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    Highlights—January 27, 2007

  • Wall Street Journal: Ricoh Buys IBM Printer Unit. By Yukari Iwatani Kane and Charles Forelle. Excerpts: Ricoh Co., a Japanese office-equipment maker, said Thursday it agreed to buy International Business Machines Corp.'s digital business printer operations, becoming the latest Japanese company to seek growth through overseas acquisitions. Terms of the deal, expected to close in the second quarter, call for Ricoh to pay IBM $725 million in cash for 51% of IBM's printing systems division and as a prepayment for the remaining 49%.
    Final consideration will be determined at the end of the three-year period, in which Ricoh will buy the remaining stake. The all-cash transaction includes a $35 million management fee, the companies said. During a press conference to discuss the transaction, InfoPrint Solutions President and Chief Executive Tony Romero said 1,200 IBM employees will be transferred to the new company with 1,000 more coming on board after the deal is closed.
  • Boulder Daily Camera: IBM spins off Boulder unit. No layoffs expected in deal with Japan-based Ricoh. By Alicia Wallace. Excerpts: IBM plans to spin off its Boulder-based printing division into a separate company that will be headquartered here and controlled by Japan-based office equipment maker Ricoh Co. International Business Machines Corp. and Ricoh on Thursday announced the creation of InfoPrint Solutions Co. — a joint venture based on IBM's $1 billion Printing Services Division, a maker of production printing hardware and software for large companies. The division, which has 1,200 employees worldwide, has a 500-person presence and a four-decades-long history on IBM's Boulder campus. [...]
    When InfoPrint becomes Ricoh's wholly owned subsidiary, it is unclear if Ricoh will keep its headquarters on IBM's Boulder campus. "I think we'll have to examine that as we go forward," Paterra said. "We plan to be on this site." Considering some of IBM's local history, that's a possibility. Fifteen years ago, IBM sold its low-end printer and printer supplies business to an investment house that renamed the operations Lexmark International Inc. The Lexington, Ky.-based Lexmark's Boulder operations remain on the northern edge of the IBM campus.
  • Wall Street Journal: IBM Earnings Disappoint, Nasdaq Down 2.1% for Week. By Andrew Lavalle. Excerpts: IBM declined $3.28, or 3.3%, to $96.17 on the New York Stock Exchange. Although Big Blue's profit rose 11% and met expectations of analysts surveyed by Thomson First Call, some wanted to see even higher earnings. Merrill Lynch said the results indicated a "good but not great quarter against great expectations."
    Others maintained cautious guidance, pointing to IBM's uneven performance across its businesses. "IBM's software segment continues to report solid results, but lower hardware revenues and profits disappointed, while services remained mixed," said Prudential analyst Bryan Keane, who backed a "neutral" rating. "Overall, gross margin expansion was reduced in all three divisions, as IBM begins to anniversary most of its restructuring and cost improvements."
  • In a Yahoo! message board post, "bits_bytes_and_bug" responds to the following comment: "Sure sounds like IBM had a great 4th QTR. 2006. And for that matter a great 2006 for the bottom line in general." Full excerpt: Just watch how fast these excellent results go sour when it is time to determine bonus (or is it bone-us?) pay for those of us in the trenches. Of course the execs will make out like bandits.
    Also don't expect the salary plan to match the great business results we've achieved in the past year. Word I hear is that it is no better than last year's plan.
    Let's wait for Sam's corporate-wide message in a week or so. That's when we will hear that once again we fell short of expectations.
  • Yahoo! message board post by "sby_willie". Full excerpt: Yep, with less employees PBC "1" and "2+" now than in years past, and more employees PBC "2" and "3", it's evident IBM will be giving out less bonus payout for 2006 results sometime in 2007.
    The variable pay and now bonus pay has been on average consistently going down each year.
    Let's see what the group executives whose scorecard result for 2006 says "needs improvement" get for bonuses and raises. It really should be on par with what their employees get but it never is.
  • Yahoo! message board post by "fhawontcutit". Full excerpt: Thank you, Janet (Krueger) and Kathi (Cooper). You can look back and say, "We really tried to fix this thing." Also, remember that some employees did come out winners through Kathi's and Janet's efforts -- the lawsuit kept employers at bay, and employees in many companies (including some IBM second choicers) made it to retirement. The IRS suspended issuance of determination letters. I have got to believe that other companies' plans for cash balance conversions were in the works, but the lawsuit prevented those companies from moving ahead. How many people made it to retirement with their full pension who otherwise wouldn't have? Thousands? Millions? We'll never know, but I'll bet it's a lot.
    IMO, Janet and Kathi accomplished more in the last seven years than most people accomplish in their lifetime.
  • In a Yahoo! message board post, Janet Krueger answers questions about the Supreme Court's refusal to consider the Cooper v. IBM case. Full excerpt: 1) Why did Anna Nicole Smith vs. Kathi Cooper get her day in the Supreme Court? Ms. Krueger replies: That is not a question we will ever know the answer to; it is important to remember that less than 5% of the petitions for Supreme Court cert get granted; they simply do not have enough time to review all requests. A good summary of how the Supreme Court makes their decisions is available at http://usinfo.state.gov/journals/itdhr/0405/ijde/messitte.htm
    2) What, if any, recourse does Ms. Cooper now have? Or it this case 'dead in the H2O'? Ms. Krueger replies: Granted, not getting a Supreme Court review was a disappointment. But let's all have some perspective... The $320+ million dollar settlement that we will receive from Cooper is still one of the largest pension lawsuit settlements in US history, if not the largest. We won far more from Cooper than most ever expected we would get.
    If you were to ask Ms. Cooper what she wishes for IBM employees and retirees in the future, now that the settlement is moving into disbursement, my bet is she wishes IBMers could have all of their benefits fully protected and negotiated via a union contract -- without that, IBM will continue to whittle away the remaining benefits of those who are left.
    A little appreciation for the substantial victory we achieved would also be much appreciated!
    3) What is the future direction of this Yahoo Group and it's future activists function about IBM's injustices to it's employees? Ms. Krueger replies: This Yahoo Group will continue to focus on IBM retirement issues -- allowed topics are listed on the home page, as are the rules for posting. If you don't agree with the rules, feel free to email the moderators at ibmpension-owner@yahoogroups.com.
  • Hartford Courant: 110 Losing Jobs At Insurer. IBM To Offer Jobs To 280 Others As The Hartford Outsources. Excerpts: About 110 employees of The Hartford Financial Services Group's data center in Hartford will lose their jobs and some 280 others will be offered positions with IBM under a new outsourcing contract. The insurer said Tuesday that its new five-year contract with IBM, which will handle many data center services, will provide The Hartford with more flexibility and ability to meet its goals for growth.
    The information technology arrangement will affect about 390 employees. IBM will start formal interviews right away to select about 280 people it wants from The Hartford, and those who are chosen will become IBM employees April 1, company spokeswoman Shannon Lapierre said. [...]
    Some of the work IBM is taking on will be done offshore, but further information was unavailable. The Hartford said employees who accept a position with IBM and stay with that firm for a certain amount of time will be paid a retention bonus. No other details were available. [...]
    The standard severance for employees who will be terminated is one week's pay for each year of service at The Hartford, up to a maximum of 52 weeks' pay. The minimum severance will be two weeks' pay. Laid-off workers will also get outplacement help and education benefits, Lapierre said.
  • ITV (United Kingdom): Where's My Pension Gone? Excerpt: "Company pensions are meant to represent something solid, safe and secure. Instead they’ve become a byword for scandal. And for many of us, it seems as if all hopes for a long and happy retirement have gone - forever." - Jeff Randall.
    Hundreds of billions of pounds saved by members of employee pensions schemes have vanished without a trace. It has left over a hundred thousand workers with little or no retirement savings, and millions more facing hardship in old age because of slashed benefits.
    In a revealing documentary for ITV1, business journalist Jeff Randall investigates how the British public has been failed so massively by the company pensions system, and tries to find out exactly why our pensions have disappeared and who’s responsible.
  • Houston Chronicle: Court: Britain Failed to Protect Workers. Excerpts: Britain has failed to meet European Union standards for protecting workers from losing their pensions when their employer goes bankrupt, the EU's highest court ruled Thursday. While the EU member states are not obliged to reimburse workers for benefits they had paid under schemes run by companies that go out of business, they must ensure the pensions are sufficiently protected, the Luxembourg-based European Court of Justice ruled.
    "A system that may, in certain cases, lead to a guarantee of benefits limited to 20 or 49 percent of the expected entitlement cannot be considered to fall within the definition of the word 'protect'," the court ruling said.
  • Silicon.com: Women abandoning tech jobs. And fewer choosing IT as a career... By Steve Ranger. Excerpts: The number of women choosing careers in IT continues to decline, with many put off by the long-hours culture and lack of flexible working.
    Most damaging for the industry is the increasing number of experienced senior female execs that are abandoning technology. As these women in their 40s leave IT behind, they take with them vital experience and contacts, and also reduce the number of role models and mentors available for younger women in IT.
  • ComputerWorld: Bush wants H-1B visa cap hike. The President makes pitch for more guest workers while selling energy plans. Excerpts: President Bush yesterday called for an increase in the federal cap on H-1B visas, an issue he said he feels "strongly" about and wants to work with Congress to make happen. [...]
    Bush did not mention H-1B visas in his Tuesday address to Congress, but at DuPont he told employees: "I also want you to know I understand that we need to make sure that when a smart person from overseas wants to come and work in DuPont, it's in our interests to allow him or her to do so." His remarks were included in a transcript of his speech to the DuPont workers.
    "We've got to expand what's called H-1B visas," said Bush.
    The president went on to say: "I feel strongly about what I'm telling you. It makes no sense to say to a young scientist from India, 'You can't come to America to help this company develop technologies that help us deal with our problems.' So we've got to change that..., change that mind-set in Washington, D.C. I know we can work together on that." [...]
    Ron Hira, vice president of career activities at IEEE-USA, a unit of the Institute of Electrical and Electronics Engineers Inc., said he and the IEEE "wholeheartedly endorse this principle. But the H-1B program does not meet it." Under the H-1B program, "employers do not have to search for Americans, and can prefer an H-1B [visa holder] over an American citizen or green card holder. So, if the President is arguing to reform the H-1B program, then this is great. But I doubt he is."
  • Denver Post: Retired pilots ask U.S. Supreme Court to review pension decision. By Kelly Yamanouchi. Excerpts: The United Retired Pilots Benefit Protection Association has filed a petition asking the U.S. Supreme Court to review a decision that allowed the Pension Benefit Guaranty Corp. to terminate the United Airlines pilots pension plan. [...]
    "We felt that the PBGC's decision to allow the termination of the plan was improper," said Roger Hall, president of the retired pilots group, which counts about 3,500 retired United pilots as its members. "Many, many retired pilots have been substantially impacted by the termination of the plan," Hall said.
  • Computerworld: Offshore attrition on the rise. Industry observer says on any particular project outsourced to a service provider in India, you can expect at least a 15% turnover rate for personnel assigned to the project within a year. By Ephraim Schwartz. Excerpts: Offshoring, especially for business process outsourcing (BPO), is about to hit a wall. After all, despite being a relatively new phenomenon made possible by advances in communications, it remains subject to one timeless principle of economics: supply and demand. The HR pros call it attrition. On any particular project outsourced to a service provider in India, you can expect at least a 15% turnover rate for personnel assigned to the project within a year. For some projects, BPO chief among them, it is not unheard of for a whole staff to turn over by year's end, according to Paul Schmidt, a partner in the global services delivery practice at TPI, one of the larger sourcing advisory organizations.
  • New York Times: Labor Union, Redefined, for Freelance Workers. By Steven Greenhouse. Excerpts: Herding freelancers is a bit like herding cats. Both are notoriously independent. Nonetheless, Sara Horowitz has figured out a way to bring together tens of thousands of freelancers — Web designers, video editors, writers, dancers and graphic artists — into a thriving organization.
    Ms. Horowitz has founded the Freelancers Union, offering members lower-cost health coverage and other benefits that many freelancers often have a hard time getting.
    A former labor lawyer, Ms. Horowitz intends to form a forceful advocacy group for freelancers and independent contractors, the most mobile members of an increasingly mobile work force. In addition, she is trying to adapt unions to a world far different from yesteryear, when workers often remained with one employer for two or three decades.
  • New York Times: A Contrarian View: Save Less, Retire With Enough. By Damon Darlin. Excerpts: Could it be possible that you are saving too much for your retirement? Such an idea would fly in the face of almost every exhortation to a nation of spendthrifts that saving more is an imperative. After all, even as people are living longer, corporate pension plans and Social Security can no longer be relied on to ease most Americans through their retirement years. Fidelity, the nation’s largest provider of workplace retirement savings plans, says the average 401(k) account balance is only $62,000.[...]
    Nevertheless, a small band of economists from universities, research institutions and the government are clearly expressing the blasphemy that many Americans could be saving less than they are being told to by the financial services industry — and spending more — while they are younger. The negative savings rate, they say, is wildly distorted.
    According to them, the financial industry, with its ostensibly objective online calculators, overstates how much money someone will need in retirement. Some, in fact, contend that financial firms have a pointed interest in persuading people to save much more than they need because the companies earn fees on managing that money. The more realistic amount could be as little as half the typical recommendation made by Fidelity, Vanguard or any number of other financial institutions. [...]
    Mr. Kotlikoff’s calculations showed that Fidelity’s online calculators typically set the target of assets needed to cover spending in retirement 36.4 percent too high. Vanguard’s was 53.1 percent too high. A calculator offered by TIAA-CREF, one of the largest managers of retirement savings, was 78 higher than his calculation.
    Fidelity’s Retirement Quick Check calculator says that a 50-year-old person making $100,000 a year with $700,000 stashed in retirement accounts, saving $15,000 a year, would still fall short of the $2.8 million goal that would provide the necessary monthly retirement income of $7,408 that it sets. Its calculations do not include Social Security payments.
    Fidelity actually recommends saving about $1,000 a month more. It also encourages this person to save more even when more than enough has been saved. It recommends putting away up to $9,749 a month on top of the $15,000 a year already being saved, an impossibility since that would more than consume the person’s entire gross income.
    Mr. Kotlikoff’s ESPlanner software, taking real estate holdings and life insurance into account, says the person could cut back on savings by $10,000 a year and still have enough for a monthly income of $6,000 at retirement, the amount his calculations deems adequate to live on given prior consumption patterns.
    Mr. Kotlikoff is trying to sell his software, called ESPlanner, to large employers as well as to the financial services industry. He has made no major sales so far. It is also available to individuals at www.esplanner.com for $150.
  • gethuman. The gethuman project is a consumer movement to improve the quality of phone support in the US. This free website is run by volunteers and is powered by over one million consumers who demand high quality phone support from the companies that they use. Editor's note: The gethuman 500 database contains touchtone phone key sequences that can be used to talk to a human customer service representative at a long list of U.S. companies.
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • New York Times: Bush to Urge New Tax Plan for Health Care Coverage. By Sheryl Gay Stolberg and Robert Pear. Excerpts: President Bush intends to use his State of the Union address Tuesday to tackle the rising cost of health care with a one-two punch: tax breaks to help low-income people buy health insurance and tax increases for some workers whose health plans cost significantly more than the national average. [...]
    In his radio address on Saturday, Mr. Bush described his proposal as a way to “treat health insurance more like home ownership,” giving people tax deductions for their health insurance in much the same way as they get tax deductions for home mortgage interest. He said the current system “unwisely encourages workers to choose overly expensive, gold-plated plans,” driving up the overall cost of coverage and care. [...]
    “The market is broken,” Mr. Wyden said. “Private insurance companies cherry-pick. They’re trying to take just healthy people and send fragile people over to government programs more fragile than they are, and I’m not sure what this does to fix the broken market.”
  • New York Times: Following is a transcript of President Bush’s State of the Union address as recorded by The New York Times, with audio excerpts and analysis by The Times’s David E. Sanger, plus links to related articles and Web sites.
  • The White House: Fact Sheet: Affordable, Accessible, and Flexible Health Coverage. Excerpt: In The State Of The Union Address, President Bush Will Announce His Proposals To Make Basic, Private Health Insurance Available And Affordable For More Americans. Americans are fortunate to have the most advanced and innovative health care system in the world. The President's plan will make private health insurance more affordable and increase the number of Americans with health insurance. The plan will also help our Nation move away from reliance on government-run health care and toward a system in which Americans have better access to basic, affordable private insurance, and increased ownership of their medical decisions.
  • New York Times: Gold-Plated Indifference. By Paul Krugman. Excerpts: On the radio, Mr. Bush suggested that we should “treat health insurance more like home ownership.” He went on to say that “the current tax code encourages home ownership by allowing you to deduct the interest on your mortgage from your taxes. We can reform the tax code, so that it provides a similar incentive for you to buy health insurance.”
    Wow. Those are the words of someone with no sense of what it’s like to be uninsured.
    Going without health insurance isn’t like deciding to rent an apartment instead of buying a house. It’s a terrifying experience, which most people endure only if they have no alternative. The uninsured don’t need an “incentive” to buy insurance; they need something that makes getting insurance possible.
    Most people without health insurance have low incomes, and just can’t afford the premiums. And making premiums tax-deductible is almost worthless to workers whose income puts them in a low tax bracket.
    Of those uninsured who aren’t low-income, many can’t get coverage because of pre-existing conditions — everything from diabetes to a long-ago case of jock itch. Again, tax deductions won’t solve their problem.
    The only people the Bush plan might move out of the ranks of the uninsured are the people we’re least concerned about — affluent, healthy Americans who choose voluntarily not to be insured. At most, the Bush plan might induce some of those people to buy insurance, while in the process — whaddya know — giving many other high-income individuals yet another tax break.
  • In a Yahoo! message board post, Mike Germano comments on the President's proposal. Full excerpt: What also bothers me is also that this is a deduction and not a tax credit, so the lower income people without health insurance who it is supposed to help either probably won't be able to use the deduction and even so will also get the taxable portion refunded which may be not be enough incentive for most anyway. If you don't have enough money and the most you'll get back in your income bracket is 15% or so a year later, then what kind of incentive is that?
    Deductions are already limited to a percentage of income, so this is really aimed to push people into very high deductible policies where they only get to deduct up to a limit for total medical costs.
  • New York Times: Bush Insurance Plan Gets Cold Reception. Excerpts: Rep. Pete Stark, D-Calif., said Monday that the tax changes, which Bush will promote in Tuesday night's State of the Union address, would encourage employers to stop providing health insurance. ''Under the guise of tax breaks, the president is pursuing a policy designed to destroy the employer-based health care system through which 160 million people receive coverage,'' the lawmaker said. [...]
    Insurers said the president's tax proposal would help many of the 17 million people who buy coverage through the individual or small-group market. Their ranks include real estate agents, consultants and employees of small businesses. Also benefiting would be those in newer industries, like technology, where the workers tend to be younger and the health coverage more basic.
    Meanwhile, many state employees, teachers and older workers in such established industries as automobile and steel manufacturing could see their expenses go up, said Karen Ignagni, president of America's Health Insurance Plans, the insurers' trade group. [...]
    Diane Rowland, executive vice president of the Kaiser Family Foundation, said some of the people with health insurance premiums above $15,000 don't necessarily have ''gold-plated insurance,'' as the Bush administration has called it. She said the cost of insurance varies depending upon the cost of health care in that state. Other factors include the size of the company and the age of its workforce. ''A single cap can mean very different things in different places of the country,'' she said.
  • Washington Post: A Healthy Initiative. Tax the rich to help others buy health insurance? That's what Mr. Bush proposes. Excerpts: There are weaknesses in the president's proposal. Rather than embracing tax deductions, which are most valuable to people in high tax brackets, Mr. Bush could have made his proposal even more progressive by recommending a refundable tax credit that would be worth the same to everyone. Moreover, there's a danger that ending the tax privilege for employer-provided insurance will cause companies to discontinue coverage, driving more buyers into the individual market, where it's hard to buy insurance at a reasonable price, especially if you already have a medical problem. The administration promises to support state efforts to redeploy federal Medicaid dollars in ways that would make the individual insurance market work better. But success here will depend on the states, and the details are sketchy.
    Despite these caveats, the president is right to go after the existing system of tax subsidies for health care. Like the deductions for mortgage interest, these subsidies are regressive and have perverse consequences. Mr. Bush has kicked off a needed discussion.
  • New York Times: Return of the Drug Company Payoffs. Excerpts: Two excessively lenient court decisions have allowed the manufacturers of brand-name drugs to resume the underhanded practice of paying generic competitors to keep their drugs off the market. It is a costly legal loophole that needs to be plugged by Congressional legislation.
    The problem arises when a generic manufacturer tries to take its drug to market before the patent on a brand-name drug has expired by arguing that its product does not infringe upon the patent or that the patent is invalid. Huge sums of money are at stake, especially with blockbuster drugs whose annual sales can exceed a billion dollars.
    Rather than risk it all, a brand-name manufacturer may choose to pay its generic competitor substantial compensation to drop its challenge and delay marketing its drug. Both companies make out handsomely. The big losers are consumers and the public and private insurers that must continue to pay monopoly prices for the brand-name drugs.
  • Washington Post: Bipartisan Cooperation on Health Care Is Dead on Arrival. By Steven Pearlstein. Excerpts: But the most surprising and encouraging development is that a president who for six years has only nibbled around the edges of health-care issues has weighed in with some bold ideas to expand coverage, rein in costs and bring some fairness to the tax code. And get this: It actually involves raising taxes on the rich and lavishly insured and giving the money to the working poor and the uninsured.
    Given that, you'd think Democrats would have welcomed a politically courageous proposal to put a cap on one of the biggest and most regressive features of the individual income-tax code. But instead, they've shifted reflexively into partisan attack mode, mischaracterizing the impacts of the proposal and shamelessly parroting the propaganda from the labor dinosaurs at the AFL-CIO.
  • Christian Science Monitor: Bush's gambit on health insurance. The president is urging a tax-code shift to spread private coverage. States are moving in other directions. By Mark Trumbull and Gregory M. Lamb. Excerpts: With pressure building to reform America's healthcare system, President Bush has launched what may be his most ambitious bid to tackle the issue from a free- market basis. Lately, the momentum has appeared stronger in another direction: States have been considering mandates on employers and individuals to purchase health insurance. [...]
    The debate now includes three major paths down which America's health system can travel:
    • Trying to preserve and improve elements of a free market, with competition and information for consumers holding prices in check. Call it the Bush plan.
    • Mandating that all employers provide insurance to their workers, or contribute a share of their payroll to help government insure the workers. This is the path many states are taking.
    • Shifting toward a single-payer system, the model in many developed countries, where Congress would expand a program like Medicare to be an insurance provider for all Americans.
  • New York Times: The President’s Risky Health Plan. Excerpts: The new health care proposals announced by President Bush this week purport to tackle the two toughest problems confronting the American health care system: the rising number of uninsured Americans and the escalating costs of medical care.
    But on both counts, they fall miles short of what is needed to fix a system where — scandalously — 47 million Americans go without health insurance.
    The financial sinkhole in Iraq and huge tax cuts for wealthy Americans have left the administration with no money to really address the problem. To keep the program “revenue neutral,” Mr. Bush would instead use tax subsidies to encourage more people to buy their own health insurance, while imposing additional taxes on people who have what Mr. Bush deems “gold plated” insurance. [...]
    The new standard deduction would almost certainly entice some people to buy health insurance who had previously elected not to. But a tax deduction is of little value to people so poor that they pay little or no income tax. And unfortunately, it is those people who account for the vast majority of the nation’s uninsured. [...]
    The administration’s goal is to instead encourage people to take out policies that might reduce the use of medical services, like policies with high deductibles or co-payments, or managed care plans. But even “copper plated” policies can exceed $15,000 in cost if they are issued in areas where medical prices are high or to groups with high numbers of older or chronically ill workers. [...]
    The greatest risk in the president’s proposal is that it would seem likely to lead many small- and medium-size employers to stop offering health benefits altogether on the theory that their workers could buy affordable insurance on their own. That would leave many more Americans at the mercy of the dysfunctional individual policy market, where administrative costs are high and insurers strive to avoid covering people who are apt to become sick and need costly care.
  • The Commonwealth Fund: The 2007 State of the Union Address: The President's Health Insurance Proposal Is Not a Solution. Excerpts: The proposal doesn't do anything to make individual coverage available or affordable for those with modest incomes or health problems. The Commonwealth Fund 2005 Biennial Health Insurance Survey found that one-fifth of people who had sought coverage in the individual health insurance market in the last three years were denied coverage because of health problems or were charged a higher premium. The survey also found that 70 percent of people with health problems or lower incomes who had sought coverage in the individual market found it very difficult or impossible to find a plan they could afford. Moreover, research has shown that few plans in the individual market, even plans with low deductibles and higher premiums, provide maternity benefits without a special rider. The President's proposal, unlike reform plans in California and Massachusetts, does not require insurers to cover everyone.
    Nor would the president's proposal likely help those who are currently uninsured. According to the U.S. Treasury Department, some 3 to 5 million of the 47 million uninsured Americans could gain coverage. About 95 percent of the uninsured would not benefit substantially from the tax deductions. As described in a 2005 Commonwealth Fund report by Sherry Glied and her colleagues, more than 55 percent of the uninsured have such low incomes that they pay no taxes, while another 40 percent are in the 10 to 15 percent tax bracket. [...]
    A major concern is that the president's plan would ultimately erode existing employer-sponsored coverage. Because the health insurance caps of $7,500 and $15,000 would be tied to general inflation, or the consumer price index (CPI)—which historically has risen at a slower rate than health insurance premiums—more and more people will wind up paying higher taxes over time. While only 20 percent of workers with employer coverage may be affected initially, if current trends continue over half could be affected by 2013. [...]
    The president's plan could actually push people out of employer-sponsored insurance, which has relatively low administrative costs, and into high-overhead individual plans. Typically, the administrative costs of individual coverage consume an estimated 25 to 40 percent of each premium dollar, compared with 10 percent for group coverage. This means that premium dollars buy fewer benefits in the non-group market than they do in employer group markets. Likewise, the IRS will have to devote time and money to verifying coverage and dealing with cases where people have only part-year coverage or have multiple sources of coverage. Employers, meanwhile, will have to sort out per-employee costs for single coverage versus family coverage, the costs for different plans offered, and other issues.
  • Reuters, courtesy of the New York Times: Bush Health Plan Would Gut Current Coverage: Critics. Excerpts: U.S. President George W. Bush's proposed health-insurance plan will raise taxes while helping only a few people, and may eviscerate existing coverage, critics said on Wednesday. [...]
    Deborah Burger, president of the 75,000-member California Nurses Association/National Nurses Organizing Committee, said some people could be forced to buy bare-bones health plans that provide little cover. "It encourages people to gamble with their health by avoiding preventive care which raises the danger of increased pain and suffering for millions of Americans down the road," Burger said. Burger's group joined others in calling for a national health system on Wednesday. [...]
    Analyst Joseph Paduda of Health Strategy Associates said he doubted insurance companies would come up with plans for individuals to buy. "They are out to make a profit, not provide health coverage to people who need it," Paduda said. "A health-insurance company still won't cover a 47-year-old male who has had a heart attack or 55-year-old woman who has had breast cancer."
  • Workforce Management: Democrats Offer Health Plan of Their Own. In response to Bush’s proposal, Reps. Dennis Kucinich and John Conyers have reintroduced a bill that would provide guaranteed coverage for all Americans through a government-sponsored health care system. Excerpts: Reps. Dennis Kucinich of Ohio and John Conyers of Michigan—reintroduced a bill that would provide guaranteed coverage for all Americans through a government-sponsored health care system. Although not all Democrats favor the single-payer approach, health care policy tension is starting to align along a familiar fault line. Bush is advocating market prescriptions; Democrats are resisting and are promoting greater government involvement in covering the uninsured—a problem, they argue, the market hasn’t solved. [...]
    Kucinich and Conyers sharply disagree. Their bill, titled the United States National Health Insurance Act, would establish a “publicly financed, privately delivered health care system” that builds on Medicare. Everyone living in or visiting the United States would receive a national health insurance card and identification number entitling them to all necessary medical services. No co-pays or deductibles would be permitted.
    The plan would be funded by a payroll tax of 4.75 percent on employers and employees, which Kucinich argues is less than employers pay for health insurance premiums. In addition, a 5 percent health care tax would be levied on the top 5 percent of income earners and a 10 percent tax on the top 1 percent of earners. Other sources of funding include a repeal of Bush tax cuts enacted in 2001 and a tax on stock and bond transactions. [...]
    How much support Kucinich and Conyers will find for the single-payer idea is uncertain. Kucinich predicts his bill will garner 100 co-sponsors in the House. But achieving a majority in that body is only half the battle. Any health care bill also needs 60 votes in the Senate to avoid a filibuster.
  • Washington Post: The Knee-Jerk Opposition. By Ruth Marcus. Excerpt: If George W. Bush proposes something, it must be bad. Such is the knee-jerk state of partisan suspiciousness that when the president actually endorses a tax increase -- a tax increase that would primarily hit the well-off, no less -- Democrats still howl. Such is the level of distrust that when the president finally disavows the free lunch and comes up with a program not financed with deficit spending -- indeed, one that would actually bring in extra revenue as the years go on -- Democrats still howl.
  • Economic Policy Institute: Bush to outline misguided health care proposal in State of the Union address. Excerpt: More than anything, the health policies introduced by the Bush administration this week (and throughout the administration) are about shifting risk onto the individual. As the employer market erodes, more individuals must seek insurance on their own if they want any kind of health security. The individual market puts the onus on the individual to find and purchase health insurance, and there is no guarantee that the insurance they buy today will be available to them next year. Those unlucky enough to be unhealthy today or to get sick tomorrow will find it very difficult to find affordable insurance in the private market. At least the employer market promotes shared risk (or risk pooling) among individuals and families in firms and provides protection from financial loss when illness strikes. Risk pooling offers a way for individuals to share that risk. This year, your co-worker might need more health care and the next year, it might be you or your child that needs it.
New on the Alliance@IBM Site:
  • AFL-CIO: State of the Union or State of Denial? Excerpt: The question on a local Washington, D.C., radio call-in show today asked: State of the Union or State of Denial? As an analysis by the non-partisan Drum Major Institute for Public Policy puts it: When one looks past the State of the Union’s middle-class window dressing, one cannot help but notice the speech reflects a view of America and an approach to government that is at odds with the reality lived by average Americans. State of the Union or State of Denial? You decide...
  • From the Job Cuts Status & Comments page
    • Comments 1/26/07: Not at all surprised by the sale of PSD to Ricoh, printer support people have told me that Ricoh people have been at the Boulder offices several times. I went over to Qualxserv last year and still deal with them on smaller printers. In our district, management is shooting itself in the foot. Many of the mainframe people are 25-30 year vets and are taking or considering retirement very seriously. The key players at PSD were being groomed for the mainframe service jobs, now they're gone. This is not something that one or two classes qualifies a person for mainframe service, it takes several years for a person to become proficient in that environment. Who's going to be left to fill those positions when the long-termers are gone? Can they bring in workers from India or will they outsource to $7.00/Hr temp workers? Sam, I hope it blows up in your face. -Anonymous-
  • From the General Visitor's Comment page:
    • Comment 1/19/07: Everything Reality Check is saying is true for new employees and those hired within the last few years. Yes, they are playing by new rules. However, the long time IBMers who were given promises by the company for long term loyalty is a bargain that should still be honored. Many of these people were very talented and could have left IBM many years ago for better paying jobs, but chose to stay because of the health and pension benefits and corporate culture that outweighed salary alone. They stayed and remained loyal based on the promises that were not only verbal, but well documented in company memos and literature.
      All the old-timers want is to be compensated for the loyalty they gave through the promises repeatedly made by IBM over many years. Existing commitments should have been met, even if it was at the expense of CEO bonuses and golden parachutes. It's not a question of enough money. It's how it's all being allocated to the top few at the expense of the many employees. That's what the anger is all about. -Anonymous-
    • Comment 1/21/07: Reality check is right in all points; however, he forgets that IBM Management is the most stagnant in the industry with the lowest turnover. If the trend is correct and the company wants employees to last only 5-10 years, why not start cleaning out the Sr VP, GM, VP and Director positions to match that accelerated turnover? You are a cynic and a liar. If you truly believed in what you said, you'd be outraged by the fact that it takes no performance, but only the tacit approval of 6 Band D or above individuals to move you to a Band D. Then, once in the club, performance is never an issue. The legal battles are over. It's time for activism, civil corporate disobedience, slowdowns and a union. -Activist in RTP-
    • Comment 1/22/07: "By the way, IBM has NEVER guaranteed us anything. I am not sure where you ever got that idea." True, but the actions of the old IBM did really include respect for the individual. Many here can sight numerous examples of that from personal experience or from co-workers. But, even without guarantees, there were detailed promises made by 1st, 2nd, and higher level managers that IBM would take care of it's loyal employees. Corporate and HR made many statements over the years about the generous pension and benefits programs being solvent and we were always told that our true salaries should include those benefits when comparing them to other companies. Sure, it wasn't a guarantee in writing, but there was no question to any of the employees a decade or more back that a firm commitment by the company was in place. Now we know better and we know enough to want everything in writing. -Anonymous-
    • Comment 1/23/07: I came to the company as the result of an acquisition. From what I hear, this was once a great company to work for. It sure doesn't feel that way today. I've worked for several other companies in my career, and I am somewhat amazed that a company that treats its employees so nastily and whose main product now seems to be bureaucratic sludge is still in existence. A question for the folks who have been here a while: When did the de-evolution begin, and what started it? -Anonymous-
  • Pension Comments page
  • Raise and Salary Comments
    • Comment 1/20/07: Salary = 99,000 base in 2006 & 50K in comm; Band Level = 9; Job Title = Client Manager; Years Service = 21; Hours/Week = 50-55; Your Gender = M; Div Name = S&D; Location = VA; Message = consistent 2+ performer. Company has moved the sales folks to a 6 month quota this year. After 6 months quota is reset. Like pushing towards two year end closes w/i one calendar year. As part of announced sales plan, all raises have gone away. The 3% you would normally get (if you were lucky) will go into a commission bucket. So, with no more raise in base pay .-Anonymous-
    • Comment 1/20/07: Salary = 76k; Band Level = 7; Job Title = Advisory I/T Specialist; Years Service = 7; Hours/Week = 50+; Your Gender = M; Location = East Coast; Message = Looks like it's time to ask for a raise. -NA-
    • Comment 1/21/07: Salary = 62k; Band Level = 7; Job Title = Staff Professional; Years Service = 28; Hours/Week = 40+; Your Gender = Male; Div Name = 48; Location = mobile; Message = I never thought I would have to decide between paying my son's college tuition or paying for a personal medical procedure. Thank's IBM for screwing us. I'm making sure my son does NOT make the same mistake I did by trusting big business to honor their social contract with employees. See you on the bread lines. -nomore spam-
    • Comment 1/22/07: Is there a point to this? When the sample size gets large enough, I think we'll find that salaries are distributed within the ranges that IBM happily shares with us for our band/region. Alliance reply: The point is to break the secrecy of pay levels. "IBM happily shares with us"? Are you kidding? -Anonymous-
    • Comment 1/26/07: Salary = 115K; Band Level = 9; Job Title = Software Engineer; Years Service = 28; Hours/Week = 60+; Your Gender = Male; Div Name = STG; Location = Tucson; Message = Not your fathers IBM. This place wreaks of incompetent management and totally insane tactical execution. Anything Long Term is of little value as it won't bring revenue into the current quarter. How short sighted can we get. -Anonymous-

Vault Message Board Posts
Vault's IBM Business Consulting Services message board is a popular hangout for IBM BCS employees, including many employees acquired from PwC. Sample posts follow:
  • "band6er might be my clone" by "consultantgal83". Full excerpt: that's actually scary how similar band6er's comments are to what i think about starting at ibm. i'm a band 6 as well, i've been here for almost 1.5 years and it's safe to say i'd be here for another 1.5 before getting promoted, so i'm getting the hell out of here. and fast.
    i was so positive and naive about ibm in the beginning. i would read dose's passages and think god this guy needs a hobby but wonder simultaneously if i should heed the advice. well i didn't. the only positives i have for ibm is that i did receive two raises and a bonus during my time here, but i quickly learned no amount of $ would keep me happy at this job. the awful job locations, the lifestyle, the mundane work i could have done as a 10 year old is really quite depressing. i just hope i can get a good job. i hear mcdonalds is hiring. i think that's my best lead.
  • "Raises" by "glo779". Excerpts: Whoever told you there were no $$ was lying. If you are indeed paid below the market or among the bottom 20% of B7, you should have received an out of cycle raise in Dec. I know at least 3 SAMs who gave their employees a 5% to 15% "surprise" raise in Dec because they were grossly underpaid (there is a vault thread on this topic). These lucky folks were selected by their SAMs. If you know some people who got promoted within the last year or two and those people are willing to share info with you, you will find that promotional raises range from 2% to 6%. If you are your SAM's golden eyed boy and get 6%, even then the pathetic raise is not worth staying for.
    I hope you are not div 16. There is one particular group within that div that has been low balling many of its employees and rewarding the already overpaid folks. Rich are getting richer and poor poorer. Every year people from this group get "sympathetic" hearing from their SAMs and get the regular 2%-4% raise at the end (if at all that much). I know at least one SAM and one PAL who continue to pay a key role in widening the wage gap. There has also been some talk of discrimination. Sorry, can't elaborate more.


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