Republicans Backed Into a Corner

The 2010 mid-term elections here in the US were all about how the Republicans were going to improve the economy and create jobs. And balance the budget. How they were going to do this in an economy that was arguably the worst since the Great Depression was anybody’s guess. But enough people were convinced to give them another chance and voted them control of the US House of Representatives along with a number of state governorships.

This lead to my posting right after the election Put Up or Shut Up Time for the Republicans.

[The Republican] plan to balance the budget is to extend the tax cuts to all including the wealthiest 2% along with mostly unspecified “spending cuts”. We don’t know exactly what they have in mind but the most consistent story is that defense, Social Security, and Medicare cuts are not on the table which is the lion’s share of the budget. With precious little else to cut, how do they propose to balance the budget while not only refusing to raise taxes but also swelling the deficit with more tax cuts for the wealthy? The math just doesn’t add up! But then again, they now have a chance to propose their own budget in the House to answer these questions.

But by forcing the extension of the Bush tax cuts for the wealthiest during the Congressional Lame Duck session last year, the Republicans were already starting to back themselves into a corner. The only possible ways out were to make cuts in defense, Social Security, Medicare, or all three.

But Social Security and Medicare are extremely popular programs and recent polls have shown that over 3 out of 4 Americans have rejected the idea of any cuts to these programs.

So by process of elimination, there are only two remaining alternatives for the Republicans to choose from. One is to propose cuts in defense which usually goes against conservative ideology but would mitigate or avoid having to deal with the "third rail" associated with messing with Social Security and Medicare. Or give in to the right and try and sell the public on making all the cuts to Social Security and Medicare without touching defense.

The Republicans chose the latter and apparently felt that Congressman Ryan could sell this to the American public. But the more Americans read the fine print of Ryan’s plan, the less they are buying it.

Here from his "Roadmap" site is Ryan’s proposal for Medicare.

It preserves the existing Medicare program for those currently enrolled or becoming eligible in the next 10 years (those 55 and older today) - So Americans can receive the benefits they planned for throughout their working lives. For those currently under 55 – as they become Medicare-eligible – it creates a Medicare payment, initially averaging $11,000, to be used to purchase a Medicare certified plan. The payment is adjusted to reflect medical inflation, and pegged to income, with low-income individuals receiving greater support. The plan also provides risk adjustment, so those with greater medical needs receive a higher payment.

So instead of the government acting as the insurer as in Medicare, it will offer payments for individuals to shop around for their own private insurance. Just the idea of people in this age group with all of their mental and physical infirmities shopping around for the best deal on their health insurance boggles the mind!

But what happens if (most say when) the premiums for the so-called Medicare certified plans grow faster than what the government is willing and able to pay for? The policyholder must then make up the difference or go without health insurance.

This would be a really tough sell to get present Medicare beneficiaries to accept. But to get around that, this plan is being sold as affecting only those presently under the age 55. As long as it’s someone else getting screwed, that’s not so bad! The plan for Medicaid which insures low-income people leads to a similar problems that may result in some losing coverage.

And here is part of Ryan's proposal for Social Security.

Offers workers under 55 the option of investing over one third of their current Social Security taxes into personal retirement accounts, similar to the Thrift Savings Plan available to Federal employees…Makes the program permanently solvent…with an eventual modernization of the retirement age.

Of course the “modernization of the retirement age” means raising it, a position openly advocated by New Jersey Republican Governor Chris Christie. But postponing the retirement age creates an additional hardship for those who do physical labor for a living in addition to those near the present retirement age who have been especially hit hard by unemployment. Raising the maximum taxable earnings for Social Security above $106,800 would likely address any future shortfalls without having to cut benefits. But this goes against the Republican ideology that taxes should never be raised!

Perhaps the most controversial part is Ryan's proposal for Tax Reform.

Simplifies tax rates to 10 percent on income up to $100,000 for joint filers, and $50,000 for single filers; and 25 percent on taxable income above these amounts…Promotes saving by eliminating taxes on interest, capital gains, and dividends; also eliminates the death tax [the Republican epithet for the estate tax].

So instead of the present highest marginal tax rate of 35% for the wealthiest under the present extended Bush tax cuts (compared to about 39% under Bill Clinton when the budget was last balanced), Ryan advocates cutting it even further to 25%. And while those who work for their income would still have to pay taxes, those more well to do who can afford to live on just investment income get a free pass on taxes.

More and more people are starting to see a pattern here. It is difficult to continually advocate governmental policies that are seen to benefit the wealthy at the expense of everybody else. Any while Mr. Ryan is a pretty slick salesman for his budget policies when he appears as a TV talking head, his recent experiences at local town hall meetings have resulted in booing and heckling by some of the attendees.

Rep. Dan Webster (R-FL) along with many other Republicans around the country suffered a similar fate during one of his recent town hall meetings while trying to defend the Ryan plan.

Republican governors adopting policies that have made budget cuts in areas like education while at the same time supporting tax cuts for corporations are also getting some pushback sometimes in the form of recalls from some of its citizens.

Don’t think the Democrats haven’t noticed the turmoil among some Senate Republicans in deciding if they really want to stick their necks out in support of the Ryan budget plan that passed the Republican controlled House. So with no danger of losing and in the spirit of "cooperation"…

Senate Majority Leader Harry Reid (D-Nev.) announced on Wednesday that he would host a vote on Rep. Paul Ryan’s (R-Wis.) budget as a means of forcing moderate GOP senators to weigh in on the legislation’s controversial proposals.

While the Tea Party purists may choose to ignore the growing voter dissatisfaction with the Ryan tax and budget proposals, the more moderate Republicans may well feel that they have been backed into a corner trying to defend these proposals that may well lead to some heavy losses in 2012. And what about the promised creation of more jobs? Of course they say that will come along if we agree to even more tax cuts. So how many Republicans will continue to try and defend the Ryan proposals in the face of such strong and emotional opposition? Stay tuned!

Post Script - May 25, 2011

Democrat Captures House Seat in Special Election

The results set off elation among Democrats and soul-searching among Republicans, who questioned whether they should rethink their party’s commitment to the Medicare plan, which appears to have become a liability heading into the 2012 elections.


Two months ago, the Democrat, Kathy Hochul, was considered an all-but-certain loser in the race against the Republican, Jane Corwin. But Ms. Hochul seized on the Republican’s embrace of the proposal from Representative Paul D. Ryan of Wisconsin, to overhaul Medicare, and she never let up.

Obama's Dilemma in Libya

di·lem·ma [di lémmə]n

1. situation with unsatisfactory choices: a situation in which somebody must choose one of two or more unsatisfactory alternatives

Suppose it was you sitting in the Oval Office and had to quickly decide whether or not to intervene in Libya to prevent the imminent slaughter of thousands, what would you have done?

It seems like a pretty easy decision. Prevent the slaughter of thousands or stand by while it happens. But of course this “easy” decision to prevent the slaughter is laced with maddening complexity. Last weekend as part of a roundtable on Meet the Press, Ted Koppel did an eloquent summary of the reasons why this decision may be just as unsatisfactory as the alternative.

The question hasn't yet been answered as to why it is that Libya, of all countries in that region, has won the humanitarian defense sweepstakes of 2011. We have seen many countries, both in that region and throughout the world, where civilian loss and civilian suffering has been much, much greater. Congo for the past 12 years, we've lost about five million people. Sudan, three million people, never any talk of military intervention. Take a look at what's going on in the Ivory Coast today. Secretary Clinton was talking about the number of refugees that might have come out of a Gadhafi attack on Benghazi. You've got 700,000 refugees in the Ivory Coast right now--close to a million, in fact. Why, why Libya? Hasn't been answered.

[Then there is] Syria. Remember that the current president's father, back in 1982, when he had a little rebellion on his hands in the city of Hama...wiped them out…Eighty thousand people were killed in Hama. What do we know about the rebels in Libya? One of the few things we know about them is that there was from that region of Libya a disproportionately high number of young men who joined al-Qaeda in Iraq. Are these the folks that we want to associate ourselves with? We know for a fact that Gadhafi is a bad guy, but we know very little about the people who seek to replace him.

We don’t seem to mind military operations for humanitarian purposes – as long as we don’t have to deal with seeing casualties on TV.

I just wanted to invoke the law of unintended consequences…Remember Somalia. There was never a more humanitarian mission than when President George H.W. Bush, the elder Bush, when he ordered U.S. troops into Somalia to avoid the starvation of hundreds of thousands of people. Ultimately, that led to a dead Ranger being dragged through the streets of Mogadishu. We pulled out of Somalia just in panic; and a few weeks later, when Rwanda happened, the United States was so shell-shocked that it was unable to do anything and 800,000 people died.

This doesn’t include a host of other questions about, for example, what happens if the operation is unable take Qaddafi out without US ground troops which the president has promised not to send. And make no mistake, if Qaddafi is still left in power, he will still be able to carry out his threat of genocide as soon as the opportunity presents itself.

And then there is the question about whether President Obama should have first obtained permission from Congress to start this military action against Libya. While this would have been desirable, how practical was it under the circumstances? The president did consult with leaders in Congress. And US Senate Resolution 85 which urged the UN Security Council to take further action against Libya including the possible imposition of a no-fly zone, was passed by unanimous consent on March 1. But time was very much of the essence to prevent Qaddafi’s troops from reaching Benghazi and carrying out his threat to start killing his citizens. What if Congress were to get deadlocked on this decision like they have on so many previous occasions? If you were President Obama, would you want to take the chance of that happening?

Despite all of the windbagging about allowing Congress to vote on this, I’m sure that many are privately relieved that they don’t have to go on record as to how they would have voted. For now, they have the luxury of waiting and seeing how it all turns out and then taking whatever position in hindsight makes them look best.

But President Obama had no such luxury. He had to make the choice of either agreeing to intervene in Libya for humanitarian reasaons and take all of the criticism and second guessing that goes with it if things had turned out bad. Or he could have decided to stay out of it all and endure the worldwide condemnation if Qaddafi had been able to carry out the slaughter of his people. That is indeed a dilemma!

Nobody knows how this will all turn out. But it’s hard to imagine any thoughtful and reasonable person not trying to prevent a massive loss of life when an opportunity like this, especially when a coalition of others is asking for your help. I think that under the extremely difficult circumstances, the president made the best choice possible.

Nicholas Kristof in his NYT op-ed Is It Better to Save No One? sums it up this way.

Critics argue that we are inconsistent, even hypocritical, in our military interventions. After all, we intervened promptly this time in a country with oil, while we have largely ignored Ivory Coast and Darfur — not to mention Yemen, Syria and Bahrain.

We may as well plead guilty. We are inconsistent. There’s no doubt that we cherry-pick our humanitarian interventions.

But just because we allowed Rwandans or Darfuris to be massacred, does it really follow that to be consistent we should allow Libyans to be massacred as well? Isn’t it better to inconsistently save some lives than to consistently save none?

The Assault on Education

Shortly after the Republican victory in November, I posted Put Up or Shut Up Time for the Republicans since the Republican narrative during the fall campaign was that they could balance budgets strictly by cutting spending without increasing taxes. But since they were unwilling (or unable) to specifically name programs they wanted to cut, it would be interesting to see what they would finally come up with.

On the federal level, the proposed cuts were for a grand total of about $61 billion out of a deficit of about $1.5 trillion including cuts to Planned Parenthood which critics feel has nothing to do with saving money.

Planned Parenthood, like other health care providers, provides a range of services for women. Every year, Planned Parenthood screens millions of women for cervical cancer, breast cancer and sexually transmitted diseases. The organization offers flu shots, diabetes screening and a host of other health services to women who might not otherwise have the means to get them. Nearly half of Planned Parenthood's clients qualify for Medicaid.

But Planned Parenthood also provides access to safe, legal abortions, and that has earned it the lasting enmity of those who would make that procedure illegal. The budget bill passed by the House would cut all funding, including Medicaid, from Planned Parenthood, likely putting it out of business.

While the Republican controlled House can pass just about any bill cutting any spending they wish to target, they know it is little more than a symbolic gesture since the Democratic majority in the Senate and the Democratic president will never let bills like this become law. But it sure makes for a great opportunity for conservatives to appeal to their base!

But it’s a far different story at the state level where Republican governors and legislatures that are in control can more easily pass spending cuts that suit their ideological views. And it seems like the most prominent target of the cuts is education.

The most visible story is in Madison, Wisconsin where the governor not only demanded pay cuts from its teachers, but also most of their collective bargaining rights. The interested reader can check out my previous posting, Making Sense of the Wisconsin Standoff.

But here in Pennsylvania, Republican Governor Tom Corbett has proposed what the Pittsburgh Post-Gazette calls a Brutal Budget that makes massive cuts in spending for education.

A governor's budget is more than a ledger; it's a blueprint of priorities. This year, in the hands of Tom Corbett, it's also a sharp and bloody ax swinging at essential programs, particularly education.

In issuing his first budget, Gov. Corbett made it clear he means to keep his campaign pledge to rein in state spending and his $27.3 billion proposal contained no new or increased state taxes. But gouging funding levels for state universities will undercut his agenda for creating and retaining jobs, and hitting school districts with the deepest cuts undoubtedly will trigger tax hikes at the local level.

This is all so wrong on so many levels. Of course, the governor's object is to balance the budget without raising any state taxes. But if the result is triggering tax hikes at the local level, doesn’t that count as a tax hike? After all, the money is still coming out of the taxpayers’ pockets.

The purpose of state supported universities is to provide educational opportunities to its residents without their having to pay very expensive private university tuitions. For many of not most people, college would be otherwise unaffordable. So while again there is no state tax hike, aren’t the resulting tuition hikes still money that will be coming out of the taxpayers’ pockets? And if college then becomes unaffordable for some, isn’t that too much of a price for those people to pay?

Perhaps the most insidious damage would come from the cuts to the local school districts. In general, public schools are financed by a combination of local property and state taxes. So the cut in state taxes will mean either an increase in property taxes (for those school districts that can afford it) or cuts in the classroom (for those that cannot).

At least in theory, public education is supposed to be the great equalizer providing an opportunity for upward mobility for those in the lower economic classes. But decreasing the state funding for education only puts more strain on poorer areas with a lesser tax base thus increasing the gap between the haves and have nots. And while it is often the poorer school districts that need to offer more money to entice the best teachers to teach there, it is the affluent school districts that will best be able to attract the best teachers.

And just to add insult to injury is the governor’s refusal to impose a so-called severance tax on the expanding Marcellus Shale drilling in Pennsylvania – the only major drilling state in the country not to tax this industry. But the governor needed some way to thank those who so generously funded his campaign!

Indeed it cannot be denied that many states are in financial difficulty. And unlike the federal government, state governments cannot resort to deficit spending to solve shortfalls like the federal government can. But while some states have perhaps not spent some of their tax dollars wisely, far and away the leading cause of the state deficits is the recession. After all, people out of work pay little or no taxes. The same goes for companies that shut down or move away. And with all of the people out of work comes an additional strain on government services to provide a safety net.

With the present Congress no longer willing to provide funds to fill the holes in the state budgets, cuts on the state and local level will be inevitable which will not only cause more pain but result in the loss of even more jobs. The lesson to be learned is that no matter what the anti-government protesters and politicians say, slashing government spending in a recession will do nothing to make things better — and a whole lot to make things worse!

Making Sense of the Wisconsin Standoff

When it comes to unions, few are indifferent. Some feel they are an indispensable part of a free society. Others feel they are responsible for overpaid, inefficient workers that can suck the lifeblood out of a struggling company.

My father was a union cement mason. And although our lifestyle was far from extravagant, we always had food on the table and clothes on our backs so I grew up with a healthy respect for the value of a union livelihood. I will certainly concede that some of the criticisms of unions have an element of truth to them. Yes, some unions have been guilty of greed and outright corruption. But so have some of the companies they have negotiated with.

Unions came into being to satisfy a need. It would be safe to say that if all employers treated their employees fairly and with compassion when it came to pay and working conditions, there would be no unions. Of course working conditions (at least in America) are a whole lot better than say, the brutal conditions before and during the Industrial Revolution which led to the formation of labor unions and the right of collective bargaining. Indeed, there are those who feel that the ability to collectively bargain is an essential human right.

With this in mind, we have the standoff in Wisconsin which has been said to be A Watershed Moment for Public-Sector Unions.

In the half century since Wisconsin became the first state to give its public workers the right to bargain collectively, government employee unions have mushroomed in size and power — so much so that they now account for more than half of the nation’s union members.

But the legislative push by Wisconsin’s new governor, Scott Walker, a Republican, to slash the collective bargaining rights of his state’s public employees could prove a watershed for public-sector unions, perhaps signaling the beginning of a decline in their power — both at the bargaining table and in politics.

By flooding the State Capitol in Madison with more than 10,000 protesters, labor unions are doing their utmost to block Mr. Walker’s plans. They helped persuade Democratic state senators to slip out of the building this week to deny Republicans the quorum they needed to pass the legislation.

Depending on ones viewpoint, what the Democrats did was either illegal or an example of civil disobedience. But after all of the setbacks that unions have suffered in recent years, the threat of losing its collective bargaining rights demanded that a line be drawn in the sand. If this attempt at neutering the union were to be successful, there would surely be others who would use the same tactics against other unions across the country to bust them.

And make no mistake; this is first and foremost about union busting. The deficit that was the pretense for demanding the union pay and benefit cuts was a result of Governor Walker turning an inherited budget surplus into a deficit by offering a business tax cut upon assuming office that has been said to benefit those who voted for him. In addition, the union was willing and able to negotiate the requested pay and benefit cuts but the governor was unwilling to sit across the table from them, but instead demanded that they first give up much of their collective bargaining rights.

Then there is the smell of partisan politics. While claiming the need to strip collective bargaining rights from its public employee unions, the governor excluded the police and firefighter unions who have benefit packages that are at least as generous. Why? Most believe it is because these unions tend to support Republicans unlike teachers unions who tend to actively support Democrats.

A number of liberal commentators observing the standoff in Wisconsin fear that since unions are about the last group of any significance that funds Democratic candidates, crushing whatever is left of the unions would give the Republican contributors even more power over our elections (as if they need it.)

Unions in America have long ago fallen on hard times. Today, only about 7% of private sector American workers are in unions. Not coincidentally, corporate America is reaping handsome profits while the typical American worker is not sharing in the prosperity to say the least. Harold Meyerson in a Washington Post op-ed article Hard Times for Workers on Labor Day 2010 writes:

Unlike European workers, unlike their own parents and grandparents who lived in a much more heavily unionized America, U.S. workers are now powerless to stop their employers from pocketing all the change.

Through the weakness of our labor laws, the reports say, private-sector American workers can no longer form unions. Human Rights Watch documents how corporations that are model (and highly profitable) employers in Europe and frequently collaborate with unions there descend to American employer norms -- denying workers the right to join unions -- when they come over here. Freedom House, citing the near-impossibility of forming unions in this country, laments that the United States cannot be classed among the 41 nations that afford their workers full freedoms.

So for me, the union in Wisconsin is definitely David going up against Goliath as represented by the Republican governor and his state assembly. For those who are interested, The New York Times offers one of their Room for Debate articles Wisconsin's Blow to Union Power which includes differing views on this issue from across the political spectrum. I fully agree with the view that the right to collective bargaining is part of The Essence of Democracy.

But collective bargaining there must be -- not a single-minded devotion to the interests of the most fortunate. That is why Wisconsin workers are right on the issues in Madison -- and why the emulation of Governor Walker by other Republican governors is a step backward away from the civilized world. The unions have made a stand for free people!

Fear of Fracking

Last week, the Murrysville (Pennsylvania) Council had an overflow crowd at a hearing to receive public comment on a proposed ordinance on gas drilling.

Usually, such routine functions of a small town government have about the same interest and attention from its residents as watching paint dry. Many Americans seem to be indifferent about participating in its democracy. Even presidential elections in recent years have only persuaded little more than half of its voting age population to turn out at the voting booths.

A friend of mine asked me to join her at the hearing since she was scheduled to be one of those offering pubic comment. We decided to get there early just in case to make sure we got a good seat. But we were too late. Despite cold weather and questionable road conditions, the council room was already filled to capacity and fearing a violation of the fire code, the remaining attendees were offered folding wooden chairs to watch the proceedings from the front lobby - some through the open double door into the meeting room and others watching the video monitor showing the meeting as covered by the local cable access channel.

As more people tried to squeeze into the lobby, those of us near the entrance door to the meeting room were asked to move forward and closer together. The resulting squeeze of humanity inside that lobby made for a much worse fire code violation than the one they were worried about in the council room. But not wanting to tell some people they had to leave, the powers-that-be winked and looked the other way.

At one time not long ago, the words “Marcellus Shale” would only be shared in conversation among those dealing in the field of geology. But since then, the words have been associated with a source of abundant locally produced natural gas and the jobs to go with it. More recently, the words have been linked to concerns about gas drilling polluting local water supplies and making people and their farm animals sick.

Last summer, HBO premiered the documentary Gasland and introduced us to the special method used to extract this gas called hydraulic fracturing or "fracking".

Hydraulic fracturing or "fracking" is a means of natural gas extraction employed in deep natural gas well drilling. Once a well is drilled, millions of gallons of water, sand and proprietary chemicals are injected, under high pressure, into a well. The pressure fractures the shale and props open fissures that enable natural gas to flow more freely out of the well.

I found the documentary to be compelling watching and urged others to watch it in one of my previous postings, Please Watch 'Gasland'. (Now available on DVD) It is hard to watch this movie and not feel sympathy for the people who most likely had their well water supply polluted with the toxins that make up the fracking fluid.

But for those living where the Marcellus Shale drilling is likely to occur, they are feeling fear. Fear that some of the bad experiences that others have endured from the drilling may happen to them.

So now we get the answer on why all of those people were so motivated to witness and speak up at the Murrysville Council hearing. It was fear.

They know of other communities who welcomed the gas drilling with open arms but later questioned, Marcellus Shale gas: A blessing or curse?

For the many farmers in the area, the prospect of collecting a royalty from a natural gas well is exciting.

But for others, there is a real fear that the side effects of natural gas drilling — from polluted water wells to potentially good paying jobs that will take workers away from farms — will outweigh the benefits.

Obviously not all of the drilling will cause any of the problems these people fear. But if something does happen to their water, is there anybody there to protect them? On a federal level, the Environmental Protection Agency (EPA) is supposedly there to protect their water. But the federal laws are so riddled with loopholes that proving EPA jurisdiction can be either impossible or impractical.

Thousands of the nation’s largest water polluters are outside the Clean Water Act’s reach because the Supreme Court has left uncertain which waterways are protected by that law, according to interviews with regulators.

As a result, some businesses are declaring that the law no longer applies to them. And pollution rates are rising.

Another loophole exempts the oil and gas industry from the Safe Water Drinking Act - a loophole that Congress is trying to close.

The Fracturing Responsibility and Awareness of Chemicals Act (H.R. 2766), (S. 1215) -- dubbed the FRAC Act--was introduced to both houses of the 112th United States Congress on June 9, 2009, and aims to repeal the exemption for hydraulic fracturing in the Safe Drinking Water Act. It would require the energy industry to disclose the chemicals it mixes with the water and sand it pumps underground in the hydraulic fracturing process (also known as fracking), information that has largely been protected as trade secrets. Controversy surrounds the practice of hydraulic fracturing as a threat to drinking water supplies. The gas industry opposes the legislation.

So if the feds don’t have jurisdiction over protecting our water from being polluted by gas well drillers, who does? The answer is that the individual states must assume this duty. For those who believe that the federal government should stay out of the regulating business and leave it to the states, that is a good thing. But state regulation instead of federal regulation has two significant drawbacks here. One is that instead of a uniform law protecting all states equally, there is a hodgepodge of different state laws of differing effectiveness in protecting its people.

In Pennsylvania, it’s the Oil and Gas Act from 1984 which predates the use of fracking to to drill for gas.

Section 208: Protection of Water Supplies (58 P.S. § 601.208)
If, during the drilling and extraction process, a well operator pollutes or diminishes a public or private water supply, the operator is obligated to restore or replace that water supply.

Fair enough. But how do you replace the water supply of someone whose well water has been polluted? Living off of water that must be transported in is not a satisfactory replacement.

Section 505: Penalties (58 P.S. § 601.505)
A violation of the Act is a summary offense and is punishable by a fine of not more than $300 or imprisonment of not more than 90 days, or both.

This is obviously not an adequate punishment for someone who would say, pollute the water supply of a whole community.

This brings us to the second drawback of state enforcement. With state governments running deficits and needing to cut services, manpower and resources to enforce these laws have been cut to the bone. Much of the frustration of the affected landowners shown in Gasland was due to an inadequate or non-existent response from the state agencies.

So can the citizens of Murrysville ask their Council to help with the regulation the states cannot or will not do? In most cases the answer is no.

There is interest among municipal officials to use zoning and subdivision and land development ordinances to regulate gas drilling and extraction. To a large extent, the Pennsylvania Oil and Gas Act preempts local regulation and puts regulatory authority into the hands of the PA Department of Environmental Protection.

It appears that there are two extreme views when in comes to deciding whether we want to allow the oil and gas companies to use this relatively new method of hydraulic fracturing or fracking to extract natural gas which entails some risk to our water supplies.

In one camp, we have those who have the most to financially gain from the drilling and want this to happen with the least amount of interference from those pesky regulations. Surely we can trust the drillers to do it right. Just like we trusted BP to do it right?

In the other camp, we have those who are fearful that the existing regulations are too weak and that their enforcement will be lax. The only way for them to deal with the fear of fracking is to try and have the drilling banned altogether in their communities.

But past legal precedent has shown that totally banning a legal activity such as gas drilling is not likely to stand up in court.

So this only leaves a middle position of allowing the drilling but making sure that there are enough regulations with teeth in them along with adequate remedies against the drillers in case something goes wrong. This means that in Pennsylvania, we need to persuade our state legislators to strengthen the provisions of the existing Oil and Gas Act to get them up to date with the newer fracking technology.

And last but not least, we need to persuade our members of Congress to pass H.R. 2766 and S. 1215 which would repeal the exemption for fracking in the Safe Drinking Water Act and allow the federal government through the EPA to get more directly involved in protecting our water supplies – which is their job in the first place!

Keeping College from Becoming a Ripoff

When I made my decisions on what I wanted to be and where I would go to school back in the early 70s, my family's modest finances made me determined to be as frugal and practical as possible. Although I had a number of interests, my aptitude in math and science (especially electricity) suggested that I become an electrical engineer, a job that paid well and would give me reasonable job prospects.

Then it was a choice of college. Deciding to stay local to be able to commute and thus save money on room and board, my choices were between a good public university, Pitt, and Carnegie-Mellon, a private university renowned for its engineering school.

But Carnegie-Mellon costed three times as much and I didn’t believe it would provide an education that was three times better. So rather than apply someplace our family couldn't afford, I foolishly put all my eggs in one basket at Pitt. Fortunately, Pitt accepted me. And since I still commuted from home, I was able to find an evening and weekend job in a restaurant near home that allowed me to pay my own tuition in full. (Today with the price of tuition skyrocketing, minimum wage jobs do not pay enough to do this anymore.)

So what was the result of all of this? I received an education that was adequate but was decidedly more impersonal due to the large size of the school. And without experiencing any of campus life by living there, my social life was frankly not much of a life at all.

But I got through it all and although I took several months after graduation to find my first professional job, it happened and I then started to earn a comfortable living – all without any college debt to worry about. This all worked perfectly until my engineering job was eliminated in my late 40s. I then discovered that those over 50 with college educations nowadays are not in demand to say the least. So although my college education is now useless in finding work, it served me well for much of my adult life.

One thing I noticed back in the times when employment prospects were more normal was that many of my colleagues did not have engineering degrees like I did. Instead of learning a trade like I did in engineering school, there were many others who graduated with an assortment of liberal arts degrees. But that was OK. At that time, a prospective employer often used a college degree to judge whether somebody had enough brainpower to be able to make a meaningful contribution to the company. If they were smart enough, they could be then be trained in whatever specialized work the company needed. It all worked quite well – but that was then.

In a previous posting, Our Jobs Crisis, I argue that unlike previous downturns that were cyclical in nature, this one is structural in which many of the jobs we have lost through outsourcing and other overseas competition may likely never come back. Even more alarming, many of these lost jobs have been in college educated professions like engineering and even law.

In my time, going to college with the expectation of using that diploma as an entry into the middle class was a reasonable one. But today, many college graduates who have borrowed heavily to get that diploma (especially to go to that prestigious private school) have encountered a nightmare where their degree is no longer in demand while at the same time they are expected to start paying off their debt – which cannot usually be discharged through bankruptcy.

While many of the degrees they offer may no longer have as much economic value in the workplace as before, schools that make money from student tuition have no real incentive to warn prospective students about all of this. Jack Kelly in a recent op-ed, The costly college scam, summed it up this way.

The biggest consumer ripoff in America today is a college education.

The scam exists for the benefit of college teachers and administrators who make a comfortable living ripping off the gullible. If only people capable of doing college work were admitted to college, and only courses with academic value were offered, there would be fewer colleges and far fewer faculty.

But in addition to the traditional colleges, the for-profit education and career training industry has grown explosively in no small part due to the GI Bill which pays for veterans’ education. This worked well for our veterans after World War II when the economy was rapidly expanding, but in today’s economy with its chronic shortage of jobs, it appears that the schools are reaping all of the benefits far more than the students which has resulted in a Senate investigation of industry practices.

A wide-ranging examination of for-profit colleges by the U.S. Senate has homed in on how the schools recruit and educate veterans -- a lucrative source of federal funds for [Pittsburgh]-based Education Management Corp.

From August 2009 to July 2010, EDMC -- which runs the Art Institutes, Argosy University, South University and Brown Mackie College -- took in about $60.5 million from the Department of Defense and Department of Veterans Affairs. According to data compiled by the Senate Health, Education, Labor and Pensions Committee, EDMC was the third largest recipient of such funds in that span, behind Apollo Group Inc. -- which runs the University of Phoenix -- and ITT Technical Institute.

The HELP Committee, led by Sen. Tom Harkin, D-Iowa, has been holding hearings on the practices of for-profit schools -- exposing aggressive and sometimes fraudulent recruiting tactics, and the high debt loads and failure rates of their students.

So am I saying that we should all give up on higher education and accept a career that pays little more than minimum wage? Hardly. It is marketable knowledge and skills that allow some to command a higher wage than others.

For those who desire it and are fit for a white collar occupation, college is certainly worth considering. But with the selective job market we now have, it is crucial to research up front how present graduates in a certain field are doing before investing the considerable amount of time and money to obtain a particular degree. While college does have certain benefits outside of career training, the expense also has to justify itself in the form of increased income after graduation. And white collar occupations are far from immune to outsourcing; in fact some of them have been hit especially hard in recent times.

Is a private college really worth all of the extra expense (and debt) over a publicly supported one? As I noted earlier, my educational experience in a large public university like Pitt was a somewhat impersonal one. Private schools offer smaller class sizes and more personal attention. But the same can be said for the smaller branch campuses of public universities like Pitt. In addition, community colleges are a great value and worth considering for a year or two before transferring to a 4 year college.

Of course, not everybody is cut out for college or a white collar career. Learning a trade that is in demand can provide just as much pay and satisfaction as many white collar careers. With the many unemployed sitting at home watching TV, commercials for different training institutes are blanketing the airwaves. But there is always the disclaimer in the fine print that employment and salary are not guaranteed. Do these places really enable their students to find jobs as advertised? Or do they leave their graduates high and dry with little more than a pile of debt to deal with? It takes some research up front to find this out – preferably by talking to previous grads of these institutions.

So although college can be a ripoff, it doesn’t have to be. When dealing with anybody who asks us to part with some of our money, we have the responsibility to be informed consumers – and education is no exception!

Post Script - January 12, 2011

Being an informed consumer is especially difficult when the schools who are supposed to be providing objective information on the employment prospects of its graduates resort to fudging their figures or are outright lying about them.

A recent NYT article Is Law School a Losing Game? is about the rude awakening many recent law school graduates have received when they discovered that the expensive degree they borrowed money to earn isn't yielding any job offers in the field despite law schools encouraging even more students to enroll.

[Michael] Wallerstein, who can’t afford to pay down interest and thus watches the outstanding loan balance grow, is in roughly the same financial hell as people who bought more home than they could afford during the real estate boom. But creditors can’t foreclose on him because he didn’t spend the money on a house.

He spent it on a law degree. And from every angle, this now looks like a catastrophic investment.

Well, every angle except one: the view from law schools. To judge from data that law schools collect, and which is published in the closely parsed U.S. News and World Report annual rankings, the prospects of young doctors of jurisprudence are downright rosy.

In reality, and based on every other source of information, Mr. Wallerstein and a generation of J.D.’s face the grimmest job market in decades.

This article is a 'must read' for anybody studying for or contemplating a legal career.

To get a perspective from someone on the street, I forwarded a link to the article to a friend of mine who is a lawyer to get some feedback. Her response below is pretty self-explantory.

It's very sobering, but not a surprise, we have usually have at least 2 unemployed attorneys volunteering for us to get experience, and our youngest attorneys have loan balances close to $200,000. (our starting salary is less than $40,000). I have no idea why anyone still thinks law school is a good idea.

Our Tax Cut Insanity

Imagine this scenario. A shopper brings $100 to the store to shop for groceries. After filling the cart she goes to check out and discovers that the total comes to $125. So what happens then?

In the practical world, she would ask the checkout person to take away $25 worth of groceries from the bill. Or if she felt that all of her purchases were really necessary, she can put the shortfall on her credit card to pay back later.

Of course she could have complained about how much food has gone up. Or perhaps about how the store charges what she feels is too much for her food. She could have even promised herself that next time, she would go to the store with only a $75 shopping list of groceries.

But try as she may, she just couldn’t find $25 worth of groceries she could do without. So she puts the extra $25 worth on her credit card for this and future trips to the store.

So why not bring $125 each time to the store? Because she is convinced that each time she goes to the store, she will find a way to cut out that extra $25 and not have to put in on the credit card. But that never happens and the credit card balance keeps going up and up.

This grocery store scenario is a pretty good match to the behavior of Congress when it comes to our annual federal budgets here in the US. We don’t have enough tax money coming in to pay the total bill. So we borrow the rest and vow to spend less next year so we don’t have to borrow more.

But it never works out that way. While we all have our own ideas on where to cut the budget, there is not enough of a consensus to ever make it happen. For example, most liberals feel that we spend far too much on our military. But most conservatives feel that the military budget is untouchable. And many conservatives feel that we spend too much on entitlements such as Social Security and Medicare. But liberals feel these are untouchable. So the process of making any significant cuts in the federal budget invariably leads to Congressional gridlock.

So it would stand to reason that if we can’t cut spending to balance our budget and not put more on the credit card, we need to raise taxes to make up the difference. But instead, the supply side economists starting with David Stockman who was President Reagan’s budget director, advocated for and helped to pass tax cuts with the idea of stimulating the economy to make up for the lost tax revenue. But instead, the lack of tax money simply resulted in a greater shortfall and the need to put more money on the credit card.

Paying less in taxes with the idea of “starving the beast” to reduce the size of government has long been a part of the conservative ideology. But tax cuts without corresponding spending cuts only puts us deeper in the hole which requires us to borrow even more.

But instead of learning our lesson under Reagan that tax cuts do little more than create larger deficits, President George W. Bush passed another major tax cut in addition to a major spending increase in the way of the Iraq and Afghanistan Wars. The result was more record deficits and more borrowing – mostly from the Chinese. With the Chinese now owning so much of our debt, trying to deal with them on their often unfair trade practices that have drained us of jobs has become increasingly difficult.

A legacy left from the Reagan and Bush tax cuts is an attitude by the conservatives that we can get all of the government we need without having to pay enough taxes to balance the budget. Instead of being “deficit hawks” we now started to get Republican excuses for the deficits.

Vice-President Dick Cheney famously told former Treasury Secretary Paul H. O'Neill, that "deficits don't matter." What's interesting and alarming, however, is that different Republican factions believe deficits don't matter for opposite and incompatible reasons.

Supply-siders believe deficits don't matter because tax cuts so boost investment and productivity that the economy grows its way out of debt. The opposite, "starve the beast" faction, epitomized by tax tactician Grover Norquist, hope tax cuts will indeed create deep deficits that will then force spending cuts. But both things can't be true.

Under George W. Bush, the merry ideology calls for tax cuts in all seasons for all reasons. Spending has increased faster than under Clinton, and deficits have ballooned, yet tax cutting marches on.

Another huge byproduct of the Bush tax cuts was their benefit to the wealthiest which has resulted in a huge concentration of income and wealth at the very top of the food chain.

With the middle and lower classes now suffering economic hard times, it is hopeless to try and balance the budget by asking more taxes from them. This is what I argue in a previous posting Make the Rich Pay Their Fair Share!

Due to technical reasons, the Bush tax cuts could not be passed as a permanent measure but instead are due to expire at the end of 2010. Logic would dictate that the tax cuts for the wealthiest Americans that created so much of the deficit should be allowed to expire. But for Republicans, tax cuts are a religion and the Senate Republicans have vowed to kill all legislation including unemployment compensation extensions until the tax cuts for the wealthiest Americans (their political base) are extended first.

Despite these tax cuts having been shown to do little more than increase the deficit and our credit card balance (the National Debt) now approaching $14 trillion, the conservatives’ insane fervor for tax cuts continues unabated, even for those who claim that they believe in balanced budgets. The classic definition of insanity – doing the same thing over and over and expecting different results certainly applies here.

Even David Stockman, the man who helped to start it all has finally admitted to the insanity in a recent 60 Minutes interview.

(Extending the Bush tax cuts is) rank demagoguery. We should call it for what it is. If these people were all put into a room on penalty of death to come up with how much they could cut, they couldn't come up with $50 billion, when the problem is $1.3 trillion. So, to stand before the public and rub raw this anti-tax sentiment, the Republican Party, as much as it pains me to say this, should be ashamed of themselves!