benefits

N.C. Gov Issues Executive Order To Restore Unemployment Benefits

by on June 3, 2011

Huffington Post…

North Carolina Gov. Bev Perdue (D) issued an executive order Friday unilaterally reinstating unemployment insurance for 47,000 laid off North Carolinians. The benefits had stopped because of an impasse between Perdue and Republicans in the state legislature that has dragged on since April. “For weeks, I have been trying to work with the Republican legislative leaders to get them to do the right thing: send me a clean bill to extend the unemployment benefits for 47,000 North Carolinians who have lost their jobs,” Perdue said in a statement . “Instead, they have persistently attempted to use our unemployed workers as hostages by tying the extension of their benefits to my acceptance of budget bills that would inflict severe and unnecessary cuts to our schools and other essential programs.” Perdue continued: “Today, I am issuing an executive order extending federal unemployment benefits to these 47,000 North Carolinians. Republican leaders in the General Assembly have been unwilling to take the necessary steps to extend these benefits, and no doubt they will attempt to interfere with this action.” Indeed, Republicans suggested they might interfere. “If the Governor does, in fact, have the authority to do this, I’m shocked that it took seven weeks for her to figure it out,” State House Speaker Thom Tillis (R) said in a statement. “It’s probably more than a coincidence that she chose this action on the same day that we are approving a budget to fix this problem. We must hold the Constitution sacred –- we cannot allow a Governor to rule the state by decree.” A Perdue spokeswoman said the U.S. Department of Labor told the News & Record that the federal government had reviewed the order and agreed to release the money. The benefits lapsed because the state lost eligibility for the federal Extended Benefits program, which gives 20 weeks of benefits for long-term jobless who exhaust 79 weeks of combined state and federal benefits. The state lost its eligibility because its political leaders couldn’t agree on a bill to realign its eligibility “trigger” with a new federal standard, implemented to allow states to keep the Extended Benefits program, that took effect in December. It’s not unheard of for governors to modify their states’ Extended Benefits triggers by executive order, according to the National Employment Law Project, which specifically cited a 2009 order from Kentucky Gov. Steve Brashear (D) and a 2010 order by former Florida Gov. Charlie Crist (R). In April, Perdue vetoed a bill that would have preserved the benefits because statehouse Republicans attached conditions that the governor said would have resulted in massive state layoffs. Perdue strongly suggested she’d veto subsequent attempts. John Allison of Charlotte, N.C., who had followed the political process closely, had been disappointed by the lack of compromise. He didn’t know Perdue could reinstate the benefits herself. “Why didn’t she do this weeks ago?” he asked. Allison, an unemployed landscaping consultant whose predicament HuffPost previously covered , has been worried about making his rent since his benefits stopped in April. On Friday, he said he had $3 left.

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N.C. Gov Issues Executive Order To Restore Unemployment Benefits

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U.S. Dollar Index Under Pressure, Euro Benefits From Talks Of New Bailout For Greece

by on June 3, 2011

menafn.com…

U.S. Dollar Index Under Pressure, Euro Benefits From Talks Of New Bailout For Greece

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U.S. Dollar Index Under Pressure, Euro Benefits From Talks Of New Bailout For Greece

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Inder Sidhu: Decisions, Decisions: How to Make Them Better and More Impactful

June 2, 2011

Brown shoes or black? This destination or that one? More risk or greater security? Every day, I make a lot of decisions, some big, some small. Naturally, I am always on the lookout for ways to improve decision-making. Regular readers know I’m not a fan of boiling difficult choices down to this or that. Whenever possible, I believe its better to take on two seemingly divergent things simultaneously. Disruptive or sustaining innovation? Tuning or transforming? More often than not, the benefits of doing both outweigh the extra effort that it requires. In fact, taking on two different things creates a multiplier effect in which one successfully executed decision can benefit another, and vice versa. But what about instances when doing both is not an option? You can’t go to two places at once, for example, or hire two candidates to fill a single position. For moments like these — as well as times when you commit to doing both — there are things you can do to improve the quality of decisions you make. Here are three suggestions. Make definitive choices : The key to any decision, researchers have found, is making it decisively . A recent article for Fast Company highlights why. When you keep your options open, you deny yourself the benefits of what our “psychological immune system” can provide. It protects us in the aftermath of a difficult decision by reducing our inclination to second guess ourselves. Once you commit to a decision to pursue one objective — or even two, the mind actively works to alleviate your stress by helping you move on to other matters. But it only works if you make a definitive decision. If you take a position on a fence instead, you’ll distract yourself with doubts over whether or not you chose wisely. As every good leader knows, you can’t get far in business sitting on a fence. Get in touch with yourself : Writer David Brooks of the New York Times has a new book out, entitled The Social Animal . In it, he examines why people with superb social skills often wind up in leadership positions. Their high emotional quotients, he believes, help them better connect with people, leading to professional advancement. But only a fraction of emotionally gifted people lead effectively. Why? Brooks believes the answer is because we are taught to discount our emotions when it comes to decision-making. This, he believes, is nuts, and leads many otherwise talented people to make poor choices. If you’re not convinced, then try a little test the next time you face a tough decision. Chances are you’ll stew over which option is better based on its pros and cons. Instead of debating endlessly with yourself, flip a coin, Brooks suggests. Don’t go by what the outcome dictates, but rather your reaction to it. If your gut says “make it two of out three,” then you know what you truly want. Effective leaders understand the value of human emotion and consider them when making difficult decisions. Stand by your convictions : When he was a young man, jazz leader Wynton Marsalis told his father Ellis that he decided to follow in his footsteps and pursue music as a profession. But the younger Marsalis was worried about the hardships of late nights and deprivations of low pay. So he asked his father if he should form a backup plan in case he failed. No, said the elder Marsalis . “The only advice I can give you is don’t have anything to fall back on … If you have something to fall back on, you gonna fall back.” The point of the story? Unwavering commitment, the kind that comes from having no other option, can often spell the difference between success and failure. NASA’s mission control specialists understand this. So do entrepreneurs like Mark Zuckerberg and others who have stared down defeat. When faced with adversity, they don’t give up quickly and switch to another option. Instead, they rely on their passion and will to carry them through. So what about you: Do you make definitive choices? Are you in touch with your emotions or prepared to stand by your convictions? If so, then you’re on your way to being an effective leader. If not, then consider the preceding advice. Not all of it will work in every situation, but it will serve you well just the same. As I have learned over the years, better decisions lead to better outcomes. Wouldn’t your organization — and your career — benefit from more of these? Inder Sidhu is the Senior Vice President of Strategy & Planning for Worldwide Operations at Cisco , and the author of Doing Both: Capturing Today’s Profits and Driving Tomorrow’s Growth . Author proceeds from sales of Doing Both go to charity. Follow Inder on Twitter at @indersidhu .

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U.S. Dollar Benefits From Risk Aversion, Euro-Loonie At Key Fib

May 11, 2011

U.S. Dollar Benefits From Risk Aversion, Euro-Loonie At Key Fib

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U.S. Dollar Benefits From Risk Aversion, Index Eyes 9800

May 11, 2011

U.S. Dollar Benefits From Risk Aversion, Index Eyes 9800

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U.S. Dollar Benefits From Risk Aversion, Index Eyes 9800

May 11, 2011

U.S. Dollar Benefits From Risk Aversion, Index Eyes 9800

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U.S. Dollar Benefits From Risk Aversion, Index Eyes 9800

May 11, 2011

U.S. Dollar Benefits From Risk Aversion, Index Eyes 9800

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U.S. Dollar Benefits From Risk Aversion, Index Eyes 9800

May 11, 2011

U.S. Dollar Benefits From Risk Aversion, Index Eyes 9800

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State Lawmakers Revisit Expired Unemployment Benefits

May 9, 2011

State lawmakers in Tennessee and North Carolina want a legislative do-over after their states became ineligible for 20 weeks of federally-funded unemployment insurance last month. Democrats in the Tennessee, where the unemployment rate is 9.5 percent, are trying to revive the Extended Benefits program. They didn’t learn of the program’s untimely death until constituents reported that their checks had stopped after April 16. The U.S. Congress had previously reauthorized the EB program through the end of the year for states with persistent high unemployment. “We were pretty surprised to learn it had happened and there weren’t other efforts to get it remedied,” said Sen. Lowe Finney (D), who introduced legislation last Thursday to restore the federal EB program. “I’ve been hearing from constituents for a few weeks.” Rep. Craig Fitzhugh (D), who introduced the same bill in the state House of Representatives, also said constituents brought the lapsed benefits to his attention. “It’s certainly something, in my opinion, we should move forward on,” Fitzhugh said. In North Carolina, Democratic Gov. Bev Perdue vetoed a bill saving the benefits because Republican lawmakers attached big budget cuts to the legislation. But now Democrats and Republicans in the North Carolina General Assembly have said they want to cut a new deal to reinstate the benefits, according to the Charlotte Observer . The federal Extended Benefits program provides the final 20 weeks of checks for the long-term jobless who have exhausted up to 73 weeks of state and federal benefits without finding work. (That full complement of 99 weeks of benefits is available in only 25 states .) States are eligible for the EB program if they’ve got unemployment above 8 percent and if the rate is 110 percent of what it was two years ago. Since unemployment rates have been flat since then, Congress told states in December that they could amend their EB laws to look back three years instead of two. But several states haven’t bothered , and others have done so only after coupling the benefits with cuts . Some 28,000 Tennesseans missed out on checks last month as EB expired with little or no public debate , even though the federal government put states on notice about how the program might lapse and what lawmakers could do about it. Sen. Finney said that the bill, if passed, would pay benefits retroactively for anyone who has missed checks since April. Republican leaders in the Tennessee General Assembly did not immediately respond to requests for comment. A potential obstacle to the bill’s passage is its cost: While the federal government would pay $57.7 million, the state would be on the hook for $396,000, according to the legislature’s fiscal review committee. That’s because states cover the cost of layoff claims from state, local and tribal governments, which the National Employment Law Project estimates amount to 2 percent of all claims. Finney said he didn’t know if the legislation will be taken up by the assembly before it adjourns for the year this month. “When we’re this late in the legislative session it’s difficult to get bills heard, and some committees have already shut down for the year,” Finney said.

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Labor Group Born After Ohio Gov’s Bob Evans Gaffe

April 21, 2011

COLUMBUS, Ohio — A labor-backed group seeking to capitalize on a verbal gaffe by Gov. John Kasich delivered a letter Thursday to Bob Evans Farms Inc. pushing the company to improve benefits for employees. Ohioans Against Shabby Benefits got its name from a remark Kasich made Tuesday while marking his 100th day in office. The Republican governor said a woman working at Bob Evans probably had no pension and health care benefits that were “shabby at best.” Company spokeswoman Margaret Standing said the governor called to apologize for what Bob Evans views as simply a misstatement. “We know he’s a fan, and he was apologetic for the attention,” Standing said. Last month, Kasich touted a deal keeping the restaurant and food company in Ohio. The state provided $7.7 million in incentives as part of the deal, which included a relocation of the company’s headquarters from Columbus to the wealthy suburb of New Albany. The labor coalition tied its Bob Evans effort to its fight against collective bargaining and pension limits backed by Kasich. He signed a law last month that allows unions to negotiate wages but not sick time, health care or pension benefits, a move that affects more than 350,000 public workers. Teresa Law, a coalition representative and member of Service Employees International 1199, offered to help the company improve employee benefits. “Governor Kasich should know something about ‘shabby’ benefits with his attack on workers’ rights in this state,” she said in a statement. “Governor Kasich needs to stop trying to eliminate middle class jobs when he should be creating them. Jobs with benefits are what Ohioans need to help get our economy back on track.” Standing said Bob Evans offers comparable benefits to its employees. “All our employees at Bob Evans Farms Inc. have the opportunity to participate in a variety of benefits programs, including medical benefits and a 401(k) program,” she said. “And we regularly review the benefits packages to make sure they’re on par with other publicly traded restaurant companies.” She said benefits information is also posted on the company’s website.

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Marc Joffe Named Senior Advisor to Kamakura Corporation

April 12, 2011

NEW YORK, NY–(Marketwire – April 12, 2011) – Kamakura Corporation announced today that Marc Joffe has been named Senior Advisor to Kamakura Corporation. Mr. Joffe will be based in San Francisco and will be part of the company’s client services team supporting existing and prospective customers as they implement and maximize the benefits from Kamakura’s risk management solutions. Additionally he will work closely with Mark Mesler, Managing Director and head of KRIS default probability services on product development efforts. Mr. Joffe is a specialist in the areas of public finance, credit risk and application development.

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Richard L. Revesz and Michael A. Livermore: Thirty Years of Regulatory Review

March 29, 2011

Thirty years ago, President Reagan put cost-benefit analysis at the heart of how agencies like the EPA and OSHA do business and initiated one of the most important recent developments in how the federal government works. In a 1981

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Dean Baker: The Deficit Hawks Target Nurses and Firefighters

March 29, 2011

Many people might think that the country’s problems stem from the fact that too much money has been going to the very rich. Over the last three decades, the richest one percent of the population has increased its share of national income by almost 10 percentage points (Excel spreadsheet). This comes to $1.5 trillion a year, or as the deficit hawks are fond of saying, $90 trillion over the next 75 years. To put this in context, the size of this upward redistribution to the richest one percent over the last three decades is roughly large enough to double the income of all the households in the bottom half of the income distribution. The upward redistribution amounts to an average of more than 1.2 million dollars a year for each of the families in the richest one percent of the population. And this upward redistribution was brought about by deliberate policy. We pursued a trade and high dollar policy that was intended to put downward pressure on the wages of manufacturing workers. The Federal Reserve Board deliberately kept unemployment higher than necessary in order to weaken workers bargaining power. We extended patent monopolies to allow drug companies to jack up prices, raking in hundreds of billions a year. And, we gave the Wall Street banks the benefit of “too big to fail” status so they can borrow with a government subsidy. These policies and others fueled this enormous upward redistribution. But the deficit hawks don’t want us talking about any of these things. The deficit hawks insist that we have to cut Social Security and Medicare benefits now! They are busy hyperventilating over the enormous deficits, the result of the economic collapse, which was in turn the result of their economic mismanagement. (Wait, we are not supposed to talk about that.) And the deficit hawks have clear ideas on how they want to deal with the costs of Social Security and Medicare over coming decades. And, it does not involve taking money from the tiny group of wealthy people who have profited enormously at the expense of the middle class over the last three decades? Nor are the deficit hawks interested in reining in the drug companies, the insurance companies or the doctors. The bloated prices and exorbitant pay of these actors is the main reason that U.S. health care costs are so wildly out of line with health care costs in other wealthy countries. But deficit hawks don’t get paid to go after rich people or the health care industry. Deficit hawks get paid to go after the benefits of middle-income people. This is why we were treated to a Washington Post column by finance industry executive Robert Pozen telling liberals that they should support his plan for raising the retirement age and cutting Social Security benefits for higher-income earners. When Pozen talks about cutting benefits for higher-income earners he is not thinking of people like Peter Peterson or Robert Rubin. He has his gun sights on people earning $40,000 to $80,000 a year. In other words, Pozen wants to cut benefits for workers like schoolteachers, firefighters and nurses. These are workers that definitely enjoy somewhat higher pay and a higher standard of living than most of the workforce, but only in Washington deficit hawks’ circles are these people living lavish lifestyles that need to be cut back. These workers are quite explicitly the target of the Washington deficit hawk gang. The deficit hawk crew will even shed some crocodile tears for the poor who earn near the minimum wage and live near the poverty level. They would raise their benefits if not for those greedy plumbers and mechanics who insist on getting the Social Security benefits that they paid for. In the next few weeks we will be treated to an endless parade of budget experts who will be yapping about “entitlements” and insisting that middle-income workers are living too lavishly. While all these experts have really impressive credentials it is important to remember that these credentials did not prevent this highly paid crew from overlooking the largest asset bubble in the history of the world. If this group had paid a tenth as much attention to the housing bubble as they are now paying to the deficit projections, we would not be sitting around with 25 million who are unemployed, under-employed or out of the workforce altogether. The deficit hawks are very good when it comes to whining about the deficit and demanding sacrifices from middle-class workers. They just aren’t very good when it comes to understanding the economy.

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GOP Leaders Agree To Meet With Dems To Discuss Bill For Long-Term Unemployed

March 22, 2011

WASHINGTON — Republican leaders in the House of Representatives have agreed to meet with two Democrats to discuss longshot legislation for the long-term unemployed, the members’ offices confirmed Tuesday. Reps. Barbara Lee (D-Calif.) and Bobby Scott (D-Va.) introduced legislation earlier this year to provide 14 additional weeks of unemployment benefits to Americans who’ve been out of work for six months or longer. Lee and Scott have spoken frequently about the struggles of so-called “99ers” — people who still haven’t found work after exhausting the maximum 99 weeks of benefits available in some states. The Lee-Scott proposal received zero initial support from Republicans because it would add roughly $16 billion to the federal budget deficit. Lee and Scott later announced they’d be open to finding budget cuts to offset the cost of the benefits, something Democrats have generally refused to do for federal extended jobless aid typically enacted during recessions. Given that concession, House Speaker John Boehner (R-Ohio) and Majority Leader Eric Cantor (R-Va.) have agreed to meet with Lee and Scott sometime in the next few weeks to discuss possible cuts to fund the benefits. “Speaker Boehner has said he would have an ‘open door’ policy for Members of both parties in the Peoples’ House, and he meant it,” Boehner spokesman Michael Steel said in an email. “He is looking forward to hearing Rep. Lee’s ideas for spending cuts that a majority in the House of Representatives can support.” HuffPost readers: Unemployed a long time? Tell us about it — email arthur@huffingtonpost.com . Please include your phone number if you’re willing to do an interview. Cantor’s office suggested he would steer the conversation toward job creation instead of just providing another 14 weeks of benefits. “Leader Cantor looks forward to the meeting and would like to broaden the conversation to focus on ways to grow the economy, spur investment and create jobs rather than simply extending unemployment benefits in some instance beyond the maximum of 99 weeks currently permitted,” a Cantor spokesman said Monday in a statement to the OC Register . Cantor spokesman Brad Dayspring elaborated in an email to HuffPost: “The point was basically that the Leader believes that the best unemployment program in America is a job, so rather than only talking about extending benefits, we should be having a broader conversation about growing the economy, spurring investment, and allowing businesses to hire.” Lee and Scott haven’t suggested what they’d be willing to cut, and House Democratic leaders have remained silent about the prospect of offsetting the cost of unemployment benefits. Last year, then-Speaker Nancy Pelosi (D-Calif.) told HuffPost she considered offsetting benefits “a completely bad idea,” though many conservative Democrats have said they support doing so. The National Employment Law Project estimated that 3.9 million Americans exhausted their unemployment benefits last year. The Congressional Research Service estimated that as of October, 1.4 million Americans had been out of work for 99 weeks or longer. Anyone who had exhausted benefits and still hadn’t found work would be eligible for retroactive benefits under the Lee-Scott proposal. “Rep. Lee is encouraged that the Speaker has agreed to meet within the next few weeks to discuss how to provide emergency benefits for millions of long-term unemployed workers,” Lee spokesman Joel Payne said. “Despite her strong belief that this should be considered emergency spending, the Congresswoman is committed to exhausting every possible option for passing this bill.”

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Kiwi Benefits From Local Newspaper Article Dismissing Rate Cut Prospects

March 8, 2011

Kiwi Benefits From Local Newspaper Article Dismissing Rate Cut Prospects

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Dave Johnson: America Waking up to Value of Unions

March 2, 2011

As Abraham Lincoln famously said, “You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time.” When you put enough dots in front of people sooner or later they will connect the dots. And Americans are connecting the dots. Dots: Trade deals close factories, outsource jobs and pit workers against each other, then wages decline and unemployment is really high, while all the money goes to a few at the top. Then calls to cut the wages and benefits of the rest. Dots: Unions squashed, then pensions disappear, then calls to get rid of public-employee unions because they have pensions . Dots: Tax cuts for the rich, then panic over resulting deficits, then calls for cuts in the things government does for We, the People. People are connecting the dots: Unions mean better wages, benefits and working conditions. There is a joke circulating that goes like this: A unionized public employee, a member of the Tea Party and a Big Corp CEO are sitting at a table. In the middle of the table there is a plate with a dozen cookies on it. The CEO reaches across and takes 11 cookies, looks at the tea partier and says, “Look out for that union guy, he wants a piece of your cookie.” Americans are waking up to the value of unions and government of, by and for We, the People. The situation in Wisconsin is waking America up to the value of unions. At a time when so many of us are hurting, seeing this naked attempt to strip from Wisconsin’s public employees the ability to bargain for a better life is resonating. A CBS/NY Times poll finds that “a majority of Americans say they oppose efforts to weaken the collective bargaining rights of public employee unions and are also against cutting the pay or benefits of public workers to reduce state budget deficits.” Further down in the story, “Americans oppose weakening the bargaining rights of public employee unions by a margin of nearly two to one: 60 percent to 33 percent.” On how to fix budget deficits, “those polled preferred tax increases over benefit cuts for state workers by nearly two to one.” Union Information Blackout In Corporate Media Interestingly, though, from the polling story , “Labor unions are not exactly popular, though: A third of those surveyed viewed them favorably, a quarter viewed them unfavorably, and the rest said they were either undecided or had not heard enough about them.” Wow! More than 1/3 of the public hasn’t heard enough about unions to know if they like them or not! This is not surprising: When was the last time you read, saw or heard from a union in the major media, explaining the benefits of joining a union? There has been a virtual blackout of information about unions in the corporate media. So this Wisconsin story is bringing home to people that there is this thing called “collective bargaining” that can help them in their own jobs! Strategy fail The plan was to spend a year claiming that public employees and their pensions were responsible for state budget deficits, then go after the unions. The strategy also threw in a dose of resentment: People were reminded that their pensions were stolen in the 80′s, but these uppity gubment workers still had pensions, so their pensions should be stolen too! But people are smarter then the plutocrats think, and they connected some more dots: Dot: People in unions have good wages and benefits including pensions. Well, that’s only one dot, but it doesn’t take a lot of neuron connections to realize this means that you should join a union, not be against unions ! The resentment argument backfired, and people are waking up to the value of unions. Unions Vital to Economy Since the Reagan Revolution crushed unions wages for everyone except a few at the top have been flat. In the ‘W’ Bush decade even before the financial crash wages were declining and job growth was anemic. And wages have been stagnant since this “recovery” began. This wage stagnation is the result of of the loss of the bargaining power of working people. Working people’s share of the benefits from increased productivity took a sudden turn down when the Reagan Revolution crushed unions: Wage stagnation resulted: (note boost in Clinton years, undoing some of the Reagan damage.) Unions are vital to a middle class society. Corporations and the wealthy behind the corporate mask have so much power. The only forces that can counter that power and fight for the rest of us are the unions and democratic government. The Reagan Revolution began the elimination of both, bringing instead plutocracy — government of, by and for the wealthy. The resulting weakness in the power of working people to bargain for a fair share has left us with an economy that didn’t work when it was “recovering” under Bush, and now can’t get out of the recession. To lift the economy we have to lift wages. Families are not sharing in the rewards, but they are waking up and connecting the dots. America is waking up to the value of unions. This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture . I am a Fellow with CAF. Sign up here for the CAF daily summary . On March 10, 2011, the Summit on Jobs and America’s Future will bring together leaders and activists who understand that America faces a jobs crisis – and who are committed to building a political movement for sustainable economic growth, dynamic job creation, and a revival of the American economy. Free. $15 with lunch. Register here.

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Rev. Al Sharpton: "We Do Big Things"

January 26, 2011

“We do big things”. One of the central themes in President Obama’s State of the Union address, “we do big things” was a reminder to all of the strength, character and ability of the nation. “We do big things” was a call to action for renewed innovation and creativity that defined much of our progress in years past, but these words were also a resounding call to appreciate and honor the American spirit. The day after this State of the Union speech, the NY Times ran a front-page story titled: ” The Financial Crisis was Avoidable .” If we now distinctly know who was responsible for this economic debacle, and it is in fact time to do big things once again, the people can no longer be the scapegoat for corporations that are still laying off and demonizing workers at such a pivotal point in our country. “The 2008 financial crisis was an ‘avoidable’ disaster caused by widespread failures in government regulation, corporate mismanagement and heedless risk-taking by Wall Street, according to the conclusions of a federal inquiry,” is the opening sentence to the NY Times ‘ cover story. According to the piece, the inquiry found fault with the Federal Reserve, two Fed chairmen — Alan Greenspan and Ben Bernanke — other governmental officials, Wall Street regulators, the SEC and more for the economic calamity we are still suffering today. As this article clearly highlights, it was those in positions of power that failed to halt this inevitable financial meltdown, and — more importantly — failed to alert the rest of us of the impeding implosion. More than two years following this preventable, unfortunate catastrophe, the people are continuing to suffer. In addition to nearly 10% unemployment across the board, with astronomically higher rates for Blacks and Latinos, corporations are still laying off and freezing workers. When workers clearly did not cause this crisis, why are they the ones to bear the brunt of its impact? If it was the lack of oversight and greed of a select few, why must the majority be demonized? And why at a time like this, do we have talk of cutting pensions and eliminating other rightfully earned benefits of workers when the benefits of those responsible are never called in to question? In fact, their benefits have only increased. On Thursday, the full breath of this 576-page report will be released and we will all openly witness the extent to which an avoidable disaster has instead crippled the nation and the world at large. President Obama undoubtedly did much to prevent our economy from plummeting into complete oblivion. It was a rough two years, but as he so eloquently reminded us in his State of the Union address, the idea of America endures. But in order for America to rectify its financial state and our place on a global stage, the onus cannot be on the middle-class or the poor. Those that were responsible for the pain and suffering of the populous must now take ardent, immediate steps to repair and rectify our current situation. The president cannot do it alone; we must hold guilty parties accountable and we must put in to place mechanisms to prevent the same mistakes from occurring ever again. As the president so aptly stated: “We may have differences in policy, but we all believe in the rights enshrined in our Constitution. We may have different opinions, but we believe in the same promise that says this is a place where you can make it if you try. We may have different backgrounds, but we believe in the same dream that says this is a country where anything is possible. No matter who you are. No matter where you come from.” We must ensure that this fundamental American concept doesn’t get lost in the voracity of the culpable.

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Jason Alderman: Taxes Follow You Into Retirement

January 26, 2011

Wouldn’t it be nice if, after decades of hard work, scrimping and saving, you could retire and no longer have to worry about paying taxes? But that’s about as likely as the Cubs winning the World Series. Even if your income drops significantly after retirement, chances are you’ll still be taxed on a portion of it. And, depending on where you choose to retire and your income sources, you’ll probably also face additional taxes on everyday purchases, real estate, capital gains, inheritances — the list goes on. Here are a few tax-related issues to consider when budgeting for your living expenses during retirement: Taxes on Social Security benefits. Most people can begin collecting Social Security benefits as early as age 62, although if you draw benefits before your full retirement age, your benefit amount may be reduced significantly. “Full retirement age” is 65 for those born before 1938 and gradually increases to 67 for those born in 1960 or later. (To calculate your full retirement age by birth year, click here .) Keep in mind, however, that even though many states don’t tax Social Security benefits, they are counted as taxable income by the federal government. So, depending on your overall income, you may owe federal income tax on a portion of your Social Security benefit. The formula is complicated, but basically: Single people whose combined income from all sources is less than $25,000 are not taxed on their Social Security benefit. (“Combined income” is adjusted gross income plus nontaxable interest earned plus half of your Social Security benefits.) For combined income between $25,000 and $34,000, you will be taxed on up to 50 percent of your benefit. For income over $34,000, up to 85 percent of your benefit may be taxable. For married people filing jointly: benefits are not taxable for combined income below $32,000; benefits between $34,000 and $44,000 are up to 50 percent taxable; benefits over $44,000 are up to 85 percent taxable. For more details, read the IRS’ Tax Topic 423 and Publication 915 . Working and Social Security. Some people find that after opting to collect a reduced Social Security benefit before full retirement age, they can’t make ends meet and must go back to work. But this can backfire: If your wages are more than $14,160 a year, you will lose one dollar of Social Security benefits for every two dollars you earn over that amount. (Note: Investment income doesn’t count.) If you’re scheduled to reach full retirement age during 2010, the benefit reduction will drop to $1 for each $3 you earn above $37,680 until the month you reach full retirement age. After that, there is no further reduction. So, if you think you’ll need to continue working to make ends meet, it might be wiser to hold off on collecting Social Security until you reach full retirement age. Be aware, though, that these benefit reductions are not completely lost: Your Social Security benefit will be increased upon reaching full retirement age to account for benefits withheld due to earlier earnings. One last point about taxes and Social Security: Any wages you earn after you’ve begun to collect Social Security retirement benefits are subject to Social Security and Medicare taxes, regardless of your age. To learn more, read How Work Affects Your Benefits at the Social Security website. Taxes on IRA and 401(k) withdrawals. After age 59 ½, you can start withdrawing balances from your IRA or 401(k) without paying the 10 percent early withdrawal penalty. However, don’t forget that you will pay federal (and state, if applicable) income tax on the withdrawals — unless it’s a Roth plan, whose contributions have already been taxed. Other taxes. Some people move to another state after retirement thinking they’ll lower their tax burden. For example, seven states do not tax personal income (although another two do tax dividend and interest income). And five states charge no sales tax. But because property, inheritance and fuel taxes and other cost-of-living expenses vary significantly by community, you should only consider such moves after doing thorough research. The Retirement Living Information Center features breakdowns of the various kinds of taxes seniors are likely to pay, state by state, including taxes on income, sales, fuel, property, inheritances and other items. You may want to consult a financial planner long before retirement to make sure you fully understand all the many tax and income implications. If you don’t have one, the Financial Planning Association is a good resource. Bottom line: Be sure to include taxes among the many expenses you need to plan for at retirement. This article is intended to provide general information and should not be considered legal, tax or financial advice. It’s always a good idea to consult a legal, tax or financial advisor for specific information on how certain laws apply to you and about your individual financial situation. To participate in a free, online Financial Literacy and Education Summit on April 4, 2011, go to Practical Money Skills .

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Unemployment Checks Will Not Arrive Until January For Some

December 21, 2010

Ken Watson said the Ohio Department of Job and Family Services notified him Sunday that on Monday he’d receive the unemployment checks Congress kept from him with its dithering the past two weeks. “I didn’t know what they were gonna do,” said Watson, a 46-year-old laid-off IT contractor with five kids in Batavia, Ohio. “I didn’t really count on it coming back.” More than a million people relying on federally-funded extended unemployment benefits had their checks interrupted after Congress allowed the benefits to lapse at the end of November, according to the National Employment Law Project. The federal benefits, which in some states give 73 weeks of aid to people who exhaust 26 weeks state benefits, were reauthorized last week after President Obama cut a deal with Republicans to attach continued help for the jobless to a reauthorization of tax cuts for the rich. When he signed the bill on Friday, Obama said the unemployed were in luck because “states can move quickly to reinstate their benefits — and we expect that in almost all states, they’ll get them in time for Christmas.” Rich Hobbie, director of the National Association of State Workforce Agencies, told HuffPost that some long-term jobless will not receive missed payments until next year. Most will be paid in the next two weeks. “The bottom line is many states will have payments out by December 25,” Hobbie said. “Some states already have payments out. And there are a minority of states whose benefit payments will spill over into January.” George Wentworth of the National Employment Law Project told HuffPost that the people most likely to be left hanging until January are the folks whose 26 weeks of state benefits expired before they could start the first “tier” of federally-funded Emergency Unemployment Compensation. “The vast majority of states are paying this week and next,” he added. HuffPost readers: Left hanging until next week or longer? Tell us about it — email arthur@huffingtonpost.com . Please include your phone number if you’re willing to do an interview. Watson told HuffPost earlier this month he was “shocked” to discover that his $300 weekly lifeline, which he’d expected to last until January, prematurely stopped on Dec. 4. He said his wife was still working part-time and that his family’s Christmas wouldn’t be spoiled by the unemployment cutoff, but he worried his youngest might not understand. “My two younger kids I really have to worry about because they believe in Santa Claus,” he said. He praised the Ohio Department of Job and Family Services for a smooth handling of the lapse in federal benefits. He did not praise the U.S. Congress, calling it “dirty politics” to leave the unemployed hanging to win tax cuts for the rich. “That was crazy,” he said. “That was totally uncalled for.”

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Jobless Mom To Son: ‘Santa Had To Cut Back At The North Pole This Year’

December 14, 2010

At first, Samara McAuliffe thought of her layoff earlier this year as a good thing. “I kind of saw the layoff as an opportunity to find a dream job,” McAuliffe told HuffPost. “I didn’t realize how long it would take to find a job.” Now all she wants is a job, any job. She said she’s applying for all kinds — she used to do HR for a big bank — and nobody’s responding except Starbucks. “They were kind enough to send an email that I didn’t meet their qualifications.” McAuliffe, 30, said her husband is still working and that the family of four is better off than many in similar situation. Nevertheless, they’re still “feeling the pinch” because of her reduced income. “My son is four. He’s at that age where Santa is a big deal,” she said. “We did have a talk because he remembers Christmas last year. He can list almost every gift he received. I told him, ‘Santa was cutting back in the North Pole this year, the focus was going to be more on family.’ He doesn’t understand, but I tried.” McAuliffe, who lives in central New Jersey, said she will receive her final unemployment check next week unless Congress reauthorizes Emergency Unemployment Compensation and Extended Benefits programs, which provide up to 73 weeks of federally-funded aid for people who exhaust 26 weeks of state benefits without finding work. Congress will probably reauthorize the benefits this month by attaching them to a reauthorization of tax cuts for the rich. More than a million people have already been cut off since the EUC and EB programs lapsed two weeks ago. McAuliffe said the debate in Congress over reauthorizing the benefits hits home. She takes it personally when politicians insinuate, as the frequently do, that the unemployed don’t want to work and would rather receive benefits worth a fraction of their former pay. “What is frustrating for me the idea that people on unemployment are making a living off of being on unemployment. I don’t think that’s the case,” McAuliffe said. “It’s embarrassing and demoralizing not being able to find a job.” A major expense is health insurance. McAuliffe said she’s been able to continue her former employer’s health insurance policy thanks to COBRA, but she lost her job one month too late to be eligible for a 65 percent COBRA subsidy that expired in May. The monthly premium is more than $1,350 — almost as much as she takes in unemployment benefits. “I feel like now we’re sort of those people they’re talking about in the news — relatively comfortable middle class, now still middle class but less comfortable.”

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Japanese Yen Benefits From Flight To Safety, Euro To Retrace September Advance

November 23, 2010

Japanese Yen Benefits From Flight To Safety, Euro To Retrace September Advance

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Unemployment Extension Defeated In House

November 18, 2010

WASHINGTON — The House of Representatives on Thursday voted down a measure that would have reauthorized extended unemployment insurance for another three months, leaving no clear path forward to prevent the benefits from lapsing as scheduled on Nov. 30. Without a reauthorization, the Labor Department estimates that two million long-term unemployed will prematurely stop receiving benefits before the end of the year. “I think it’s a sad moment,” said Rep. Alan Grayson (D-Fla.) after the vote. “It appalls me that the Republicans keep pitching and pitching and pitching the tax cuts for the rich and won’t join in a bill to help people keep their homes and not have to live in their cars.” The bill was brought to the floor under a “suspension of the rules,” meaning it required approval from two-thirds of the House. It failed 258 to 154, with mostly Democratic support. Twenty-one Republicans voted in favor and 11 Democrats voted nay. Even if it had passed the House, it’s unclear how it would get through the Senate, where Democrats will need at least three Republicans to switch sides. No GOP moderates have signaled a willingness to support an unemployment reauthorization that isn’t “paid for” with spending cuts — something Democrats have refused to do all year. In most recessions, the cost of federally-funded jobless aid is usually paid for with deficit spending. It’s likely there will be another effort in Congress to reauthorize the benefits before the Christmas break, though lawmakers will be off next week for Thanksgiving. “My understanding is the Senate is trying figure out what vehicle they can add it to and how they can include and we’ll see, but I don’t think we should be going home over the holidays when people are losing their unemployment benefits, and especially when the struggle seems to be how you can give more money to rich people,” Rep. George Miller (D-Calif.), chairman of the House Education and Labor committee, told HuffPost. Democrats may attempt to attach a reauthorization of the extended benefits to a broader bill, such as a measure reauthorizing some of the Bush-era tax cuts set to expire at the end of the year. Advocates for the unemployed want a bill that preserves existing benefits for the entirety of 2011. White House spokesman Robert Gibbs on Thursday said Congress ought to reauthorize the benefits before its Christmas break. “When we discuss how to get our economy moving again, there isn’t an economist in the country who won’t tell you that ensuring [that] those who lost their jobs have the ability to pay their rent, support their families, isn’t in and of itself a great boost to the economy,” he said. I do not think that we want to leave here having fought for tax cuts for millionaires and against… unemployment insurance for those who lost their jobs.” Federally-funded extended benefits, which give the unemployed up to 73 weeks of benefits once they exhaust 26 weeks of state benefits, have needed several reauthorizations in the past year, and Congress has let them lapse three times. The shorter lapses didn’t cause too much of an interruption in benefits, but over the summer, as Senate Republicans filibustered a reauthorization for 50 days, 2.5 million people stopped receiving checks for several weeks. “Sadly, Congress is once again heading out of town just as the federal unemployment insurance programs are slated to expire, this time right as the holiday season begins,” said Christine Owens, director of the National Employment Law Project, in a statement. “It is critical that a full-year renewal of the program moves to the top of the agenda when Congress returns on November 29th, to minimize the hardship and disruption to families and the economy that will result from the November 30th cut-off.” Sam Stein contributed reporting.

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No Plans In Senate For A Vote On Unemployment Benefits

November 17, 2010

Senate Democrats have not figured out a way to get around Republican opposition to reauthorizing extended unemployment insurance for the long-term jobless. “We are still in the process of trying to establish the schedule of the lame duck session, in terms of the remaining days of the session, so no specifics, but think we all understand that this is something that is going to have to be done,” said Sen. Jack Reed (D-R.I.) during a conference call with reporters on Wednesday. The benefits are set to expire at the end of the month, jeopardizing a lifeline for two million people during the holidays. But it’s not likely the benefits will be reauthorized before they lapse, since Congress will go home for Thanksgiving next week, meaning this week is the last chance to prevent an interruption in benefits. Reed said there is no plan for a vote. “At this point it’s not been scheduled,” he said. “We’re trying to make a case that there be action but at this point I can’t point to a specific time it will come up for a vote this week.” Extended unemployment insurance is federally-funded and gives the long-term unemployed up to 73 weeks of payments after they finish 26 weeks of state benefits. Previous reauthorizations have been held up because Republicans and conservative Democrats don’t want the cost of the benefits added to the deficit, even though extended benefits have traditionally been given “emergency” status and financed with deficit spending. (A full-year reauthorization might cost $65 billion, according to the Economic Policy Institute ). Democrats have been highlighting the fact that the people insisting on offsets for unemployment benefits are not insisting on offsets for tax cuts for the rich. “On the one hand they want to provide $700 billion in tax cuts to the wealthiest Americans but not pay for them. And on the other hand they’re demanding that UI benefits for the middle class be paid for,” Reed said. “That’s a little like someone on a diet who orders a Diet Coke and a Big Mac simultaneously.” Starting Dec. 1, people who exhaust state benefits or one of the four “tiers” of Emergency Unemployment Compensation will be ineligible for another tier or for Extended benefits. HuffPost readers: Are you in this boat? Tell us about it — email arthur@huffingtonpost.com . Pat McNamara, 61, said she lost her job with the Philadelphia mayor’s office in August 2009. She’s been unable to find work. “I am not proud. I have applied for everything from administrative positions to temp jobs, even customer service jobs paying $7.50 an hour with no benefits,” she said. “It’s going to be tough when federal unemployment benefits end. I have no other source of income.” Reed and Sen. Robert Casey (D-Pa.) said they didn’t know whether Democrats would attempt a deal to attach the benefits to the tax cuts, but both said they wanted the benefits reauthorized for a full year. Democrats will need at least a handful of Republicans, but moderates who previously crossed the aisle for the unemployed have not signaled they will do so this time. Reed said Senate Democrats are focused for now on reauthorizing current benefits and not giving additional weeks to people who have already exhausted their federal benefits. On Wednesday the National Employment Law Project delivered a petition with 100,000 signatures to Casey’s office calling on the Senate to reauthorize the benefits.

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Jobless Benefits About To Lapse As Senate Dems Mull Strategy

November 16, 2010

WASHINGTON — Senate Democrats are discussing their strategy for reauthorizing extended unemployment insurance on Tuesday as the expiration date for the jobless aid is fast approaching. Neither the House nor the Senate will be in session next week, aides say, so extended unemployment benefits for the long-term jobless will need to be reauthorized this week before they expire on Nov. 30. Two million people could prematurely lose their benefits by New Year’s Day, according to the National Employment Law Project. Currently five million people are receiving aid under two federally-funded programs for the long-term unemployed. Yet no clear path forward has emerged in Congress for reauthorizing those programs. Aides have floated the idea of coupling the benefits with a reauthorization of the expiring Bush-era tax cuts for the top two percent of earners. “I support extending unemployment benefits whichever way we can do it,” Sen. Debbie Stabenow (D-Mich.) told HuffPost before heading into a weekly caucus lunch with other Democrats. Sen. Ben Nelson, a Nebraska Democrat who sided with Republicans when they blocked the previous reauthorization for nearly two months this summer, said he doesn’t love the tax cut deal. “That’s a mistake,” said Nelson, who has joined the GOP in opposing the extended benefits unless their deficit impact is offset with spending cuts. “Unless unemployment is paid for, I can’t support it.” (Nelson and Republicans do not insist on offsetting the deficit impact of tax cuts for the rich, estimated to be near $700 billion. The progressive Economic Policy Institute puts the cost of a full year’s worth of extended unemployment benefits at $65 billion.) “I think what we want to do is not give $700 billion in tax breaks to the richest people in this country and cut back on the needs of Americans who are really really hurting,” said Sen. Bernie Sanders (I-Vt.) before meeting with his colleagues. “I’m walking into the room, those are the things I’m going to fight for.” A lobbyist who has been pushing for a year-long reauthorization said Democratic leadership sees tying unemployment to the tax cuts as an effective strategy. “Leadership is very aware of the beautiful symmetry of tax cuts for millionaires doesn’t need to be offset but $293 a week for the long-term unemployed does.” Aides have said it’s not likely a deal on unemployment will be sorted out this week, meaning a lapse is highly likely. It would be the fourth lapse in a year. People who missed checks during the previous lapses were paid retroactively when Congress got the job done. The programs needing reauthorization kick in after a layoff victim’s initial six months of state benefits are exhausted. If the benefits lapse, people whose state benefits end after Nov. 30 will be ineligible for the additional 73 weeks of benefits granted to people laid off closer to the beginning of the recession. State workforce agencies have made it through some of briefer lapses without a major interruption in benefits, but NELP estimates that this time, 800,000 people in the federally-funded “Extended Benefits” program, which offers 13 or 20 weeks, depending on the state, will almost immediately stop receiving checks when the program expires. People receiving benefits in any of the four “tiers” of federally-funded “Emergency Unemployment Compensation,” which provides up to 53 weeks of aid, will be unable to move to the next tier or to EB once their current tier expires. HuffPost readers: Would you be affected by a lapse? Tell us about it — email arthur@huffingtonpost.com .

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Euro Benefits From Talks of EU Bailout, British Pound To Make Another Run At 1.6300

November 12, 2010

Euro Benefits From Talks of EU Bailout, British Pound To Make Another Run At 1.6300

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Merton and Joan Bernstein: Fiscal Commission Mistakenly Targets Social Security for Cuts

September 27, 2010

The National Commission on Fiscal Responsibility, charged by President Obama to recommend ways to reduce the federal deficit, appears fixated on Social Security. The commission co-chairs and several members have advocated reducing benefits and raising the retirement age, another benefit cut. The question is why? Could it be because Social Security: • Pays its own way, does not and cannot add to the deficit, but produces surpluses, already totaling $2.77 trillion and projected to exceed $ 4 trillion? • Pays benefits only to those “entitled” by satisfying prescribed eligibility requirements – extensive periods of work and contribution? • Insures family members – starting at birth – against income loss due to an earner’s death, disability or retirement? • Reduces poverty program more effectively than any other program, especially for older women? • Generates billions of dollars in beneficiary purchasing power that fuel hundreds of billions in sales and millions of jobs? • Has non-benefit costs below one percent of benefits paid? None seems like a reason to diminish the program. Social Security is a model of fiscal responsibility. Three dedicated sources fund it: a modest payroll tax; income taxes on the benefits of high earners; and market-rate interest the U.S. Treasury pays on funds it borrows from Social Security. They will suffice to pay for benefits in full for decades. The Earned Income Tax Credit (EITC) purposely ameliorates the impact of the payroll tax on low earners by reducing their incomes taxes. That explains why many people pay more in payroll taxes than in income taxes. Moreover, the law permits benefit payments only if there are funds on hand to pay them; and Social Security has no authority to borrow. So, Social Security not only does not increase the deficit, it cannot. Social Security’s trust fund derives from its revenue not immediately needed to pay benefits. The U. S. Treasury issues certificates of obligation to the Social Security trust fund for those surpluses. Starting around 2024, Treasury will begin to repay those loans. This can be done most readily by: expanding the economy thereby improving wages and enlarging payroll tax revenues, and gradually raising the cap on taxable wages (now at $106,800 a year), to its historical level. Increasing the payroll tax rate by only 1 % on employer and employee, starting years from now, if needed, would complete the program to achieve long-term actuarial balance. The commission seems to ignore justifiable and politically palatable ways to trim the deficit, such as tackling the hundreds of billions in tax subsidies enjoyed by those already best off: for example, tax deductions for interest on mortgages for second homes. There’s much more where that came from .( If we ignore those sources, Treasury will have to borrow to pay – not for Social Security – that’s already been paid for without borrowing – but for the other non-Social Security outlays hitherto paid for by borrowing from the Social Security trust fund. Some commentators, such as New York Times political columnist Matt Bai, inaccurately assert that the U.S. Treasury bonds in the trust are merely worthless IOUs. Can they really not know that governments and private trust funds buy such obligations by the billions because they are regarded as valuable and reliable? Some assert that Social Security is unsustainable because retiree ranks are growing faster than the working population. You’ve heard the litany: in 1950, 16 people paid payroll taxes for each retiree; today that’s 3.3 people; in a few decades that will be 2.2 for each retiree. It seems plausible that this apparently worsening “aged dependency ratio,” spells calamity for Social Security. But if that trend were so lethal, with the shrinkage from 16:1 to 3.3:1, Social Security should have run aground. Instead it creates huge surpluses. For one thing, technological advances enable most of today’s employees to produce more goods and services than comparable individuals did in 1950. Agriculture provides a dramatic demonstration. In 1900, almost 40% of the work force farmed; today fewer than 2% do. By the “logic” of the aged dependency ratio, we should be starving. But farms produce quite enough for us to eat, with plentiful leftovers to export. The slogan “We live longer, so we should work longer ” attempts to justify the proposal to raise Social Security retirement age. We don’t have to raise it to provide incentives to work longer. Present law provides them: each year of delayed retirement generates higher benefits. And it is perverse to try to goad people to work longer when we see the doleful effects of mass unemployment – which can recur. In 2009 (the last year reported), Social Security paid out $658 billion in benefits to 52.5 million beneficiaries, including almost 3.5 million children. Those payments quickly translate into business income and wages rapidly and repeatedly; economists call that “the multiplier effect.” Some use an entirely inapplicable meaning of “entitlement” to sneer at Social Security and Medicare. With these social insurance programs, “entitlement” means a legal right earned by satisfying statutory eligibility requirements – years of work and contributions. Alas, Alan Simpson qualified for commission membership even though unable to tell the difference between an earned entitlement and a cow’s tits (his unfortunate language). Advocates of knifing Social Security argue that it would show “the markets” that we are serious about addressing U.S. deficits. That sounds quite as effective as appeasing the gods by sacrificing live virgins. Simply put, misinformation and misunderstanding, much of it deliberate, fuel the mistaken notion that we can pare the federal deficit by trimming Social Security. That path would lead to undiminished deficits, more poverty, less purchasing power, less business income and more unemployment

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States Slashing Pensions, Benefits For Public-Sector Retirees

September 15, 2010

TRENTON, N.J. — The security guards at the headquarters of New Jersey’s pension fund have never seen anything like it before: lines of public employees extending out the door and into the street. Day after day, workers come in droves to apply for retirement. They often line up before dawn. The rush has been set off in part by Republican Gov. Chris Christie’s campaign in this cash-strapped state to make government employment – and retirement – less lucrative. Since 2008, New Jersey and at least 19 other states from Wyoming to Rhode Island have rolled back pension benefits or seriously considered doing do – and not just for new hires, but for current employees and people already retired. After telegraphing his intentions for months, Christie spelled out the details of his proposal Tuesday. They include: repealing an increase in benefits approved years ago; eliminating automatic cost-of-living adjustments; raising the retirement age to 65 from 60 in many cases; reducing pension payouts for many future retirees; and requiring some employees to contribute more to their pensions. “We must reverse the damage caused by fairy-tale promises that have fattened benefits and pensions to unsustainable levels,” the governor said. To be sure, the looming benefit changes are not the only reason many public employees in New Jersey are retiring. Some say they want out for the usual reasons – to spend time with the grandchildren or go fishing, for example – or complain that government layoffs and other cutbacks are making work unbearable. But other employees figure that by retiring now, they can lock in certain benefits before it is too late. William Liberty started as a trash collector in Lindenwold 37 years ago and worked his way up to a job as public works supervisor. But his pay has been frozen for two years and he has to take an unpaid furlough day a month. And given Christie’s pension cut proposals, “it’s going to get worse,” Liberty said. He hoped to keep the job until he turned 65. But at 62, he went last week to the state pension office to see about retiring soon. Christie has warned that New Jersey’s pension fund will go belly up unless something is done to close the $46 billion gap between how much the state expects to bring into the system and how much it has promised to workers. Other states’ pension funds are in shaky condition, too. The Pew Center on the States reported this year that in eight states, at least one-third of the future pension obligations for all public employees, including teachers, are unfunded. As of 2008, Pew said, state and local governments had pension obligations totaling $3.35 trillion – $1 trillion of that not covered by the future stream of government and employee contributions specified under current law. Only four states – Florida, New York, Washington and Wisconsin – had fully funded pension systems as of 2008. Part of the reason for the gap is that in tough times, states often skip paying their share into retirement funds. New Jersey, for instance, is skipping its $3.1 billion in payments this year. The problem is compounded when investments lose money, as many have in recent years. In 2008, for instance, the Pennsylvania State Employees’ Retirement System fund had investment losses of nearly 29 percent – the worst in the country. In the past, states have been more likely to reduce pensions for incoming employees, while generally leaving the benefits of current workers and retirees untouched. That strategy can be a way around objections from unions and lawsuits from those who say the government is reneging on promises. Keith Brainard, research director for the National Association of State Retirement Administrators, says it may be unprecedented that so many states at once are raising employees’ pension contribution rates. Among the developments around the country: _ In Mississippi, employees of state and local governments and school districts are now being required to put 9 percent of their pay into the state retirement system, up from 7.25 percent. _ Rhode Island in 2009 reduced cost-of-living increases and tightened eligibility requirements for retirement. Previously, employees could retire with 28 years of service. Now, those already employed by the state will have to meet a new standard that takes both age and years of service into account. _ In Wyoming, as of Sept. 1, employees will have to start paying 1.4 percent of their salaries into a pension fund – the first time in a decade the workers have had to contribute anything. _ Vermont earlier this year changed the retirement age for many current employees. They must be 65, or their age and years of service must add up to 90. Previously, retirees had to be 62 or have 30 years of service at any age. _ Lawmakers in Colorado, South Dakota and Minnesota rolled back cost-of-living increases this year for public employees who already have retired. In Colorado, retirees had gotten 3.5 percent annual increases. They are getting no increase at all this year, and future ones will be capped at 2 percent. Legal challenges to the cuts have been filed in all three states. “Whether legislatures have the power to change benefits for people who are already in the system, that’s a tough question,” said Ronald Snell, an analyst for the National Conference of State Legislatures who monitors public pension issues across the country. “It’s unresolved in a lot of places.” Unions are on guard against the benefit cuts – and the implication that workers are to blame for states’ financial messes. “What we don’t need is more scapegoating of public service workers and their benefits,” said Matt O’Connor, a spokesman for the Connecticut State Employees Association. In some states – including South Dakota and Mississippi – public employee retirements are up by more than 20 percent, though it is not clear whether changes to pension programs there are a factor. The retirement rush is even more dramatic in New Jersey, where by the end of July nearly 18,000 employees in the three biggest public worker pension funds had retired or declared their intent to retire this year. That is up almost 50 percent over all of last year, and several union leaders and workers considering retirement said that possible pension changes were a factor. The exodus could end up hurting the pension funds, because retired workers will be making withdrawals, not deposits into the system. Mike Ryer, a firefighter in Morris Township, was among employees in line at the New Jersey pension office around dawn one morning this summer, considering whether, at 59, he was in financial shape to retire after 32 years. He is afraid of changes in his benefits and also figures his retirement now might save a younger colleague from layoff. If he stays, he faces a smaller department and a bigger workload. He blames Christie for driving him out. “It’s hard to understand why all of this had to come at once,” he said. ___ Haigh reported from Hartford, Conn. Contributing to this report were Associated Press writers Steve Paulson in Denver; Ben Neary in Cheyenne, Wyo.; Michelle Smith in Providence, R.I.; Chris Williams in Minneapolis; Dirk Lammers in Sioux Falls, S.D.; and Emily Wagster Pettus in Jackson, Miss.

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Robert Reich: ‘Aftershock’: How America’s Shift Away From Helping Its Own Ruined The Economy And The Middle Class (PHOTOS)

September 15, 2010

In the 1930s and 1940s, we restructured our economy to widen prosperity. The result was the Great Prosperity — a period running from 1947 to 1975, in which the American economy boomed. Almost everyone shared those gains. But after 1980, the pendulum swung backward. Instead of helping the middle class prosper in the new global, high-tech economy, government did just the opposite. It narrowed prosperity. The result was stagnant wages. The middle class steadily lost ground, while more and more of the benefits of economic growth flowed to the top.

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Dan Solin: Shooting Morningstars

September 14, 2010

No one knows more about mutual funds than Morningstar. Its web site provides data on approximately 350,000 investment offerings, but it is best known for the “star” system of ranking mutual funds (from a low of 1 to a high of 5 stars). Brokers love the star system and often use it as a basis for recommending mutual funds. How many times have you heard “the fund has a 5 star Morningstar ranking”? One study found that upgrading a mutual fund’s star rating results in a significant positive “abnormal” flow of funds into that fund. I was surprised by a recent article by Russel Kinnel, Morningstar’s director of mutual fund research. If anyone should be extolling the benefits of the Morningstar system, you would think it would Mr. Kinnel. Mr. Kinnel reviewed data on the predictive value of expense ratios (the stated costs of running the fund, which are deducted from returns) and the Morningstar ratings. His conclusion is unequivocal: “Expense ratios are strong predictors of performance. In every asset class over every time period, the cheapest quintile produced higher total returns than the most expensive quintile.” He also found the star ratings can be “helpful”, but “[I]nvestors should make expense ratios a primary test in fund selection.” The issue which Mr. Kinnel does not address is how highly rated Morningstar funds actually perform. I can understand this omission. One study reported by Vanguard founder John Bogle reviewed the total return of Morningstar’s top-rated domestic stock funds for the period 1993-2000. They averaged 106%. How would investors have done if they simply purchased a low cost index fund that tracked the Wilshire 5000 index (like Vanguard’s Total Stock Market Index Fund [VTSMX])? The index returned a whopping 222% during the same period. In the same paper, Bogle looked at the performance of Morningstar’s designated mutual fund “Manager of the Year” from 1987-1995. These are supposed to be the brightest stars in the mutual fund universe. Bogle found their stars dimmed significantly in the years following their lofty designation. As a group, they underperformed a simple S&P 500 index by 2.4% for this period. The combination of misusing the Morningstar star system and relying on brokers is a perfect storm for investors. Brokers tout the benefits of highly rated funds, without disclosing you would be better advised to invest in low cost index funds. It gets worse. Brokers don’t tell you the chance of picking any actively managed fund that will beat the market over a significant period of time is exceedingly small. One study looked at 2,076 domestic stock mutual funds over a thirty-two year period from January, 1975 to December, 2006. The authors concluded 99.4% of all fund managers failed to demonstrate true stock picking ability. Here’s the takeaway: Morningstar ratings are not a sound basis for selecting mutual funds; Focus on low cost index funds; Your broker is a poor source of advice for selecting mutual funds that will outperform the market. Remember the admonition of the first American Nobel laureate in economics, Paul Samuelson: “It is not easy to get rich in Las Vegas, at Churchill Downs, or at the local Merrill Lynch office.” The views set forth in this blog are the opinions of the author alone and may not represent the views of any firm or entity with whom he is affiliated. The data, information, and content on this blog are for information, education, and non-commercial purposes only. Returns from index funds do not represent the performance of any investment advisory firm. The information on this blog does not involve the rendering of personalized investment advice and is limited to the dissemination of opinions on investing. No reader should construe these opinions as an offer of advisory services. Readers who require investment advice should retain the services of a competent investment professional. The information on this blog is not an offer to buy or sell, or a solicitation of any offer to buy or sell any securities or class of securities mentioned herein. Furthermore, the information on this blog should not be construed as an offer of advisory services. Please note that the author does not recommend specific securities nor is he responsible for comments made by persons posting on this blog. Here is the trailer for my new book, Timeless Investment Advice .

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Joan Blades: A Virtually Perfect Labor Day

September 7, 2010

I work from home. So do all the people who work with MomsRising.org and MoveOn.org , the two organizations I co-founded. It works great for us and has for years, and so, when I read that the number of U.S. telecommuters dipped to 8.7 million in 2009 from 9.2 million in 2006 (according to the IDC, a Framingham, Massachusetts research concern), I did a double take. What is going on? Word is that this drop is not due to job loss or employers discouraging virtual work. Rather, employees are too anxious to ask for any kind of special work arrangement in uncertain economic times. Social scientists explain that when we are fearful, we are less creative and tend to hunker down with what is familiar and feels safe. But I know, as an employer, what substantial research finds: that virtual work is a great way for small organizations to do more with less and for any workplace to boost the bottom line . I worry, this Labor Day, that employers and employees frozen in a defensive crouch are going to miss an opportunity for all of us to be more successful and improve our working lives. Though this might surprise people who opine about the influence of MoveOn.org (and MomsRising.org ), these organizations are entirely virtual. They have no physical headquarters. Offices cost money, and we choose to spend the funds we have on advocacy and education, instead of walls and floors. We also find that trusting our employees to work wherever it works for them means we get great people who are happy and remarkably productive. When my daughter gets sick, I don’t have to choose between getting my work done and being there for her, and if I want to go for a hike on Tuesday afternoon, I can. I work when the time is best for me and for the work I’m doing. I know from experience that intelligently structured virtual work is incredibly good for business and cost effective. We are not the only organizations that have discovered this. Most virtual workers work for traditional organizations with which we are all familiar. A recent study from Brigham Young University reports that telecommuting, coupled with flexibility, dramatically reduces work/life conflict and has saved millions of dollars for IBM. AT&T saved over 6 million dollars in real estate costs in New Jersey and realized millions of dollars in productivity gains when they embraced virtual work. Jet Blue’s call center is not in India; it is in homes in Utah, which lets the company realize cost savings while keeping jobs in the United States. Virtual and flexible work are management opportunities . While some organizations are embracing virtual work, even more people would like to try it. One survey on worker productivity found that nearly 60% of employees believe that telecommuting at least part time is the ideal work situation. 60% of federal agencies include virtual work in their emergency and continuity of operations plans in 2007. Yet only 7% of eligible federal employees regularly telecommute. The Employment Policy foundation suggested that 65% of jobs could be done remotely, yet less than 30% of managers and professionals work virtually even one day a week and far fewer in more blue-collar jobs. Clearly, we have a long way to go. The data about the benefits of virtual work are compelling. Is it really just unthinking fear that is stopping us? Change does create risk and new challenges. Individuals, managers, and even chief executives are feeling risk averse. It is not surprising that employees fear asking for flexibility or the ability to work virtually when they are fearful that their jobs might be cut. Likewise, managers who have the benefit of a hungry labor pool may not experience a strong push to make their employees’ lives better at the risk of having that change create unforeseen challenges. But businesses must recognize that there is a flipside to the risks of change – which is that there are risks in not changing, too. I have a hard time imagining a more efficient, environmentally sound, family-friendly work practice for a surprisingly broad swath of jobs in this country than virtual work. This is not the kind of opportunity business can afford to overlook. It is time for those of us that have experienced the benefits of these non-traditional work practices to reassure others that embracing these new practices is not only good for the bottom line, but necessary for success in the coming decade . Working virtually is what has enabled MoveOn.org and MomsRising.org to do so much with the resources we have. So I’m speaking out, and I hope others will too. This Labor Day, it is time to get serious about embracing virtual work. This blog is part of the Peaceful Revolution series that explores innovative ideas to strengthen America’s families through public policies, business practices, and cultural change. Done in collaboration with MomsRising.org , read a new post here each week.

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Labor Day Car Deals: The Best Time To Buy A Car?

September 3, 2010

Labor Day was created to honor workers, but it may be the one of the best times of the year to be a consumer. CBS News business and economics correspondent Rebbecca Jarvis recently spoke to “The Early Show” and ran through the reasons why Labor Day can mean a plethora of great car deals. “The 2010 models they want off the lot and you’re going to get a great deal as a result,” Jarvis said. Zero percent financing for five years, $3,000 to $5,000 cash back and a great selection are among the benefits of buying a car this weekend, Jarvis says. And the best car to buy on Labor Day? Compacts are especially discounted this year, and trucks tend to have the best cash back offers, according to Jarvis. WATCH:

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Samuel H. Williamson: The Macro Economics Social Security – Part Two

August 22, 2010

How someone views Social Security is often based on what they think it is. How many times have you seen the quote “social security was never intended to be…”? And then the writer puts in what they do not like about it today. I am not sure that it matters what it was intended to be, but it does matter what its impact has been on individuals and the economy for the last 75 years and how that impact has affected us today. Most individuals consider Social Security as a saving program or as a “welfare program for seniors and the disabled. Either choice gives them a reason to criticize as discussed in the next two sections. I will offer an alternative view in the following section. Is it a Saving Program? If Social Security is a saving program then we think that we are paying in contributions while working and then received benefits when we retire. We have paid for our benefits. A problem with this at the individual level is that it has not been equitable. For example, the generations who retired 40 to 50 years ago put little in and received benefits in far greater than the amounts they contributed. Also those who live long lives do better than those who die at age 62. By contrast, today’s workers will probably receive a small return on their contributions to the program and lots of them do not even believe it will be there when they retire. They think that if they could opt out, they could do better on their own. Economists such as Martin Feldstein have another criticism of Social Security as a saving program. They say that Social Security created less private saving and thus the economy grew slower than it would have without Social Security. Without making contributions to Social Security, they feel that the workers would have invested this money in the private sector. I think they are wrong as I explain below. Is it a “Welfare” Program? If Social Security is a welfare program then we think it is designed to help the elderly and disabled. This is particularly true for the depression of the 1930s when this program began since the highest level of poverty was among the elderly. I do not imagine anyone wants to return to seeing masses of senior citizens begging on the streets or living in almshouses. Whatever the intent was at that time, the program is no longer well designed for this purpose either. The benefits are paid even if the recipient is wealthy and not in need. If this program were truly aimed at helping lower income participants, it would not be financed by a payroll tax that is regressive to workers and a burden for employers to pay. It would make more sense to finance the program with an income tax. It is an intergenerational “Insurance” Program The best way to see Social Security is not as a saving or welfare program, but as an intergenerational insurance program. Social Security is actually called “old age and survivors insurance.” But the insurance should be thought of as for the children against their parents living too long. Social Security is a way for the working population to pay into a fund that relieves them the burden of using their own money to pay for their parent’s (and even grandparent’s) needs if those parents became old and dependent. Whether the worker’s parents live until they are 63 or 93, their benefits will be covered by this insurance. Instead of having to house their parents in the spare room and buy groceries for them, workers pay part of their own wage to a fund that gives their parents enough to do these things on their own. Under this interpretation, Social Security did not crowd out private saving; it was a public substitute for interfamily transfers. It is not a saving plan that gives you a return, but an insurance plan that pays off well if your parents are survivors. When you retire, your (or at least someone’s) children will pay for this insurance on you. This has been going on for three generations, so the current workers are providing benefits for their parents who in turn had provided benefits for their parents. Workers cannot opt out of the program, because they are (collectively) obligated to pay for their parent’s benefits now and in the future. Under this interpretation, it also makes more sense that benefits are the same for all retirees regardless of their income. We do not say that when we have a car accident that the amount get from the insurance company will be dependent on our income. We get what we insured it for. Conclusion Once we view Social Security as an intergenerational insurance program, we can see why many of the current criticisms are no longer valid. Workers should stop thinking that they should be able to opt out because they incorrectly think it is only about them. Critics of the way benefits are determined should not complain either. Since they are taxable, it is not necessary to means test these benefits when they are received. We can change the income tax rates if we choose if you want to reduce net benefits. Finally, since all workers had parents, but many workers do not pay income taxes, the payroll tax is a more inclusive way to collect the “insurance” premiums. Under this interpretation, the system first put in place for our parents and grandparents 75 years ago was a contract that has been passed on to the current generations whether we like it or not. It is a small price to support these previous generations given all they have done for us by first winning WWI and then building the schools and universities that we attended and which enabled us to earn the incomes we have.

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Lycos, Once Bought For $12.5 Billion, Sold For Just $36 Million

August 17, 2010

NEW YORK — An Indian company on Monday said it is buying Lycos Inc., once a high-flying U.S. Web portal, for $36 million from Korean Web company Daum Communications. The buyer is Ybrant Digital, a digital marketing company based in Hyderabad. Originally based in Waltham, Mass., Lycos was one of the top destinations on the Web around 2000, helped by its Tripod Web-hosting services. It was bought by Spanish Internet service provider Terra Networks SA in 2001, in a deal originally valued at $12.5 billion. Lycos was unable to keep up with Google, Yahoo and other competitors for the attention of Internet surfers. In 2004, when Lycos was the eighth-largest destination on the Web, Terra sold the Web portal business to Daum in 2004 for $105 million while keeping other assets. “Our goal is to combine the benefits of Ybrant’s global network with what Lycos has to offer in creating a compelling global destination for our advertising clients worldwide,” said Suresh Reddy, chairman and CEO of Ybrant.

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Social Security Keeps 20 Million Americans Out Of Poverty, Report Finds

August 13, 2010

As Social Security approaches its 75th anniversary on Saturday, the program is playing an especially vital role in reducing poverty across America during the worst economic crisis since the Great Recession. If benefits were to be significantly cut, 19.8 million more Americans would be thrust in poverty, according to a recent report by the Center on Budget and Policy Priorities. In addition to supporting the elderly, Social Security is currently keeping more than 1 million children and more than 5 million adults below the age of 65 above the poverty line. Cuts to Social Security would be especially devastating for older women, the report shows. While 11.9 percent of women over the age of 65 are currently below the poverty line, nearly half of them would be poor if they no longer received benefits. Veronica Daniels, 62, of Houston, Texas, says a reduction in her Social Security benefits would be calamitous. An engineer with over 37 years of experience, Daniels lost her job in 2007 and has not been able to find steady work since. After blowing through most of her savings on a major surgery and dental emergency without the help of health insurance, she was forced to start collecting Social Security early to stay afloat. “I wanted to wait until I was 66 to start collecting it, because I will lose about 25% of my benefits by doing it this way, but I had no choice,” Daniels told HuffPost. “If the government cut my benefits right now, it would be horrible for me. I’m making just enough to cover basic expenses and save about a hundred dollars or so a month for medical emergencies. I can’t really afford to be squeezed.” Daniels said she lost her house to foreclosure in 2009, and she now lives in a one-bedroom apartment in Houston with no sofa and only a small folding table to eat on. She worries that once the prices of food and housing and utilities go up, she will no longer be able to pay her modest rent. “I’m hoping to live until my 80s, but it’s gonna be really tough to make ends meet by myself,” she said. “Social Security will cover the basics, but what if something happens and I need more? Will I be homeless? I’m just crossing my fingers and hoping to hell I don’t get seriously sick.” Daniels and millions other Americans who depend on Social Security are watching closely as a bipartisan commission set up by President Obama mulls over the idea of cutting funds to the program to reduce the deficit. HuffPost’s Ryan Grim reported that nearly 85 percent of American adults polled oppose cuts to Social Security, according to a recent survey conducted by GfK Roper, and 72% “strongly oppose” the idea. Daniels belongs firmly in the latter category. “I get so damn disgusted,” she told HuffPost. “I don’t understand how they can even think about cutting the benefits they’ve promised you and you’ve planned on your whole life. They want to treat us as less than humans.”

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Rob Carmona: New York Times Article Misses Benefits of Job Training Benefits

July 29, 2010

A recent New York Times article: “After Job Training, Still Scrambling for a Job” paints an inaccurate picture of the benefits of job training, and I’d like to illustrate why. STRIVE International , a workforce development non-profit organization, was overjoyed to place 49% of its 2009 New York trainees in jobs during one of the worst recessions in memory. Among our graduates who pursued STRIVE’s vocational skills training, 58% have secured employment and are earning an average wage that is 56% above the minimum wage. In the world of the chronically unemployed, these statistics represent a substantial victory over the cycle of failure and rejection that perpetuates poverty. Our pool of clients is drawn from the hard core unemployed: 30% have been convicted of a felony, 66% are male, and 62% are African-American. Most have no prior employment history. The majority receive some form of public assistance. When the costs to society of sustaining the unemployed are considered, a more accurate picture of the benefits of job training emerges. On average, a year of incarceration costs taxpayers roughly $50,000 per inmate in New York State. A year of TANF cash benefits for a family of 3 is approximately $6,000 – $8,000. When factoring in Medicaid, Food Stamps and housing subsidies, governmental outlays for a family of three can exceed $25,000 per year. STRIVE’s program converts these individuals into economic contributors who will earn starting salaries between $19,000 and $24,000 per year along with medical benefits. Not only will these individuals develop credentials in the workplace and become taxpayers themselves, they will cease to engage in activities that negatively impact our society, while also providing financial security to their families and modeling responsible behavior to their children. We agree that skills training must be closely aligned with available jobs. Hence, STRIVE’s Skill training regimens are drawn from the Department of Labor’s research on growth industries and close collaboration with local companies. Our program is flexible enough to quickly adapt to the requirements of the job market. These are the keys to success that those of us in the workforce development profession follow. An evaluation of job training programs must consider the specific challenges of the population served and the costs to society of not providing vocational training. Further, no program can be evaluated only one year out – STRIVE follows its graduates for a minimum of 2 years and we continue to serve them after that period when they reach out to us for help. A blanket rejection of job training ignores the many examples of success and hope provided by the Workforce Development Community.

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Colleges NOT Worth Their Tuition (PHOTOS)

July 26, 2010

How much is your college education really worth? Are you taking advantage of what you paid (or are paying, or will pay) for? According to a return on investment report from salary data site PayScale , the sticker price of some American schools outweighs the benefits of its degree. Sure, some recent graduates leave college with a handle on Rousseau and microeconomics, but they aren’t necessarily making back what they spent on those four (five, or six) years. PayScale’s data reinforces that notion: Out of the 800-plus schools the site surveyed, some of the priciest institutions produce more graduates whose 30-year earnings hardly measure up to the price of four years of tuition. According to a report in BusinessWeek , schools that cost approximately $190,000 often have a 30-year net return on investment below $280,000. In the following slideshow, based on BusinessWeek’s list of the 20 institutions of higher education with the highest tuition and lowest ROI , are ten of the schools with the smallest payoffs. See BusinessWeek’s full list here — and check out PayScale’s complete ROI database .

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Laurence J. Kotlikoff: Repay and Apply for a Higher Social Security Check Before It’s Too Late

July 21, 2010

Using Social Security’s 521 form (http://www.socialsecurity.gov/online/ssa-521.pdf), millions of elderly who opted to take Social Security prior to age 70 can raise their sustainable living standards by repaying all the benefits they’ve received in the past and reapplying for higher benefits. The required repayment is gross of the Medicare Part B premiums paid in the past.* Bummer. On the other hand, no interest is charged on the repayment. And, get this, the repayment is tax deductible. For people close to 70 who took their benefits early (e.g., at age 62), this can be a very big deal. But if you are in this boat, you best move quickly. Social Security is considering closing down this option. Changes could come either through regulation or legislation. But it’s certainly on the Social Security Administration’s agenda to eliminate this provision, which the agency considers a loophole. How much would you gain from this strategy? My company’s download programs, available at www.esplanner.com, can calculate your potential living standard gains.** Here’s an example: John, age 68, lives with his wife Sue, age 62, in Connecticut. John worked in retail after college. His first job paid $30,000 a year. When he retired at 62, he was making $168,000. Sue stayed home and raised the kids. The couple saved diligently and has $300,000 in regular assets and $600,000 in retirement accounts. John is now receiving Social Security benefits of $21,489, which he started collecting at 62. Sue is receiving a Social Security spousal benefit of $9,815. After paying taxes and paying their Medicare Part B premiums, their spending power, according to ESPlanner, is $63,505. This is what the couple can spend each year until John reaches age 100 (his maximum age of life) over and above covering their taxes and Medicare Part B premiums. After John reaches his maximum age of life (if he’s so lucky), Sue’s discretionary spending drops to $39,691 which provides the same living standard assuming, as we do, that two can live as cheaply as 1.6. If John repays $117,354 and takes the tax deduction, he’ll be able to receive a 73 percent higher benefit of $37,111 for thirty years, if he lives to 100. This raises the couple’s sustainable spending from $63,505 to $72,908, or by 13.5 percent! Earth to the elderly in this general boat: This is a 13.5 percent hike in living standard for every year for the rest of their lives! To achieve the same increase in sustainable spending the couple otherwise would need an extra $240,000 in regular (non-retirement account/taxable) assets! If John not only repays and reapplies at 70, but Sue also waits until age 66 — her full retirement age — to collect her spousal benefit, her benefit rises to $13,939 (in today’s dollars), and the couple’s spending power rises from $72,908 to $74,667! Compared to where they started, this is the same as finding not $240,000, but $310,000 on the sidewalk! But what about the kids? If John drops dead two minutes after writing the $117,354 check, the money is gone. Neither Sue nor their children will get it. On the other hand, if John dies before his maximum age of life (assumed to equal 100), he takes away a mouth to feed. And, as ESPlanner’s survivor reports show, in this case, Sue will have a higher living standard than had John not died. She’ll also receive 100 percent of John’s now higher benefit. (Even if John dies before he reaches age 70 and starts collecting retirement benefits, Social Security will give Sue his full retirement benefit adjusted for the delayed retirement credit up to John’s date of death.) So repaying and reapplying pays off in terms of much larger survivor benefits for Sue even in the two-minutes later death scenario. For example, if John dies at any time after age 70, Sue will begin receiving $37,111 per year for the rest of her life. Had John not repaid and reapplied, Sue would receive only $21,489 per year until she died. In short, Sue is well taken care of. So what about the children? Well after securing a higher living standard for themselves, John and Sue are free to give their children immediately whatever they feel is appropriate in direct gifts. In this manner, John and Sue not only reduce the prospects that their children will need to help them out financially. They also provide their children with more certainty about what they will receive. So repaying and reapplying can be a win-win situation for everyone. There is a general point here that applies apart from the issue of Social Security, namely that our kids are not insurance companies and using them as insurance companies should be avoided if at all possible. Warning note: Many elderly have visited their local Social Security offices or called them and been told there is no option to repay or to reapply. Or they’ve been told they can’t do this after age 70. This is incorrect. This option is available at all ages, until it is revoked. There is, however, no reason to wait until after age 70 to reapply, since the maximum benefits are earned at age 70. If the local office gets this wrong, have them call Social Security’s Office of the Actuary, which will set them straight. Social Security has 2,728 rules in its Handbook and thousands of rules in its Program Operating Manual System that explain the 2,728 rules. The system is so complex that three offices can easily give you three answers to the same question. * This means what you need to repay is more than what you actually received in checks from Social Security in the past. The reason is that the Medicare Part B premium was deducted from those checks. ** In using ESPlanner to determine the living standard gain, you first just run yourself through the program assuming you don’t elect to repay and reapply, next you run yourself again assuming you do so elect, and then you compare the two living standards. When you run the program assuming repayment, enter the repayment (Social Security will tell you the amount) as a tax deductible special expenditure and tell the program when you’ll start collecting again. This tells the program to internally calculate your higher benefit. Also, you’ll need to enter your earnings history, which is available from www.ssa.gov.

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Grant Cardone: Extending Unemployment Benefits Don’t Prepare People for Jobs

July 17, 2010

Extending unemployment benefits will not prepare the unemployed for the workforce anymore than a life preserver teaches someone to swim. While the benefits may provide immediate relief it doesn’t really benefit the same people in the future. Because of what will appears to be a long duration of high unemployment numbers the administration should make mandatory skill enhancement part of the extended unemployment package. Rather than just giving money for extended unemployment let’s make sure those same people are taught new skills so that they become more valuable going forward. This is the 3rd time in 18 months that we have extended unemployment benefits at a cost of 34b, just this round. I don’t have a problem with the cost but I do have a problem with handouts that don’t ensure the recipients are better prepared when the benefits end. Regardless of how long we provide benefits if the unemployed are no more valuable when the benefits end they will not be able to get good jobs in the future. Almost every economist predicts high unemployment numbers extending beyond the 99 weeks of maximum benefits. If the economy is not better by then should the government extend again? More importantly what are we doing as a nation to ensure these people are more valuable to the economy, the workforce and our nation so that we have the best trained people in the world? We make it mandatory for our children to attend schools and invest money in them before they are even employable. Why would we not make it mandatory that to receive unemployment benefits the unemployed would be required to enhance their skill set. This would create new jobs, improve self-esteem and enhance the quality of workers in this country. During times of economic contraction it is critical that individuals and companies rebuild their skills and abilities to prepare for the next expansion. The people are the greatest resource of any nation. While government benefits are necessary to help those in dire straits if it doesn’t make those same people more able in the future it fails the very same group of people. It is shortsighted, impractical and irresponsible to keep throwing a life preserver to someone without finally making it mandatory that they learn how to swim. Grant Cardone, NY Times Best Selling Author

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Video: Ballim Sees South Africa Investment Boost Post-World Cup

July 9, 2010

July 9 (Bloomberg) — Goolam Ballim, chief economist at Standard Bank Group Ltd, talks about the benefits of the World Cup for the South African economy.¶ He speaks with Rachel Brookes on Bloomberg Television’s “Countdown.”

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Unemployment Extension Fails: Senate Rejects Jobless Benefits 58-38

June 30, 2010

The Senate rejected Wednesday — for the fourth time — a bill that would have reauthorized extended benefits for the long-term unemployed, by a vote of 58 to 38. Democrats will not make another effort to break the Republican filibuster before adjourning for the July 4 recess. By the time lawmakers return to Washington, more than 2 million people who’ve been out of work for longer than six months will have missed checks they would have received if they’d been laid off closer to the beginning of the recession. Only two Republicans, Sens. Olympia Snowe and Susan Collins of Maine, crossed the aisle to support the measure. That gave Democrats 59 of the 60 votes they needed to break the GOP filibuster, but without the late Sen. Robert Byrd (D-W.Va.), Nebraska Democrat Ben Nelson’s nay vote was enough to kill the bill. (The final tally shows only 58 yea votes due to arcane rules of Senate procedure, which require Senate Majority Leader Harry Reid (D-Nev.) to vote against the bill in order to allow for another vote on it in the future.) “We will vote on this measure again once there is a replacement named for the late Senator Byrd,” Reid said in a statement after the vote. “In the meantime, I sincerely hope that Republicans will finally listen to the millions of unemployed Americans who need this assistance to support their families in these tough times. These Americans and millions more demand that Republicans stop filibustering support for unemployed workers.” Already, more than 1.2 million people out of work for longer than six months have missed checks since federally-funded extended benefits lapsed at the beginning of June. “Senators had a chance to put election year posturing aside and one too few rose to that challenge,” said Judy Conti, a lobbyist for the National Employment Law Project. “It’s a sad night, especially for the over one million workers and their families who will have little cause to celebrate this holiday weekend. It is a disgrace and an absolute slap in the face to basic human decency.” During the past several weeks, in an effort to appease deficit hawks, Reid and Sen. Max Baucus (D-Mont.) trimmed a broader spending bill that included the benefits among a host of other domestic aid programs. They reduced the bill’s 10-year deficit impact from $134 billion to $33 billion — the cost of reauthorizing extended unemployment benefits through November — but to no avail. This week, Reid and Baucus pulled out the unemployment benefits as a $33-billion standalone bill, attaching an extension of the homebuyer tax credit, yet it wasn’t enough of a sweetener to overcome the deficit demands of most Republicans and Ben Nelson. After the vote, the Senate unanimously consented to the extension of the tax credit, as Reid said would happen if the vote failed. Though there is some talk within their caucus of offsetting the cost of unemployment benefits to keep them from adding to the deficit, Democratic leaders refused to cave; they argued that because the cost of federally-funded extended benefits has never been offset, deficit neutrality shouldn’t suddenly become a requirement for emergency aid. Republicans offered alternative bills that would have paid for extended benefits with unused stimulus funds. “The only reason the unemployment extension hasn’t passed is because our friends on the other side have refused to pass a bill that doesn’t add to the debt,” Senate Minority Leader Mitch McConnell (R-Ky.) said after the vote. Republicans and some Democrats are uneasy about the unprecedented duration of benefits made available to the unemployed by last year’s stimulus bill and subsequent acts of Congress, which in some states reaches 99 weeks. Without those provisions, layoff victims are currently eligible for only 26 weeks of benefits in most states, while the average unemployment spell is 34 weeks. Lurking beneath the deficit concerns for some members is the suspicion that the extended benefits discourage people from looking for work — even though there are five people vying for every available job and a full third of the 15 million unemployed don’t actually receive the benefits. If Congress eventually does reauthorize the aid, people eligible for extended benefits during the lapse will be paid retroactively. Failure to do so would be unprecedented : Since the 1950s extended federal benefits have never been allowed to expire with a national unemployment rate above 7.2 percent. The current rate stands at 9.7 percent. Reid vowed earlier on Wednesday that the Senate would try again. “We’re not moving away from this issue,” he said. “We’ll be back to haunt [Republicans] for what they’re doing to people who are in such desperate shape.”

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‘Cautious’ U.S. Consumers Could Fuel Debate Over Deficits

June 28, 2010

WASHINGTON — A tepid gain in consumer spending last month could fuel a debate over whether the United States and other governments should further stimulate their economies to sustain the recovery. A report that Americans spent cautiously in May came after world leaders meeting in Toronto over the weekend pledged to reduce government deficits by cutting spending and raising taxes. They did so despite warnings from President Barack Obama that scaling back spending too fast could derail the global recovery. U.S. lawmakers are wary of approving more stimulus spending in light of record-high budget deficits. As a result, millions of Americans could lose unemployment benefits and states could be forced to lay off tens of thousands of workers. “In our view, it is way too early to apply the fiscal brakes,” said Zach Pandl, an economist at Nomura Securities. Cutting off unemployment benefits “is a dangerous way to cut deficits when the economy is still fragile.” Economic growth, which leads to higher tax receipts and less spending on social programs, is the best way to reduce the deficit, Pandl said. Other economists note that wages and salaries rose 0.5 percent in May, a second consecutive month of strong gains. That is a sign that the recovery can survive without government propping it up. If the trend in income growth continues, “consumers’ spending power will be bolstered, which will in turn drive economic growth, necessitating less government support,” said Dan Greenhaus, chief economic strategist at Miller Tabak. One thing is certain: Americans are being careful with their money. Consumer spending rose 0.2 percent last month after no change in April, the Commerce Department said Monday. Consumer spending accounts for about 70 percent of economic activity. But the consumer hasn’t been driving this recovery. Instead, it has depended more on business and government spending, along with exports. In the four quarters following the steep 1981-82 downturn, consumer spending rose by an average of 6.5 percent per quarter. By contrast, even as the economy has grown for the past three quarters, consumer spending rose an average of only 2.5 percent per quarter. If consumption remains sluggish, the economy may not grow fast enough to generate jobs and quickly bring down the 9.7 percent unemployment rate. Some economists are concerned the economy could slow later this year if government cuts back on stimulus spending. Pandl said Nomura is lowering its forecast for third-quarter economic growth to 2.2 percent from 2.6 percent based on the assumption that Congress will not extend federal unemployment benefits. Up until last month, jobless workers who exhausted their 26 weeks of state benefits had been able to qualify for up 73 weeks of additional federal benefits. But Senate Republicans have blocked an extension, citing concerns over the deficit as their main reason. That means about 2 million out-of-work Americans could lose their benefits by the middle of July, the Labor Department estimates. The Senate has also balked at providing stimulus money to cash-strapped state governments. Thirty states had been counting on federal support to help balance their budgets. Without the money, governors warn they’ll have to lay off tens of thousands of workers. The debate over how big a role governments should play featured prominently at the G-20 summit. World leaders agreed to cut deficits in richer countries in half by 2013, although they gave themselves some wiggle room to meet that goal. Obama, who has been pushing for an extension of unemployment benefits in the U.S., said countries had to proceed at their own pace in either emphasizing growth or cutting deficits. “We can’t all rush to the exits at the same time,” Obama said. Income is rising as employers slowly add jobs. That could make up for lost unemployment insurance and other benefits. Personal incomes rose for the sixth time in seven months, boosting household finances. The savings rate, or the percentage of income that wasn’t spent, bumped up to 4 percent. Paychecks gained from recent increases in the average work week, as well as temporary census hiring. “This supports our view that a rebound in labor income growth will support consumer spending” even as government payments fade, said Peter Newland, an economist at Barclays Capital. Americans spent more on services in May, likely the result of greater use of electricity as the weather warmed up. Money spent on goods actually declined. Many economists expect consumer spending to grow by about 3 percent in the current quarter, the same as the first quarter. The government said Friday that the nation’s gross domestic product, the broadest measure of economic output, rose 2.7 percent in the January-to-March period, slower than previously estimated. Employers added 431,000 jobs in May, but the vast majority were temporary census positions. Private employers added only 41,000 jobs. About 250,000 of census jobs are expected to end this month.

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National Business Group on Health Elects Judith Verhave, BNY Mellon Executive, to Board of Directors

June 22, 2010

WASHINGTON, DC–(Marketwire – June 22, 2010) –  The National Business Group on Health, a non-profit association of more than 290 large employers, announced today that Judith Verhave, Executive Vice President and Global Head of Compensation and Benefits for BNY Mellon, has been elected to its Board of Directors, effective immediately.

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Video: Shaffer Favors Splitting Goldman Chairman, CEO Roles: Video

May 7, 2010

May 7 (Bloomberg) — Laura Shaffer, director of shareholder activities at the Nathan Cummings Foundation, talks with Bloomberg’s Julie Hyman about Goldman Sachs Group Inc.’s annual meeting today and the benefits of separating the chairman and chief executive officer roles. Shareholders voted against splitting the two roles. (Source: Bloomberg)

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Video: Ernst & Young’s Diron Sees Larger Economic Divide in EU

April 16, 2010

April 16 (Bloomberg) — Marie Diron, an economic adviser to Ernst & Young, talks about the prospects for a greater economic divide among European countries. Diron also discusses the benefits of European monetary union. She speaks with Bloomberg’s Maryam Nemazee.

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