On Tuesday, December 3, 2013 at 9:00 AM, U.S. Bankruptcy Judge Steven Rhodes will announce his opinion at 9:00 am as to whether or not the Detroit bankruptcy can proceed. If he says it can, the next step in the process is to have Emergency Manager Kevin Orr, submit a plan to deal with $18 billion in debt. If he says “no”, Kevin Orr will still have to wrestle with a payment plan for the debt. Major portions of that debt are the legacy costs, that is pension and retiree health plan costs. The unions contest the potential reduction in pension benefits as they say pension benefits are protected by the state constitution. Mr. Orr contends that federal bankruptcy overrules the state law and as a result pensions can be part of the potential reduction in debt. But whether or not pensions can or cannot be reduced, what about the retiree health care costs? How significant are they in the state and what possible problems lie ahead for many municipalities in Michigan? Is it time for our municipalities to reconsider retiree health benefits in order to head off “Who’s Next” in a municipal bankruptcy? What is the “Right Thing to do?”
We all have heard the uproar that has been created with the number of individuals who are having their current health insurance cancelled because the terms do not meet the requirements of Obamacare. This is despite President Obama’s assurance that “If you like your plan you can keep it, period.” The cancellations are effective December 31st this year and individuals are required to get a new policy on the healthcare website —even though it is not working and there are serious security issues.
U.S. children score lower on standardized tests than students in many developed countries. The U.S. ranks 17th in reading, 23rd in science and 31st in math, behind countries like Slovenia and Poland. One of the main differences is that high achieving countries have a higher level of difficulty for becoming teachers. Concern is growing that we will become less competitive globally unless our education system improves. It may be even more critical in Michigan because of our relatively low performance. Education Week ranked Michigan’s K-12 system 24th, 23rd in high school graduation rate, 36th in percent of adults with a college diploma, 39th in 4th grade math and 30th in 8th grade reading, according to the National Assessment of Educational Progress exam. How do we start to improve the educational performance in the U.S. and even more importantly in Michigan? What is the “Right Thing to do?”
One of the biggest political stories in 2011 was the battle in Wisconsin over Governor Scott Walker’s plans to reform the state’s relationship with public employee unions. If you remember, the state capitol was occupied by opponents to the law, there were mass demonstrations, the Democrats hid out in Illinois to avoid voting on the bill and later, the attempt to recall the Governor and several state legislators. The law was passed. Two years later, it is time to consider if that was the “Right Thing to do”.
In one issue of the Wall Street Journal last week there were 4 articles about regulators use (or is it abuse), of their power. The articles showcased Labor Secretary Perez, Health and Human Services, the State Department’s US trade negotiators and the Department of Housing and Urban Development. If we include the Energy Department’s announcement of potential new coal fired power plant regulations also last week and the Transportation Department’s new ethanol standards, we get a flavor of the activity pushing new rules outside the legislative process. Should we be concerned that more regulatory power is being exercised? Is this the “Right Thing to do?”
More than 4 years after the end of the recession officially ended 11.5 million Americans are unemployed, many of them for years. Millions more have abandoned their job searches, hiding from the economic storm in school or turning to government programs for support. Do we have a permanently smaller workforce that has created a new normal? Should we be passing new legislation to promote job creation? What is the “Right Thing to do?”
The anti-carbon position of the EPA has produced unexpected results and at best can be seen as ineffective—if not counter-productive. A new study by the National Academies provides insight about the wasteful spending on Green Energy subsidies, in particular targeting ethanol. Should the US government continue to provide subsidies for green energy? Is this the “Right Thing to do?”
We have seen demonstrations in Michigan and around the country about providing a so-called living wage for everyone. The protesters targeted fast food chains demanding that they pay a minimum of $15 an hour. Is this the “Right Thing to do?” Let’s look at some issues…
According to the U.S. Constitution the executive branch government has the responsibility to implement and enforce the law—at least that is what I thought until recently. The Affordable Care Act, Obamacare, was passed to be implemented by January 1, 2014. The insurance exchanges are to be operational by October 1, 2013. However, what we have seen in the past month or so has been a number of changes in the law orchestrated by the White House without new legislation passed by Congress. On what basis have these changes been made and are they the “Right Thing to do?”
The Environmental Protection Agency is set to move forward with some of the most costly regulations in history. All new regulations that will cost the public $100 million or more are to be disclosed and the benefits provided. So far, we have not seen the data used to justify the multibillion dollar regulatory agenda. Is this the “Right Thing to do?” At a time when the economy is still under duress and growing at a sub-par rate of less than 2%, can we afford additional regulatory pressures?