Archive for the ‘Money’ Category

Michigan Proposals 1 and 2 for 2014: An Analysis of the Wolf Hunting Refrenda

October 30, 2014

To fully understand Prosposal 14-1 and Proposal 14-2 that will be on the ballot here in Michigan one must go back to 2012 to understand the big picture.  In 2012, the Michigan Legislature passed Senate Bill 1350, which Governor Snyder signed, making it Public Act 520 of 2012.  The act added wolves to the definition of “game” animals; declared that wolf hunting was necessary to manage the growing population of wolves in order to protect humans, livestock, and pets; authorized a hunting season for wolves; established a licensing scheme; and established the Wolf Management Advisory Council.  Some citizens were opposed to the idea of wolf hunting, so they formed Keep Michigan Wolves Protected and filed a petition, with sufficient signatures, to have a referendum on Public Act 520.  Thus, it is this law that is on the ballot as Proposal 14-1.

(At this point, it is helpful to lay out the difference between an initiative, a referendum, and a proposal: An initiative is a citizen-initiated piece of legislation that goes before the Legislature if enough signatures are gathered; if the Legislature passes it, the legislation becomes law; if the Legislature does not pass it, it goes before the people for a vote.  A referendum is a citizen-initiated protest to a law passed by the Legislature and signed by the Governor; those who want the law to stay vote “Yes”, while those opposed to the law vote “No”.  Once a referendum is certified, the law in question is suspended, pending the outcome of the election.  Thus, in an initiative, those filing the petition would vote “Yes”, while in a referendum, those filing the petition would vote “No”.  A proposal is anything that goes before the people for a vote, including referenda, initiatives, constitutional amendments, etc.)

I have no issue with voting “Yes” on Proposal 1, and unless you are opposed to the hunting of wolves, you likely will not either.  But Proposal 2 is where it gets a bit trickier.  After Keep Michigan Wolves Protected got Public Act 520 on the ballot as a referendum, the Legislature decided to pass another law, in case the referendum was successful; thus, Senate Bill 288 was passed, and Governor Snyder signed it, making it Public Act 21 of 2013.  The act continued the designation of the wolf as a “game” animal (since the bill was passed before the Public Act 520 referendum was certified, Public Act 520 had not yet been suspended, but if Proposal 1 were to pass, then the wolf would no longer be designated as a game animal); granted the Natural Resources Commission (NRC) the power to designate animals as game animals, with some restrictions (however, it also stipulated that only the Legislature has the power to remove animals from the list of game animals); granted the NRC the ability to establish the first open season for any animal that it adds to the list of game animals; granted the eliminated the fee for hunting licenses for military personnel; and granted the NRC sole authority to regulate fishing.  Again, Keep Michigan Wolves Protected filed a petition, with sufficient signatures, to have a referendum on Public Act 21, so it is now on the ballot as Proposal 14-2.

Personally, I am not a fan of Public Act 21; I do not like the added authority that the Legislature gave to the NRC, and I do not feel that it is wise to allow the agency to have the power to designate animals as game animals and establish a hunting season for such animals without any legislative input.  I also question the wisdom of granting the NRC exclusive authority to regulate fishing.  If the story had ended here, I likely would’ve voted Yes on Proposal 1 and No on Proposal 2, but what happened next made the whole situation much more interesting.

A group of citizens in favor of hunting wolves, under the name Citizens for Professional Wildlife Management, successfully filed an initiative petition.  The proposal continued the designation of the wolf as a game animal; continued the grant to the NRC to designate animals as game animals and establish a first open season; continued the stipulation that the Legislature has the sole power to remove animals from the list of game animals; and appropriated $1,000,000 to the Department of Natural Resources to fight the invasion of Asian Carp.  The proposal also had a section that stipulated that if language from Public Act 520 or 21 was removed due to failure of either referenda, that language was reinstated by the initiative.  The Legislature adopted the initiative, meaning that it became law (Public Act 281 of 2014) without having to be signed by Governor Snyder.  So what makes the initiative so special?

The appropriation of money to the DNR means that, pursuant to Article 2, § 9 of the Michigan Constitution, the law cannot be subjected to a referendum petition.  (This specific issue was addressed in Michigan United Conservation Clubs v. Secretary of State, 464 Mich. 359 (2001), where the Michigan Supreme Court interpreted that any appropriation is an “appropriation” under this provision of the Constitution, which I agree with, even though the result is that the Legislature can make a law referendum-proof.)  In drafting the initiative, the drafters knew that adding the appropriation would make it referendum-proof, and in approving the initiative, the legislators knew that even though they had previously passed two bills to allow wolf hunting with pushback from voters, by passing this initiative, they would be making the act referendum-proof.  The inclusion of the appropriation was not simply a coincidence; the drafters, and the Legislature, knew what they were doing.  They knew that this was a hot-button issue that some (perhaps even many) voters opposed, yet they went forward and passed it in a way that would not allow a referendum on the issue.

I have no problem with the Legislature passing Public Act 21 after the petition for Public Act 520 was filed; if it wants to do so, that’s fine with me.  But what I do have a problem with is the Legislature passing an initiative with an appropriation provision in it solely to make that law referendum-proof.  To do so is disingenuous and out-of-line with the intent of the appropriations process.

So that gets us to where we are today: Proposal 1 and 2 are on the ballot, but even if the No voters win on both proposals, the result is still ultimately the same as if Yes were to win.  (It should be noted that a court could potentially overturn the initiative, but I see no legal grounds for that to happen, and I think the chances of that happening are next to none.  The voters could also push for a new initiative that would undo the last initiative, but that seems unlikely to be successful.)  But voting No on the proposals can still send a message.  Those opposed to wolf hunting overall should vote No on both, but those who respect the referendum process, regardless of their feelings on wolf hunting, should vote No on Proposal 2.

There has been a lot of confusion and dishonesty surrounding the proposals.  Contrary to what some Yes supporters say, these proposals have nothing to do with allowing hunters or citizens to kill nuisance wolves; nuisance wolves can already be killed under existing law.  Farmers can still kill wolves that threten their livestock (although allowing them to be hunted would decrease the wolf population and chance that their livestock would be threatened overall).  Those who say otherwise are not being honest.

So why do the proposals even matter?  Again, it is about making a statement that the Legislature should not abuse its appropriation power to remove the power of a referendum from the people.  Regardless of your feelings on wolf hunting, all Michiganders should support the ability of those opposed to wolf hunting to hold a referendum on legislation that allows for wolf hunting; furthermore, voting No on Proposal 2, because of the passage of Public Act 281, will not have any adverse effect on the existence of wolf hunting in Michigan.  For those reasons, I urge a No vote on at least Proposal 2.

For more information about voting in Tuesday’s election, please see below.

Done Ranting,

Ranting Republican

Monica Conyers Sentenced to 37 Months in Prison

March 11, 2010

Well, yesterday the city of Detroit finally received some well-deserved justice.  Former Detroit City Councilwoman Monica Conyers (wife of the Congressman John Conyers), was sentenced to serve 37 months in a federal prison after she plead guilty to accepting bribes.

Her plea was for taking bribes to support a contract with Synagro, a sludge processing company; however, the trial of her former aide, Sam Riddle, also exposed a series of other payoffs.  Because of that,  U.S. District Judge Avern Cohn was going to increase Conyers’ sentence.  He had originally planned on 3 years, then wanted to move up to 4-5 years, but Conyers protested and claimed she was a victim of an overzealous media out to get her.  She wanted to take back her guilty plea, but the judge wouldn’t allow it.  Instead, he backed down on the sentencing and went back to 3 years (37 months).

Here is a video, courtesy of FOX 2 Detroit:

And when reporters went to talk to Conyers, again courtesy of FOX 2 Detroit:

Conyers absolutely deserved this (in fact, she probably deserved the full 5 years).  She plead guilty to the charge, and then when she saw that she as going to get a REAL punishment, she tried to back out of it.  If she wasn’t guilty, she never should have plead guilty the first time.  Detroit deserved some justice yesterday, and I am happy to see Monica Conyers going to jail.  Her crooked ways and the ways of those like her (Kwame Kilpatrick, for one) are purely disgusting, and not what Detroit needs.  Hopefully, this, along with the sentencing of Kwame Kilpatrick, mark the road to recovery for Detroit politics and an end to corruption in Detroit.

Done Ranting,

Ranting Republican

Michigan Legislature Needs to Get to Work on Permanent Budget

October 5, 2009

Last week, Michigan saw its second government shutdown in the state’s history.  In the history of this country, only two other states have had government shutdowns because of a budget crisis, and Michigan is the only state to have more than one shutdown.  What’s even more sad is that the 2 shutdowns came only 2 years apart.

I ended up watching most of the late-night sessions last week, as I followed the budget crisis, and while there were some humorous segments (such as “I can count!” coming from the chairman of the Senate), most of what I saw was just sad – it’s sad that the Michigan legislature can’t pass a budget on time.

So why does Michigan have problems passing a budget?  There has been a fundamental failure in leadership, as well as the overall impacts of having the state in such a poor economic state.

Michigan is essentially the same position as it was for the 2007 shutdown: a Democratic Governor with terrible economic policies, a Democratic-controlled House of Representatives with Andy Dillon (D-Redford) as Speaker of the House waiting until it is too late to work on the budget, and a Republican-controlled Senate who tried to get the budget done on time, but was unable to overcome the incompetency of the House.

In both the 2007 and 2009 shutdowns, work on the budget started too late, and many legislators (including Republicans) weren’t committed to finishing the budget on time.

While portions of the budget were being passed by the Senate late Tuesday night, the House had already recessed for the day.  We saw the same thing in 2007: Andy Dillon would go would only have the House in session once or twice a week over the summer, and he even took a five-day weekend trip to Mackinac Island after acknowledging that the state was facing a budget crisis.

Meanwhile, Senate Majority Leader Mike Bishop (R-Rochester) had been getting Senate budget bills passed and sent over to the House faster than House bills were coming to the Senate.

But this isn’t to say that all Republicans were trying to finish the budget on time or that all Democrats were uninterested in finishing on time.  While the Senate Republicans seemed to generally work harder as the deadline got closer, NOBODY was working hard enough in the month and weeks beforehand.  Instead of passing a budget 2 hours into the government shutdown, the legislature should be passing a budget weeks or even months beforehand.

Representative Tim Bledsoe (D-Grosse Pointe) has suggested that the Michigan Constitution be amended to require the budget be done by July 1st, and legislators wouldn’t get paid after that date until a budget was passed.  Bledsoe told the Detroit Free Press, “We’ve had every opportunity to get this work done earlier in the year.  There’s no excuse to be moving the budget as late as we did.”

Senator Hansen Clark (D-Detroit) has suggested fining legislators $1,000 a day for each day after the fiscal year that a budget isn’t completed, with the Speaker of the House and Senate Majority Leaders paying $3,000.  He told reporters, “Even though many of us work long hours, we don’t have the same incentives as other sectors of the work force.  Typically, our incentive would be to do a good job so we can get re-elected, but apparently that’s not enough. … The leaders have to be accountable for results.  If you don’t perform the core mission of your job, and that’s to enact a balanced budget … there should be a penalty.”

Former Majority Leader Ken Sikkema (R) said that the problems run deeper than just legislators not cracking down in time: “The gap between revenue and spending is so large that there isn’t any structural issue that can compensate for it.  It’s a much deeper issue that legislators don’t want to deal with.  Michigan as a state can’t continue the level of spending it’s enjoyed for many years.  The economy has downsized underneath it.  Until you change the tax structure and the spending process, this kind of paralysis is likely to continue.  There is no process change that is going to make this a rational, timely, decision-making process.  Until there are fundamental changes, you can’t avoid this kind of chaos.”

And in part, I would agree with that.  The Democrats in the legislature have refused to accept that spending cuts are an inevitable result of the state’s deficit.  Taxes can only be raised so many times and only to a certain level, and when you’ve exhausted that option, you have to cut spending.  Michigan is not in a position to raise taxes.  Businesses won’t come to Michigan if we raise taxes, and we’ve even seen film companies come to Michigan now that we have a tax credit for film companies.  Raising taxes is only going to hurt the economy more and drive more people out of the state.

Fortunately, an interim budget was passed and signed by Governor Granholm only 2 hours into this year’s shutdown, but we aren’t in the clear yet.  The legislature gavels into session tomorrow, and a permanent budget still needs to be passed for the new fiscal year.  Unless legislators understand that spending cuts are not and option, but a necessity, and that they have to start cracking down and getting to work, we will wind up seeing a full government shutdown when the interim budget expires.

And we need to learn from our mistakes – this cannot happen in 2010.  It’s just unacceptable.  Fortunately, 2010 is an election year, and lawmakers will be trying to pass a budget on time so that they can get reelected, but unless things change, we will see ourselves back in this same position in 2011.

Done Ranting,

Ranting Republican

Live Analysis of President Obama’s Health Care Speech to Congress

September 9, 2009

I know it’s been a while since I’ve done a blog post (other than the one I did yesterday), but I figured this was an important issue to talk about, and I’ll probably be writing a column on health care sometime this week, so this will help me get some ideas down a little early.

President Obama is about to give  a speech to a joint session of Congress, and I’ll be giving my live analysis of his speech.  And this is live, so excuse any typos – I’m not always great at typing quickly.

Speaker of the House Nancy Pelosi has just gaveled the session into order, so we’ll begin in about 10 minutes here.

The President’s speech is expected to last about 45 minutes (not including applause), so I’m guessing that it will run close to an hour (maybe a little over) when it’s all done.

Speaker Pelosi has now called the session to order – Vice President Joe Biden by her side.

The Escort Committee is now leaving to follow behind President Obama when he enters the chamber.

Michelle Obama is now arriving.  The Cabinet is now coming into the chamber.

President Obama is now coming into the chamber – and he’s getting a lot of applause (as every President does during these joint sessions).

He’s now up to the podium – Speaker Pelosi is trying to bring the chamber to order.  She is now introducing President Obama.

He’s talking about the last time he spoke here – that it was during the worst economic situation we’ve faced since the Great Depression.  “We are by no means out of the woods … a full recovery is still months away.”  He’s saying that he won’t let up until “those who seek jobs can find them.”

Wow – Hillary Clinton looks out-of-place – she’s wearing this red suit and she’s surrounded by men in black suits.

President Obama is thanking Congress for their help and support in trying to fix America’s economy.  He’s talking about building a future for America, and that health care is central to that future.

“I am not the first President to take up that cause, but I am determined to be the last.”  It’s a nice quote, but there’s always going to have to be reform – things change – nothing will ever be perfect.

He’s talking about Teddy Roosevelt talking about health care reform, and Representative John Dingell (D-MI) introducing a bill every session to reform health care.

Talking about the hardships facing those who are uninsured – not those on welfare, but mostly the middle class.  He’s talking about people being denied insurance because of previous conditions.  “We are the only democracy … the only wealthy nation who allows such hardship for its people.”  But we’re also the democracy who other countries turn to for certain health care needs (such as Canadians needing some quick emergency treatments).

Talking about insurance companies dropping patients in the middle of treatment for bogus reasons such as having acne and not claiming it – and I’ll agree with him here – that’s a problem that SHOULD be addressed.

Talking about insurance premiums going up, and leading to businesses not being able to open/survive because of health care costs.

It’s “placing an unsustainable burden on taxpayers. … We will eventually be spending more on Medicare and Medicaid than every other program combined.”  Again – he’s right here – Medicare/Medicaid costs are getting out of control – it’s just the solution where I disagree with him.

Talking about a single payer system like Canada’s or a plan that individuals should buy their own health care, but both of these are radical shifts that would disrupt the health care system.  He’s saying we should use what works as a template and fix the problems in our current system, rather than switch to a Canadian-style system or a completely individual style system.

He’s now talking about the 5 committees coming up with health care bills in Congress – an amount of reform that has been unprecedented in history – and again – this is a good thing – if we have multiple ideas, we have more to choose from and more discussion going around.

Now he’s talking about opponents to reform using scare tactics and just trying to score political points.  “The time for bickering is over.  The time for games has passed.”  Games and bickering are part of the American political system – it’s a sad fact, but it’s true.  And both parties do it, but getting into a “Well the other party did __________” kind of mentality is bad for America.

“If you already have insurance … nothing in this plan will require you to change what you have. … What this plan will do is make this insurance that you have work better for you.”  It’ll make it illegal for insurance companies to deny you based on a preexisting condition.  And that got a LOT of applause.  It will be illegal for them to drop you when you get sick.

“No one should go broke because they get sick. … Insurance companies will be required … to cover routine check ups … and preventative care. … It saves money and it saves lives.”  And that was all for people who already have insurance.

For those who don’t, this plan will give you an opportunity to get quality insurance.  “We’ll do this by creating a new business exchange.”  Insurance companies will want this because it gives them more customers.

And for those who still can’t afford insurance, tax credits will be provided.  The exchange will take effect in 4 years.

He’s talking about immediate relief for those who get sick before then, citing a plan that Senator McCain proposed during the plan during the 2008 campaign – and Senator McCain just got a huge grin on his face.

He’s saying that some people may not want to pay for insurance, but when they get sick, we wind up paying for their health care when they wind up in the hospital.  “Under my plan, people will be required to carry basic health insurance” just like states require people to have basic auto insurance.

And this is where I disagree with the President.  Personally, I don’t think we should be forcing people to buy insurance; however, I also don’t think that we should then be paying for their hospital visits.  If someone decides not to get insurance, and they get sick, then we shouldn’t be footing the bill – they should just have to pay for treatment themselves or not get it.

Now, moving on to “key controversies that are still out there:”

  • Saying that there won’t be plans to try to kill off the elderly who are sick.
  • No money will go toward illegal immigrants. – and somebody just shouted “Lie!” and Speaker Pelosi gave him a stare of death – whoever it was, that was pretty unprofessional and immature.
  • No money will go toward funding abortions.
  • This will not be a takeover of the entire health care system.

These are all good points, and I’d encourage EVERYBODY to read the bill that finally gets introduced instead of just listening to either the Democrats’ talking points or the Republicans’ talking points.

“Consumers do better when there’s choice and competition.”  And he’s absolutely right about that – but instead of setting up a government program to do this, we should open insurance markets to cross state lines, so that companies can compete nationwide, adding more competition all over the nation.

He’s saying that he doesn’t want to drive insurance companies out of business, just hold them accountable.

He’s saying that he would like a non-profit public option (which that surprised me that he still pushed for that – I figured that he wasn’t going to try to push that tonight).  It would be an option for those who don’t have insurance, and people wouldn’t be forced to chose it.  He estimates that less than 5% of Americans would sign up.  He’s saying that this public option wouldn’t be funded by the government, but would have to be self sufficient.

But what would happen if it stopped being self sufficient?  Would it essentially turn into a Fannie Mae or Freddie Mac?

He’s saying that some are suggesting that the public option only go into effect where insurance companies aren’t competing well, or that we have a private co-op instead.  Saying that he won’t back down from giving a choice to people who can’t afford health care.

And the screen just panned over to the Republican section and they really do not look happy about this.

“Now he’s talking about how we’ll pay for the plan – “I will not sign a plan that adds one dime to our deficit – either now, or in the future. … Period.”  He’s saying that in his plan, there will be a section that will require spending cuts if the means of saving money aren’t there.  He’s now talking about the past administration making a mistake in passing tax cuts that we couldn’t afford as well as the Iraq War.

And while he does have an excellent point with the Iraq War part (which is a whole separate issue), I don’t think that that jab at the Bush Administration is going to help win any Republicans over – and with Senator Kennedy gone, they’re going to need an additional Republican vote in the Senate.  That was a bad strategic move on the President’s part.

Talking about ensuring that Medicare will be there for future generations.  Saying that seniors pay too much out-of-pocket for prescription drugs.  Saying not to pay attention to “scary stories that your benefits will be cut.”  GOP members don’t look happy.  “I will protect Medicare.”

“Making [Medicare] more efficient will [help make] the entire system more efficient.”  Saying that if we reduce waste in Medicare and Medicaid, that will pay for his plan.  Well why don’t we just reduce waste in Medicare and Medicaid anyway!  Why do you need to add one “good” thing to get rid of one bad thing?  Why not just cut waste out of M&M whether or not the other health care reforms pass or not.

Talking about malpractice reform bringing down costs of health care – and all the GOP members stood up and started cheering – even Biden stood up for that one.  Saying that we need to put safety first and let doctors focus on practicing medicine.  Saying that the Bush Administration wanted to test some of these ideas in individual states, and he likes that plan too.  So now he’s playing to the Republican side a bit – which is good because he’s going to need to do that if he wants this to pass the Senate.

Now talking about it’ll cost $900 billion over the next 10 years, but that’s less than the Iraq War…and I think he said something about the Bush tax cuts – I didn’t catch it.  Whatever it was, the Dems liked it, but the Repubs looked pretty pissed off – Rep. Thad McCotter (R-MI) really didn’t like whatever was said.

Saying he won’t stand by as the special interest groups fight to keep things the way they are.  “I will not accept the status quo as the solution.”  And he’s right – we DO need reform – I just disagree with him on the type of reform we need.

Talking about reforms leading to saving lives.

“We cannot fail … there are too many Americans counting on us to succeed.”

Talking about the late Senator Kennedy (D-MA) on his death bed talking about this year being the year that health care reform will be passed.

Health care reform has been a source of “rigorous and intense debate”.

Obama’s talking about Senators Hatch (R-UT) and McCain (R-AZ) and Grassley (R-IA) working with Senator Kennedy.  That his p”assion was born out of his own experience … having 2 children stricken with cancer.”  He’s saying that “concern for others … is not a partisan” issue.  “We are all in this together, and when fortune turns against us, others are there to give us a helping hand. … Sometimes government has to step in.”

Saying that Republicans and Democrats joined together in 1965 when they created Medicare.

“When any efforts to help people in need are attacked as unAmerican … and we can no longer engage in a civil conversation” … I missed that last part.  Whatever his point was (I’m sure it was something about engaging in civil debate) – I agree here – we need to discuss it, not try to drown one side out.

“I still believe we can act when it’s hard.”  Saying we need to have “civility” and not gridlock the process but make progress.

“I still believe we can do great things, and that here and now we will meet history’s test.  Because that is who we are.  That is our calling.  That is our character.  Thank you, God Bless You, and may God Bless the United States of America.”

Now the Republican response by Representative Charles Boustany (R-LA):

Republicans are ready for reform.  We’ve lost jobs since February.  “Americans want health care reform … [They're saying] it’s time to start over with a … bipartisan plan.”

He’s saying that Obama’s plan will cost Americans more – that even the Congressional Budget Office agrees – it’ll create 53 new bureaus and raise the deficit.  It won’t make the program better for seniors.

“The President [could have] taken government run health care off the table, but he didn’t.”

Americans should be able to get insurance with preexisting conditions.  We should give incentives for healthy choices and preventative care.

“We’re grateful that the President mentioned medical liability reform.”  “Junk lawsuits drive up the cost of medical care.”

We should establish a plan that would enable people to buy insurance across state lines – and that was one of McCain’s big pushes during the ’08 campaign that I really agreed with.

“This Congress can pass meaningful reform soon … working together in a bipartisan way, we can lower the cost of health care.”

Alright – I wasn’t able to catch that much of the response because there weren’t any pauses in that speech, but it was basically the same thing that McCain said during his Presidential campaign.

Overall, I think the President did a moderately good job.  I wish he would’ve gone into detail a little more than he did, and there are some things that I definitely disagree with, but there were some good points:

Malpractice/tort reform is a huge part of the plan that will help lower costs of health care.  Eliminating waste in Medicaid and Medicare is another great thing that we need to do.  Ensuring a way that people can keep their coverage even when they get sick is another necessity that almost everybody agrees with.

I disagree with the public option, and I disagree with forcing people to have some sort of insurance plan.

I wish that he would consider adopting the plan to allow people to cross state borders to purchase health care plans.

Overall, it was a good speech, but I think he took a couple too many jabs at Republicans and the Bush administration (he’s going to need some Republicans’ votes, and that wasn’t a way to win them over).  I also wish he would’ve had more details of his plan, but with only having 45 minutes, that’s hard to do.

I’m not sold on the President’s plan, but I do think there are some good parts of the plan that I’d like to see develop.

We’ll see what’s introduced and what Congress does with the bill(s).

Done Analyzing,

Ranting Republican

House of Representatives Votes to Tax AIG Executives’ Bonuses at 90%

March 19, 2009

The House just passed H.R. 1586, officially titled “To impose an additional tax on bonuses received from certain TARP recipients” (sponsored by Charlie Rangel [D-NY]), which taxes the bonuses of AIG executives.  The bill technically places a tax on any bonuses given by companies who received TARP (Troubled Asset Relief Program) money.

The following is the text of the legislation:

HR 1586 IH

 

111th CONGRESS 

1st Session

H. R. 1586

To impose an additional tax on bonuses received from certain TARP recipients.

IN THE HOUSE OF REPRESENTATIVES

March 18, 2009

Mr. RANGEL (for himself, Mr. ISRAEL, Mr. PETERS, Mrs. MALONEY, Mr. STARK, Mr. LEVIN, Mr. LEWIS of Georgia, Mr. TANNER, Mr. POMEROY, Mr. THOMPSON of California, Mr. LARSON of Connecticut, Mr. BLUMENAUER, Mr. PASCRELL, Ms. BERKLEY, Mr. VAN HOLLEN, Mr. MEEK of Florida, Mr. DAVIS of Alabama, Mr. DAVIS of Illinois, Mr. ETHERIDGE, Ms. LINDA T. SANCHEZ of California, Mr. HIGGINS, Mr. YARMUTH, Mr. DINGELL, Mr. CONNOLLY of Virginia, Ms. FUDGE, Mr. LUJAN, Mr. MAFFEI, Mr. PERRIELLO, Mr. CARNEY, Ms. CASTOR of Florida, Ms. CLARKE, Mr. COHEN, Mr. ELLISON, Mr. HALL of New York, Mr. HARE, Mr. KLEIN of Florida, Mr. LOEBSACK, Ms. SCHAKOWSKY, Mr. SIRES, Mr. WELCH, Mr. WILSON of Ohio, Mr. WU, and Mr. HILL) introduced the following bill; which was referred to the Committee on Ways and Means

 


 

A BILL 

To impose an additional tax on bonuses received from certain TARP recipients.

    Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. BONUSES RECEIVED FROM CERTAIN TARP RECIPIENTS.

    (a) In General- In the case of an employee or former employee of a covered TARP recipient, the tax imposed by chapter 1 of the Internal Revenue Code of 1986 for any taxable year shall not be less than the sum of–

 (1) the tax that would be determined under such chapter if the taxable income of the taxpayer for such taxable year were reduced (but not below zero) by the TARP bonus received by the taxpayer during such taxable year, plus

(2) 90 percent of the TARP bonus received by the taxpayer during such taxable year.

    (b) TARP Bonus- For purposes of this section–

(1) IN GENERAL- The term `TARP bonus’ means, with respect to any individual for any taxable year, the lesser of–

(A) the aggregate disqualified bonus payments received from covered TARP recipients during such taxable year, or

(B) the excess of–

(i) the adjusted gross income of the taxpayer for such taxable year, over

(ii) $250,000 ($125,000 in the case of a married individual filing a separate return).

 (2) DISQUALIFIED BONUS PAYMENT-

(A) IN GENERAL- The term `disqualified bonus payment’ means any retention payment, incentive payment, or other bonus which is in addition to any amount payable to such individual for service performed by such individual at a regular hourly, daily, weekly, monthly, or similar periodic rate.

(B) EXCEPTIONS- Such term shall not include commissions, welfare or fringe benefits, or expense reimbursements.

(C) WAIVER OR RETURN OF PAYMENTS- Such term shall not include any amount if the employee irrevocably waives the employee’s entitlement to such payment, or the employee returns such payment to the employer, before the close of the taxable year in which such payment is due. The preceding sentence shall not apply if the employee receives any benefit from the employer in connection with the waiver or return of such payment.

(3) REIMBURSEMENT OF TAX TREATED AS TARP BONUS- Any reimbursement by a covered TARP recipient of the tax imposed under subsection (a) shall be treated as a disqualified bonus payment to the taxpayer liable for such tax.

    (c) Covered TARP Recipient- For purposes of this section–

(1) IN GENERAL- The term `covered TARP recipient’ means–

(A) any person who receives after December 31, 2007, capital infusions under the Emergency Economic Stabilization Act of 2008 which, in the aggregate, exceed $5,000,000,000,

(B) the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation,

(C) any person who is a member of the same affiliated group (as defined in section 1504 of the Internal Revenue Code of 1986, determined without regard to paragraphs (2) and (3) of subsection (b)) as a person described in subparagraph (A) or (B), and

(D) any partnership if more than 50 percent of the capital or profits interests of such partnership are owned directly or indirectly by one or more persons described in subparagraph (A), (B), or (C).

 (2) EXCEPTION FOR TARP RECIPIENTS WHO REPAY ASSISTANCE- A person shall be treated as described in paragraph (1)(A) for any period only if–

(A) the excess of the aggregate amount of capital infusions described in paragraph (1)(A) with respect to such person over the amounts repaid by such person to the Federal Government with respect to such capital infusions, exceeds

(B) $5,000,000,000.

    (d) Other Definitions- Terms used in this section which are also used in the Internal Revenue Code of 1986 shall have the same meaning when used in this section as when used in such Code.
    (e) Coordination With Internal Revenue Code of 1986- Any increase in the tax imposed under chapter 1 of the Internal Revenue Code of 1986 by reason of subsection (a) shall not be treated as a tax imposed by such chapter for purposes of determining the amount of any credit under such chapter or for purposes of section 55 of such Code.
    (f) Regulations- The Secretary of the Treasury, or the Secretary’s delegate, shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section.
    (g) Effective Date- This section shall apply to disqualified bonus payments received after December 31, 2008, in taxable years ending after such date.

The bill passed 328 (243 Democrats, 85 Republicans)-93 (6 Democrats, 87 Republicans).

Personally, this bill is very troubling to me.  It’s debatable as to whether or not it’s Constitutional.  Some have said that it’s a bill of attainder (a bill that focuses on punishing 1 group of people).  Technically, it never names AIG as the focus of the bill, but that’s definitely the intent.

This bill is more legally binding than Representative Gary Peters’ bill (H.R. 1527) that would impose a 60% tax on bonuses paid to executives if “the ownership interest of the Federal Government” is at least 79%.  Basically that says that if the government owns at least 79% of a company’s stock, it can tax bonuses on that company’s executives at a rate of 60%.  The problem with that bill, which I talked about yesterday, is that the government technically doesn’t own AIG. 

Even if it is Constitutional, I find this a huge invasion of the business sector.  Two wrongs do not make a right.  It’s a complete twist of the American tax code, and it sets a VERY dangerous precedent.

I don’t think AIG executives should have received the bonuses, but that stipulation should have been placed in the original TARP legislation.

Now, that stipulation WAS in the original bill; however, when it went to the conference committee, the Democrats took out that provision.  The exact details of how that happened are still unknown, but Chris Dodd had said that he introduced an amendment at the request of the Obama administration.  When this actually gets sorted out, I’ll let you know what actually happened.

Regardless of how they were allowed to get the bonuses, they were, and taking the bonuses away like this is questionably constitutional, but in the least, a blatant perversion of the tax code.

Done Ranting,

Ranting Republican

Bonuses for AIG Executives Are Disgusting, but Legally Necessary

March 18, 2009

I’m sure that by now, most of you have heard about AIG giving out $165 million in bonuses, and that has outraged many Americans, including many politicians because people don’t think that executives should be getting money for driving AIG into the ground and then receiving government bailout money.

Personally, I agree that they don’t deserve bonuses, especially after receiving government money.

The problem is, there’s really no way that I see the government LEGALLY stopping these bonuses.  The government lent out money to AIG originally, without putting any requirements on the money not going toward bonuses, so the government has no right to step in and stop it now.

The bonuses are in the executives’ contracts, and thus should be paid out.

And the idea to tax the bonuses 100% is just plain wrong – that’s government intrusion and it crosses the line.

And Representative Barney Frank’s (D-MA) solution isn’t exactly legal either.  He told CNN earlier today:

We own this company in effect, and we’re not asking that these bonuses be rescinded because we have lent money to the company.  I believe we are saying as the owners of the company, we do not think we should be paying bonuses or should have paid bonuses to people who made mistakes, who were incompetent.

No, I don’t think the American people want a situation where Congress, whenever it feels a contract shouldn’t have been signed, passes a law to abrogate that past contract.  That’s why I am saying we should assert our ownership rights.

I want to invalidate these contracts and say, look, we are the owners of this company.  Yes, contracts were signed with you that I wish hadn’t been signed.  But given how badly you performed, I want to argue that they did not perform under the contract.

The difference would be having a precedent that I don’t think the American people want, even if for this situation, we’d all like to see it different, where whenever Congress thinks a contract should be abrogated, it should be abrogated.  So, I’m talking about a legislative abrogation of a contract.  I’m talking about a lawsuit as an owner of the company [that wants to reward a] bonus, we ought to fine you for messing it up.

Well, I personally have a problem with Representative Frank’s plan.  Sure, the government pumped billions of dollars into AIG, but they did it as a loan.  We’re not talking about being the majority shareholder here – we’re not talking about buying stocks, we’re talking about a loan.  Giving a company a loan gives Congress absolutely no ownership rights, and the fact that Barney Frank thinks that the loan gave the government “ownership,” even in the slightest, is honestly quite scary.

Think of it on a more personal level than if it were a company.  Imagine that the government gave you a student loan.  If they gave you a loan intended for school, but never put in writing that it had to be spent on school, and you spent the money on candy bars, you have that legal right.  What Barney Frank wants to do is say, “The federal government is part owner of your life, and you are not allowed to buy candy bars.”  Well, I would be fine with that if it had been in the original agreement, but it wasn’t.  Now, what was in the original agreement was that the the government got “equity participant warrants” for 79.9% of AIG’s equity.  For those of you who don’t know what equity warrants are, they’re a contract that says that the government has the option and right to own 79.9% of the AIG shares; however, the government is not exercising that option now.  Until we exercise that option, the government has NO RIGHT to step in here.

If the government takes back any of this money and gets away with it, it sets a VERY dangerous precedent.

Now, Edward Liddy, the CEO of AIG, is encouraging employees to give back half of the bonus money.  And if they do, that’s fine, because THEY are giving it up.  But if the government takes the money simply because the executives dont’ deserve it, that would be a major government intrusion.

Done Ranting,

Ranting Republican

A Look at the Causes of the Credit Crisis

March 17, 2009

Recently, there’s been a lot of talk about the American credit system.  Personally, I think Americans rely far too heavily on credit, and that is going to come back to haunt us VERY soon if we don’t make some drastic changes.

Back during the debate over the first bailout bill of this year, Senate Minority Leader Mitch McConnell (R-KY) made the following comments:

more about “A Look at the American Credit System …“, posted with vodpod

And it’s that type of thinking that leads to the credit crisis that we’re in now.  The credit system is like our circulatory system?  NO!  We should not be relying that heavily on our credit system.  Credit is NOT intended to be the same thing as money.  Equating credit with available spending money is one of the major factors that led to the Great Depression.  People were buying things on credit and laying out installment payment plans.  That enabled them to buy more stuff, and this created an artificially high demand for items (such as radios or cars, both of which were often being bought on credit).  But once they began having to pay multiple payments back, people could no longer to afford to continue buying stuff (thus why I called the demand “artificially high”) – the demand for those items was not necessarily high, people were just buying things immediately that they normally would have saved up for.  And when they didn’t keep track of how much that would cost in the long run, the credit bubble burst.

The other day, I posted a comment on a friend’s blog (Right Wing Reform), and that’s what got me thinking about all of this.  The following is my comment (with a little more added in – I wrote the original comment to be quick and short):

The credit system is intended to be used as a crutch.  You still do the walking, but you can’t quite walk all by yourself at the beginning of an injury (purchasing a large item).  Over time, you begin to pay off the debt (heal), and use less and less of the crutch, until eventually you don’t need it (the item is paid off).  The problem with the current way many Americans are using credit is that they’re using it more like a wheelchair than a crutch.  And it’s used too often, even to take one little step in a room (buying a meal at McDonald’s or a small purchase at the grocery store).  The problem with using it for small items is that over time, you begin to lose track of how much you’re spending (unless you have a GREAT memory), and a lot of people find themselves not being able to pay off the entire credit card bill at the end of the month.  And do you know what that means?  That’s right, they have to pay interest on that.  And that means less money in their pocket, meaning that they are MORE likely to use credit as cash.  And the person (or family) gets deeper and deeper into debt.

When you overburden the credit system and you never try to walk on your own, the crutch breaks.

Honestly, we’re never going to be able to get rid of credit.  And there’s no reason to.  When used responsibly, it’s a great tool.  But a strong financial system would be able to withstand a loss of a credit system (at least small item credit [the biggest example of a small item credit system would be credit cards; another example would be  installment payments for stuff like furniture] – I would argue that it should be able to withstand the loss of large item credit, but this would mean that buying a house would be something that takes a lot of work and time, and you’d go back to the days of people building their own houses and living with other people rather than a single person owning a home by the age of 23).

Right now, America would not withstand the loss of even the small item credit system, and THAT is a problem for us financially.

If Americans want to get through this financial crisis, keeping the credit cards at home more often would be one way to help.

Done Ranting,

Ranting Republican

Central Michigan University President Michael Rao to Leave CMU

February 24, 2009

Alright, this news came in over the weekend while I was at the Michigan Republican Winter State Convention, and I’ve been swamped with stuff, so I’m just now getting to it.

President Machael Rao, who’s been at CMU for 9, decided that he’s going to leave at the end of this year, to take a job as  president of Virginia Commonwealth University.

Personally, I think that Rao is leaving at a bad time.  He just started his pet project, the medical school (which I strongly oppose because, in my opinion, it’s a waste of money that we can’t afford to waste right now), and now he’s leaving.

Personally, I hope that we have a president who’s more fiscally responsible than Rao was.  He overspent money, raised tuition, initially refused to give a pay raise to the teachers, but then decided that a 3% pay raise was alright for him.  Instead of cutting costs where we could (aluminum gutters on Warriner Hall, new street signs with university colors), lowering tuition for the students (or at least keeping it the same), and giving the teachers a pay raise, he gave HIMSELF a pay raise.

Probably the worst thing he did was get rid of the CMU promise, which promised that tuition would stay at the same level for students throughout their stay at CMU.  That was a HUGE draw for CMU, and with that gone, CMU lost a lot of it’s luster.

I wish Rao the best as he leaves.  He’s a really nice guy, but I think he could’ve done a lot better for CMU, and leaving right now is the wrong thing to do.

Good luck, Mr. Rao!  At least it’ll be warmer in Virginia!

Done Ranting,

Ranting Republican
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Lansing, Michigan Mayor: Automotive Union Members Have Sacrificed Enough

February 18, 2009

Yesterday on Happening Now on FOX News, Virg Bernero, the Mayor of Lansing Michigan, said that auto industry workers have already sacrificed enough and it’s time for Wall Street to start making some sacrifices.  Watch the video (courtesy of FOX News), and I’ll discuss it below:

Alright, honestly, the mayor went nuts in my opinion, and kinda made a fool out of himself.  He said, “I was a little offended by your question, you know, have the unions given up enough, has the working man given up enough?  You know, my question is, has Wall Street given up enough, for the billions that they have taken?”  Um, the anchor (who’s  name slips my mind at this point) never said ANYTHING about union concessions or anything related to it!

The anchor points out that that wasn’t his question (go back to the beginning and check – it was NOT his question).  When asked if he thought that the UAW should have to “swallow some pay cuts,” Bernero focused solely on health benefits, again NOT answering the question that was asked!

Bernero late shows exactly what the problem with Michigan is, when he asks the question, “What are we going to produce in this country, if we allow the auto industry to go by the wayside?”  For too long, Michigan has relied on the auto industry as “our industry.”  The fact is that the auto industry isn’t what it used to be, and we can no longer rely on it as our only industry.  And to ask what we will produce if we don’t produce automobiles, as if saying that’s all we produce, is insulting to those who work in other manufacturing fields.

The anchor also brings up the fact that UAW members don’t need health care for life!  That’s one of the reasons that the Big 3 are suffering, because they’re giving health care to people who don’t work for them anymore.  Bernero says that the UAW has given concessions.  True, they have, but they need to give up WAY more.  UAW members are WAY overpaid and get WAY too many benefits.

If UAW members would just realize that he auto industry is in trouble and can’t afford to pay them what they have been up until now, and would take some pay/benefit cuts, then the auto industry could rebound.  But while the UAW shares the mentality that Bernero has, the auto industry is going to continue to suffer.  I’ve said time and time again that while the auto executives share some of the blame, a lot of the blame falls on the greedy UAW for keeping the auto industry in such a choke hold.

Done Ranting,

Ranting Republican
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Massachusetts Proposes Using GPS Chips to Tax Drivers’ Mileage

February 18, 2009
Yesterday, on Happening Now on FOX News, there was a  discussion a new idea for a way for Massachusetts to increase their revenue.  The idea was to use GPS chips to track mileage (mileage only and NOT location) of cars, and then tax drivers based on how far they go.  Some like the idea, which is being tested in Oregon.  FOX interviewed Jim Whitty from the Oregon Department of Transportation.  Meanwhile others, such as Massachusetts state Senator Scott Brown views it as Orwellian and an invasion of privacy.  Brown also said that taxes are too high already in Massachusetts.  Watch the video and I’ll discuss it below (video courtesy of  FOX News):

Now, did you catch what Whitty said?  At one point he was talking about the test that Oregon did of using the system and said, “There was no issue with tracking, because we didn’t–we didn’t do that.”  Notice, he never said that “We couldn’t do that.”  He said, “We didn’t do that.”

The whole point of GPS, Global POSITIONING System is to track where you’re at.  Now, I’m sure that the government in Oregon may only be paying attention to the distance that people travel; however, that doesn’t mean that they couldn’t just one day decide, instead of just counting the miles, let’s start paying attention to where these people are going.  Originally, it may be to catch criminals, or determine traffic patterns, but that’s a violation of privacy.  And it leads down a slippery slope.

Additionally, Senator Brown is right, taxes in Massachusetts could be lowered if the government would just better manage its money.

But my main problem with the system is the fact that it is, for lack of a better word, Orwellian.  Even my liberal roommate agrees with me here!  It’s an invasion of privacy.

If you’re going to do anything, put a device that measures odometer changes.  But using GPS, Global POSITIONING System, to track people’s “distance” is in invasion of privacy.

Let me know what you think:

Done Ranting,

Ranting Republican
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