California is notorious for ballot box budgeting. Prop. 98 (education) Prop. 10 (mental health), and Prop. 49 (after-school programs) are prime examples of initiatives that have been placed on the ballot that mandate that their revenue be spent on certain things – and only those things – with the money being spent badly, or not at all. Proposition 29 is the newest contender in the ballot box budgeting sweepstakes.

Sponsored by a career politician, Prop. 29 will generate $735 million in new revenue by imposing a $1 tax on cigarettes. But instead of this money going to education, health care, job creation, or balancing our $16+ billion budget deficit, it will create a huge uanccountable bureaucracy packed with political appointees and cronies.

Cancer research is a good thing, which is why the federal government spends $6 billion a year on it. California doesn’t need another tax increase to contribute to an already well-funded program.

Let’s face it — California is broke. Yet Prop. 29 essentially says, “Here’s hundreds of millions in new revenue, but you can’t use it to fund California’s most basic and essential needs.” Funding cancer research in our current fiscal crisis is like a family paying for premium cable when they can’t pay their mortgage.

Vote NO on Proposition 29.

New Mexico is a battleground state this November, not only for Electoral College votes in the Presidential election, but because its Republican Senator Heather Wilson is up for re-election.

The Lincoln Club’s Federal PAC contributed to her 2006 campaign and will be paying close attention to this and other key Senate races in November where modest investments can make a big difference.

If you don’t know much about Heather Wilson, watch this great introductory video.

Recently the Concordia Center for Public Policy hosted a program on managing pension costs. Rapidly escalating pension expenses have dominated the news and forced the issue to the top of every local government agenda.

The rapid increase in pension costs is due to the poor investment performance of pension funds such as CalPERS, changing assumptions regarding mortality and longevity and rapidly escalating salary and benefit levels which have pushed up pension payments. Today’s crisis in pension funding can be traced to 1999, when CalPERS actuaries testified that the California legislature could enact a “3% at 50” pension formula for public safety workers and that it would be “at no cost” to local governments due to the investment performance of CalPERS pension funds at that time. This induced a bi-partisan enactment of the new formula, signature by then-governor Gray Davis and adoption by nearly every local government in California.

In retrospect, it is now clear that the “3% at 50” formula did not work as a matter of mathematics. The investment returns, increasing contributions and mortality assumptions to make it work simply cannot be achieved. CalPERS’ testimony to the contrary stands as an act of financial malpractice much greater in scope and cost than the Orange County bankruptcy. People went to jail for the Orange County bankruptcy.

Governor Jerry Brown, Stanford University, the Little Hoover Commission and local elected officials of all political persuasions have all used the same word to describe this system; unsustainable.

In my own city of Newport Beach, the projected increase in pension costs between 2010 and 2014 is estimated to be about $9 million based on the most recent CalPERS announcements. That amount would enable us to more than double the expenditures on our library system or to double our parks, recreation and senior services budget. It is this crowding out of public services by increasing pension costs that has led some so-called liberal communities such as San Jose and San Francisco (where there are more retired than active city workers), to call for pension reform.

Recently, Governor Brown has proposed some far reaching pension initiatives. The most significant is to require public employees to pay half of their pension costs and to create a hybrid, second tier system for new employees. These are substantial reforms that would have a major impact on pension funding.

Again using Newport Beach as an example, going to a 50/50 split would reduce our taxpayer paid pension costs to pre-2005 levels, a very affordable situation. Similarly, a second tier program for new hires would begin to bend the out year cost curve and over time, will reduce our ongoing liability.

What impact would a 50/50 split have on our employees? For safety employees the pension cost is equal to 44.9% of salary, so a hypothetical police officer making $85,000 would pay 50% of $38,165 or $19,082 equal to 22.45% of salary. This would certainly be a big hit to take home pay and cops like everyone else are subject to expenses expanding to meet the amount of income available.

This is even more true in the family formation years when officers are in their 20’s and 30’s.

Higher employee pickups will need to be phased in over time, but is this level unfair or excessive? Not really. Self employed individuals are compelled by law to pay 15.3% in self employment tax for Social Security. If that same self employed individual set aside 10% of income in a 401(k), the percentage of income allocated to retirement would be 25.3%. A private sector employee pays 6.2% in Social Security tax (reduced to 4.2% temporarily by the payroll tax cut), and with 10% to his 401(k) would be paying 16.2%. A lower percentage, but for a much less beneficial retirement plan. Most public employees, including those working for Newport Beach, do not pay into nor receive Social Security.

When you consider that the additional pension contributions by public employees would be pre-tax, the savings from reduced state and federal income taxes would offset the increased cost by approximately 37% or $7,060. While everyone’s tax and expense situations are different, the point is the amount is similar to the retirement contributions being made by private sector employees.

The tradeoff is that today’s public sector workers are the last generation to enjoy an enhanced retirement benefit paying as much as 90% of salary at 50 years of age, with lifetime adjustments for inflation that he cannot outlive. Furthermore, he is 100% protected from losses due to fluctuations in market value. Any 401(k) holder who has watched his value drop in the past few years would jump at the chance for this investment vehicle.

It is because current employees enjoy such a valuable financial asset in the form of their pensions that I believe, acting out of enlightened self-interest, labor will work constructively with local governments to address this problem. The alternative is massive reductions in workforce. Indeed, nationally, state and local governments have shed 650,000 jobs since 2007 and that number is expected to rise to over 1 million by 2013. A “3% at 50” pension does you no good if you lose your job at thirty five after ten years.

Indeed, we are seeing this happen all over California as local elected officials and their bargaining units are crafting agreements that introduce a second tier and increase contributions by current employees. If the legislature provides the tools and gets out of the way, local governments and their employees together will craft pension programs that are economically sustainable and preserve vital public services.

Keith Curry is the Director of the Concordia University Center for Public Policy and Mayor Pro-tem of the City of Newport Beach, California. The opinions expressed are his own and do not necessarily reflect those of the University, the Board of Regents, Board of Directors of the Center or the City.

From the Flashreport:

CA Reps. McClintock, Royce and Campbell Named Club For Growth “Defenders Of Economic Freedom”

The Club for Growth, the nation’s leading free-market advocacy organization, announced that from California, three members of the 53 person delegation had received their coveted Defender of Economic Freedom Award — Reps. Tom McClintock, Ed Royce and John Campbell.  The award honors Members of Congress who have a strong, consistent voting record on economic growth issues. 11 U.S. Senators and 34 U.S. Congressmen received the award this year.

“The Club for Growth values Members of Congress who vote based on principle for pro-growth policies that will restore America. The people of the 48th congressional district of California are lucky to have him fighting for them in Congress,” said Club for Growth President Chris Chocola.

To see how all Members of Congress did in the Club’s 2011 Scorecard, visit www.ClubforGrowth.org/projects.

Here is an opinion by Joseph Rago from the WSJ.

He does a good job describing the current payment system.

To appreciate what’s wrong with the current system, imagine four patients identical in every way except for their insurance coverage. They report to the same doctor for a routine procedure, say, a colonoscopy.

The first patient is on Medicare, which controls prices. The program’s fee formula sets prices unilaterally for about 7,000 physician services and pays lump sums for 600 general hospital diagnoses, regardless of the quality of care. Medicare pays twice as much on average for a colonoscopy if it is performed in a hospital outpatient setting rather than in a doctor’s office.

Patients two and three are covered by private insurers, but those insurers are likely to reimburse the doctor at different rates—whatever they’ve negotiated to include him in their networks. The rate will be higher than competitive to make up for Medicare’s below-cost fees—the gap between public and private rates is now about 40 percentage points. The rate is also likely to be a proprietary trade secret, or else literally unknowable: The doctor can only generate price information when he codes his services and bills the insurer.

The fourth patient is uninsured. If she seeks treatment, she’ll be billed directly from a “chargemaster,” a hospital’s list of marked-up sticker prices that no one with coverage will ever pay.

So one doctor, four patients, four different prices, multiplied times one-sixth of the economy. Price discrimination, or varied pricing, is common in service industries with high fixed and low marginal costs: airlines, colleges, hotels, telecom. But nowhere else but health care are prices so arbitrary, so disconnected from value. The consensus, on the right and left, is that this fee-for-service jumble is incoherent.

He explains the move toward sharing market information.

The big insurers now publish transparent, meaningful all-in prices for hundreds of services by hospital and doctors, and they are building Web platforms that allow consumers to shop for providers. Tiered-benefit structures that use cost-sharing to steer patients to more efficient providers finally give patients the means and incentive to make reasoned medical decisions outside of an information vacuum.

He explains about the selection of insurance and value.

The other important trend in terms of aligning costs and incentives is the growing interest by employers in defined-contribution insurance. Here companies would give their employees a fixed-dollar payment and allow them to choose from a menu of coverage options and make the trade-offs themselves, rather than having their bosses do it for them. Workers would pay the marginal costs of higher-priced plans, much like what Rep. Paul Ryan has proposed for Medicare.

The impulse here is to restore the price signals that will drive U.S. health care to deliver care that is worth the money. But these gains—in transparency and efficient pricing, for instance—will need to be consolidated and expanded to constitute a true revolution. The Affordable Care Act stands in the way.

He explains the problem with Obamacare.

ObamaCare’s core philosophies are standardization and centralization, which in practice will mean higher costs for everyone caused by suffocating price competition. The share of insurance industry revenue that comes from government now stands at 42%, up from 36% just three years ago, and that’s before the new entitlement kicks in. And a wave of ObamaCare-promoted provider consolidation is creating hospital monopolies that can demand higher-than-competitive prices.

His Summary

“Health-care reform” is inevitable. The only question is whether it will run in the direction of prices and choice or more government control.



My wife (Peggy) and I were discussing the success of Jeremy Lin who is a sensational basketball player with the New York Knicks.

We are sickened to read and to hear racist comments against Asians from the liberal media. Look at ESPN, Saturday Night Live, and FOX Sports who used terms and jeers such as “chink in armor”, “slanted eyes”, and questioned his “manhood”. We also doubt these comments would ever be made against other minorities without reprise. This is blatant racism.  Sadly, none of the major networks or cable news channels reported on these racial slurs in the last two weeks.   We have yet to hear any “civil” rights leader come out denouncing these racist comments.

Asian Americans in the US and Orange County are the fastest growing population group. Many own their businesses and earned advanced degrees.  Asian Americans excel academically even when affirmative action discriminates against them. Asian Americans do not rely on handouts or entitlements. Perseverance, self-reliance, hard-work, and family are values within the Asian American culture.

Since the 1960s, the Democratic Party portrayed themselves as a party for the minorities and the ones fighting against racism; however, they are the ones who continue the ridicule and cause the divide.  They pit one group against another. From the recent media blitz, it is apparent that racial slurs against Asians are acceptable and perpetuated from the liberals themselves.

President Abraham Lincoln, a REPUBLICAN, stated that slavery was morally wrong because the blacks have no hope for the future. Martin Luther King, Jr, who is a REPUBLICAN, denounced racism with his peaceful civil rights movement. One of the tenets of the Conservative movement within the Republican Party is the celebration of the worth and dignity of every man and woman, regardless of race, color, creed, or religion. The Conservative movement holds dear the exercise of freedom’s most essential element-personal responsibility. This is reflected in our underlying actions and speech in both private and public arenas.

These public comments by the liberals and the liberal media clearly show the underlying bigotry within their ideology. Although they publically embrace everyone, liberals underhandedly support policies which do not provide a hand up, but a hand out which keeps many from having an opportunity in America. A hand out may be good for the short term; however, it destroys the keys within the human soul (self-worth and dignity). Yes, people like to “earn” a part of the American dream once given an opportunity to use their talents. Americans have always taken the path towards equality and fairness. It has always brought our Country towards great prosperity by welcoming everyone, which has made America exceptional.

In celebrating the success of Jeremy Lin, we should all be proud of a second-generation Taiwanese American, a Harvard graduate, and a rising star in the NBA. The future of America is not fighting among us, but in creating a deeper appreciation of our wealth of talent from all ethnicities, cultures, and beliefs. By fostering a culture away from stereotypes, ethnic & class warfare, and jealousy, America can once again be the “shiny city upon the hill”.

This is our challenge to the liberals and liberal media.

Governor Chris Christie just announced flags will be flown at half-staff to honor Whitney Houston as an iconic figure in New Jersey’s storied history. Could such a decision represent an attempt to placate a powerful constituency or another example of the decline and fall of a culture?

The warning about the death of our cultural institutions has been made by such scholars as Larry Arnn, Victor Davis Hanson, Charles Murray, Thomas Sowell and Mark Steyn in eloquent and urgent tones. They argue that we are on a deliberate course to cultural and intellectual oblivion because of liberalism’s mandated political correctness.

How else can we understand the rise of gangsta’ rappers Biggie Smalls, FiftyCent, Snoop Dogg and MIA and fall of Bach, Beethoven, Brahms and Mozart or to explain the substitution by high school superintendents of Beloved or Jazz by Toni Morrison or I Know Why the Caged Bird Sings by Maya Angelou for Hamlet or Macbeth?

President Obama recognized Barbara Cook, Neil Diamond and Sonny Rollins in 2011, Merle Haggard, Paul McCartney and Oprah Winfrey in 2010 and Mel Brooks, Grace Bumbry and Robert DeNiro in 2009 for their contributions to the enrichment of the cultural life of our nation and the world! How do we explain the choices honored at the Kennedy Center as National Treasures or in Oslo as Nobel Laureates in literature?

Are liberalism and secularism threats to the recognition of what is great from what is dross? Are we held hostage to a national, perhaps even global refusal to make judgments? Is this deliberate blindness critical for our continued greatness and survival?

The Founding Fathers said we must be treated as equals in the eyes of the law, not in the eyes of the national citizenry. When flags are flown at half-staff by order of a state governor to honor not a fallen national hero but a songstress cum drug addict, is our culture not so different from that of Rome in the final days before its fall? While Houston’s powerful rendition of the national anthem in 1991 will always remain the gold standard, public sympathy and admiration do not merit public honor by government decree.

Perhaps we need to reassess the admonition in Matthew 5:39 and again in Luke 6:29 to turn the other cheek. Perhaps we would be better advised to follow Van T. Barfoot, a Choctaw who was awarded the Congressional Medal of Honor for his heroism in WWII.

Charles Krauthammer noted with great prescience several years ago that decline is a choice. We must, therefore, eschew the instruction of the New Testament and choose not to decline. If we don’t defend the values and principles which are at the heart of our greatness, we may one day lower the flags to honor the death of our own country.

Today’s main feature column over on FlashReport is by Jon Coupal, making the case for the Stop Special Interest Money Now initiative, which California voters will face this November. It is by far the most important measure that will be on the ballot, one that could finally put voters back in control of Sacramento.

STOP SPECIAL INTEREST MONEY

Jon Coupal, President, Howard Jarvis Taxpayers Association

Unless one is wearing Brown colored glasses, it is easy to see that California is a mess. We rank second in unemployment and millions of Californians have fled the state since the millennium — most as economic refugees seeking to carve out a better life for themselves where taxes are lower and job opportunities are better.

Most taxpayers see as their biggest obstacle to an improved life those elected officials who work against their interests, while bowing and scraping before those who provide millions of dollars in campaign cash. What it comes down to is that the Sacramento politicians are making war against regular folks, while assisting narrow, well-heeled, special interests to prosper.

What happens when an average Californian travels to Sacramento and requests an office meeting with a state representative? Those few ordinary citizens who attempt this pilgrimage are in for a rude awakening. First, you’re lucky if you get a meeting. If you do, it will most certainly be with a junior staffer just barely old enough to vote. Not so for those lobbyists whose firm or organization contributed thousands of dollars to the politician’s most recent campaign fundraiser. Those who provide campaign cash expect access to “their” lawmaker at a moment’s notice and they demand “correct” votes on the legislation they care about. And no, this is not a partisan issue; representatives from both political parties are more than willing – and some are eager — to take contributions from powerful special interests.

In 2010, corporations, business groups and labor organizations gave $89 million dollars to the Sacramento politicians. Unions weighed in with $25 million in direct contributions, while major corporations ponied up $48 million.

Saying these payouts were made to advance good government would not pass the “laugh” test. Look at these examples. PG&E donated $561,000 playing in 70 percent of state legislative races. BNS Rail infused another $400,000 into 94 percent of legislative races, while AT&T was good for $760,000 to 99 percent of races. These records demonstrate that the goal of these firms is to buy influence with whoever is elected.

For the unions and corporations these expenditures are a great deal, even if for average taxpayers it is not. A few hundred thousand dollars invested in politicians can provide big payouts in return. Of bills passed by the Legislature, 60 percent are written by lobbyists and attorneys for special interests.

This corruption of the legislative process is nothing new, but with our state’s failing economy and high taxes, it can no longer be ignored. This fall, California voters will have the opportunity to strike a major blow against the system of influence peddling that currently dominates Sacramento.

A just qualified initiative, Stop Special Interest Money Now, will appear on the November ballot. It will accomplish three things that will diminish the control of special interests over elected officials. First, it will prohibit corporations and unions from contributing directly to the campaigns of political candidates. Second, it will bar contributions to officials by those contracting with, or seeking to contract with government – no more “pay to play.” Finally, it will stop labor unions from taking money, to be used for political activity, directly from workers’ paychecks without their explicit permission.

While there may be no foolproof way to totally prevent special interests from trying to manipulate the system for their benefit, the passage of Stop Special Interest Money Now will go a long way toward leveling the playing field so that the concerns of average Californians are given the same consideration as those of big corporations and unions in the deliberations of government.

This declaration addresses a hidden danger with Obamacare (PPACA and ACA) and HHS.

President Obama’s decision on Catholic charities makes Romney’s big gaffe look trival.

Here is a very insightful declaration by Peggy Noonan from the WSJ.

Here is Noonan’s best line: “There was nothing for the president to gain, except, perhaps, the pleasure of making a great church bow to him.”

From the Declaration by Noonan, here is the crux of the problem.

The president signed off on a Health and Human Services ruling that says that under ObamaCare, Catholic institutions—including charities, hospitals and schools—will be required by law, for the first time ever, to provide and pay for insurance coverage that includes contraceptives, abortion-inducing drugs and sterilization procedures. If they do not, they will face ruinous fines in the millions of dollars. Or they can always go out of business.

In other words, the Catholic Church was told this week that its institutions can’t be Catholic anymore.

There was no reason to make this ruling—none. Except ideology.

The conscience clause, which keeps the church itself from having to bow to such decisions, has always been assumed to cover the church’s institutions.

Now the church is fighting back. Priests in an estimated 70% of parishes last Sunday came forward to read strongly worded protests from the church’s bishops. The ruling asks the church to abandon Catholic principles and beliefs; it is an abridgment of the First Amendment; it is not acceptable. They say they will not bow to it. They should never bow to it, not only because they are Catholic and cannot be told to take actions that deny their faith, but because they are citizens of the United States.

If they stay strong and fight, they will win. This is in fact a potentially unifying moment for American Catholics, long split left, right and center. Catholic conservatives will immediately and fully oppose the administration’s decision. But Catholic liberals, who feel embarrassed and undercut, have also come out in opposition.

The church is split on many things. But do Catholics in the pews want the government telling their church to contravene its beliefs? A president affronting the leadership of the church, and blithely threatening its great institutions? No, they don’t want that. They will unite against that.

The smallest part of this story is political. There are 77.7 million Catholics in the United States. In 2008 they made up 27% of the electorate, about 35 million people. Mr. Obama carried the Catholic vote, 54% to 45%. They helped him win.

They won’t this year. And guess where a lot of Catholics live? In the battleground states.