Tuesday, July 26, 2011

The Unitary Executive Of New Jersey Strikes Again

So Chris Christie is offering to restore the $139 million in discretionary aid to urban areas he cut from the Democratic budget. With one caveat -- the Governor gets to oversee how the money is spent.

The Governor's stated rationale is that the discretionary aid has been used by Democratic party bosses as a piggy bank. But when you look at the Governor's pattern of behavior, another reason emerges.

This Governor has publicly stated that the State Constitution gives him a lot of power, and he intends to use all of it. And the way Chris Christie uses his power is as any fundraiser would (Christie is a fundraiser at heart).

Any power the Governor gets will be used to punish those who cross him and reward those who support him. How vindictive is the Governor? He used a line item veto to cut $100,000 from a Rutgers intern program because the program was run, in part, by the Rutgers professor who chose the Democratic redistricting map over the Republican plan.

So when the Governor says he wants oversight on how urban areas spend their discretionary aid, he is really saying that he is looking for power to punish those in urban areas who cross him and reward those in urban areas who support him.

At least the Governor is consistent.

Monday, July 11, 2011

A Budget Of Retribution

I recently heard Sen. Buono describe the Governor's line item veto of some $900 million from the state budget as a retribution by budget.

I thought it an interesting perspective. Most of the so-called news coverage I have heard about the Governor's line item veto focused on women, children and AIDS patients. Certainly, these are the areas where Democrats will seek to override the Governor's veto. While I could understand (while disagreeing with) the Governor's decision that there was not enough money in the budget for these safety net social services, I would not say the Governor was trying to get back at women, children and AIDS patients.

What did occur to me was the huge amount of discretionary funding for urban areas that the Governor cut. Here, I could see retribution. The State Supreme Court ordered the Governor to send $500 million to urban areas to adequately fund schools. The Governor then responded by reducing State aid to urban areas by $140 million. This particular cut was labeled "vindictive" by Sheila Oliver and by Bonnie Watson-Coleman.

On the one hand, the Governor is catering to his base, wealthy suburbs which feel that too many of their tax dollars are sent to urban areas. On the other hand, the Governor was simply continuing to act as the unitary executive of New Jersey. The Supreme Court says to send more money? He just goes around the Supreme Court.

I think that the Sen. Buono, when using the word "retribution," has hit on a potentially powerful criticism of the Governor. Using the power of one's office to seek retribution against political enemies and taxpayers is not one of the qualities most people look for in a President. At least Nixon had the good sense to use intermediaries, for all the good it did him.

Saturday, July 2, 2011

A Quick Note On AIDS Patients

New Jersey has about 35,000 people living with AIDS. In 2010, about 7,645 people received AIDS medications, as well as medications for AIDS related health issues, under the State ADAP, or AIDS Drug Assistance Program. About half of those people are African-American and about a quarter are Latinos. The 2010 budget cut about 950 of those people from the ADAP plan by lowering the income eligibility for the program from 5 times the Federal poverty rate to 3 times the Federal poverty rate.

Then the Governor announced that, by negotiating additional drug rebates with pharmaceutical companies, those 950 people would continue to get their AIDS drugs free from the State. Of course, they would no longer receive free drugs for AIDS related medical conditions.

In the 2011 budget, the Democratic legislature tried to restore those 950 people to the ADAP program, thus restoring their right to receive free drugs for AIDS related medical conditions in addition to their AIDS meds. Since the 950 were already getting their AIDS meds free, this was a modest budget proposal. In 2009, the State spent $8.7 million in ADAP funds for people making 4 and 5 times the poverty level; the additional rebates from pharmaceutical companies must have reduced this figure dramatically.

However, despite the nominal cost of the program, the change did not escape the Governor's line item veto. So, for another year, the largely black and latino AIDS population making 4-5 times the poverty level -- i.e., between $32,500 and $55,150 -- will not be getting free medication for AIDS related illnesses.

Insert millionaires' tax joke here.

The Helicopter Flap and the Missed Point

By now we've all heard about CopterGate; Chris Christie taking a State helicopter from Trenton to his son's baseball game, and then taking the copter back to Trenton to meet with a delegation from Iowa trying to get the Governor to jump into the Presidential Race. Since neither trip was for State purposes, critics cried foul.

Practically speaking, this should have been a non-event. The helicopters have to fly a certain amount of hours for training, so they would have been in the air anyway. And, reportedly, Christie uses the helicopter much less frequently than did his immediate Democratic predecessors.

But this is not a practical issue. This is an exercise in branding.

There are three legs to the Republican Party, the fiscal conservatives, the social conservatives and the small government advocates. Christie is a favorite of all three legs -- not only has he cut the budget and laid off government workers, he has also defunded all women's health centers because three provided abortions and has come out against gay marriage (no pun intended).

Truth be told, there are fiscal conservatives and small government advocates outside of the Republican party. Like me, for instance. The biggest reason I'm not a member of the Republican party is because I cannot join forces with the social conservative wing of the party.

So any chance Christie opponents can get to either (i) play up Christie's social conservative values, making him unattractive to independents like me, or (ii) attack Christie's bona fide credentials as a fiscal conservative or a small government advocate, making him less attractive to all of his fans, they are going to jump. This is in addition to efforts such as Loretta Weinberg's repeatedly making the Governor veto bills for women's health centers, and the Democrats repeatedly making the Governor veto a millionaire's tax, because they want to make the Governor unattractive to women and blue collar workers, i.e., Democrats.

The attention to the Governor's helicopter trip was an attempt to reach into the Governor's own base and show him to be a big government guy, taking advantage of his perks as Governor while causing middle class pain.

And this does strike at a weak spot of the Governor. As a U.S. Attorney, Christie was repeatedly cited for staying at hotels more luxurious and expensive than other Attorneys General, i.e., repeatedly taking expensive perks for himself and his staff on the public dime.

But Christie opponents continue to miss the biggest chink in the Governor's Republican bona fides, which is his continued expansion of the State's Executive Branch. Christie has repeatedly said he will use his power as Governor to the full extent of his Consitutional powers. He has sacked a State Supreme Court Justice for purely political reasons, an unprecedented step; he has taken over various independent watchdog agencies; he has taken over Atlantic City; he sought to limit the amounts municipalities can choose to pay their school superintendents, expanding State power; and he fired the Newark School Superintendent for no reason other than he wanted to to make room for Michelle Rhee, who ultimately turned down the job. These are not the actions of a small government advocate, yet no one has successfully connected the dots to call the Governor on his expansion of State power.

So tilt at helicopters if you will, but at least notice the big stuff.

State Commission of Investigation in Chris Christie's Pocket

What with the death of public media in New Jersey and all, I thought it was time to fire up the blog again.

Prior to Chris Christie's taking office, New Jersey had three independent watchdog agencies -- the Inspector General, the Medicaid Inspector General and the State Commission of Investigation. Last year, as a budget cutting move, the Inspector General and the Medicaid Inspector General were merged with the State Comptroller, bringing both into the Executive Branch and under the control of Chris Christie.

Christie also wanted to merge the State Commission of Investigation into the Comptroller's Office. However, the SCI is under the jurisdiction of the Legislature; and there was great outcry from both Democrats and Republicans, currently in office and retired, against merging the agency. So the Governer relented.

In late March of this year, however, Governor Christie announced that U.S. Attorney Patrick Degnan had been named Executive Director of SCI for the next three years. Degnan, like anyone who has ever worked for Christie, knows that if Degnan ever crosses Christie, not only will Christie never again promote him but Degnan will be on Chris Christie's hit list. Think Joan Verplank at the Chamber of Commerce.

How exactly did Chris Christie get his man in charge at the State Commission of Investigation? Members of SCI are appointed by the Governor, the President of the New Jersey Senate and the Speaker of the New Jersey Assembly. Which means Steve Sweeney and Sheila Oliver agreed placed the SCI under the control of a former U.S. Attorney approved by Chris Christie.

One wonders the full parameters of THAT deal.

Friday, April 29, 2011

Haley Barbour Clears The Way For A Christie Run In 2012

Haley Barbour has announced that he will not seek the Presidency in 2012.

As head of the Republican Governors Association, Barbour was a staunch supporter of Chris Christie's gubernatorial run. And since Christie is essentially a fundraiser at heart, he knows not to bite the hand that feeds him. So since the RGA pumped millions of dollars into Christie's campaign, Christie raised millions for Republican gubernatorial candidates in 2010.

As long as Haley Barbour was a potential Presidential candidate, Christie could not run. Christie simply will not run against anyone who supported him to the extent Barbour did -- it would violate the Christie brand of rewarding his benefactors and punishing his foes.

But it's an entirely new situation now, opening the possibility that Barbour himself, through the RGA, would launch a draft Christie campaign. Why would Barbour do that? His term as Governor of Mississippi is up in 2012, and he is term barred from running again. Which means Barbour will be looking for a job in 2012. Helping Christie take the White House would mean a plum position in Washington for Barbour.

Time will tell.

Thursday, April 14, 2011

Proof The Christie Plan Is Working

Yesterday, NJN News had footage of students across New Jersey protesting against tuition hikes.

I remember stories of students protesting against the war in Viet Nam. I can remember protesting against Reagan-era policies on the environment and on Central America. Today's students protest over tuition.

And that's the plan. Undermine the middle class so they only have the time and energy to worry about their own survival, and they won't have time to worry about anything else.

I've heard the common wisdom that if you're not a liberal in your 20's you have no heart and if you're not a conservative in your 40's you have no mind. But if you never get to be a liberal in your 20's, where do you end up in your 40's?

Monday, February 14, 2011

The War On Jobs Comes Home To NJ

Economists in this country are faced with a quandary: how can the economy be recovering (which it is) without generating new jobs (which it is not, in any meaningful way)?

What few acknowledge is that this point has been 30 years in the making. The war on jobs started under Ronald Reagan. The call to arms -- "We must increase productivity!" Under the mantra of realizing the full value of assets, companies were bought, broken down into their constituent parts and sold. The ability to provide the same level of goods and services with fewer people was lauded.

And so launched the now familiar story of the 50 year old middle manager who was downsized and never recovered his or her financial security. The first of those people are now collecting social security and consuming less. When consumers consume less, the economy suffers.

Now, it wasn't so bad when the middle class was consuming beyond its means by tapping home equity and easy credit. But it's a new day now. So not only are the displaced middle managers of the 1980s consuming less now, but all consumers (displaced and otherwise) are consuming less now.

Is it possible, then, that a side effect of the 30 year march towards greater productivity (doing more with fewer people and fewer resources) has a side effect -- lower consumer consumption?

If so, then, there may be an argument to made for the value of employment to the economy on a par with productivity. Maybe cutting all of those jobs over the past 30 years resulted in short term gain at the expense of the long-term health of the economy.

It is against this backdrop that a privatization debate is playing out in New Jersey. Apparently, Governor Christie's privatization commission believes the State can save $210 million, about 1% of its budget, by privatizing state workers (I note that said report is deeply flawed, as discussed earlier on this blog). Allowing a toll taker who earns $65,000 a year to be replaced by a part-time employee who makes minimum wage and gets no benefits. A new coalition, the Coalition on Privatization, says that outsourcing functions currently performed by government will endanger the environment and public health, result in higher fees and a decline in the level of service provided to the public.

But the coalition missed the point. The Governor is seeking to create short-term gain for his supporters at the expense of the long term ability of the public to consume goods and services here in New Jersey. But wait, the Governor will explain, the short-term gain will allow small business to create more jobs, more efficient and productive jobs which are better for the economy.

To which I reply, it's been 30 years since the war on employment began, Governor, where are the jobs? Where are the jobs the Bush tax cuts were supposed to generate? Show me the jobs, Mr. Governor, and you can replace my toll taker with Robbie the Robot. But until then, stop adding to unemployment and stop undermining consumption in this state.

Until Republicans begin to understand that short-term gain that adds to unemployment is hurting the economy by squeezing out middle class consumption, our economy will continue to limp along. All of us -- rich, poor and the three people left in between -- are in the same sinking economic boat now.

Sunday, January 23, 2011

WSJ Hearts Utah Pension Reform

The Wall Street Journal editorial page recently waxed rhapsodic about Utah, which has replaced a defined benefit pension plan for new state and municipal workers with a 401(k)-style plan.

In Utah, new state and municipal employees can choose to: receive an amount equal to 10%-12% from the state as a contribution to a private retirement account, and contribute an additional 8%; or receive up to 10% contribution to a private defined benefit plan with less generous benefits than the existing plan, with the employee bearing the responsibility for contributing anything above that. Under both plans, the employee decides how to invest the funds (and bears the entire risk if those decisions are poor ones).

The result is that Utah taxpayers no longer bear the responsibility of paying defined benefits to retirees for life, regardless of how the state pension fund fares in the marketplace. The reform was triggered when the 2008 market crash caused Utah's pension fund to lose 22% of its value.

According to the WSJ, "The reform has benefits for taxpayers and public employees. Workers own their own retirement account and can carry it to another job. They also benefit because politicians can no longer steal from the pension plan to pay for other government spending. As for taxpayers, the reform will eventually slash state pension liabilities in half and they no longer bear the risk of having to pay higher taxes if the stock market declines."

Shockingly, to the WSJ, union leaders resisted. Apparently, union leaders feared the dissolution of a public safety net for retirees. And the slashing of other social programs which had been financed by leveraging the state pension fund.

The WSJ editorial was widely quoted across the internet, giving legitimacy to the pension reform echo chamber. It won't be long before we hear Governor Christie start beating the same drum.

Wednesday, January 19, 2011

Quote Of Note: The Ultimate Public Pension Reform

It seems Chris Christie sat down with the editorial board of the Wall Street Journal recently, which means that the Governor has been getting even more press from the WSJ than usual. For example, the Governor's plan to eliminate teacher tenure was prominently featured in an article by Lisa Fleischer.

And last Friday, assistant editorial page editor James Freeman published a love note to the Governor's public pension reform plans. The editorial included the following quote:

"The ultimate reform is to move to a 401(k)-style [public pension] plan that provides transparency to taxpayers while allowing government employees -- not politicians or union bosses -- to control their retirement savings with individual accounts. How to enact such reform in New Jersey? 'You get a Republican legislature, that's how you do it,' says Christie. 'I'm dealing in a context where the Democratic Party in my state has been ruled by the public-sector unions.'"

This line of reasoning brings back fond memories of George W. Bush's plan to privatize Social Security by diverting Social Security taxes into private accounts. At the time, critics viewed the plan as a giveaway to Wall Street, which would end up managing Social Security funds on a for-profit basis. Of course, this was before the Great Recession made it clear that there is real risk in relying on the marketplace for retirement funds.

So, in addition to his expansion of executive power by absorbing the Medicaid Inspector General and Inspector General into the executive branch of the State government, and his plan to absorb county prosecutors into the Attorney General's office, the Governor has now found another way to show his affinity for the Bush-Cheney-Rove faction of the Republican party -- handing government pensions to Wall Street.

Saturday, January 15, 2011

Chris Christie's Culture Of Half-Truth

I finally made my way through the Governor's State of the State address, and by and large I find what it fails to say to be more important than what it actually does say.

Although the Governor said he believes in a culture of truth, he began his speech with a number of half truths. He claims to have balanced the State budget; however, the budget isn't truly balanced. The Governor relied on FMAP money which only partially came in, failed to fully fund the transportation trust fund and refused to make Constitutionally mandated payments to the public employee pension plan. He claimed that taxes are lower, but did not clarify that they are only lower for the wealthy and that property taxes are certainly on their way up this year. And he claimed that New Jersey's taxes are causing the wealthy to flee the State, a claim which has already been debunked.

On the stay the course front, the Governor reiterated his three top priorities: fiscal discipline and lower taxes; reforming the public pension system by raising the retirement age, freezing COLAs in times of little or no inflation and requiring public employees to contribute to their own pensions; and reforming our education system by eliminating tenure, closing failing schools, instituting merit pay and creating more charter schools.

On the revisiting Reagan front, the Governor referenced the shining city on a hill, which Christian conservatives recognize as a reference to heaven. He also seemed to embrace trickle down economics by suggesting he would close popular programs to fund infrastructure investments and tax breaks.

But on what may well be Christie's most lasting legacy, nary a word. First, the Governor said nothing about his battle against the rule of law. Many of his cost-cutting moves are being challenged in court, including his education cuts and his attempt to cap superintendent pay. There is a good chance both plans may be found to be unconstitutional. The Governor actually said he would allow the State to make its Constitutionally mandated pension contributions if, and only if, he gets the pension plan reforms he seeks. So, despite the fact that Governor has sworn to uphold the State Constitution, he continues to ignore select Constitutional duties.

Second, the Governor said not a word about his expansion of the executive branch of New Jersey's government. He has merged the Inspector General and the Medicaid Inspector General into the executive branch, and seeks to do the same with the State Commission of Investigation. He is also exploring absorbing the county prosecutors into the Attorney General's office.

So, simply put, the Governor is mum about bringing all of the State's investigative and prosecutorial power under the control of an executive branch which feels free to ignore the rule of law, seriously undermining our State's checks and balances.

I know that telling people that he is expanding government does not play as well with his right wing besties as beating up on teachers and cops, but really, I do think it deserves some mention when discussing the State of the State.

Thursday, January 6, 2011

Our Children As Profit Centers

Remember, in New Jersey, children are not just our future, they are our future profit centers.

This is the philosophy at the center of Chris Christie's education policy. According to the Governor, the best hope for public education is to replace it with for-profit education facilities such as charter schools; undermine the teachers' union so as to be able to force out senior, expensive teachers; and combine schools to promote efficiency at the expense of local control of curricula. In other words, treat education like a business.

So advertising on school buses is a no-brainer. Which is why the Governor just signed into law a bill that allows just that.

Oddly, only the 40% of municipalities that own their own school buses can advertise; the municipalities which lease their buses cannot sell advertising space. Ads for tobacco and alcohol are prohibited, as are any ads the Commissioner of Education deems inappropriate. In other words, this law is just a lawsuit waiting to happen. Some districts can sell ads, others can't; some businesses can advertise, others can't. It's an equal access/ First Amendment nightmare.

But it's also a sign of things to come. Get ready for corporate logos on football fields and basketball courts; brand logos on school uniforms; and any and all other means available to turn access to our school children into a thriving industry.