn appointed Carenne Gordon a member of the Illinois Prisoner Review Board. Carenne Gordon was a Democratic state representative from Morris, who lost her November re-election bid. After her term ended Wednesday, Governor Quinn appointed Gordon to the Illinois Prisoner Review Board, earning $86,000.00 annually.

Gordon was given this job after she was one of the 60 legislators who voted for the 66% tax increase demanded by her new employer, Governor Quinn. It took 60 votes to pass the measure; without Gordon’s vote, the tax hike would not have passed.

This gets to the heart of the fundamental injustice of the tax increase.  Although the tax increase was debatably essential because of the bond markets, there’s no way of knowing how much spending could be cut if the state would just cut the decision-makers out.  Similarly, there’s no reason to expect things to get any better until these crooks start actually going to jail (which is unlikely so long as the House Speaker/King of Illinois’ daughter is the Attorney General).

Written by updowndownup

January 16, 2011 at 10:53 pm

The Cost of the Tax Hike

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Bigger Piece, Smaller Pie

The Sun-Times had an interesting, if not terribly informative, piece yesterday.  In talking to “ordinary” Illinoisans about the effect of the tax hike, they stumble upon one of the biggest problems with it:

Matt Smallheer, owner of an exotic reptile store not far from the Illinois-Missouri border, already knows the price of the tax increase: his pay raise.

The O’Fallon business has grown steadily in the nearly five years it has been open, but Smallheer hadn’t given himself a raise the last two years. He had been planning on a 20 percent bump as a perk.

But Smallheer, a 28-year-old married father of two, quickly decided against it because he doesn’t want to pass along the cost of a tax increase to his customers.

Now I can agree it’s good to have legislators who have non-economic experience.  Still, you’d hope there’d be at least one person they’d listen to who could explain the idea of a tax base to them.

They seem to think that if they raise taxes, they’ve magically created new money, and all of the belly-aching about it is just from ignoramuses who don’t understand the value of creating new money.

In order to tax incomes, people have to make incomes.  In order to tax profits businesses have to make them first.

The reality is this guy was going to spend this money that is now going to Illinois government.  It would have gone to a business that’s selling something of value to consumers, allowing them to stay open or possibly even expand.  Now one could argue that the government also puts the money back into the economy, but if you honestly think stuffing union coffers, paying interest on their debt or giving a kickback to a generous government contractor has the same economic impact as giving it to someone who, you know, earned it, you’re an idiot.

Taking money out of the economy and spending it in a less effective manner means you have less to tax.  Something tells me they’ll be figuring that out the hard way.

Written by updowndownup

January 16, 2011 at 9:17 am

John Cullerton on Tax Hike: Come On Baby, It’s Not So Bad

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It's even worse.

The debate over Illinois’ 67% increase of the personal income tax and 46% business tax increase, in certain mediums, has taken an interesting turn.  On Wednesday Wisconsin’s Governor Scott Walker, suggested that Wisconsin’s old slogan “Escape to Wisconsin” could now apply to Illinois businesses.  In response, Illinois Senate President John Cullerton came back with a fairly pithy response:

In a statement, Cullerton thanked Walker for pointing out that even with the tax hike, the vast majority of Illinois residents pay lower personal income tax rates, and that Illinois businesses pay lower corporate income tax rates.

“Between our investments in infrastructure, our recent moves to stabilize our budget and now Governor Walker leading the marketing effort, we hope to see a lot of interest in Illinois from businesses,” said Cullerton. “I’d like to thank Wisconsin’s governor for helping spread the word.”

In the release, Cullerton goes on to point out Wisconsin has its own budget deficit and insinuates that Wisconsin may have to raise taxes in the coming years.

The Huffington Post piled on, pointing out that all of Illinois’ more Republican neighbors had higher personal income taxes at the median income, save for Indiana.

Reading this got me wondering, if Illinois is so great, why does it rank 48th in job creation?  Doesn’t pass the sniff test.

The reason why is that claims of Illinois having low taxes are nonsense.  So at the median income Wisconsin has a 6.5% personal income tax, as compared to Illinois’ 5%.  Yet, somehow, Illinois has a higher per capita tax burden ($4,346 vs. $4,194).  Some of this is that incomes are slightly higher in Illinois (as is cost of living), but a lot comes from other revenue sources Illinois has at state and local levels.

For example, Illinois has the 8th highest combined state and local sales tax rate.  The state sales tax rate in Illinois is 6.25%, vs. 5% in Wisconsin.  On top of that, the average local sales tax in Illinois is 1.97%, or 469% of the same in Wisconsin (0.46%).  Illinois’ median property tax burden is 16.9% higher than Wisconsin’s.

On top of this, even with the huge tax increases, Illinois still has a gigantic deficit.  This year Illinois managed to run a $15 billion deficit (total general fund spending was $33 billion, so nearly a 50% deficit).  Before we take into account that Illinois’ spending is going to increase at least $3.5 billion next year the Democrats estimate that the new taxes are going to generate $7 billion in revenues.  So if we’re going to pretend as if the tax base is going to be the same size in future years (it will in fact be much smaller, as Illinois was 48th in net migration before the tax increase) the deficit is going to still be $8 billion this year and over $11 billion the year after that.  That means the deficit is going to be right back where it is right around the same time these tax hikes are supposed to sunset.

That means even though we on average already pay 3.5% more in taxes than our neighbors to the north (not to mention 24% more than our neighbors to the east and west and 34% more than our neighbors to the south) these tax hikes are not only going to be permanent, they’re just the tip of the iceberg.  And that doesn’t even start to take into account the fact that the municipalities, even with their high taxes, are up to their eyeballs in debt.

In short, the only upside is that within a few years it’ll be so hard to keep the lights on that jobs leaving for Indiana and Kentucky will probably be the least of our concerns.

Written by updowndownup

January 15, 2011 at 9:02 am

Spending Caps in Illinois Tax Hike Would Be a Joke if Poverty Was Funny

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Bandits

A funny and tragic piece on the tax hike yesterday:

 

Illinois taxpayers will have to fork over a lot more money now that Gov. Pat Quinn has signed a major tax increase, but Democratic leaders want them to take comfort in knowing that new spending limits will ensure their dollars are handled carefully.

Not so fast, say Republicans. They see potential loopholes that Democrats could exploit to avoid any real fiscal discipline.

The most vocal advocate for the spending limits, Senate President John Cullerton, seems almost hurt that anyone would suggest deception.

“Please believe these spending caps are real,” the Chicago Democrat said during debate in the chamber over the legislation. “It’s the first time it’s ever been done here, and it’s literally turning over power to the minority.”

Calling the holes in the spending caps “potential loopholes” is like calling mesothelioma a slight cough (or that Michael Jackson got a little creepy towards the end).  Facts:

  • Only the general fund is subject to the caps.  Any “special fund” is completely exempt.  And the law coincidentally creates two new “special funds” including one for “human services” (i.e. absolutely anything the state government could ever imagine spending money on).
  • The cap for 2012 is a 10% spending increase over 2011’s non-capped spending.  And it increases 2% per year after that.  Think about that.
  • The Governor can at any time declare a fiscal emergency (just in case they don’t feel like moving funds to the human services fund, I guess) where the caps cease to apply.  This is the smallest loophole, at least at the moment, because 1 of the 2 constitutional offices held by a Republican over the last decade is comptroller, who has a veto over the Governor’s declaration.

Did I mention that there’s a mandatory funding level for the new “special funds”?  After everything the tax hike is expected to raise about $7 billion (which some have apparently forgotten is a smaller number than $15 billion, which is the size of the current deficit).  And they specifically cut municipalities out of the new funds, so it doesn’t change one damn thing about the impending municipal collapses.  Apparently Madigan and Cullerton don’t think that’s going to effect the state government at all (good luck with all that).

Written by updowndownup

January 14, 2011 at 10:22 am