Closer to Pension Deal?

Kevin Landrigan reports in the Nashua Telegraph that there is progress towards working out of the state's huge pension deficit:

Concessions in pension deal

Don't look now, but there's a seismic breakthrough in a three-year effort by House leaders to get local and state police officers and firefighters to work longer before getting their pension.

Currently, these employees in Group II of the N.H. Retirement System can retire with a pension working after 20 years and reaching the age of 45.

The House has wanted and the Senate has balked at moving both standards to 25 years work and age 50.

The deal's not done yet, but union leaders made a big-time concession agreeing to a compromise that emerged before the Senate Executive Departments and Administration on Thursday.

This new plan would compel all law enforcement officials hired after July 1 to work at least 25 years to get a pension without changing the age limit.

Professional Firefighters of New Hampshire President David Lang said today's public safety officers are getting years of training and/or post high school education, so they are practically low- to mid-20s before coming on the job.

"In a sense, the Senate is agreeing to meet the House more than halfway,'' Lang said. "I think this is a solution under which we can put forward a workable plan."

The bipartisan group of senators working on it included Barrington Democrat Jackie Cilley, Manchester Democrat Betsi DeVries, Salem Republican Michael Downing and Londonderry Republican Sharon Carson.

The Senate is likely to approve it next week.

On a related front, the Senate is expected to kill the House-passed ban on counting privately paid special duty pay as part of compensation that counts in a pension (HB 532).

A Senate panel unanimously recommends it die. The subject won't end there, because Cilley has told associates she will urge D'Allesandro to address the subject in the trailer bill to the state budget (HB 2).

Cilley supports the proposal of Rep. Patricia McMahon, D-Sutton to make sure the state gets 35 percent of any special duty payments that are now given to cities and towns when they approve these private details.

According to one estimate, this could amount to a $1 million windfall for the state over a two-year budget cycle.

A picture is worth $328,835

White House aide Louis Caldera has resigned after masterminding this botched photo-op, and scaring lower Manhatten and northern New Jersey.

Louis Caldera, for your conspicuous waste of taxpayer dollars, we present you with the Dig 'Em Award:

Watch more Family Guy videos on AOL Video

Mayor Evelyn Sirrell Passes

Adam Leach reports in the Portsmouth Herald on the passing of former Portsmouth Mayor Evelyn Sirrell:

Former Mayor Evelyn Sirrell died Friday morning following a prolonged series of illnesses at the age of 78.

Know for her feistiness and personable nature, the “people’s mayor” has had several medical problems since she decided to not run for re-election in 2005. She served on the City Council for 14 years beginning in 1986 and served as the mayor from 1998 to 2005.

Token Budget Cuts Dead On Arrival

President Obama's first crack at belt-tightening, a ludicrously small $100 million cut, still hasn't seen the light of day. And his next salvo, a rather modest $17 billion cut, is dead on arrival at Capital Hill, as Democratic lawmakers vow to go to the mattresses to protect their pet projects:

President Obama's modest proposal to slice $17 billion from 121 government programs quickly ran into a buzz saw of opposition on Capitol Hill yesterday, as an array of Democratic lawmakers vowed to fight White House efforts to deprive their favorite initiatives of federal funds.

Last year, President Bush proposed about $34 billion in cuts to outdated, ineffecient, and indefensible projects that remain in the budget because powerful Members of Congress like to dish out federal money to their friends and supporters. It was an annual exercise in futility, as Congressional leadership in both parties had no interest in curbing their own appetites.

TGIFriedman

Here's your Friday Friedman:

Enjoy the weekend, and Happy Mothers Day.

James Pindell bats .500

In his latest New Hampshire Magazine column, political reporter James Pindell reflects on the unique nature of New Hampshire's 400-member House. Any Representative can introduce legisaltion, and each bill requires a public hearing in Committee and a vote on the House floor.

Here are two ideas that would change the Statehouse for the better.

Give more power to leadership. State law says that every bill, like the one of fences, gets a public hearing and a vote in committee. We should give chairman the ability to not bring up bills that are obviously non-starters.

Shorten sessions. The Legislature meets for six months every year and members get paid just $100 for their service. Historically, sessions lasted just a few months each year and it was a true citizen legislature. Now it is more of a “leisure legislature,” i.e. members are not like you and me. They are generally college students, retired or independently wealthy with time on their hands. Long sessions only mean big decisions get delayed, legislation isn’t focused and true leaders and talent are left on the sidelines — or leave after a term or two.

The first idea is horrible. The fact that leadership can't throw a bill "in a drawer" like they do in Washington is a good thing, and gives each and every member of the House real indepedance. We should not surrender that distinction, and allow the very few weilding gavels in Concord to set the Legislature agenda. Our 400 State Representatives introduces over 1,000 bills a year, and that number should probably be lower. But the way to reduce bad legslation is to vote for other people.

The second idea has great merit. New Hampshire used to do just fine with the Legislature meeting once every two years, and coming back into session only if necessary. And even the House breaks for the summer, the State House is still humming with activity, and study committees and other legislatively-created busywork fill the halls. Shortening the Session in the second year, or returning to Biennial Sessions, would force House and Senate leadership to set real priorities, meet deadlines, and make the tough choices that we expect for $100 a year.

$10 prescription drugs

Mark Perry at Carpe Diem noted Wal-Mart's new program offering 300 generic prescription drugs for just $10 each, and with free mail delivery. He suggests an alternative to nationalizing the health care industry:

Maybe instead of turning over America's health care system to the federal government, we should turn it over to Wal-Mart.

The high cost of prescription drugs is often cited as evidence of the need to take health care decisions out of the marketplace. Funny how markets tend to lower prices when given the chance to work.

Valley News reports key opposition to Cap Gains

John Gregg reports in the Valley News that two Senate Committee Chairmen oppose instituting a Capital Gains Tax on New Hampshire:

2 N.H. Legislators Frown on New Tax

By John P. Gregg

Valley News Staff Writer

Prospects for passage of a capital gains tax in New Hampshire appear uncertain, with two key Senate committee chairmen yesterday saying they are opposed to the measure.

“I can only tell you that I have no desire to do a capital gains tax,” Senate Finance Committee Chairman Lou D'Allesandro, a Manchester Democrat, said in a phone interview. “If ever there was not a time for capital gains, it is now.”

Senate Ways and Means Chairman Bob Odell, a Claremont-area Republican, also said he opposes the tax, noting that many retirees move to New Hampshire because of its favorable tax climate for such income. “I think it would be a major change in the public policy we have on taxes,” Odell said. “I think that will get a lot of discussion and debate if it is brought forward. I haven't heard a lot of sentiment in the Senate for that particular tax.”

Lou has three weeks to save NH

By CHARLES M. ARLINGHAUS

The guy you have to feel sorry for in the state budget process is Sen. Lou D'Allesandro, D-Manchester. The state's budget is a mess, and the whole mishmash has been dumped in his lap to fix.

Normally, a sitting governor proposes a budget he thinks is a complete document. The House then makes changes and puts its own policy stamps on the bill, also creating a budget that could be final. By the time the Senate receives the budget bill, it is essentially complete, allowing the Senate to balance the policy choices it makes by changing spending or tax decisions.

This year, neither the governor nor the House passed what they considered a finished product. Apparently they figured it was too difficult and Senate Finance Committee Chairman D'Allesandro could be counted on to bail them out.
CharlesArlinghaussig_135px

When the governor submitted his budget, he said twice in his budget address that this was just one possibility and he encouraged people to look for other solutions. This was one of the few times in modern political history when a politician actually talked down his own proposal. "This is what I came up with, but I'm sure you can think of something better," was the governor's message.

The House described its budget as a work in progress and hoped the Senate would make important changes. The representatives would be sorely disappointed if the Senate just passed what they sent over. They and the governor are counting on Sen. D'Allesandro to fix everything.

As an example, both the House and the governor have said they want school construction aid to be put back in the budget. The governor didn't include money in his budget for it. He suggested the state borrow more money to pay for it. The House sensibly eliminated that borrowing.

House leaders said they hope the Senate finds a way to put it back in even though they couldn't. The governor has said it really ought to be included, but he has no suggestions for what to do. So it all falls to Lou.

The bigger difficulty is that there are other significant problems with the budget. The budget as passed by the House raises taxes in a recession and uses huge, one-time windfalls to pay for spending, creating larger problems in the future.

Almost everyone expected this budget to be a transition from the mess created by last year's budget to a balanced budget in a few years. Over the two years of the budget now ending, revenues will have been a combined $350 million or so below the amount budgeted. Even after some spending cuts and borrowing $40 million, the budget for the last biennium will end up with a $170 million deficit.

That deficit will be paid off with stimulus money, the rainy day fund and the controversial raid on a medical malpractice fund that is by law supposed to be refunded to the doctors who paid the premiums. Regardless, it is obvious that this budget should transition so that regular revenues are not $170 million lower than spending. At a minimum, we might have expected budget writers to do something like reduce the operating deficit to around $100 million in the first year of the budget and closer to $50 million in the second. We might have objected that they hadn't achieved balance, but at least they would be moving in the right direction.

Unfortunately, the budget punted over to Lou does nothing of the kind. It moves in the wrong direction. It uses $600 million of one-time revenue to hide the problem and make the operating deficit worse, not better.

By the final year of the budget, FY 2011, the gap between revenues and spending will grow to $211.5 million. That doesn't include some programs that have been temporarily suspended or replaced with federal stimulus money but will be back in the next budget.

As if that weren't bad enough, the only reason the operating problem isn't greater is that the House budget writers counted on increased revenue from a series of tax increases, such as a hike in the tax on tourism (the room and meals tax) and new taxes, such as a job-discouraging capital gains tax.

No one envies Sen. D'Allesandro's monumental task. He needs to find a way to reduce the operating deficit so it's much smaller in the final year of the budget than it is coming in. He needs to roll back at least some of the tax increases that will cost us jobs. And he's essentially starting from scratch with only three weeks to work.

Good luck!

Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.

Americans for Prosperity-NH Name Honorary Chairman

The New Hampshire Chapter of Americans for Prosperity today named Tom Thomson as Honorary Chairman and launched their opposition to four pending tax increases in the Granite State. Grant Bosse reports for the Josiah Bartlett Center for Public Policy:

What's another $94 billion for our grandchildren?

House Democrats are preparing an additional $94.2 billion in "emergency" spending for ongoing operations in Iraq and Afghanistan, some money for the flu, and I'm sure a few pet projects we'll find out about after the bill passes. Funny how the price always goes up:

Last month, President Barack Obama asked Congress to give him $83.4 billion more to pay for the wars in Iraq and Afghanistan. He is hoping to use the money to begin phasing out combat operations in Iraq while building up U.S. forces in Afghanistan where al Qaeda and Taliban fighters are gaining strength.

The Pentagon wants the U.S. Congress to approve the money promptly, before a congressional recess that is scheduled to start at the end of May.

One of many budget mistakes of the Bush Adminstration was characterizing war funding as "emergency" spending, outside of the normal budgeting process. The argument was that up-tempo military operations required in a shooting war shouldn't be built into the baseline for Pentagon spending. But we're going on eight years of operations in Afghanistan, and six years in Iraq. American has made military commitments, and Congress has plenty of notice to build this spending into its budget. Continuing the fantasy of "emergency" spending simply removes accountability from both Congress and the President, and provides a fast-track for wasteful spending. In this case, we're throwing an additional $2 billion on influenza simply because an overhyped strain of moderately severe flu came out of Mexico this spring. The public health situation is no different than it was when Congress passed its last bloated spending bill, but members of both parties have caught the highly contagious "Do Something Syndrome", so our grandchildren inherit a hole that's $2 billion bigger.

A matter of scale

A stunning visual representation of President Obama's proposed budget cuts:

Points for Honesty; None for Policy

Congresswoman Jan Schakowsky admits that the single-payer health care system she supports would destroy the private health-care marketplace, and she thinks that's a good thing:

The claim that health care is "too important to be left to the market", as so-called health care reformers argue, is laughable. If you think a good is important, and want to improve choice and quality while decreasing cost, you encourage markets. You certainly don't replace the billions of discreet decisions made each year with the wishes of bureaucrats and politicians.

Hattip: Chequer Board of Days and Nights, the best free market, foreign policy, and chess website on the Internet.

Emergency Recall of US Dollars

Breaking news from the Onion:

Treasury Department Issues Emergency Recall Of All US Dollars
Of course, those dollars aren't worth as much as they used to anyway.

Congressional Priorities

Floundering economy...
Flu epidemic...
Busting busting deficit...
College football...

Yep, let's talk college football.

"I had hoped through a spirit of volunteerism, the BCS would decide to go to a playoff system," he said during a hearing today of the House Energy and Commerce Committee's trade, commerce and consumer protection subcommittee. "That hasn't happened yet. It is interesting that people of goodwill -- I think everybody on whatever side of the issue is a person of goodwill -- keeps trying to tinker with the current system."

"It's like communism, you can't fix it," he continued. "Sooner or later you are going to have to try a new model."

Barton's quote will get most of the attention, though he wasn't really saying that the BCS was Communism. The very fact that he and Committee Chairman Bobby Rush were wasting their time and our money holding this hearing should be the real story.

TGIFriedman

Because it's Friday, here's some Milton Friedman for you:


Enjoy the weekend. Optimize your utility!

Tea Party Politics From Colonial Boston to the Obama Bailouts

Bedford's Bill Martel writes a piece on the history of Tea Party Politics in U.S. News and World Report:

Two hundred and thirty-six years ago this week, Britain's Parliament passed the Tea Act. It lowered taxes on tea.

And the Colonies were furious.

Why? The act gave a monopoly to the British East India Company on trade to the Colonies, effectively scuttling colonial tea smugglers and angering locals who had been quite satisfied with their own arrangement. As one more sign of British arrogance and meddling, it eventually sparked a revolution.

Two hundred and thirty-six years later, the very idea of taxation is no more popular. And politics are just as complicated. So it's little surprise that April 2009's American tea parties denouncing congressional spending of taxpayer dollars took their cue from patriot Samuel Adams.

Read the whole thing.

William Martel is associate professor of international security studies at The Fletcher School, Tufts University, and author of Victory in War: Foundations of Modern Military Policy.

Edited to show that Bill Martel is from Bedford, not Amherst.

Good news for Chrysler and taxpayers

UPDATE- Never mind.

President Barack Obama announced Thursday that Chrysler would head into bankruptcy with the aid of up to another $8 billion in taxpayer money, a last-resort attempt to quickly restructure the struggling giant. He blasted hedge-fund creditors whom he said held out for a richer deal.

Chrysler will file for bankruptcy, rather than bureaucracy, after negotiations for a taxpayer-financed bailout broke down. This means the flailing U.S. automaker will get to restructure and perhaps come back under competent management. The Washington Post has more:

Under the administration's detailed plan for a "surgical bankruptcy," ownership of Chrysler would be dramatically reorganized, the leadership of Italian automaker Fiat would take over company management and the U.S. and Canadian governments would contribute more than $10 billion in additional funding.

Company and government officials had feared that a bankruptcy would stain the brand, shake customer confidence and erode sales, but the administration said it would seek to use the process to create a new Chrysler company. Its ownership would be divided, with the company's union retiree health fund receiving a 55 percent stake, Fiat would claim as much as a 35 percent share and the United States would take 8 percent. The Canadian government would receive two percent.

Years of building cars that were too expensive and not reliable enough stained the brand. Bankruptcy merely acknowledges reality. This gives Chrysler a chance to make up for decades of bad decisions and come back to compete in the highly competitive automotice marketplace.

Of course, what's best overall isn't best for everyone involved. Employees will be probably be better off working for a car company with competitive wages than not working for a defunct car company with higher wages. Retired workers will get hit. There is no way that Crysler could ever have afforded the pension promises it's made over the years, and bankruptcy opens the door to renegotiating those commitments.

A polically-mediated bankruptcy, with politicians picking how and when the company restructures, isn't optimal. But it's probably going to lead to a more competitive company than the disasterous GM bailouts.

That Wasn't Me!

Presidents get far to much blame and far too much credit for the performance of the national economy. But is is strange that President Obama wouldn't take credit last year's record deficit, a deficit he helped created with his votes in the Senate, and which he would quadruple this year under his proposed budget. The AP fact checks the President's deficit dodge:

"That wasn't me," President Barack Obama said on his 100th day in office, disclaiming responsibility for the huge budget deficit waiting for him on Day One. It actually was him — and the other Democrats controlling Congress the previous two years — who shaped a budget so out of balance.

And as a presidential candidate and president-elect, he backed the twilight Bush-era stimulus plan that made the deficit deeper, all before he took over and promoted spending plans that have made it much deeper still.

We present the Obama "First 100 Days" Theme Song:

WGIR Podcasts

NH Watchdog's Grant Bosse joins Charlie Sherman, Katrina Swett, and Steve Marchand on WGIR's weekly political roundtable.

Topics include Arlen Specter's party switch, President Obama's First 100 Days, Swine Flu, and a busy day of controversial issues in the State Senate.

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Part I

Part II

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