Warning: The (Federal) Debt, Deficits Are HERE!

[asmodeus]

One day most people will realize that what the government has done is fundamentally no different than what Bernie Madoff did.

It's all a big Ponzi scheme.

[macrockett]

i think a fair number of people already understand that asmodeus.

The mantra "don't count on social security.." is certainly an expression of skepticism.

When you look at the list of agencies I went through you can see a common theme, they are all broke or going broke.

[macrockett]

The latest on FHA
www.nytimes.com/2009/10/09/business/09fha.html?_r=1&pagewanted=print

New York Times
October 9, 2009
F.H.A. Problems Raising Concern of Policy Makers
By DAVID STREITFELD and LOUISE STORY


A year after Fannie Mae and Freddie Mac teetered, industry executives and Washington policy makers are worrying that another government mortgage giant could be the next housing domino.

Problems at the Federal Housing Administration, which guarantees mortgages with low down payments, are becoming so acute that some experts warn the agency might need a federal bailout.

Running questions about the F.H.A.’s future — underscored by interviews with policy makers, analysts and home buyers — came to the fore on Thursday on Capitol Hill. In testimony before a House subcommittee, the F.H.A. commissioner, David H. Stevens, assured lawmakers that his agency would not need a bailout and that it was managing its risks.

But he acknowledged that some 20 percent of F.H.A. loans insured last year — and as many as 24 percent of those from 2007 — faced serious problems including foreclosure, offering a preview of a forthcoming audit of the agency’s finances.

“Let me simply state at the outset that based on current projections, absent any catastrophic home price decline, F.H.A. will not need to ask Congress and the American taxpayer for extraordinary assistance — we will not need a bailout,” Mr. Stevens said in his testimony.

But to its critics, the F.H.A. looks like another Fannie Mae. The hearings on Thursday came on the same day that the federal agency charged with overseeing Fannie Mae and Freddie Mac provided a somber assessment of those giants’ health. In the year since the government stepped in to rescue them, the companies have taken $96 billion from the Treasury, and may need more.

Since the bottom fell out of the mortgage market, the F.H.A. has assumed a crucial role in the nation’s housing market. Created in 1934 to help lower-income and first-time buyers purchase homes, the agency now insures roughly 5.4 million single-family home mortgages, with a combined value of $675 billion.

In addition, these loans are bundled into mortgage-backed securities and guaranteed through the Government National Mortgage Association, known as Ginnie Mae. That means the taxpayer is responsible for paying investors who own Ginnie Mae bonds when F.H.A.-backed mortgages hit trouble.

“It appears destined for a taxpayer bailout in the next 24 to 36 months,” Edward Pinto, a former Fannie Mae executive, said in testimony prepared for the hearing. Mr. Pinto, who was the chief credit officer from 1987 to 1989 for Fannie Mae, went further than most housing analysts and predicted that F.H.A. losses would more than wipe out the agency’s $30 billion of cash reserves.

The issue has polarized Congress. Republicans, who led efforts to rein in Fannie Mae and Freddie Mac before those companies ran into trouble, are now seeking to bridle the F.H.A. Many Democrats insist the F.H.A. is playing a vital role in the housing market, which is only just starting to stabilize.

“F.H.A. has stepped into the void left by the private market,” Representative Maxine Waters, Democrat from California, said at the hearing. “Let’s be clear; without F.H.A., there would be no mortgage market right now.”

That was the case for Bernadine Shimon. Like many Americans, Ms. Shimon has recently been through some rough times. She lost a house to foreclosure, declared bankruptcy, got divorced and is now a single mother, teaching high school English in a Denver suburb.

She wanted a house but no lender would touch her. The Federal Housing Administration was more obliging. With the F.H.A. insuring her mortgage, Ms. Shimon was able to buy a $134,000 fixer-upper in August.

“The government gave me another chance,” she said.

The government is giving as many people as it possibly can the chance to buy a house or, if they are in financial difficulty, refinance it. The F.H.A. is insuring about 6,000 loans a day, four times the amount in 2006. Its portfolio is growing so fast that even F.H.A. backers express amazement.

For decades it was an article of faith that helping people of limited means like Ms. Shimon get a house was good for the new owner, good for the neighborhood and good for American capitalism. Then came the housing bust, which demonstrated that when lenders allowed people to buy houses they ultimately could not afford, it hurt the parties — while putting the economy itself in a tailspin.

In the aftermath of the crash, there is wide divergence on how easy, or how hard, it should be to become a homeowner. Skittish lenders are asking for 20 percent down, which few prospective borrowers have to spare. As a result, private lending has dwindled.

The government has stepped into the breach, facilitating loans with down payments as low as 3.5 percent and offering other incentives to stabilize the market. Real estate agents in some hard-hit areas say every single one of their clients is using the F.H.A.

“They’re counting their pennies, scraping up that 3.5 percent,” Bonni Malone of Prudential Americana in Las Vegas said. “Mostly they’re buying foreclosed homes from banks, although I had one client who bought from a guy that was dying. It’s turning around the market.”

While the government’s actions have helped avert full-scale economic disaster, there is growing concern that it might have doled out its favors with too generous a hand.

Many of the loans the F.H.A. insured in 2007 and last year are now turning delinquent, agency officials acknowledge. The loans made in those two years are performing “far worse” than newer loans, dragging down the whole portfolio, Mr. Stevens of the F.H.A. said in an interview.

The number of F.H.A. mortgage holders in default is 410,916, up 76 percent from a year ago, when 232,864 were in default, according to agency data.

Despite the agency’s attempt to outrun its fate by insuring ever-larger amounts of new loans to such borrowers as Ms. Shimon — the current rate is over a billion dollars a day — 7.77 percent of the portfolio is in default, up from 5.6 percent a year ago.

Barney Frank, the Massachusetts Democrat who is chairman of the House Financial Services Committee, said in an interview that the defaults were, in essence, worth it.

“I don’t think it’s a bad thing that the bad loans occurred,” he said. “It was an effort to keep prices from falling too fast. That’s a policy.”

The troubled loans are nevertheless weighing on the agency’s capital reserve fund, which has fallen to below its Congressionally mandated minimum of 2 percent, from over 6 percent two years ago.

The optimism expressed by Mr. Stevens, the F.H.A. commissioner, places him at odds not only with some outside experts but with Kenneth Donohue, the inspector general of the Housing and Urban Development Department, who is also F.H.A.’s watchdog. Mr. Donohue said the drop in reserves was “a flashing red light” that the agency was not taking seriously enough.

“It might be we’ll get ourselves out of this and that everything will be fine, but I don’t paint that rosy a picture,” Mr. Donohue said. “They’re banking on the fact that the economy will continue to improve, that the housing market will begin to sustain itself.”

He noted that if private lenders had raised their down payment requirements in the last two years, it raised the question, “what does the F.H.A. think it is doing by asking only 3.5 percent?”

Any more than that and Ms. Shimon, 45, would still be a renter. As it was, she cashed in her retirement savings account to come up with the necessary funds. She did not have enough to spare for closing costs, so her mortgage broker arranged a deal where the charges were wrapped into the loan at the cost of a higher interest rate. She cried when the deal was done.

The house was empty and trashed. Slowly, she is trying to bring it back to life. She spent the first few weeks picking up garbage in the backyard.

Is Ms. Shimon a good bet? Even she has no easy answer. Her mortgage payment, $1,100, is half of what she takes home every month. It is not easy to make ends meet. Teachers can get laid off like everyone else.

“The government,” she said, “is doing what it needed to do — taking a risk on people.”

Chaz Fullenkamp, an automotive technician in Columbus, Ohio, got an F.H.A. loan even though he was living on the financial edge. “If I got unemployed, I’d be wiped out in a month or two,” he says. Thanks to the F.H.A., however, he is better off than he used to be.

Mr. Fullenkamp used F.H.A. insurance to buy a house this spring for $179,000. The eager seller paid the closing costs and also gave Mr. Fullenkamp $2,500 in cash. He immediately applied for the $8,000 tax rebate. Even taking his down payment into account, he came out ahead.

“I knew in my heart I could not really afford the house, but they gave it to me anyway,” said Mr. Fullenkamp, 22. “I thought, ‘Wow, I’m surprised I pulled that off.’ ”

As the number of loans has soared, random quality control checks have decreased sharply, F.H.A. staff members say. Mr. Donohue, the inspector general, cited numerous examples of organized fraud in testimony to Congress earlier this year.

“They need to stop taking bad loans in the door,” he said in an interview. “They’re taking on all this volume, they have to have very active underwriting standards.”

Jack Healy contributed reporting from New York.

[macrockett]

And if that weren't enough


New York Times
October 9, 2009
Fannie and Freddie Continue to Struggle, Lawmakers Told
By JACK HEALY

In the year since the government stepped in to rescue the collapsing mortgage giants Fannie Mae and Freddie Mac, the agencies have taken $96 billion from the Treasury, and may still need more.

That was the somber assessment delivered Thursday by the federal agency charged with overseeing the government-controlled Fannie and Freddie, which have lost a combined $165 billion since July 2007 as their bets on the housing market went bad.

“The short-term outlook for the enterprises remains troubled,” said Edward J. DeMarco, acting director of the Federal Housing Finance Agency, in testimony before the Senate Banking Committee.

Fannie Mae and Freddie Mac, which bought millions of home mortgages, were taken over by the government last September after their share prices plummeted and investors abandoned the companies, fearing they would collapse under the weight of their loan portfolios. The government put Fannie and Freddie into a conservatorship and offered billions in federal lifelines.

Now, as housing prices struggle higher and an $8,000 tax credit has enticed many first-time home buyers into the market, Fannie and Freddie are limping along. The Federal Reserve is buying more than $1 trillion in mortgage-backed securities in an effort to loosen credit and restart the mortgage-financing markets.

Yet even as the broader economy tries to turns a corner, Fannie and Freddie face huge obstacles, Mr. DeMarco said.

Their books are still bleeding red as foreclosures rise and homeowners — even the highest-quality borrowers — fall behind on their mortgage payments. Several crucial positions remain vacant, and Mr. DeMarco said the agencies were worried about losing workers because of the uncertainties surrounding their fate.

Right now, 3.1 percent of Freddie Mac loans are seriously delinquent, and Fannie’s seriously delinquency rate is an even higher 4.2 percent, Mr. DeMarco testified. And as unemployment nears 10 percent and homeowners struggle to persuade lenders to refinance their mortgages, delinquency rates are rising.

Fannie and Freddie now manage nearly 100,000 foreclosed properties, and those numbers are almost certain to grow.

[macrockett]

If you thought it was "under control" you may want to reconsider. In one quarter, Q3, Fannie Mae has posted a loss of nearly $20 Billion (yes, that is a B...). See below.
----------------------------------------------------------
Fannie Mae Seeks $15 Billion in Aid After Posting Loss
EARNINGS, FANNIE MAE, MORTGAGES, HOUSING, REAL ESTATE
The Associated Press
| 05 Nov 2009 | 05:21 PM ET

Fannie Mae is asking for an additional $15 billion in government aid after posting another big loss in the third quarter as the taxpayer bill from the housing market bust keeps rising.

The government-controlled company continued to see a dramatic surge of borrowers fall behind as the unemployment rate climbs. At the end of last month, about 4.7 percent of Fannie Mae's borrowers had missed at least three payments. That's nearly triple last year's level.

Seized by federal regulators 14 months ago, the problems at Fannie Mae and sibling company Freddie Mac have proven far worse than most experts had foreseen. Fannie Mae's request Thursday will bring the tab for rescuing both companies to about $111 billion. The government has promised up to $400 billion in assistance.

And Fannie Mae cautioned: "We do not expect to operate profitably in the foreseeable future."

Fannie Mae and Freddie Mac play a vital role in the mortgage market by purchasing loans from banks and selling them to investors. Together, Fannie and Freddie own or guarantee almost 31 million home loans worth about $5.5 trillion. That's about half of all mortgages.

The two companies lowered their standards for borrowers during the real estate boom and are reeling from the consequences. High-risk loans, now defaulting at a record pace, have come back to haunt the companies.

Worse still, the recession is causing formerly reliable homeowners with good credit to default.

Fannie Mae posted a quarterly loss of $19.76 billion, or $3.47 per share. The loss includes $883 million in dividends paid to the Treasury Department and compares with a loss of $29.41 billion, or $13 per share, in the year-ago period.

The results were driven by $22 billion in credit losses as the company continued to build its reserves for sour mortgages.

Thursday's request for financial aid—Fannie Mae's fourth—brings the company's total to about $60 billion.

© 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

URL: www.cnbc.com/id/33688574/

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If that weren't enough, Meredith Whitney, one of the few banking analysts believes MBSs (mortgage backed securities) held my JP Morgan, BofA, Wells Fargo, and Citigroup (in aggregate about $146 Billion) will be impared when the Fed discontinues buying MBS and Agency debt in Q1 of 2010.
-------------------------------------

Whitney's Vision For The New Normal
PISANI, TRADER TALK, BLOG, CNBC, CNBC.COM, MARKETS, STOCKS, STOCK MARKET, STOCK MARKET NEWS, CNBC STOCK NEWS, CNBC MARKET NEWS, INFLATION, OIL PRICES
Posted By: Bob Pisani | CNBC Reporter
cnbc.com
| 04 Nov 2009 | 08:51 AM ET

Bank analyst Meredith Whitney out with two notes to clients over night:
1) Ain't Gonna Happen, where she argues that "normalized" earnings for banks is a fallacy, that it's more likely we will see protracted consumer deleveraging, fewer consumers who qualify for credit, and dramatic regulatory change, which will negatively impact earnings for a protracted period, and

2) The Great Exit: The Biggest Market & Bank Risk Over the Next Four Months, a long note on the importance of the Fed's agency MBS purchase program, where she argues that uncertainty over when the program will end (now scheduled for end of Q1 2010), and who the substitute buyer for the Fed will be, means that "prices will go down meaningfully and rates will go up meaningfully." She argues that it is possible the mortgage market will again shrink notably: "We believe this represents one of the larger risks to the banks and overall market over the next several months."

[Arch]

"Worse still, the recession is causing formerly reliable homeowners with good credit to default."

Key point of the whole thing... It's not going to get any better for a long while.

[macrockett]

* NOVEMBER 12, 2009, 10:25 A.M. ET Wall Street Journal

Governors Predict Revenue Struggle
By KRISTINA PETERSON

WASHINGTON -- State governments likely will struggle with dragging revenue until 2012, the National Governors Association predicted Thursday.

In fiscal 2009, states saw their revenue drop 7.5%, and it will likely continue to decline for one or two more quarters, according to a survey from the governors' group and the National Association of State Budget Officers released Thursday.

"These are the worst numbers we've ever seen in the decades of putting together this report," said Scott Pattison, executive director of the budget officers' association.

State revenue from sales and income taxes has been hit hard by unemployment. Last week the national unemployment rate hit 10.2%, its highest level in 26 years.

Struggling to balance their budgets, state governments faced $250 billion in budget gaps between fiscal years 2009 and 2011, according to the survey. So far states have been able to close $72.7 billion of that gap in 2009 and $113 billion before enacting fiscal 2010 budgets, thanks in part to federal stimulus funds. State governments also have cut spending and enacted tax and fee increases.

Still, states have been forced to curtail their spending dramatically. In 2009, states slashed their general-fund spending by 4.8% and are expected to reduce expenditures by at least 4% in 2010, the first time ever that states have cut spending in back-to-back years, according to the report.

Though the country has recently seen signs of broader economic recovery as gross domestic product begins to grow, states are likely to struggle into the next decade, the governors' association predicted. State governments will have to deal with obligations they can't duck, including funding pension and health-care trusts, maintaining local infrastructure and rebuilding rainy-day funds, said Raymond Scheppach, executive director of the governors' association.

"The bottom line is that states will not fully recover from this recession until late in the next decade," Mr. Scheppach said.

Write to Kristina Peterson at [e-mail]

Copyright 2009 Dow Jones & Company, Inc. All Rights Reserved

-------------------------------------------------------

By AMY MERRICK

After months of spending cuts and layoffs, states are drawing up plans for tax increases and an even larger round of service reductions next year as budget shortfalls continue to widen.

In hard-hit Michigan, Democratic Gov. Jennifer Granholm directed state agencies last week to plan for 20% budget cuts for the fiscal year beginning Oct. 1, 2010, on top of 10% cuts made to balance the current budget.

Indiana Republican Gov. Mitch Daniels said last week that revenue for the first four months of the fiscal year was 7.4%, or $309 million, below forecasts. He ordered state agencies to cut spending by 10%, on top of 5% cuts at the beginning of the current fiscal year.

A report Wednesday from the nonpartisan Pew Center on the States warned of "fiscal peril" in clusters of Midwestern and Western states, the result of widespread foreclosures, rising unemployment and poor financial management. The report cited Illinois, Michigan, Wisconsin, California, Oregon, Nevada and Arizona. Florida, New Jersey and Rhode Island also were in bad shape financially, the Pew report said.

Some economists and lawmakers are pressing for another round of federal stimulus aid to states and localities.

The liberal Center on Budget and Policy Priorities said Wednesday that, without more federal help, state budget cuts will shave nearly a percentage point off growth in U.S. gross domestic product, eliminating roughly 900,000 jobs in fiscal 2011, which for most states begins on July 1, 2010.

The U.S. Conference of Mayors said last week that cities faced drastic spending cuts without additional federal aid.

"The problems are evident from coast to coast," said Mark Zandi, chief economist of Moody's Economy.com. "Without more help to state and local governments, the resulting budget cuts will become a very significant drag on the economy."

Across the U.S., states filled 30% to 40% of budget gaps for the current fiscal year with federal stimulus money. They were allotted about $250 billion of the $787 billion stimulus package, most of which will have been disbursed by the end of next year. That means the stimulus will help fill gaps in fiscal 2011, too, but not as much.

Once stimulus funds have been accounted for, states still face a combined deficit of $142 billion for fiscal 2011, up from $113 billion for the current fiscal year, according to the Center on Budget and Policy Priorities.

The budget problems could weigh heavily on political races next year, when 37 governors' seats and 46 state legislatures will be up for election.

In a handful of states, economies are turning up. Moody's Economy.com says Iowa and North Dakota are emerging from recession. They are being bolstered by stable housing markets and relatively high prices for agricultural commodities.

But conditions remain bleak elsewhere. "States historically have their worst years shortly after a national recession ends, as they cope with higher Medicaid and other safety-net expenses, at the same time revenues lag because of stubborn unemployment," the Pew report said.

When joblessness is high -- it reached 10.2% nationally in October -- residents pay lower income taxes and cut their spending, which reduces state sales-tax revenues. Foreclosures and falling home prices diminish the property-tax base.

Starting next month, governors will begin proposing budgets for the next fiscal year. To fill shortfalls, many states are considering raising taxes, laying off state workers and cutting services -- all moves that threaten to slow the national economic recovery.

When he ordered the spending cuts last week, Indiana Gov. Daniels said, "We've seen enough to know that new actions are necessary, if we're going to protect Indiana taxpayers against the tax increases that are happening in most of the rest of America."

In Pennsylvania, Gov. Edward Rendell, a Democrat, said he expected hundreds of layoffs before Thanksgiving, as the state implements budget cuts passed last month.

Illinois Gov. Pat Quinn, a Democrat, has said he wants to revive his proposal to increase tax rates, but he doesn't plan to raise the issue until after the Feb. 2 Democratic primary for governor. His rival Democrat candidate, state Comptroller Daniel Hynes, has criticized the governor for the state's budget woes.

Gov. Quinn recently said he wanted Illinois to borrow $900 million to fund tuition grants for low-income college students and to pay late bills. If that plan goes through, it would come on top of more than $2 billion already borrowed to make it through the current fiscal year. That means Illinois would have to repay more than $3 billion over the next eight months.

Although California's budget problems are the most severe, neighboring Arizona, Oregon and Nevada also have been hit by the housing bust. Oregon depends on the timber and computer-chip industries, while Florida relies on tourism, and Nevada gets 60% of its revenue from gambling and sales taxes, the Pew study said. All of those industries have tumbled.

"Nevada has had five [tax-reform] commissions," said Susan Urahn, managing director of the Pew Center. "They all recommended broadening the tax base. They never did it."
—John Coston contributed to this article.

Write to Amy Merrick at [e-mail]

[macrockett]

Daley's new budget will drain meter sale reserves
Comments

December 3, 2009

BY FRAN SPIELMAN City Hall Reporter/[e-mail]

Chicago’s 75-year, $1.15 billion parking meter windfall would be nearly drained in just one year to provide token property tax relief and stave off tax increases, thanks to a $6.1 billion 2010 budget approved Wednesday.

Despite complaints that Chicago’s future was being mortgaged, the City Council voted 38-to-12 to approve Mayor Daley’s plan to drain reserves generated by asset sales to solve the city’s worst budget crisis in modern history.

“We haven’t made 12 months and I guess we’ve reached eternity,” said Ald. Tom Allen (38th), noting that parking meter reserves were billed as a “perpetual replacement fund” when the deal was rammed through a year ago.

“We have breached our fiduciary duty to taxpayers. You can’t break a contract in 12 months that’s supposed to last for 75 years. It’s unconscionable. It’s irresponsible. It’s disingenuous. …The decision to raid this fundamental asset is mind boggling.”

Ald. Robert Fioretti (2nd) noted that $400 million of the parking meter proceeds were supposed to be salted away in a long-term reserve fund earning interest that would help replace the $20 million in annual parking meter revenues the city lost. “You don’t eat your seed corn,” he said.

Daley said he has no qualms about raiding reserves he once called untouchable, in part, to dole out $200 grants to hardpressed homeowners.

In exchange for a combined $3 billion, contractors got the right to pocket Chicago Skyway tolls for the next 99 years and parking meter revenues for the next 75 years. Those reserves will now shrink to just $773 million by Dec. 31, 2010. The $223 million left from the parking meter lease amounts to just eleven years worth of annual meter revenues.

“Now is the time that we must draw on them. [It’s] not a rainy day. This is a flood in the economy,” he said.

“You know it in your own company how many people have been laid off…They’re losing their homes, food. They’ve lost their pensions, their health care. This is a very difficult time, not only for Chicago, but for the country. And you have to have a human side of this. You cannot disregard people.”

Daley loves to pitch a shutout on the budget, the most important Council vote of the year. He’s gotten unanimous votes seven times in 20 years, including five straight between 2000 and 2004.

Wednesday’s vote did not achieve that lofty standard. Fioretti and Allen were joined by aldermen: Manny Flores (1st), Pat Dowell (3rd), Sandi Jackson (7th), Ricardo Munoz (22nd), Sharon Dixon (24th), Scott Waguespack (32nd), Brendan Reilly (42nd), Vi Daley (43rd), Tom Tunney (44th) and Joe Moore (49th).

The “no” vote on a Daley budget was Allen’s first in 16 years. Vi Daley is normally a staunch mayoral ally, but she, too, changed sides on grounds that, “Most of the money is coming from the parking meters. That bothered me a lot.”

The mayor countered by challenging his critics.

“What taxes and fees would they raise to balance our budget? No one presented a bill to raise a tax or raise a fee. What major city services would they like to cut? No one said that,” he said.

Finance Committee Chairman Edward M. Burke (14th) agreed that there is “a lot of merit” to complaints about the raid on long-term reserves. But, he said, “Where is there a source of income big enough to fill the [$520 million] hole? There isn’t any. So we are in a hang-on mode. We have to hang on until things get better.”

That won’t happen anytime soon, warned Ald. Pat O’Connor (40th), the mayor’s floor leader. This spring, taxpayers could face another body blow when an arbitrator rules on the new police contract.

“Next year, buckle up. I don’t care what happens to the economy between now and then. None of these indicators are gonna get back to a point where we don’t have to make more cuts and have more savings and have more debate on where we’re gonna find the money,” O’Connor said.

Although tax increases have been avoided, spending cuts have not.

With the exception of police and fire, city employees will be required to take 24 unpaid furlough days. Tourism funds will be slashed. Library hours will be cut by 20 percent. Venetian Night will bite the dust and another day will be shaved off an already-reduced Jazz Fest—from three days to two.

The budget includes no funding to continue the citywide switch to suburban-style blue cart recycling that was supposed to be completed by 2011 in all 600,000 households that get city garbage pick-up.

And some of the 240,000 households that already have blue carts will see less frequent pick-ups: from every other week currently to every three weeks.

With the Chicago Police Department already operating 2,000 officers-a-day short of authorized strength, the budget uses federal stimulus funds to add just 86 officers, 30 of them for the CTA.

That’s nowhere near enough hiring to solve a manpower shortage that Police Supt, Jody Weis fears will get dramatically worse when as many as 1,000 more officers retire next year.

[Arch]

Daley, if you think this is a flood, you haven't seen nothing yet.

[macrockett]

www.suburbanchicagonews.com/napervillesun/news/1909439,Naperville-budget-main_NA112909.article

Why does Commerce Dept. need $2,821 in hot sauce?
Comments

December 5, 2009

BY KATE CAMPAIGNE PIERCY

Why would the state of Illinois spend $7,875 on "bird testing"?

What's the need for a typewriter in a computer-centric world? The Illinois Employment Security Department spent $245.80 on a Brother ML100 Typewriter -- in addition to $12,176.54 on a Canon Microfilm/ Fiche Printer.

The governor's office shelled out $20,692.24 on "subscriptions." The Commerce Department spent $3,770 for golf carts, $280 on soy crayons and $2,821 on hot sauce --all with Illinois citizens' tax dollars. That must be some good hot sauce.

Everyone knows government spends money. Some would say it spends too much. Others argue it needs to spend more. Yet few know where the money actually goes.

No matter what you think about Illinois' expenditures, most can agree it's a good idea to have as many helpful tools as possible to keep government honest and accountable for spending decisions. Yet, everyone from legislators to citizens to the media has a murky -- at best -- understanding of how the government spends tax dollars. Without the best tools to measure how government spends money, people have no way to figure out whether tax dollars are being put to good use, making it even more difficult to hold elected officials accountable for their decisions.

Illinois took a positive step toward more government transparency this past summer with the passage of the Illinois Accountability Portal, an effort spearheaded by Rep. Mike Tryon (R-Crystal Lake). The resulting Web site, www .accountability.illinois.gov, provides a good look at state spending. In the spirit of more transparency and friendly competition, the Illinois Policy Institute has launched its own government spending Web site, IllinoisOpenGov.org.

This site gives Illinois citizens a comprehensive tool to look into the details of state spending -- down to the agency, person and penny. The site provides an unbiased look into raw state government spending data, collected directly from official government sources through Freedom of Information requests.

The site lists state employee salaries, retiree pensions and vendor information in an easy-to-understand and user-friendly way. Ultimately the site will include all state spending. IllinoisOpenGov.org provides a comprehensive supplement to the Illinois Accountability Portal, which offers access to some state employee pay information, state agency expenditures and contracts, corporate accountability and professional licenses.

In addition to that, IllinoisOpenGov.org:

••Makes the details of state spending available in easy-to-use, downloadable, Excel or CSV file formats, allowing anyone to repurpose the data for their own study.

••Includes salary and benefit information for all Illinois government workers (as opposed to the state's current site, which at this point does not include information on the Legislature or benefits data).

••Provides information on payouts to retired state employees.

••Offers a blog with highlights posted regularly from the database.

••Features a forum for public conversation and offers the option for commenting on individual expense items.

Transparency creates a more active, informed citizenry and puts pressure on government to make better choices. People think twice about spending if they know someone is looking over their shoulder. Every dollar, penny and dime spent by government has a direct impact on families and businesses of this state, and government workers need to treat their spending with that concept in mind -- not as a blank check of "funds available."

Tools such as IllinoisOpenGov .org aim to place that extra pressure on every elected official responsible for spending decisions. It will allow the public to ask, for example, if it was really necessary for the governor's office to spend $4,986.86 on cooler rental and $404.21 for bed sheets.

Providing spending information in a clear, complete and easy-to-understand way will lead to better, more accountable and open government. With the transparency provided by IllinoisOpenGov.org, citizens and the media will have better tools to join in the call for spending control and government reform for Illinois.

Kate Piercy is director of government reform for the Illinois Policy Institute, a nonpartisan, free-market think tank.
----------------------------------------------------------------------
As family budgets are being squeezed, more people are waking up and paying attention to how poorly our government representatives manage our assets and in many cases are just in it for themselves and special interests. One way to respond, is to demand transparency and accountability. This is a start.

Another thing we should all expect is for our elected representative to represent the best interest of all the people of Illinois, not just special interests, whether they be unions or corporations.

[macrockett]

www.suburbanchicagonews.com/napervillesun/news/1909439,Naperville-budget-main_NA112909.article

The transparency test
How easy is it to track how county governments spend your tax dollars?

November 29, 2009
By MATT HANLEY [e-mail]

A Naperville Sun watchdog report:

On Nov. 2, 2004, the DuPage County state's attorney's office spent $225.02 on printer paper from Canon Business Solutions.


On March 27, 2006, the DuPage County coroner's office paid Blue Diamond Coffee Services $319.40 for coffee.

Neither of those purchases is particularly exceptional. What's unusual is that anyone who wants to see those expenditures — and almost every other check the county wrote over the past five years — and can look it up any time.

It doesn't involve waiting for a Freedom of Information request, or a trip to the county offices in Wheaton. All it takes is an Internet connection. The county's checkbook is online and open for inspection.

As counties finalize their budgets, a review of their Web sites reveals that DuPage is far ahead of the transparency curve for one of government's most crucial functions: spending your money.

Most local counties post some version of their expenses online. But DuPage leads the state in transparency, and is far more accessible than other local counties, including Will.

Perhaps most surprising, DuPage County Auditor Bob Grogan and his staff did it all in less than two months without spending additional tax dollars.

"With the technology available, this is something that everybody should do," said Kate Campaigne Piercy, director of government reform for the Illinois Policy Institute, a nonprofit think tank. "It's a fairly simple thing to do and shows a basic respect for taxpayers."

Not a huge task

To be clear, local counties would make their budgets available with a proper request. And counties are not required under Freedom of Information laws to post their budget online.

But to advocates for government transparency, meeting minimum legal obligations is not the same as being truly open and accessible.

"It's all about holding government accountable for their spending decisions," said Campaigne Piercy. "They're available at a board meeting and through (Freedom of Information request) so why not make it available? It's really not a huge (request)."

For Grogan, putting together the online database was easier than he imagined. When he took office in December, he wanted to know if it was possible to make the county's checkbook more visible.

Grogan says within three hours his staff had a prototype to convert the information from the auditor's internal records to an online format that could be searched by year, department, vendor and even check number.

By January his staff had put all of the county's expenditures online, through Web coding built by the staff. That means no dollars spent for an outside vendor. And you can verify that easily through the Web site, which is updated monthly — the only local county to update more than once a year.

Now, with simple navigation tools, it's easy to see the election commission paid $2,321 for coffee from Warehouse Direct. But you could also search the county's total expenditures with Warehouse Direct, which will show up in printable, easy-to-read forms.

No other counties in Illinois break down expenditures to such a detailed level. Several do have last year's expenditures and next year's budgets available online, but the quality and accessibility of that information varied.

For instance, in Will County, budgets include grouped expenditures, but no line items. The actual budgets go back to 2006, but Will County does not put up a proposed budget, according to auditor Duffy Blackburn.

Campaigne Piercy knows counties aren't looking to add programs in down economic years. But she says this is transparency that can be accomplished easily.

"I think that's the general perception of that — it's a big undertaking," she said. "Basically all they need to do is turn their board packets that they have every month into a PDF (a scanned copy of a paper print out). It takes five minutes."

'Let's try to be open'

After his staff finished the prototype for the online checkbook, Grogan presented the idea to County Board Chairman Bob Schillerstrom and other department heads. From a completely open checkbook, they started to look for areas that would conflict with privacy issues.

"Before I put something online, I say, 'What can go wrong?'" Grogan said. "The default is: Let's try to be open."

Not every check DuPage County writes is online yet. Grogan acknowledge there are still legal and emotional challenges to balancing the public's right to know with privacy issues. For instance, certain information about how much the county spends on medical bills for inmates are withheld under Health Information Privacy Act.

And he's still trying to prepare DuPage employees for the reality that their salaries are public record. That was the one bit of public information people are still a bit squeamish about, although Grogan points out, "you're one FOIA away from being outed."

Within the county, Grogan said the results have been positive. His office has had to spend less time fulfilling FOIA requests because the information is already available.

And while Grogan can't point to a specific example, he believes some folks have reined in the spending. Someone might try to slide a Christmas party past the auditor, but maybe they'd hesitate if they know a neighbor or their sister-in-law could peruse the budget.

So what's next for Grogan?

His staff is working to put those salaries online as well as copies of all the county's contracts. And he'd also like to help other counties take the same steps. So he has made the Web coding built by his staff available to other counties, free of charge.

Blackburn said he met Grogan last week and discussed ways he could present his budget in a similar way.

"I feel the benefit for displaying this amount of transparency is to offer a tremendous amount of assurance to all the stakeholders of the county and to support civic confidence," Blackburn said.

When asked why he's so committed to transparency, Grogan pauses, as if he never considered not opening up the books.

"Maybe it's just a deep-seated insecurity about not being smart enough to cover things up," he said, laughing. "People can't accuse me of hiding things if I show them everything."

Staff writers Katie Anderson, Dan Campana and Joe Hosey contributed to this story.

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Unfortunately this "crack" team of investigators left out a very important detail. An important source for putting information on line was Adam Andrzejewski, the founder of forthegoodofillinois.org, www.forthegoodofillinois.org/About-Us/ who resigned this year and is currently running for the governor of Illinois. www.adamforillinois.com/

If you get a chance, catch him at one if his meet and greets, I did just that this morning, although I met him for the first time over a year ago to discuss the online transparency topic. Great guy and, imo, about the most honest guy you will every meet.

[macrockett]

I finally received a response from Senator Durbin (well, staff anyway) to the letter I wrote and posted above.

After reading it, I am contemplating moving to California where it appears there will be a provision on the November ballot to legalized marijuana. What the hell? It makes as much sense as this response. latimesblogs.latimes.com/lanow/2009/12/marijuana-legalization-initiative-headed-for-2010-ballot-organizers-say.html


December 14, 2009


Mr. Michael Crockett
1344 Kewanee Lane
Naperville, IL 60564

Dear Mr. Crockett:

Thank you for contacting me regarding federal funding for the John Murtha Johnstown-Cambria County Airport and other smaller regional airports. I appreciate hearing from you.

We must be vigilant to root out inappropriate targeting of funds, while keeping in mind that many programs benefit far more than just the targeted population. During the Senate debate on the Legislative Transparency and Accountability Act of 2007, I offered an amendment to strengthen the definition of "earmark" and require more disclosure of targeted spending. I support efforts to require that earmarks benefiting specific entities be identified and posted on the Internet before they come up for a vote, so that Senators and the public can better understand the contents of the bills they are voting on. Senators who promote valuable projects have nothing to fear from this scrutiny.

Despite some reports to the contrary, most federal funding for smaller regional airports, including the Johnstown-Cambria County Airport, is through the Department of Transportation's (DOT) Essential Air Service (EAS) program. The EAS is not an earmark, but is a formula-based program that provides financial support to 140 airports across the nation, including Illinois, which support commercial air service to smaller communities. These airports not only provide commercial service for individuals, but also serve an important role in the economic development of the area. Airports provide a significant amount of jobs and serve as an incentive for new business to locate in the area. It is important that we continue to provide support for smaller communities trying to maintain air service and develop businesses in the area.

While the Senate must continue to combat inappropriate congressionally directed spending, it is also important that we do not jeopardize valid formula and competitive based programs by mischaracterizing them as earmarks. I will keep your thoughts on this issue in mind as the Senate considers appropriations bills in the future.

Thank you again for contacting me. Please feel free to keep in touch.

Sincerely,

Richard J. Durbin

United States Senator



RJD/tr

[macrockett]

Latest letter to the Senator

Dear Senator Durbin,

Thank you for your response Senator, however I disagree that this is money well spent. Perhaps I don't have all the facts but $200 million, as I recall, on an airport with three flights a day just doesn't make sense, jobs or not.

When you take all the money spent on things like this by every Congressman and woman, and every Senator across our country, you could have easily funded the supercollider in Texas (see NYT story www.nytimes.com/2008/09/10/nyregion/10end.html ) and done something meaningful with long range implications for our country. I don't care if anything creates jobs in Illinois unless they make sense for the long term future of our country. With record deficits and debt, as well as unfunded liabilities in the trillions, we just cannot continue on the same path.

On another subject, pay for federal employees, how can such salaries be justified? (see video from CNBC www.cnbc.com/id/15840232?video=1359672339&play=1 and article in USA today www.usatoday.com/news/washington/2009-12-10-federal-pay-salaries_N.htm. See also Bureau of Labor Statistics pdf Employer Costs for Employee Compensation-September 2009 www.bls.gov/news.release/pdf/ecec.pdf

When you add the benefits of retirement and healthcare there is no such thing as public servant here, it appears to me that the federal government workforce is in charge and dictating its own compensation. The average American worker makes approximately $40 thousand per year. The average federal government worker makes over $70 thousand per year. In addition, benefits for federal workers are much more generous than for private sector employees and getting more so.

I have heard the argument that federal workers are, on average, more educated (but looking at the BLS' Carrier Guide to Industries, www.bls.gov/oco/cg/cgs041.htm , I fail to see any evidence of that). Perhaps to a degree it is true, but even so there seems to be no merit given to the fact that private sector employees take on more risk. There are no guarantees in the private sector Senator. You could lose your job in a heartbeat therefore, more risk, more reward in terms of compensation.

In addition, the safety net of Social Security is not a guarantee like the contractual obligation afforded to federal employees by way of the taxpayer. As we both know, Social Security is a moving target and the "benefits" that are "promised" can change at any time by an act of Congress.

In summary Senator, there is a growing disconnect between government and the private sector in terms of how government employees are compensated and how our Congress spends the precious dollars that flow to Washington courtesy of the American taxpayer. I personally don't understand how you specifically, or Congress in general, can justify it with so many unemployed and needy families in our country and the fiscal state of our country.

Sincerely,


Michael Crockett

[macrockett]

www.chicagotribune.com/health/chi-health-lobbyists_bddec20,0,4862599.story
chicagotribune.com

TRIBUNE WATCHDOG
How health lobbyists influenced reform bill
Former staffers of lawmakers from Harry Reid to Mitch McConnell push clients' agenda

Search our database to see who had the most influence on the health care bill

By Andrew Zajac

Tribune Newspapers

December 20, 2009

WASHINGTON

David Nexon had a big problem. An early version of national health care legislation contained a $40 billion tax aimed squarely at members of the medical device trade association he represents.

Nexon, a former adviser to the late Massachusetts Sen. Ted Kennedy, went to work. He marshaled 14 people like himself -- lobbyists who were once congressional aides, many of them from staffs of congressional leaders or committees that had a hand in crafting the health care overhaul.

When Senate Democrats unveiled their bill in mid-November, Nexon's handiwork was evident. The tax on device-makers was still large -- $20 billion -- but only half what it might have been without the efforts of Nexon and his fellow lobbyists.

Nexon's team is an illustration of how deeply the health care industry has embedded itself on Capitol Hill, using former aides of lawmakers and ex-lawmakers themselves.

An analysis of public documents by Northwestern University's Medill News Service in partnership with the Tribune Newspapers Washington Bureau and the Center for Responsive Politics found a revolving door between Capitol Hill staffers and lobbying jobs for companies with a stake in health care legislation.

At least 166 former aides from the nine congressional leadership offices and five committees involved in shaping health overhaul legislation -- along with at least 13 former lawmakers -- registered to represent at least 338 health care clients since the beginning of last year, according to the analysis.

Their health care clients spent $635 million on lobbying over the past two years, the study shows.

The total of insider lobbyists jumps to 278 when non-health-care firms that reported lobbying on health issues are added in, the analysis found.

Part of the lobbying pressure on current members of Congress and staffers comes from the powerful lure of post-congressional job possibilities.

"There's always a worry they may be thinking about their future employment opportunities when dealing with these issues, particularly with health care, because the stakes are so high and the breadth of the issues -- pharmacies, hospitals, doctors," said Emory University political scientist Alan Abramowitz.

Lobbyists' earnings can dwarf congressional salaries, which currently top out at $174,000 annually for lawmakers and $156,000 for aides, though committee staff members can earn slightly more.

In the health care showdown, insider lobbying influence has magnified the clout of corporate interests and helped steer the debate away from a public insurance option, despite many polls indicating majority support from Americans, according to Rutgers University political scientist Ross Baker.

"It imposes a kind of conservative bias on the discussion," said Baker, himself a former Senate staffer.

The lineup of insiders working for clients with health care interests includes at least 14 former aides to House Majority Leader Steny Hoyer and at least 13 former aides to Montana Democratic Sen. Max Baucus, the chairman of the Finance Committee and a key overseer of the health care overhaul.

Nexon, who is now senior executive vice president of the Advanced Medical Technology Association, is among at least a half-dozen former Kennedy aides lobbying on health care.

Nexon acknowledged the value of congressional connections, "but in the end, it's not who I know, it's what I know."

It makes sense to hire former staffers for the health care showdown because they tend to be "more generalists, dealing with a broad range of issues," something that is in demand for legislation that sprawls across at least a half-dozen federal agencies and encompasses issues ranging from tax policy to hospital reimbursement rates, according to Nexon. But specific issues also get specialized help. Earlier this year, the Christian Science Church hired a former Kennedy staffer, Carolyn Osolinik, and three of her colleagues at the Mayer Brown law firm, all veterans of Capitol Hill. The firm has been paid at least $110,000 so far to push a provision requiring insurers to consider covering Christian Science prayer treatments.

Phil Davis, a senior official of the church, said the church wanted access to decision makers. "The noise level goes sky high. It's hard to get in to talk to people," he said.

The largest insider lobbying cadre belongs to the Pharmaceutical Research and Manufacturers of America, or PhRMA, which employs at least 26 former congressional members and staffers, according to Medill/CRP research.

Two other drug interests, biotech firm Amgen Inc. and the Biotechnology Industry Organization trade group, with at least 24 and 16 insiders respectively, ranked second and fourth among reported hiring over the past two years of lawmakers' former staffers and members of committees considered in the analysis.

"The numbers shouldn't surprise anyone," said Ken Johnson, a PhRMA senior vice president. "Former staffers have a unique understanding of how the legislative process works. And when you are trying to advocate on behalf of smart public policies, you want smart people on your team."

But Bob Edgar, president of Common Cause, a nonpartisan, nonprofit watchdog group, had a harsher assessment, blaming "a toxic cocktail of insiders and money" for short-circuiting a government-run plan that would have competed with private insurers.

"We'll get a bill. And the president will sign it. But it'll be less than the country deserves," said Edgar, a former six-term member of the House.

Health care lobbyists increase their effectiveness by strategically targeting their campaign contributions or the donations of the interests they represent, Edgar said.

Health industry contributions to congressional candidates have more than doubled so far this decade, rising to $127 million in the 2008 election cycle from $56 million in the 2000 election, with disproportionate sums going to the party in power and to members of committees that oversee health care, according to the Center for Responsive Politics.

But lobbyist and former Kennedy staffer Andrew Rosenberg said political conditions, not big money or the predispositions of lobbyists sidelined a public option.

"You could see this coming from a long way off. The Democratic Party is now the big tent party. They have to get to 60 votes. That is the reality," Rosenberg said. "It was going to have to be something that appeals to moderates" opposed to expanding government-run health insurance.

Tribune Newspapers' Tom Hamburger and Joe Markman contributed to this report.

[e-mail]
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Be sure to go to the database to see the army of former aides that are now lobbyists for big business.

Do lobbyists' activities circumvent the Constitutional requirement of "one person, one vote?" If money can buy access and that access can influence a legislator's vote, where does that leave the rest of us?

[macrockett]

www.chicagotribune.com/health/la-oe-mcmanus20-2009dec20,0,6330402.column
chicagotribune.com

Opinion
60th senator wields power over healthcare
When any one senator can threaten to stop a bill, many senators will be tempted to try -- if only to see what they can get in return for their support.

Doyle McManus

December 20, 2009
Click here to find out more!

Last June, a long time ago in politics, Democrats in the Senate were briefly jubilant. For the first time in a generation, they held 60 seats, the "supermajority" required to control the Senate's proceedings. The road to enacting President Obama's center-left agenda looked, for a moment, almost smooth.

But that's not how the Senate works. It's an assembly of 100 independent egos, not a parliament of two disciplined parties. The word "control" doesn't apply.

Last week, as Majority Leader Harry Reid struggled to corral 60 votes to move a healthcare bill forward, the jubilation of summer gave way to desperation on cold winter nights -- with occasional flashes of recrimination.

"Everybody gets to be the 60th senator," observed Sen. John D. Rockefeller IV (D-W.Va.), a liberal champion of healthcare reform. What he meant was that when any one senator can threaten to stop a bill, many senators will be tempted to try -- if only to see what they can get in return for their support.

Last week, three senators each held the role of No. 60 in turn -- and each held the fate of Obama's healthcare proposals in his (or her) hand.

First was Joe Lieberman of Connecticut, who lost his party's primary election in 2006, won reelection as an independent, campaigned against Obama in 2008 -- but still claims a seat in the Democratic majority.

Lieberman won several days in the spotlight for abruptly announcing that he would vote against any bill that included either of two measures favored by liberals: a government-run health insurance plan (known as the "public option") or a plan to offer Medicare to people younger than 65 (known as "Medicare buy-in").

In an instant, both ideas were vaporized. Liberals outside the Senate excoriated Lieberman as a traitor and a hypocrite, noting that he had once advocated allowing people over 55 to buy in to Medicare.

But inside the Senate, Lieberman's colleagues were not as harsh -- at least, not on the record; you never know when you're going to need a 60th vote.

And in fact, Lieberman may have done his colleagues a favor. Several centrist Democrats weren't happy about the public option or Medicare buy-in either. Neither proposal was likely to attract 60 votes, even if Lieberman had stayed in the fold.

In effect, Lieberman volunteered for the role of scapegoat (intentionally or not), taking the blame for shooting down liberal ideas that were already doomed. At any rate, by the end of the week, he was promising to help Reid move a rejiggered bill forward.

The second holdout was Ben Nelson of Nebraska, a taciturn former insurance executive from a solidly conservative state. (Republican presidential nominee John McCain won Nebraska by 57% last year.) Nelson votes with Republicans more often than any other Democrat (even Lieberman), and he warned colleagues long ago that he would insist on tough provisions barring any federally funded insurance policies from covering abortions before a healthcare bill could win his vote.

Reid deputized Bob Casey of Pennsylvania, another antiabortion Democrat, to work out a compromise -- essentially to allow women in those plans to pay for abortion coverage with their own funds -- but Nelson warned that he'd be a tough sell. The Nebraskan said he would submit any abortion proposal to his "constituency groups" -- antiabortion organizations that are opposed to any form of compromise.

And even if he got his way on abortion, Nelson warned, he wasn't sure he would vote to move the bill forward -- leaving Reid still uncertain where he would find his 60th vote.

Which revived the name of the third "60th senator," a moderate Republican, Olympia J. Snowe of Maine. Snowe has worked for months on healthcare legislation, says she wants to pass something and broke with her party to vote in favor of a bill drafted by the Senate Finance Committee. Obama and his aides have lavished private attention on her, knowing that her single vote would give them the right to anoint the result as "bipartisan."

But Snowe has a flaw: She's serious about the substance of healthcare. All week long, as Reid struggled to find a way to amass 60 votes among Democrats, he kept his version of the bill under wraps, to maximize his negotiating room. Snowe said she might be willing to vote for a bill -- but she'd have to see it first, and let it be analyzed, and think about it awhile. That meant: not before Christmas.

So on Friday, Reid went back to Nelson, who finally said yes -- as long as states were given the right to prohibit plans from covering abortion, and as long as Nebraska got a special deal on the cost of expanding Medicaid coverage to the poor.

Meanwhile, the rest of the Republican caucus, which took a walk from the Democrats' bill last summer, had a much easier task: obstruction and delay.

They handled their role

expertly, demanding that the Senate clerk read the full text of a 700-page amendment aloud, threatening to torpedo a defense funding bill that they actually favor, and generally making Democrats miserable.

As a result, Reid's "optimistic" timetable had the Senate passing the bill at 7 p.m. on Christmas eve.

Strangely, amid the frustration and farce of Reid's search for a 60th vote, some parts of the bill may actually be improving. Liberals were unhappy that they lost their public option, but most vote counters believe that's been a lost cause for months.

Several Democrats, including Rockefeller and, yes, Lieberman, have proposed expanding programs that would test new models for healthcare delivery and payment -- alternatives to the costly and inefficient "fee for service" model that pays doctors

for individual medical procedures instead of patients' overall healthcare.

That's one reason Rockefeller, a thoroughgoing liberal, favors passing whatever bill can attract 60 votes; he sees this year's legislation -- which has already become next year's legislation -- as the beginning of a longer process.

"You never get everything that you want," he said. "You try to keep improving the bill, and you do it next year or the year after."

[e-mail]

Copyright © 2009, The Los Angeles Times
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www.chicagotribune.com/business/sns-ap-us-health-overhaul-hospital,0,1882638.story
chicagotribune.com


Sen. Christopher Dodd hopes UConn qualifies for $100 million

By Associated Press

10:32 PM CST, December 20, 2009

WASHINGTON (AP) — A $100 million item for construction of a university hospital was inserted in the Senate health care bill at the request of Sen. Christopher Dodd, D-Conn., who faces a difficult re-election campaign, his office said Sunday night.


The legislation leaves it up to the Health and Human Services Department to decide where the money should be spent, although spokesman Bryan DeAngelis said Dodd hopes to claim it for the University of Connecticut.

The provision is included in a 383-page series of changes to the health care bill that Senate Majority Leader Harry Reid, D-Nev., outlined Saturday. Scattered throughout are numerous items sought by individual lawmakers, many of them directing money explicitly to programs or projects in their home states.

The one sought by Dodd provides $100 million for "a health care facility that provides research, inpatient tertiary care, or outpatient clinical services." It must be affiliated with an academic health center at a public research university in the United States "that contains a State's sole public academic medical and dental school."

The money can cover a maximum of 40 percent of the facility's construction costs.

Based on the criteria set out on the bill, it appeared that state-affiliated hospitals in about a dozen states could compete for the funds.

Dodd has played a key role in development of the health care bill in the Senate. He wielded the gavel earlier in the year when the Senate Health, Education, Labor and Pensions Committee spent weeks drafting its version of the measure. The late Sen. Edward M. Kennedy, D-Mass., was chairman at the time, but unable to preside.

Dodd, who is chairman of the Senate Banking Committee, is seeking a new term in 2010, but polls so far show him in a tight race.
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www.chicagotribune.com/health/chi-tc-nw-health-senate-1219-122dec20,0,4694492.story
chicagotribune.com

Health care gets 60 votes: Democrats win Ben Nelson's promise to back health care bill
Nebraska senator relents after winning abortion concessions

By Noam N. Levey and Janet Hook

Tribune Newspapers

December 20, 2009

WASHINGTON
Click here to find out more!

-- With a critical vote looming this weekend, Senate Democrats reached a deal with the lone Democratic holdout, Nebraska Sen. Ben Nelson, who will back the party's health care bill after settling weeks of negotiations on abortion.

That would give Democrats the 60 votes they need to quash a series of Republican-led filibusters and pass a bill by Christmas.

At the White House, President Barack Obama thanked the Senate Democrats.

"With today's developments, it now appears that Americans will have the vote they deserve," Obama said. "There is still much work left to be done and not a lot of time left to do it."

Americans are "on the cusp of making health care reform a reality," he said.

Nelson, who was pushing for tougher restrictions on federal funding for abortion, reached the agreement with Senate Majority Leader Harry Reid's office Friday night after round-the-clock talks with Reid, of Nevada, and Sen. Barbara Boxer, D-Calif., a leading supporter of abortion rights.

Under the agreement, individual states would be allowed to prohibit insurers from offering abortion services in new regulated insurance marketplaces, or exchanges, where Americans who do not get health benefits through work would shop for coverage.

But if states do not exercise that option, insurers would be free to offer abortion coverage to customers in an exchange, even if they receive federal subsidies.

If a woman who receives a subsidy wants to get a policy that covers abortion, she would have to send two payments to the insurer; one would be placed in an account reserved for abortion coverage.



The segregation of funding was a key priority for Nelson. Reid's bill originally required insurers only to segregate funding they received to ensure that federal subsidies were not used for abortions.

"My values and principles have required me to fight hard to prevent tax dollars from being used to subsidize abortions," Nelson said Saturday. "I believe we have accomplished that goal."

Nelson also secured more tax breaks for adoption.

Nelson negotiated a special commitment for his home state, which will receive full federal funding to expand its Medicaid insurance program for the poor. Other states must split the cost of the expansion with the federal government.

The abortion compromise is less restrictive than the House health care bill, which banned any insurers from offering abortion coverage to any American who receives insurance subsidies.

That pleased many supporters of abortion rights. In a joint statement, Boxer and Sen. Patty Murray of Washington said: "We said all along that we wanted to ensure there was a firewall between private and public funds -- this compromise achieves that."

Reid's health care bill also eliminates a new government insurance plan for Americans who do not get insurance through work.

Instead, Reid's amendment would authorize the government to contract with a nonprofit insurer to give consumers an alternative to commercial insurers' plans.

[e-mail]
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The fact that all of this, in the end, is out in the open tells me there is no fear in Washington about anything they do.

All I can say is we all need to wake up and pay attention.