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6, 2000 April, 2000

Highlights—August 18, 2012

  • Yahoo! IBM Pension and Retirement Issues message board: "Latest numbers for IBM" by Lee Conrad. Excerpts: Latest numbers for IBM: Our sources tell us that the number of regular IBM US employees is now at 92,000. Down from 98,000 for 2011. Number of US executives has increased. Lee Conrad, National Coordinator, Alliance@IBM CWA Local 1701.
  • Wall Street Cheat Sheet: IBM India IGNITES Salary Raises and 3 Dow Spotlight Stocks. By Mark Lawson. Excerpt: International Business Machines Corporation’s (NYSE:IBM) India division issued salary increases that were higher than anticipated this year, when compared to the single digit rises at Indian information tech firms, according to the Economic Times. Several workers at IBM reported that the increases were between 10 and 25 percent, depending on seniority levels and the business division involved.
  • Mid-Hudson News: Union Workers present IBM with raspberry “Hall of Shame” medal. Excerpts: Union workers held a rally outside the Dutchess County Office Building Wednesday afternoon, criticizing IBM for taking public tax incentives while they say Big Blue created no new jobs. The event culminated with a mock “Hall of Shame” award presented to the corporation, formerly one of the largest local employers ...

    A fictional character, dressed up like the millionaire from the board game Monopoly, accepted the medal on behalf of IBM, while mocking taxpayers.

    “IBM is a true shining example of a corporation that cashes in on tax breaks in the name of job creation,” said SEIU Local 200 Secretary-Treasurer Michael Lonigro. “They fail to create community benefits, or any jobs whatsoever.” ...

    Local resident Carolyn Phillips was laid off from IBM. “My job and many others were eliminated in 2007,” she said. IBM hired her back in 2010 as a temp, at half pay with no benefits. Ten months later, the position was outsourced to Argentina, she said.

  • Atlanta Journal-Constitution, courtesy of the Charlotte News & Observer: Evaluating employees with forced rankings is now passé. By Michael E. Kanel. Excerpts: Many American companies that had adopted a much-vaunted employee evaluation system have lately been turning away from it. Known as “stacked ranking” or “forced ranking,” the process made famous by GE is really just a version of what teachers call grading on the curve – a few people at the top, a few at the bottom and the rest clumped in the middle.

    The practice leaped into the spotlight – at least for people who study how companies perform – when Vanity Fair’s August issue published a profile of technology icon Microsoft. The company’s malaise, the author argued, was partly pegged to its evaluation system. ...

    Vanity Fair notes that Apple now has more revenue from one product, the iPhone, than mighty Microsoft has in all its businesses combined. The article, by Kurt Eichenwald, portrays the company’s culture as “cannibalistic.” Microsoft’s response to the Vanity Fair story: The company’s performance review system is designed to “provide the highest rewards to employees who have the highest impact on our business success.”

    Stacked ranking was popularized by GE during the much-touted tenure of Jack Welch, and was adopted by thousands of companies. Yet in 2004, just a few years after Welch retired, GE itself stopping using it. ...

    GE still grades employees on their performance, but there is no mandate to give a certain percentage of either high grades or low marks, Semper said. “We found that at times, we were unfairly putting people there. We don’t get to that rating now by comparing people to one another.” ...

    According to surveys of “high-performing” companies by the Institute for Corporate Productivity, the percentage using forced ranking has plummeted from 49 percent to 14 percent in just two years.

    But why? Doesn’t ranking make a certain sense? What is wrong with picking out top performers and targeting poor ones? A lot, say many experts and human resource professionals.

    First and foremost, say critics, ranking undermines teamwork. Why help someone if that might vault them above you? Why ask for assistance if it hurts your standing? In many workplaces, teamwork is essential. ...

    At its worst, ranking produces a toxic culture in which workers aim to make themselves look good and rivals look bad – not focusing on making the team succeed. Microsoft employees, for example, for many years made money on their own stock. But the stock price stopped surging.

    “Then, the only way to make more money was to step over each other,” said Peter Cohan, a Massachusetts consultant in management and venture capital. “It twists the way that people behave.”

    A forced ranking system can be unfair. What if all team members are competent? What if the difference between the best and the worst is marginal? What if different managers judge differently or – even worse – play favorites? And what about people who have different strengths? ...

    What’s more, forced ranking can be expensive. Companies could be cutting people they’ve already spent a lot of money hiring and training, said Deb Keary, vice president of human resources for the Society of Human Resources Management. ...

    “There is a desire to have a single, one-size-fits-all solution and there is never one size that fits all,” he said. “There is no shortcut to good management of people.”

    Selected reader comments follow:

    • You see only a few companies that have good management. Most companies are managed by self serving cronies. Companies for the most part will always be run by a few people at the top making all the money, while all the workers doing all the work and very little money. The poor economy encourages employers to use the excuse of the poor economy, to abuse workers, knowing they may not be able to get another job. Building employee loyalty and morale is a thing of the past. Which is one more reason jobs are going over seas, or going to foreign owned companies here in the USA.
    • Jack Welch. What a greasy-greedy you-know-what. He "left" GE with a net worth of more than $270 million, and that was AFTER he paid his second wife, Jane, $180 million. Let's not forget that third wife, Suzy, was editor of the Harvard Business Review and was advancing "stacking" in HBR. Like all good corporate lemmings who read HBR, if it's in HBR, then we must implement it. Thanks Jack. Thanks Suzy. You guys a real lulus.
    • This is so true and it is why we have to change the IBM culture before it destroys us. At one time in our business this was the right thing to do. We were struggling and it helped get us out of that struggle. Now, it is time for another change that will strengthen teamwork and encourage it. It just might be the key to our successful road to 2015!

  • Philadelphia Inquirer: Without a Pension's Security. Once, Americans could expect enough money to take care of themselves after a life of work. The promise was pulled away. By Donald L. Barlett and James B. Steele. Excerpts: In “The Betrayal of the American Dream,” Donald L. Barlett and James B. Steele revisit their 1991 Inquirer series, “America: What Went Wrong,” in which they forecast a decline of the middle class. Now, they document how actions going back three decades have left millions of Americans in economic ruin. Excerpts from their book continue in Currents every Sunday through Aug. 19.

    Of all the statistics that show how the rules are changing for middle-class Americans, here is one of the most alarming: Since 1985, corporations have killed 84,350 pension plans - each of which promised secure retirement benefits to dozens or hundreds or even thousands of men and women.

    Corporations offer many explanations and excuses for why they are cutting down a vital safety net for Americans, but it all comes down to money. The money saved by not funding employee pensions now goes for executive salaries, dividends, or some pet project of a company's CEO. Congress went along and even compounded the betrayal by pretending that the change was in employees' best interest.

    What this means is that fewer and fewer Americans will have enough money to take care of themselves in their later years. As with taxes and trade, Congress has been pivotal in granting favors to the most powerful corporations. Lawmakers have written pension rules that encourage businesses to underfund their retirement plans or switch to plans less favorable to employees.

    These rules deny workers the right to sue to enforce retirement promises. Lawmakers have also written bankruptcy regulations to allow corporations to scrap the health-insurance coverage they promised to employees who retired early - including workers who were forced into early retirement. Congress has enacted legislation that adds to the cost of retirement. One by one, policies that once afforded at least the possibility of a secure retirement to many seniors have been undermined or destroyed, while at the same time Congress has allowed corporations to repudiate lifetime-benefit agreements.

    Pensions were once an integral part of the American dream, a pledge by corporations to their employees: For your decades of work, you can count on retirement benefits. In return for lower earnings in the present, you were promised compensation in the future when you retired. Not everyone had a pension, but from the 1950s to the 1980s, the number of workers who did rose steadily - until 1985. Since then, more and more companies have walked away from pensions, reneging on their promise to their employees and leaving millions at risk. Before today's workers reach retirement age, decisions by Congress favoring moneyed interests will drive millions of older Americans - most of them women - into poverty, push millions more to the brink, and turn the golden years into a time of need for everyone but the affluent. For all of this you can thank the rule makers of Wall Street and Washington, who have colluded to rewrite the rules on retirement in ways that will harm millions of middle-class Americans for decades. Here is what they have done...

    From 1990 to 2012, the financial industry - which includes stockbrokers, investment houses, brokerage firms, and financial planners - contributed $875 million to members of Congress, mainly Republicans, according to the Center for Responsive Politics. From 1998 to 2011, the period for which data are available, the securities and investment industry spent an estimated $900 million lobbying Congress and federal agencies.

    For the industry, it was money well spent. Corporations saved tens of millions of dollars by eliminating pensions, and the substitution of 401(k)s created a profitable new industry in the financial sector. Studies show that the administrative costs of 401(k)s are higher than traditional pensions, in part because there is so much overhead as a result of an army of players grasping for a piece of the $3 trillion industry. Even more distressing, the returns of 401(k)s have been, with some exceptions, inferior to those of pensions. Not to mention all the losses suffered during the great crash.

  • Pension Rights Center: Pension Rights Center Applauds Senator Harkin for Bold Proposal to Solve Nation’s Retirement Crisis. Excerpts: Today the Pension Rights Center applauded Senator Tom Harkin, chairman of the Senate Health, Education, Labor, and Pensions Committee, for his new report, The Retirement Crisis and a Plan to Solve It.

    “Senator Harkin’s bold report identifies the causes of the retirement crisis and proposes imaginative and realistic solutions to the address the crisis,” said Karen Friedman, the Center’s executive vice president and policy director. “The report makes a compelling case for a new private retirement system that would provide a meaningful supplement to Social Security for the millions of employees whose employers do not offer pensions or retirement savings plans. The report also makes common-sense recommendations for strengthening Social Security, the foundation of our nation’s retirement system. Together, these measures would help ensure that all Americans can retire with security and dignity.” ...

  • Glassdoor IBM reviews. Selected reviews follow:
    • Work w/highly talented people, on a winning strategy. Watch out for corp. politics plus ageism” Former Manage. Pros: IBM attracts and nurtures some of the brightest minds in any field. The Smarter Planet strategy is spot on. They provide many HR resources and programs for development. It's very cool to work with people in many countries at the same time. Good career mobility. Cons: The politics are fierce and snap judgements are made before projects can prove themselves out. Poor management behavior tolerated /promoted (public tear downs, intolerance for different styles.) Overall atmosphere of distractedness- people are never paying 100% attention even in person - email, chat, text even during performance reviews. Advice to Senior Management: Focus on coaching and evaluating executives and managers on how they actually manage, atmosphere they set.
    • Services unit (GBS) is just a body shop” Current Employee in Washington, DC. Pros: Brand recognition is good. State of the art technology company. Broad range of technologies and opportunities to use them. High business ethics.

      Cons: Little respect for employees. Written direction that if you take your vacation, you should work extra to make up for it. Documented minimum acceptable work week is 45 hours. Education opportunities are rare, and usually only offered after hours or weekends. Business is managed on an individual utilization model that motivates employees to charge more hours, not to do a better more efficient job for our services customers. Employee year end evaluations are first measured on who has billed the most hours.

      Little opportunity for internal innovation. IBM just buys innovation in the form of acquisitions.

      Way too much bureaucracy. Every business opportunity has 6-10 people in charge, client executives, delivery executives, business development executives, practice area executives, sector executives, geography executives, and the list goes on.

      Advice to Senior Management: Manage the business, not individual utilization. Get rid of all the executive overhead.

    • Stagnant pay and benefits, US layoffs” Current Employee in East Fishkill, NY. Pros: IBM has flexible work schedule, however you can easily have a job that requires 50+ hrs/week. They have a rich network to draw from. Cons: Pay raises are non existent, especially in finance. Layoffs are periodic and continuous which creates underlying resentment. IBM's plan is to reduce US headcount and increase overseas headcount. Stock EPS projections have built in employee cost reduction (benefits/retirement).
    • They do lay-off every quarter - watch your back!” Former IT Specialist in Glendale, CA. Pros: Decent salary/benefits, good 401k, good health care. Cons: 80 hour work weeks, they do layoffs every quarter. No job security. Advice to Senior Management: Management was NOT supportive at all.
    • Nothing special anymore, decent place to build resume.” Former Employee in Chicago, IL. Pros: Benefits, telecommuting, looks great on resume. Depending on business unit, work life balance can be a challenge. Cons: Internal administrative processes appear more important than actual selling or customer face time. Layoffs are semi-annual events.
    • IT Specialist” Current Employee. Pros: Solid, respected, innovator, competitive, respects diversity. Cons: Health buster, stressful, exhausting, cheap, disloyal to employees
    • Offshore everything to low cost centers” Current Sales in New York, NY. Pros: Brand recognition. Marketing programs. Not much else Cons: Driving cost down, down, down. Low morale due to the beat down. Advice to Senior Management: Listen and act, be bold
    • Unfulfilling” Current Employee. Pros: IBM is a good place to work (or at least start your career) if you have specific architectural skills, and are measured on a specific set of objectives. They have great brand equity and this opens doors. Cons: I would caution anyone who is pursuing a career with IBM to go in with their eyes open. I am not a disgruntled employee by any means, but the corporate structure and policies can suck the life out of you if you're not smart about how you manage your career. Advice to Senior Management: PLEASE start focusing on getting back on track with employees in mind, rather than the almighty bottom line. The 2015 plan deployment as it is being implemented today, is not sustainable and I seriously question whether or not it will truly benefit the company in the long run. Certainly in the short term it benefits shareholders, albeit at the cost of the employees who have seen their jobs move to low cost offshore countries.
    • Big company with lots of bureaucracy” Current Employee in San Jose, CA. Pros: IBM is the world's biggest company. They do a good job of managing costs in order to meet financial projections. They provide lots of opportunity for career development and training. Cons: Lot's of bureaucracy. Difficult to get your job done unless you understand all of the processes and procedures. They don't understand Silicon Valley very well so it makes it hard to recruit good employees. No stock options. Advice to Senior Management: Make it easier for employees to get their jobs done. Communicate better.
    • Great Company, Brand Recognition is top notch” Current Senior Consultant in Washington, DC . Pros: – Great benefits like 401K, Health/Dental. Competitive salary for new hires and great training program. Diverse workforce, smart people and managers, culture is great -- as well as a nice work/life balance -- when you aren't trying to meet a deadline. Cons: Raises are minimal, performance reviews are done by project managers, while promotions are done by managers whom you rarely see. High utilization targets, and bonuses do not reflect the hard work and long hours.
    • Great heritage and breadth of work available. Bad if you end up in the wrong part of the company.” Current Employee in London, England (United Kingdom). Pros: A very large IT company who provides hardware, software and services in almost all industries. So the opportunities to grow are there, if you can develop your network and strike out of your current area (should you want to). Cons: Too much focus on quarterly profits. There's always a reason to hold back bonuses or pay rises.
    • Very Bad” Former IT Consultant in Montreal, QC (Canada). Pros: Chance to learn IBM products. Work Life Balance. IBM Canadian experience was still better than IBM India experience. Cons: Less Salary, Management Bureaucracy. Tension between IBM India and IBM Canada and competition to send the work to India.
    • Desperate times” Current Project Manager. Pros: Good colleagues but little opportunity to socialise due to long hours; variable work which can be interesting, Cons: Very poor salaries, no pay rises, long hours, diminishing benefits, an annual review system which is totally opaque, unbelievable red tape. Employees are exploited. IBM's values sound great but are ignored by the management. Advice to Senior Management: Think of something other than your fat cat bonuses. Your employees are as vital to the success of the company as you are.
    • Not worth it” Current Financial Analyst in Rochester, MN. Pros: Good pay and benefits to start. Cons: Poor moral, poor education, lots of turnover. Advice to Senior Management: Improve the education of new hires. Act like you care about the work that is being done.
    • Lacks Intelligence” Former Employee in Lake Mary, FL. Pros: Benefits are the only thing that this company provides. Cons: Lack of management skills, care for workers, and innovative products. Has become nothing but a sweat shop for avarice corporate leaders.
    • This long ago stopped being "our father's IBM"” Former Employee in Armonk, NY. Pros: Name recognition; still clings to some of the core values. Cons: Too focused on short-term results. Constant cost-cutting by reducing headcount, but workload remains the same. So you're always required to "do more with less." Most technical jobs being sent overseas. Advice to Senior Management: After sending the technical jobs to the BRIC countries you'll find that while you DID reduce costs, you also reduced the experience and, in many cases, professionalism of your workforce. Whatever happened to "Our people are our most important resource"? This will come back to bite you.
    • IBM Australia Services - treated like dirt when insourced” Current Systems Analyst in Melbourne (Australia). Pros: Good Sick Leave (1 year out of 2 in a rolling window). Can work from home (faster internet that way anyway). Cons: Poor bonus scheme (if paid at all). Lower than CPI pay rise. No training. No travel. Low powered mediocre laptops. VGA fuzzy screen. Slow Internet. Useless Office tools (Lotus etc). No Tea/Coffee/Breakout room facilities. Xmas functions not very good. No stationery. Hot desking. Cannot move between accounts. Dreary dilapidated office. Everything is done via spreadsheets and emails flying about. No professional process. Advice to Senior Management: Be more like NASA and less like Scrooge.
    • Review of IBM's global delivery organizations in India and not of IBM itself” Former Employee in Bangalore (India). Pros: Laid-back lifestyle; good work-life balance; decent money by India standards; easy work hours; employees stroll in anytime between 9.30 to 12 noon; less pressure; one often leaves by 3 in the afternoon and continues work at home (almost entirely due to traffic congestion on Indian roads between 4 in the evening and 9 in the night); processes are steadily getting built; rewards and recognition programs are steadily being put in place. Cons: Very slow career growth; lower single-digit salary hike; very slow promotion opportunities; work is often of no consequence; dismally low opportunities to bag client-facing roles; completely back-end work with no visibility to decision-makers who are usually in IBM's worldwide geographies; IBM has these global delivery organizations in its consulting practice, its market insights practice and its marketing practice - all based in Indian and Chinese cities. Advice to Senior Management: IBM must have career growth plans in place for meritorious employees, which must include the option to move out of the low-cost back-end global delivery centres into geo-based profit centres.
    • No smarter planet, no international opportunities, no career progression, low pay. Very easy work, very nice people.” Former Employee. Pros: –90% of people are nice. Very flexible, work from home, etc. Good education opportunities if you get the right manager. No blame culture. Cons: Poor career progression, victimised by the matrixed organisation. Low pay. Endless bureaucracy. Extremely cost focused and tightly controlled budget. Stuck with outdated technology internally. Cool marketing stories around smarter planet are all but invisible to the mere mortal employee. Promises of role changes and international secondments are not nearly as achievable. Experience varies wildly from department to department. Advice to Senior Management: The graduate program is very messy and comes across as an exercise in acquiring highly motivated cheap labour. GBS grads are valued much higher than GTS graduates. Annual salary review has to at least match inflation. Make employee progression a measurable outcome of every manager's annual review. Conduct reviews quarterly with new hires.
    • A place for all those who doesn't qualify for a place in a good company” Current Employee in Bangalore (India). Pros: Not much work pressure, occasionally allows work from home.

      Cons: Loads. Firstly they will boast themselves to 'hire the best talent' in the market, but that is what Google, Amazon and Microsoft do; what IBM does is go to colleges and recruit leftovers, students who couldn't manage a job in another company, asks childish grade 10 questions in the interview process (people who don't speak a single word in the GD often crack the process comfortably), recruit them with overwhelming promises of 'excellent career opportunities, 100 year old software company, largest number of patents', blah blah blah. So in that sense, IBM doesn't recruit the best, it recruits the very worst, and if a meritorious student is unlucky enough to fall in the midst, no way, he will get stuck. The salary is less than meagre, but there is no dearth of showmanship, attitude and aplomb. The job sucks as usual, everybody will get that profile which he or she doesn't want, there will be zero consideration for one's already acquired skills and knowledge. The annual increment is again less than meagre, and in 5-6 years, you won't be surprised if your monthly salary hasn't increased by more than 4-5k.

      Advice to Senior Management: Have some balls, stop boasting that you 'recruit the best talent' and agree that you 'recruit the worst, put whatever good it contains to be in the same stream, and pay like beggars." I would have advised them to pay better, but I know that will be of no use, so why care?

    • Does value people. Some concepts gone wrong.” Former Employee in Singapore (Singapore). Pros: Company does value people (as compared to other service providers). Salary is OK but benefits are rather good. -You get to work with the occasionally brilliant people. Pretty good global brand name. Cons: If you are in an account, you get affected by the crap in the account (basically passed down from the customer). If you are not in any account, you get the IBM billing crap. Bosses want you to do stuff but refuse to give you codes to bill your time to to cut costs. Said bosses at the end of the month will then come and hound you on why you have insufficient billed time. Too much information that needs to be collated and reported to higher ups; no sanity checks done on why the same information has to be reported to different teams in different templates. People who tend to go far in IBM are usually those who put in 200% and basically has no life outside work. More and more good people moving to other positions or leaving company, leaving with imbeciles that you have to work with. Advice to Senior Management: Cutting costs is not just about numbers. When you don't hire, you need to think about how the work needs to be reduced.
  • Alliance for Retired Americans: Friday Alert. This week's articles include:
    • Mitt Romney Chooses Paul Ryan as His Running Mate
    • Biden Guarantees There will be No Changes to Social Security!
    • Easterling Weighs in on Democratic Party’s Platform on Social Security, Medicare
    • Welcome, Montana…
    • Judge Refuses to stop Pennsylvania Voter ID Law; Part of Florida Law Rejected
  • CBS News: What are the best retirement calculators? By Steve Vernon. Excerpts: In my first post in a series this week on the efficacy of online retirement calculators, I showed how widely these tools can range in the savings they recommend -- from 9 percent of a person's pay to almost 70 percent. This makes it hard for people to understand how much they need to save for retirement.

    In this post I'll dig deeper into the calculators I tested, which are sponsored by AARP, CNNMoney, the Financial Industry Regulatory Authority (FINRA), MSNMoney, Schwab, SmartMoney and T. Rowe Price. (You'll want to read my previous post for background on this post, if you haven't already.)

  • Financial Times: Romney link to union suppression ruling. By Robin Harding. Excerpts: A company controlled by Republican presidential candidate Mitt Romney’s Bain Capital ran an unlawful campaign to suppress a potential union in the 1980s, according to US court and federal agency documents. ...

    “The anti-union activities in this case are not merely unfair labour practices as Key argues, but blatant, grievous, wilful, deliberate and repeated violations of the Railway Labour Act,” Roger Foley, federal judge for the District of Nevada, wrote in 1992, in a case brought by two Key pilots.

News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • New York Times: Ambiguity in Health Law Could Make Family Coverage Too Costly for Many. By Robert Pear. Excerpts: The new health care law is known as the Affordable Care Act. But Democrats in Congress and advocates for low-income people say coverage may be unaffordable for millions of Americans because of a cramped reading of the law by the administration and by the Internal Revenue Service in particular.

    Under rules proposed by the service, some working-class families would be unable to afford family coverage offered by their employers, and yet they would not qualify for subsidies provided by the law. ...

    The law specifies that employer-sponsored insurance is not affordable if a worker’s share of the premium is more than 9.5 percent of the worker’s household income. The I.R.S. says this calculation should be based solely on the cost of individual coverage for the employee, what the worker would pay for “self-only coverage.”

    Critics say the administration should also take account of the costs of covering a spouse and children because family coverage typically costs much more.

  • Washington Post opinion: Feeling ill over the Medicare debates. By Ruth Marcus. Excerpts: The Republican National Committee chairman says President Obama has “blood on [his] hands” for cutting Medicare. Mitt Romney blasts the president for having “robbed” the program of $700 billion. ...

    Let’s pause for a bit of fact-checking.

    The cheeky response to the critique of Obama’s Medicare cuts is that Ryan assumes those very cuts in his budget — the one passed by the House and endorsed as “marvelous” by Romney. So there are robbers galore and blood to spread around. ...

    The on-the-merits response is that the cuts — more accurately, reductions in the rate of growth — involve lower reimbursements to hospitals and nursing homes, reduced payments to insurers, higher premiums for better-off beneficiaries, and savings from reforms such as lower hospital readmissions.

  • Forbes: Obamacare Rebate Means Perks, Day Off From Health Costs. By Bruce Japsen. Excerpts: Lower premiums, a day off from health costs or maybe a wellness visit may be headed to certain workers in the coming months thanks to a part of the federal health law that requires a rebate from plans that don’t spend at least 4 of every 5 premium dollars on medical care.

    The perks are made possible from more than $1 billion in rebates from health plans that spent too much on administrative overhead. Individuals who buy health insurance policies on their own should have already received checks, but employers have the next three months to decide how to allocate the money to their workers and in what capacity. Most major insurers like UnitedHealth Group (UNH), Humana (HUM) and Aetna (AET) paid rebates to individuals and employers. Here’s a list of health plans and payouts across the country.

  • Fox Business News: Boomers Need Health-Care Costs Reality Check. By Casey Dowd. Excerpt: When it comes to retirement planning, experts say most boomers overlook the cost of health-care. In fact, a new study from the Society of Actuaries shows nearly half of Americans between the ages of 45 and 70 years have no financial plans in place to protect themselves against outliving their assets and the rising cost of health care.
  • Washington Post: The real Medicare question. By Eugene Robinson. Excerpts: Republicans and Democrats are being equally nasty in their campaign rhetoric, but they’re not being equally truthful. To cite one example, much of what the GOP is saying about Medicare simply isn’t supported by the facts.

    Former New Hampshire governor John Sununu, one of Mitt Romney’s more pugnacious surrogates, almost had a conniption fit Tuesday when CNN’s Soledad O’Brien pressed him on his assertion that President Obama “gutted Medicare by taking $717 billion out of it.” As Sununu knows but refused to acknowledge, this is not true. ...

    The Affordable Care Act, otherwise known as Obamacare, slows the rate of growth of payments to Medicare service providers by more than $700 billion over a decade. But no impact is felt by seniors themselves, whose benefits and costs remain the same. ...

    Ryan’s plan — which Romney has semi-endorsed and now cannot credibly disown — effectively would “end Medicare as we know it” — the phrase voters will hear a bazillion times between now and Election Day, especially those who live in Florida. This is one piece of campaign rhetoric that happens to be true. ...

    There is no reason Medicare cannot be reformed as social insurance. Other industrialized countries provide universal health coverage for their entire populations for a fraction of what we spend in the United States, and those other countries achieve equal or better health outcomes. Surely we can continue to do so for those of retirement age — if we still want to.

  • New York Times editorial: Truth and Lies About Medicare. Excerpts: Republican attacks on President Obama’s plans for Medicare are growing more heated and inaccurate by the day. Both Mitt Romney and Paul Ryan made statements last week implying that the Affordable Care Act would eviscerate Medicare when in fact the law should shore up the program’s finances. ...

    A Republican attack ad says that the reform law has “cut” $716 billion from Medicare, with the money used to expand coverage to low- income people who are currently uninsured. “So now the money you paid for your guaranteed health care is going to a massive new government program that’s not for you,” the ad warns.

    What the Republicans fail to say is that the budget resolutions crafted by Paul Ryan and approved by the Republican-controlled House retained virtually the same cut in Medicare.

    In reality, the $716 billion is not a “cut” in benefits but rather the savings in costs that the Congressional Budget Office projects over the next decade from wholly reasonable provisions in the reform law.

    One big chunk of money will be saved by reducing unjustifiably high subsidies to private Medicare Advantage plans that enroll many beneficiaries at a higher average cost than traditional Medicare. Another will come from reducing the annual increases in federal reimbursements to health care providers — like hospitals, nursing homes and home health agencies — to force the notoriously inefficient system to find ways to improve productivity. And a further chunk will come from fees or taxes imposed on drug makers, device makers and insurers — fees that they can surely afford since expanded coverage for the uninsured will increase their markets and their revenues.

    And a further chunk will come from fees or taxes imposed on drug makers, device makers and insurers — fees that they can surely afford since expanded coverage for the uninsured will increase their markets and their revenues. ...

    The Republicans also argue that the reform law will weaken Medicare and that by preventing the cuts and ultimately turning to vouchers they will enhance the program’s solvency. But Medicare is not in danger of going “bankrupt”; the issue is whether the trust fund that pays hospital bills will run out of money in 2024, as now projected, and require the program to live on the annual payroll tax revenues it receives.

    The Affordable Care Act helped push back the insolvency date by eight years, so repealing the act would actually bring the trust fund closer to insolvency, perhaps in 2016.

News and Opinion Concerning the "War on the Middle Class"
Minimize "It is a restatement of laissez-faire-let things take their natural course without government interference. If people manage to become prosperous, good. If they starve, or have no place to live, or no money to pay medical bills, they have only themselves to blame; it is not the responsibility of society. We mustn't make people dependent on government- it is bad for them, the argument goes. Better hunger than dependency, better sickness than dependency."

"But dependency on government has never been bad for the rich. The pretense of the laissez-faire people is that only the poor are dependent on government, while the rich take care of themselves. This argument manages to ignore all of modern history, which shows a consistent record of laissez-faire for the poor, but enormous government intervention for the rich." From Economic Justice: The American Class System, from the book Declarations of Independence by Howard Zinn.

  • Wall Street Journal: Treasury Eyes Funds Hidden Overseas. By John D. McKinnon. Excerpts: The Treasury Department released new details Thursday of a plan to ferret out Americans' global tax dodging, though some lawmakers and banks remain concerned about the initiative's scope and regulatory costs.

    Treasury officials said they hope to finalize the system's basic rules by the fall and expressed confidence it would be on track for implementation by 2014 as scheduled. Congressional experts said the new system would recover $8.7 billion in tax revenues over 10 years. ...

    The rules are mandated under the Foreign Account Tax Compliance Act, or FATCA, passed by Congress in 2010. It requires foreign banks and other financial institutions to report in detail to the U.S. on Americans' foreign accounts. This would help the government learn whether some Americans aren't paying taxes on earnings overseas.

  • National Public Radio: Calculate Your Taxes Under Obama’s Vs. GOP’s Tax Cut Proposals. Excerpt: Citizens for Tax Justice has just released an interactive tool that calculates what you would pay in taxes should Obama’s tax cut extension pass, should the GOP’s tax cut extension pass, or should the Bush tax cuts simply expire.

    Try it out!

    Use the Basic Calculator if you are an employee, your income comes entirely from your wages or salary, and you take the standard deduction.

    Use the Detailed Calculator if you have other types of income or if your situation is more complicated.

  • Washington Post opinion: Understanding the Ryan plan. By Matt Miller. Excerpts: The striking thing about Paul Ryan’s ascent is the gulf between his proposals and the way the media have characterized them. Since Mitt Romney named Ryan to the ticket on Saturday, the news has been filled with talk of the “fiscal conservative” (NPR) “intent on erasing deficits” (New York Times) who has become “the intellectual heart of the Republican Party’s movement to slash deficits” (The Post). All of this is demonstrably false. Ryan’s con has succeeded largely because Democrats haven’t sensed the political salience of assailing his plans from the right; instead, they’ve chosen to slam only Ryan’s regressive priorities and Medicare scheme.

    This strategic error allows the presumption that Ryan, and thus Romney, are the true apostles of fiscal responsibility in this race, a value important to the voters who will decide November’s outcome. But the con has worked in part because budgets make journalists’ eyes glaze over, and once the phony Ryan meme took hold two years ago it became hard to dislodge. ...

    Ryan is not a “fiscal conservative.” A fiscal conservative pays for the government he wants. Ryan never has. His early “Roadmap for America’s Future” didn’t balance the budget until the 2060s and added $60 trillion to the national debt. Ryan’s revised plan, passed by the House in 2011, wouldn’t reach balance until the 2030s while adding $14 trillion in debt. It adds $6 trillion in debt over the next decade alone — yet Republicans had the chutzpah to say they wouldn’t raise the debt limit! (I remain mystified why President Obama never hammered home this reckless contradiction by insisting that the GOP “raise the debt ceiling just by the amount it would take to accommodate the debt in Paul Ryan’s budget.”) ...

    Ryan says that on our current path we will “transform our social safety net into a hammock, which lulls able-bodied people into lives of complacency and dependency.” But I’ve never understood what hammock Ryan is talking about. If programs for seniors haven’t been a “hammock” until now, simply doubling the number of people eligible for them can’t turn them into a “hammock” tomorrow. We have an aging population challenge and a health-cost challenge. We don’t have a “hammock” challenge. ...

    Ryan is not a truthteller. Ryan boasted on Saturday that he and Romney have “the courage to tell you the truth.” But political courage means telling your base things they don’t want to hear. The truth Ryan and Romney won’t tell — which explains the staggering debt in Ryan’s plan — is that taxes need to rise as the boomers retire. (The truth Democrats won’t tell is that raising taxes on the rich alone won’t suffice.) ...

    But on Medicare...I can hear the Democratic groans coming, but Ryan deserves credit here. Ryan leaves Medicare on its current outsized trajectory for the next decade, as spending soars from $560 billion to $950 billion. Because of our uniquely inefficient health-care sector, which leaves us spending twice per capita what other wealthy nations spend, the voucher he calls for thereafter would suffice to buy seniors terrific care everywhere but here. Even if his approach is imperfect, Ryan is right to challenge our Medical Industrial Complex to change.

  • Washington Times opinion: Paul Ryan and the triumph of theory. By E.J. Dionne Jr. Excerpts: If Paul Ryan were a liberal, conservatives would describe him as a creature of Washington who has spent virtually all of his professional life as a congressional aide, a staffer at an ideological think tank and, finally, as a member of Congress. In the right’s shorthand: He never met a payroll.

    If they were in a sunny mood, these conservatives would readily concede that Ryan is a nice guy who’s fun to talk to. But they’d also insist that he is an impractical ideologue. He holds an almost entirely theoretical view of the world defined by big ideas that never touch the ground and devotes little energy to considering how his proposed budgets might affect the lives of people he’s never met. ...

    How can Ryan justify his Medicaid cuts when, as the nonpartisan Kaiser Family Foundation found, they would likely leave 14 million to 19 million poor people without health coverage? How can he justify tax proposals that, as The New Republic’s Alec MacGillis pointed out, would reduce the rate on Mitt Romney’s rather substantial income to less than 1 percent? How can he claim his budgets are anti-deficit measures when, as The Post’s Matt Miller has noted, his tax cuts would add trillions to the debt and we wouldn’t be in balance until somewhere around 2030? ...

    But the issue in this election will be how Americans want to be governed. Republicans mock President Obama for still thinking like the professor he once was, yet in this race, Obama — far more than today’s conservative theorists and to the occasional consternation of his more liberal supporters — is the pragmatist. He’s talking about messy trade-offs: between taxes and spending, government and the private sector, dreams and the facts on the ground. In embracing Ryan, Romney has tied himself to the world of high conservative ideology. As liberals learned long ago, ideology usually loses.

  • New York Times editorial: The Romney-Ryan Plan for America. Excerpts: Mr. Romney hasn’t issued a real budget plan and appears to have no interest in doing so before the election, perhaps for fear that voters might realize how little they would like it. Mr. Ryan, on the other hand, has assembled two spending plans, both of which were passed by the House. While the country is fortunate they were never enacted, they reveal Republican priorities in a way that Mr. Romney up to now has avoided.

    Most voters know little about Mr. Ryan. Those who have heard of him are probably most familiar with his Medicare plan, which would turn the program into a voucher system that would pay beneficiaries a fixed amount for their medical care, leaving them on their own if the voucher did not cover their costs.

    This notion so alarmed the public last year that Mr. Ryan was forced to backtrack and leave the existing Medicare system as an option. Even so, the plan would leave older Americans on average with $6,400 in extra costs by 2022, according to the Congressional Budget Office.

    Even less familiar to voters are Mr. Ryan’s plans for the rest of the federal budget, which if anything are worse than his Medicare proposal. By cutting $6 trillion from federal spending over the next 10 years, he would eliminate or slash so many programs that the federal government would be unrecognizable. That has long been a goal of the Tea Party ideologues who support Mr. Ryan fervently, but it is not one shared by anywhere near a majority of Americans. ...

    He certainly can’t pretend to turn around the economy by eliminating the deficit. Mr. Ryan’s budget would not reach a surplus for 30 years, according to the C.B.O., because he would cut taxes, largely for the rich and for corporations, by $4 trillion. That’s even more than Mr. Romney’s extravagant tax giveaways, because Mr. Ryan would erase all capital gains taxes. Since investments are the principal income generators for Mr. Romney and millions of other high earners, Mr. Romney made the more prudent choice to cut capital gains taxes only for the middle class.

  • Center on Budget and Policy Priorities: Statement of Robert Greenstein, President, on Chairman Ryan's Budget Plan. Excerpts: The new Ryan budget is a remarkable document — one that, for most of the past half-century, would have been outside the bounds of mainstream discussion due to its extreme nature. In essence, this budget is Robin Hood in reverse — on steroids. It would likely produce the largest redistribution of income from the bottom to the top in modern U.S. history and likely increase poverty and inequality more than any other budget in recent times (and possibly in the nation’s history). It also would stand a core principle of the Bowles-Simpson fiscal commission’s report on its head — that policymakers should reduce the deficit in a way that does not increase poverty or widen inequality. ...

    Yet alongside these extraordinary budget cuts, with their dismantling of key parts of the safety net, the budget features stunning new tax cuts for the wealthiest Americans. These tax cuts would come on top of the average tax cut of more than $125,000 a year that the Tax Policy Center (TPC) estimates that people who make over $1 million a year will receive if — as the Ryan budget also proposes —policymakers make all of President Bush’s tax cuts permanent.

  • Center on Budget and Policy Priorities: New Tax Cuts in Ryan Budget Would Give Millionaires $265,000 on Top of Bush Tax Cuts. By Chuck Marr. Excerpts: Even as House Budget Committee Chairman Paul Ryan’s budget would impose trillions of dollars in spending cuts, at least 62 percent of which would come from low-income programs, it would enact new tax cuts that would provide huge windfalls to households at the top of the income scale. New analysis by the Urban-Brookings Tax Policy Center (TPC) finds that people earning more than $1 million a year would receive $265,000 apiece in new tax cuts, on average, on top of the $129,000 they would receive from the Ryan budget’s extension of President Bush’s tax cuts.

    The new tax cuts at the top would dwarf those for middle-income families. After-tax incomes would rise by 12.5 percent among millionaires, but just 1.8 percent for middle-income households (see Figure 1 and footnote 6). Low-income working families would actually be hit with tax increases.

  • The New Yorker: Judges for Sale. By Jeffrey Toobin. Excerpts: Campaign-finance discussions tend to focus on a) the Presidential race and b) the Supreme Court’s Citizens United decision, but the biggest outrage concerning money in politics has little to do with either. It involves elections that rarely receive the attention they deserve: those for judgeships.

    Thirty-eight states elect judges to their highest courts. (Fortunately, New York does not, though many lower-court judges in the state stand for election.) State courts decide about ninety-five per cent of the cases in American courts. The federal courts, where the judges are nominated by the President and confirmed by the Senate, hear only about five per cent, though those appointments get far more attention. Criminal prosecutions, civil lawsuits, child-custody matters, personal injuries—almost all are decided in state courts, under rules established by each state supreme court. ...

    A new report, issued yesterday by the left-leaning Center for American Progress, shows that the race for control of state judiciaries has become a rout. The report, entitled “Big Business Taking over State Supreme Courts,” found that,

    Fueled by money from corporate interests and lobbyists, spending on judicial campaigns has exploded in the last two decades. In 1990 candidates for state supreme courts only raised around $3 million, but by the mid-nineties, campaigns were raking in more than five times that amount, fueled by extremely costly races in Alabama and Texas. The 2000 race saw high-court candidates raise more than $45 million.
  • National Journal: The Obama and Ryan Budgets: By the Numbers. How President Obama and the GOP's VP pick would shape fiscal policy.
  • Huffington Post: As Social Security Turns 77, the Most Successful Program in American History Is Under Fierce Attack. By Senator Bernie Sanders (I-VT). Excerpts: In the 77 years since President Franklin Roosevelt signed Social Security into law on August 14, 1935, the retirement program has been one of the nation's most successful anti-poverty programs. Before Social Security existed, about half of America's senior citizens lived in poverty. Today, less than 10 percent live in poverty.

    Today, Social Security not only provides retirement security but also enables millions of people with disabilities and widows, widowers and children to live in dignity and security.

    In these highly volatile economic times, when millions of Americans lost their life savings in the 2008 Wall Street crash, it is important to remember that since its inception, through good economic times and bad, Social Security has paid every penny owed to every eligible beneficiary.

    Despite Social Security's popularity and overwhelming success, we are now in the midst of a fierce and well-financed attack against Social Security. Pete Peterson, the Wall Street billionaire, has pledged $1 billion of his resources to cut Social Security and other programs of enormous importance to the American people. Other billionaires and Wall Street representatives are also working hard to weaken or destroy Social Security and endanger the well-being of millions of Americans. We must not allow their effort to succeed.

    Let us never forget that the current deficit of $1 trillion was primarily caused by two unpaid-for wars and tax breaks for the rich. These policies were strongly supported by "deficit hawks." The deficit is also related to a major decline in revenue as a result of the Wall Street-created recession. The deficit is a serious issue, but we must not move toward deficit reduction on the backs of the elderly, the children, the sick and the poor. This would not only be immoral, it is bad economic policy. At a time when the wealthiest people in this country are doing phenomenally well and their effective tax rate is the lowest in decades, the top 1 percent must begin paying their fair share of taxes. At a time when large corporations are enjoying record-breaking profits, we have got to eliminate the huge corporate loopholes which result in a massive loss of federal revenue. At a time when we have tripled military spending since 1997, we must take a hard look at a bloated and wasteful Defense Department.

  • AARP: State ID Laws Restrict Older Americans. The battle against state photo ID laws that are obstacles to older voters. By Marsha Mercer. Excerpts: Voting is easy, right? You simply show up. If the poll worker isn’t a neighbor, you might be asked for identification, but most anything will do. Then your name is checked off the list, and you vote.

    Not so fast, James Madison. Over the past 18 months, state legislatures around the country have passed laws requiring voters to present government-issued IDs before they can cast a ballot. Some of the battles over the new requirements have moved from statehouses to courthouses. ...

    Eighteen percent of voters over 65 lack a current, government-issued photo ID, according to the Brennan Center for Justice at New York University School of Law. If the most stringent photo-ID laws stand, hundreds of thousands of eligible citizens could be disenfranchised Election Day, Nov. 6.

  • New York Times opinion: Paul Ryan’s Fairy-Tale Budget Plan. By David A. Stockman. Excerpts: Thirty years of Republican apostasy — a once grand party’s embrace of the welfare state, the warfare state and the Wall Street-coddling bailout state — have crippled the engines of capitalism and buried us in debt. Mr. Ryan’s sonorous campaign rhetoric about shrinking Big Government and giving tax cuts to “job creators” (read: the top 2 percent) will do nothing to reverse the nation’s economic decline and arrest its fiscal collapse.

    Mr. Ryan professes to be a defense hawk, though the true conservatives of modern times — Calvin Coolidge, Herbert C. Hoover, Robert A. Taft, Dwight D. Eisenhower, even Gerald R. Ford — would have had no use for the neoconconservative imperialism that the G.O.P. cobbled from policy salons run by Irving Kristol’s ex-Trotskyites three decades ago. These doctrines now saddle our bankrupt nation with a roughly $775 billion “defense” budget in a world where we have no advanced industrial state enemies and have been fired (appropriately) as the global policeman.

    Indeed, adjusted for inflation, today’s national security budget is nearly double Eisenhower’s when he left office in 1961 (about $400 billion in today’s dollars) — a level Ike deemed sufficient to contain the very real Soviet nuclear threat in the era just after Sputnik. By contrast, the Romney-Ryan version of shrinking Big Government is to increase our already outlandish warfare-state budget and risk even more spending by saber-rattling at a benighted but irrelevant Iran. ...

    The greatest regulatory problem — far more urgent that the environmental marginalia Mitt Romney has fumed about — is that the giant Wall Street banks remain dangerous quasi-wards of the state and are inexorably prone to speculative abuse of taxpayer-insured deposits and the Fed’s cheap money. Forget about “too big to fail.” These banks are too big to exist — too big to manage internally and to regulate externally. They need to be broken up by regulatory decree. Instead, the Romney-Ryan ticket attacks the pointless Dodd-Frank regulatory overhaul, when what’s needed is a restoration of Glass-Steagall, the Depression-era legislation that separated commercial and investment banking. ...

    The Ryan Plan boils down to a fetish for cutting the top marginal income-tax rate for “job creators” — i.e. the superwealthy — to 25 percent and paying for it with an as-yet-undisclosed plan to broaden the tax base. Of the $1 trillion in so-called tax expenditures that the plan would attack, the vast majority would come from slashing popular tax breaks for employer-provided health insurance, mortgage interest, 401(k) accounts, state and local taxes, charitable giving and the like, not to mention low rates on capital gains and dividends. The crony capitalists of K Street already own more than enough Republican votes to stop that train before it leaves the station.

  • AlterNet: Bush Tax Cuts Saved 57 CEOs More Than $1 Million Each Last Year. Excerpts: In a new report, the Institute for Policy Studies shows just how unnecessary the tax breaks on high income are, noting that last year, 57 of the top 100 CEOs in the country saved more than $1 million due to the Bush tax cuts alone:

    – CEOs have benefited enormously from the Bush tax cuts for upper-income taxpayers. Last year, 57 CEOs saved more than $1 million on their personal income tax bills, thanks to these Bush-era cuts.

    – The top CEO beneficiary of the Bush tax cuts in 2011, James Mulva of ConocoPhillips, saved $6.7 million. Mulva cashed in more than $140 million in stock options in his last year at the energy company’s helm. ...

    In recent decades, CEO pay has absolutely skyrocketed, leaving worker pay far behind. It would take the typical American worker 244 years to earn what the average CEO now makes in one year. Over the last 30 years, CEO pay has increased 127 times faster than worker pay. And at the same time, taxes on the rich have gone down further and further, further exacerbating already high income inequality.

  • Huffington Post: Mitt Romney: 'I Never Paid Less Than 13 Percent' In Taxes. By Sam Stein. Excerpts: Mitt Romney said on Thursday that he has paid at least a 13 percent tax rate every year for the past 10 years, directly rebuking an allegation by Senate Majority Leader Harry Reid (D-Nev.) that he paid effectively nothing in income taxes during that time period. ...

    Obama for America spokeswoman Lis Smith released the following statement on Mitt Romney’s claim that he never paid less than 13 percent in taxes at any point over the past decade:

    Mitt Romney today said that he did indeed ‘go back and look’ at his tax returns and that he never paid less than 13% in taxes in any year over the past decade. Since there is substantial reason to doubt his claims, we have a simple message for him: prove it. Even though he’s invested millions in foreign tax havens, offshore shell corporations, and a Swiss bank account, he’s still asking the American people to trust him. However, given Mitt Romney's secrecy about his returns, coupled with the revelations in just the one return we have seen to date and the inconsistencies between this one return and his other financial disclosures, he has forfeited the right to have us take him just at his word.
  • Washington Post: Bill Clinton tried to limit executive pay. Here’s why it didn’t work. By Dylan Matthews. Excerpts: In 1993, Bill Clinton signed into law his first budget, which created section 162(m) of the Internal Revenue Code. The provision stated that companies could only deduct the first $1 million of compensation for their top five (later top four after changes by Bush’s SEC) executives from their corporate taxes. The idea was to discourage companies from paying in excess of $1 million, as any additional compensation would be taxed. So why didn’t it work?

    According to a new paper from Temple University’s Steven Balsam published by the Economic Policy Institute, the big flaw in 162(m) was its broad exemption of “performance-based” pay. The $1 million cap only applied to traditional salaries, bonuses and grants of company stock. Stock options (that is, stock grants that take time to vest and are meant to provide a performance incentive to workers) and other performance incentives are considered performance-based pay and are deductible even in excess of $1 million. So, unsurprisingly, businesses starting paying executives more in the form of stock options, such that fully 55 percent of deductible executive pay was “performance pay” between 2007 and 2010.

If you hire good people and treat them well, they will try to do a good job. They will stimulate one another by their vigor and example. They will set a fast pace for themselves. Then if they are well led and occasionally inspired, if they understand what the company is trying to do and know they will share in its sucess, they will contribute in a major way. The customer will get the superior service he is looking for. The result is profit to customers, employees, and to stcckholders. —Thomas J. Watson, Jr., from A Business and Its Beliefs: The Ideas That Helped Build IBM.

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