Stunted

Over the weekend, five of the Democratic party candidates for NYC Mayor spent the night in public housing in Harlem at the request of Al Sharpton. They included Christine Quinn, Bill DelBlasio, Anthony Weiner, Bill Thomspon, and John Liu.

Democratic candidates Christine Quinn, Anthony Weiner, Bill de Blasio, William Thompson Jr. and John Liu spend 12 hours with a host family at the Lincoln Center Houses, located on East 135th Street Between 5th Avenue and Lennox Avenue.

The candidates slept on sofas, air mattresses and sleeping bags in the apartments, some of which were without air conditioning on one of the hottest days of the year.

On Sunday, Christine Quinn discussed the conditions of the apartment she spent the night with the NY Post.

“The apartment I stayed in had a bathroom that was covered with black mold,” said City Council Speaker Christine Quinn. “It was the worst I’ve ever seen. When the city of New York is the landlord, this is unacceptable.”

Quinn was one of five Democratic candidates for mayor who accepted a challenge from the Rev. Al Sharpton to spend a night in a public-housing complex.

The candidates say they wanted to highlight condition in city-run public housing. About 3,100 residents live in the East Harlem project.

All emerged from the overnight stay with claims that all would fight to improve the conditions.

I'm sorry, but I can't believe any of them when they say that they would work to improve conditions.

You see, all of them have been in a position to not only understand the conditions, but to actually fix them.

Christine Quinn is the current Speaker of the New York City Council. As such, she can hold hearings, address budgetary concerns, and demand changes at the New York City Housing Authority which oversees public housing in the City.

Bill Thomspon and John Liu are the former and current City Comptroller, respectively. As such, both could investigate the Housing Authority for mismanagement of city resources, failures to enact reforms on spending, and demand changes in how the Housing Authority operates.

Then, there's Bill DelBlasio, who's the City Advocate. In that position, he's able to gather and collect complaint data about public housing and demand change.

Finally, there's former Congressman Anthony Weiner who could have addressed the matter while in Congress and sought more funding or reforms in the Housing Authority to get local politicians to demand improvements and change.

All five share the failed opportunities to fix the Housing Authority and poor housing conditions while they were in their current positions. Now that all five are seeking the mayorality, they are willing to say or do anything to get the votes of those living in the projects.

None are deserving.

All failed to do what needed to be done when they had the chance to act, but since votes are on the line, all are speaking out about the deplorable conditions. Anyone who spent any time in these projects would have known this - anyone who spoke or responded to constituent letters would have heard the horror stories.

What we had was a photo op that will be quickly forgotten once the votes are counted. That's not how it should be, but there it is.

Charles Barron Has No Business Being In Congress

Firebrand New York City Councilmember Charles Barron is running for Congress in the newly created NY8 district that includes parts of Southern Brooklyn. He's running against Hakeem Jeffries, and it's turning into a nailbiter of a primary race.

That's despite the fact that Barron has no business being in office. He's a racist and anti-Jewish at that. His new district has a significant Jewish population and I'm sure they'd be thrilled to know that Barron doesn't think highly of them at all.

The primary race is causing great consternation among local Democrats. More than a few aren't exactly thrilled about Barron's chances. In fact, a ton of money is being thrown at his opponent, Hakeem Jeffries. Jeffries has support of local politicians including Congressman Jerrold Nadler, Ed Koch, Dov Hikind, and local papers have come out in opposition, including the Daily News. DC-37, former Congressman Ed Towns and the Amsterdam News have thrown their support to Barron.

The UFT is refusing to back either Jeffries or Barron.

Jeffries is getting backing from several law firms, firms representing charter schools (one of the reasons that DC 37 is backing Barron and UFT is sitting on the sidelines).

Considering that many of the residents in the new NY 8 are Jewish, Barron's potential primary win is a huge affront considering his anti-Jewish views (to say nothing of his other inanities that he regularly spews from the steps of City Hall as a Councilmember).

Barron has no business being in Congress for other reasons too. He's got a truly distorted worldview in which he praises the likes of Mumar Khadafi and Robert Mugabe and slams Israel. Jeffries capitalized on that in a recent debate.

Election Day Results Show Resurgent GOP And Democrats Licking Wounds

Just two years after some were writing off the GOP after being battered in the 2006 midterm elections and then in the 2008 general elections, the GOP has regained control of the House with a resounding and convincing win.

What exactly does that mean though. It's expected that the GOP will pick up more than 60 seats - quite possibly up to 64 seats, depending on a couple of close races. That gives Republicans a strong majority in the House.

John Boehner will be the next Speaker of the House, with Nancy Pelosi moving into the minority.

The Senate went about as well as should have been expected for Republicans. They picked up six seats with three races still pending.

In both instances, the outcomes come close to matching my own predictions yesterday - 68 seats in the House and 7 seats in the Senate.

Does this mean that Republicans have a mandate? Hardly.

People are voting against Democrats and considering Republicans the lesser of two evils. They see government spending run amok and promises broken. They want to see spending reined in and some credibility reestablished (though some local races are thoroughly baffling - see that under-investigation Charlie Rangel won reelection in a landslide despite being under a monstrous cloud of ethics, legal, and tax woes that could see him kicked out of office).

Apparently, throwing the bums out didn't apply to Rangel, but that was an exception more than the rule. People aren't in a charitable mood and the economy is playing a large role in that.

If the newly formed Republican majority can't get its act together in short order to put together a coherent economic policy and work with the Democrats who control the Senate (where Harry Reid appears to have held on to his seat over Sharron Angle), and President Obama, things will get ugly going into 2012 and the general elections. Chief among the issues are expiring tax cuts, economic policy, and those will trump whatever socially conservative agenda that the right wing Republicans hope to push through the House. They wont get anywhere with a Senate controlled by Democrats, but they make take up enough issues (like abortion restrictions, pushing intelligent design/creationism, and junk science on climate change) to encourage their constituents and backers.

Democrats will have to content themselves to holding on in the Senate and winning several key races in state capitals. New York was one of the few bright spots along with California. In New York, Andrew Cuomo handily defeated Carl Paladino, whose rambling and disjointed speech following the results again showed just how ill-suited he was to the job he sought. Downticket races also broke for Democrats as Eric Schneiderman and Thomas DiNapoli both overcame strong challenges. It looks like Paladino's putrid campaign and odious positions made it tougher for the Republican challengers to overcome the stench in the statewide races. Still, the State Senate is still up for grabs, but Republicans say that they've regained control of that chamber.

Connecticut's governor's race was tight, but Republican Thomas Foley won there. Linda McMahon fell to Dick Blumenthal in the Senate race to replace retiring Chris Dodd. That's something of a surprise given that Blumenthal repeatedly lied about his military service, but McMahon turned off voters because of her background in professional wrestling and its related scandals. Still, Democrats have to be thankful that Blumenthal won out or else the job of holding on to the US Senate would have been much more difficult.

The oddest race of the day has to go to Alaska though, where the write-in ballot is the winner in a three-way race. The write-in candidate, incumbent US Senator Lisa Murkowski, lost the primary to a tea party candidate:

The Alaska Senate race was headed for another nailbiter in the rematch between Sen. Lisa Murkowski and tea party favorite Joe Miller as supporters from both sides prepared Wednesday for a potentially prolonged ballot count.

Write-in ballots held the lead in the hotly contested three-person race late Tuesday, a potentially good sign for Murkowski's long-shot effort to keep her job.

"They said it couldn't be done," she told supporters Tuesday night. "We said if it can be done anywhere, it can be done in Alaska, and let's prove the rest of the country wrong. And we're doing that tonight."

No U.S. Senate candidate has won as a write-in since Strom Thurmond did it in 1954. But with nearly 99 percent of precincts reporting early Wednesday, write-ins had 41 percent of the vote.

Miller, who beat Murkowski for the GOP nomination in August by just 2,006 votes, received 34 percent. He sent supporters home early from his campaign's Tuesday evening party, then returned to his hotel with his family.

Democrat Scott McAdams had about 24 percent and all but conceded Tuesday evening.

That would be a potential repudiation of Sarah Palin in her own backyard, but other Tea Party luminaries did manage to win, including Rand Paul in Kentucky.

UPDATE:
Nate Silver has been blogging up a storm about the election results and his thoughtful comments about the potential outcomes and statistical analysis is a must-see. He figures that the most likely outcome of the election is that Republicans pick up between 64 and 66 seats in the House, which is a stunning win for Republicans. That the Democrats managed to hang on in the Senate is a lesser achievement given that the Democrats had a built in advantage given the nature of the seats that were at stake to begin with. Still, the Republicans cut that margin to near razor-thin majority. The Democrats will hold at least 52 seats, unless the Democrats lose both Washington and Colorado, which is unlikely. Connecticut continues to be a most curious race, with ballot issues in Bridgeport and slow reporting being major issues.

Rep. Maxine Waters Likely Faces Ethics Trial Of Her Own

Hers is a case that's largely gone under the radar, particularly with the glare of malfeasance squarely on Democrat Charles Rangel from New York. However, it appears that Rep. Maxine Waters, a 10-term California Democrat, is going to face the ethics trial herself for charges stemming from improper communications with government officials.

Ms. Waters, at the time the investigation by the House ethics panel began last fall, was accused of intervening on behalf of OneUnited, a Boston-based bank. The Times reported last year that Ms. Waters called Treasury Secretary Henry M. Paulson Jr. in 2008, as the economy was in a free fall, to ask him to host a special meeting with executives from black-owned banks.

As a key House player on the Financial Services Committee, Ms. Waters often called Mr. Paulson. He agreed to arrange the requested meeting, The New York Times reported last year.

What Mr. Paulson did not know at the time was that Ms. Waters’s husband, Sidney Williams, owned stock in and had served on the board of OneUnited, whose chief executive turned the Treasury headquarters meeting into a special appeal for bailout assistance. The executive of the institution, one of the nation’s largest black-owned banks, asked for $50 million in federal aid, The Times reported.

This is the kind of self-interest that raised all kinds of red flags for the Office of Congressional Ethics, which referred the situation to the House Ethics Panel, which launched the investigation.

Waters is fighting the matter, but charges should be forthcoming this week.

And again, one should expect to hear that Democrats are more than willing to offer a slap on the wrist for Waters' malfeasance. After all, if they were merely willing to recommend the minimum sanction - a reprimand - to Rangel for failing to report income for more than a decade and multiple ethics and legal violations, the self-dealing that appears involved here (assisting a bank with which there are close relations) would not garner more.

Farce on the Hill

A pox on both the House Democrats and Republicans.

The Republicans deserve scorn and derision for their abject failure to support a measure to provide assistance and compensation for Ground Zero workers who toiled on the pile and were sickened by their service to recover the remains of nearly 3,000 people who were pulverized by the collapsing Twin Towers.

The Democrats had put forth a measure that would have provided $7.4 billion to compensate sickened workers, expanded the Victim Compensation Fund, and provided medical care. The bill fell 255-159, largely along party lines. It required a 2/3 passage. 95% of Democrats voted for the bill and 98% of Republicans voted against it. The roll call tells the tale of this measure. And among those who voted no was NJ Rep Scott Garrett (R), who knows or should have known that this would directly affect some of his constituents adversely - because his district encompasses part of Northern New Jersey and whose citizens were affected by the attacks directly.

That's absolutely insane, especially when President Bush, in the days following the attacks, asked Sen. Chuck Schumer, the senior senator from New York, what was necessary, and the President promised everything that the state needed it would get.

The same courtesy should have been extended to the workers who toiled to recover the remains of nearly 3,000 people and the debris that showered down all over Lower Manhattan. Nearly nine years later and the country is still treating these workers little different than the Soviet Union did the liquidators who toiled to put out the fires and enclose the nuclear reactors at Chernobyl.

Meanwhile, Democrats and their leadership deserve to take all the scorn and derision for their continued support and protection of corrupt Democrats, the latest of which is Rep. Charles Rangel, the senior Democrat from New York. The findings by the ethics panel reflect the news reports for more than two years that show just how Rangel gamed the system to his advantage and steadfastly refused to abide by tax laws of the local, state, and federal levels (and where at the federal level he was in charge of setting tax policy as Chairman of House Ways and Means), didn't feel that he was subject to rent stabilization laws, ignored ethics rules and guidelines, and generally treated his position as an entitlement and in the process disrespected his constituents.

The leadership refused to move against him in 2008, fearing that it might anger the Congressional Black Caucus (which is essentially a subgroup of Democrats in Congress). Instead, they let him keep his chairmanship until earlier this year when the evidence became such that even the leadership could no longer ignore the festering problem. That it's taken more than two years to act on this ethics probe shows the unseriousness that Democrats had to cleaning up the swamp of corruption in Congress (which is just as bad as when the Republicans were in charge).

In fact, both instances show that neither party should be trusted with power. The party out of power thinks that they can act as irresponsibly as they want without repercussion to their actions while the party in power thinks that they can act with impunity and without regard to the will of the people or in disregard to the law.

A pox on both their houses.

UPDATE:
Republicans claimed that their opposition was on procedural grounds.



Rep. Anthony Weiner was right in being outraged over the failure to pass this legislation. Rep. Peter King, one of the few Republicans to vote for the measure also castigated his fellow caucus.

UPDATE:
Some are calling Weiner's righteous rant on the floor the wailings of a 4-year old whose video game was taken away claiming that this was a vote on the merits against watered down legislation. Nonsense. That's not what the legislation contained and anyone who paid attention to what was in the legislation would know that.

UPDATE:
Gothamist has more on the contentious floor debate over the 9/11 workers bill.

Rangel Awaits Ethics Probe Announcements With Defiance: UPDATE: Will Stand Trial on 13 Counts

Will Rep. Charles Rangel be forced to apologize for saying that awaiting the results of the House ethics panel investigations into his gross misconduct is the worst thing to happen to him since the Korean War? It's all about him. It always was.

Speaking to reporters today, Rangel said he survived a Chinese attack in North Korea 60 years ago. As a result, he says, "I haven't had a bad day since." But Rangel says "today I have to reassess that statement."

I guess watching the Twin Towers collapse killing nearly 3,000 people - many of his fellow New Yorkers and residents of his and neighboring Congressional districts doesn't make the cut.

He may be sounding less defiant, but that's only because of the overwhelming charges against him that are pending.

He's still unrepentant over his tax evasion, the use of rent stabilized apartments in violation of state law, House rules on long term parking, and various other matters. Rangel has framed this as a public lynching, even as he ignores that he violated multiple laws at the state and federal level.

Sorry Charlie, but you're not being lynched. You're in the process of facing justice that you so richly deserve for feeding at the public trough for so long that you consider yourself entitled to take whatever actions you thought without repercussions or consideration to the legal and ethical violations you committed.

His lawyers are busy trying to find a negotiated settlement that avoids opening Rangel up to criminal prosecution for his malfeasance. If he admits to any wrongdoing or criminality, the doors open up to criminal prosecution.

That's the real reason why he's not cut a deal with the panel thus far. Everyone knows just how serious the issues are against Rangel, and a wrist-slap isn't going to be enough here. A wrist-slap will result in the GOP using it as a wedge issue against Democrats and their leadership in the midterm elections, just as surely as Democrats did to the corrupt Republicans in the 2006 and 2008 elections.

The panel is expected to issue its determination at 1pm EDT.

UPDATE:
It has come down to the wire, but CBS News Channel 2 in NY is claiming that he's cut a deal with the panel. No word on the details, but they'll probably be released this afternoon.

UPDATE:
1010wins.com reports that there is no deal in place, but apparently the committee is still in talks with Rangel's lawyers.

New York Democrat Charles Rangel says there's no deal yet to settle his ethics case and avoid a trial on charges of violating standards of conduct.

Rangel told reporters outside his office, "Until someone tells me there's a deal, there isn't."

The former committee chairman spoke just before a House ethics panel is to hold a public session where charges will be read.

UPDATE:
Deal or no deal, and Rangel chose no deal. He chose poorly. Rangel will now face trial in the House on 13 charges.

The charges include allegations that Rangel failed to report rental income on vacation property in the Dominican Republic and over the course of nearly a decade failed to report more than $600,000 on his financial disclosure statements.

Rangel's refusal to make a deal means that this will now play out over the next few months unless Rangel's fellow Democrats push him to retire or resign to avoid damaging their own reelection chances.

State Police Investigating Voter Fraud In Rensselaer County

The investigation relates to charges of voter fraud and submitting fraudulent ballots in a September 2009 primary election in Rensselaer County County, New York (just outside Albany). It includes Troy city council members and several Democratic party operatives.

State Police investigators have obtained a court order that seeks DNA samples from nine people, including several Rensselaer County and city of Troy public officials, who are identified as targets in a massive voter-fraud conspiracy that took place during last September's primary elections.

Court records filed in connection with the investigation include allegations that the officials, and several political operatives for the Rensselaer County Democratic Party, may have conspired to file dozens of fraudulent absentee ballots last year in an attempt to seize the Working Families Party line for the general election.

The officials identified as targets of the investigation are: Rensselaer County Board of Elections Commissioner Edward G. McDonough; city Councilmen Michael LoPorto, Gary Galuski, Kevin McGrath, and John Brown; City Council President Clem Campana; City Clerk William A. McInerney; and political operatives Dan Brown, who is John Brown's brother, and Anthony DeFiglio, a former Troy Housing Authority clerk.

State Police characterized the targets as "active participants in the conspiracy," according to court records.

The suspects were identified in an order signed Tuesday by Albany County Judge Stephen W. Herrick. The application for a search warrant to obtain their DNA samples included hundreds of pages of ballots, witness and voter statements, and an affidavit by a State Police investigator. A hearing on the request for DNA samples has been set for Sept. 14.

The alleged voter fraud was first reported last year by the Times Union.

The victims include dozens of residents of city housing projects, all registered to vote on the Working Families Party line, who had absentee ballots filed in their name that included forged information, including signatures and the excuses for why they could not vote in person.

DeFiglio admits to participating in the fraud according to state police sources. Investigators are seeking DNA evidence to corroborate handwriting evidence showing that signatures were forged.

Rangel Remains Defiant As Democrats Move To Exits

Senior Democrat Rep. Charles Rangel from Harlem continues to act as though he's entitled to his seat despite multiple legal, tax, and ethical lapses. He's maintaining his grip on his seat, even as fellow Democrats are trying to shove him through the door into retirement. They can see the writing on the wall of having to deal with sleazy ethics charges entering the primary and midterm general elections by the guy who was responsible for putting together the nation's tax policy.

"I think it's best that he settle," Rep. George Miller, an influential California Democrat who helped engineer Pelosi's rise to power, told The Post.

"Because I just said so, that's why. That's my feeling," he added.

Amid mounting pressure on Rangel, Miller's blunt statement is the most direct message from any member of Pelosi's inner circle, and comes just a day after Rep. Chris Van Hollen (D-Md.) -- another member of her leadership team -- met with Rangel to talk about the charges he's facing.

Van Hollen heads the campaign arm charged with getting enough House Democrats re-elected to keep their majority -- a task that grows harder as the Rangel affair draws voters' focus to scandal instead of the party's own agenda.

For any plea bargain to be accepted by the bipartisan House Ethics Committee, which is bringing charges against the 80-year-old Rangel, he would have to swallow a bitter pill -- admitting to multiple, substantial ethics violations, sources said.

Considering that Rangel was facing ethics charges likely stemming from breaking House rules on long term parking, failing to disclose paid junkets, undisclosed income from real property in Latin America, violating rent stabilization laws in New York, abusing homestead property tax credits/exemptions in multiple jurisdictions, and violating federal tax law, there's any number of legal and potential criminal angles the House panel could take.

The saddest part is that Rangel's constituents would likely reelect him even if this ethics cloud remains, all while saddling the rest of the Democrats with a mess. After all, his Harlem constituents reelected him in 2008 even with the unfolding scandal breaking in its full glory.

Rangel Attempting Last Minute Deal To Save Face In Ethics Flap

Don't think for one moment that Democrats in Congress were on Rep. Charles Rangel to make some kind of a deal and get out of sight as quickly as possible before their already dim chances in November get worse as Rangel's dirty laundry gets aired for all to see.

Rangel is apparently trying to negotiate an end to the ethics investigation before Thursday's release of the charges and potential repercussions.

The Associated Press has learned that New York Democrat Charles Rangel is making a last-minute effort to settle his ethics case. A settlement would mean that Rangel must agree that he committed some ethical misconduct.

The talks were confirmed by people familiar with the situation, but who were not authorized to be quoted by name.

Rangel stepped down earlier this year as chairman of the tax-writing Ways and Means Committee because of an earlier ethics charge. A settlement would spare him an embarrassing ethics trial. It also would be a relief for other Democrats, who fear that an dragged-out ethics proceeding during the fall election campaign would hurt their ability to maintain their House majority.

Democrats Distancing Themselves From Rangel Hoping to Limit Political Fallout

As I've been noting for some time now, Rep. Charles Rangel is in a pretty secure seat -- he's a 20-term Congressman from Harlem who has won reelection time and time again without even the slightest bit of concern for his reelection chances.

It's quite likely he'd win reelection again in 2010, though he's finally getting an opponent who has the kind of name recognition to send Rangel packing - Adam Clayton Powell IV (the son of the man that Rangel beat to win his House seat 40 years ago). Rangel won in 2008 with the tax evasion and rent stabilization mess breaking before the election and that didn't stop his constituents from reelecting him handily.

His fellow Democrats aren't so blessed with constituents willing to overlook his corruption, ethics flaps, tax evasion and avoidance, and other legal issues (like gaining benefits from rent stabilization despite not being in compliance with state law). They are thinking they're going to be hammered in November in part because Rangel is still in office because Democrats aren't going to take the steps needed to purge Congress of corrupt officials.

Rangel is still putting up a defiant front, but even fellow New York Democrats are starting to distance themselves from the radioactive Rangel. That includes Senator Chuck Schumer, who just a month ago gave $10,000 to Rangel's reelection campaign effort. Schumer's probably wishing that he could get the money back now that the ethics flap has come to a head - even though anyone and everyone knew that Rangel was going to be toxic for their political futures with all the issues facing him.

Other Democrats have given back $500,000 in money donated by Rangel to avoid the stench of corruption and the appearance of impropriety.

"Democrats will start heading for the hills — distancing themselves from Charlie once those charges are out — so if he wants to keep a modicum of support, he better reach a deal with the House over the next few days," a senior state Democrat told the New York Post.

A House panel has scheduled a reading of ethics charges against Rep. Rangel on Thursday.

Rangel is accused of accepting four rent-stabilized apartments in New York City and creating an alleged tax loophole for an oil executive who contributed to a City College program under the his name. Rangel also failed to pay taxes on a villa he owns in the Dominican Republic.

"He did some things that look like they ought to get him thrown out of Congress, and if it turns out that he did them, he's going to get thrown out of Congress," former DNC Chairman Howard Dean said on "Fox News Sunday."

The longtime Harlem Congressman said over the weekend that he could beat a public trial, opposing the advice that Democratic leaders have given him to cut a deal and avoid the possibility of Republicans using his case to take back the majority in the House in November.

Even House Democrats Deserting Defiant Rep. Rangel

New York Democrat Charles Rangel continues his defiant tone over ethics charges filed against him this week, despite the overwhelming number of issues facing the 20 term Congressman.

The situation is so bad that even fellow Democrats are telling him to pack it up because it's going to harm their chances in November.

In a major development, Rep. Betty Sutton (D-Ohio) on Friday night called on beleaguered Rep. Charles Rangel (D-N.Y.) to resign.

Sutton's statement comes one day after the House ethics committee charged the 80-year-old Democrat with multiple violations.

In a statement to The Hill, Sutton stated, "It is regrettable, but Charlie Rangel needs to resign from his seat in Congress. This isn’t about being a Democrat or Republican, this is about preserving the public trust. Our nation is facing extraordinary challenges and we must be focused on building a sustainable economy that will allow our workers and businesses to flourish."

Sutton has built a reputation as a crusader for congressional ethics. In 2008, she led the fight to pass legislation creating the Office of Congressional Ethics, which now serves as an independent ethics body within the House of Representatives.

In March, Sutton donated to charity the $7,000 given to her campaign by Rangel. Sutton, a GOP target this fall, was elected in 2006. President Barack Obama attracted 57 percent of the vote in her district in 2008.

When you have a Congressman telling another Congressman of the same party to resign to restore the public trust and that it isn't because they're Democrat or Republican - you can bet it's precisely because it's going to hurt their political chances in a difficult election season.

Despite all this, Rangel is defiant and thinks that he's going to be vindicated and that he will win reelection. Well, he may be right on the latter point. His constituents reelected him in 2008, even as all the news broke about his unreported income, tax problems, rent stabilization violations, and other ethics and legal problems.

Health Care Reform Critics Were More Than Justified Over Cost Criticism and Burden Shifting

I wish "I told you so" means something, but I told you so. You were warned that health care costs would soar and that companies would consider dropping their health care coverages for employees because they would see the costs of maintaining the health care benefits were greater than the penalties that the government was imposing. It would be cheaper for the companies to dump the employee benefits on the government. Well, four of the largest companies in the nation were examining their options:

Internal documents recently reviewed by Fortune, originally requested by Congress, show what the bill's critics predicted, and what its champions dreaded: many large companies are examining a course that was heretofore unthinkable, dumping the health care coverage they provide to their workers in exchange for paying penalty fees to the government.

That would dismantle the employer-based system that has reigned since World War II. It would also seem to contradict President Obama's statements that Americans who like their current plans could keep them. And as we'll see, it would hugely magnify the projected costs for the bill, which controls deficits only by assuming that America's employers would remain the backbone of the nation's health care system.

Hence, health-care reform risks becoming a victim of unintended consequences. Amazingly, the corporate documents that prove this point became public because of a different set of unintended consequences: they told a story far different than the one the politicians who demanded them expected.

Why the write-downs happened but the hearings didn't

In the days after President Obama signed the bill on March 24, a number of companies announced big write downs due to some fiscal changes it ushered in. The legislation eliminated a company's right to deduct the federal retiree drug-benefit subsidy from their corporate taxes. That reduced projected revenue. As a result, AT&T (T, Fortune 500) and Verizon (VZ, Fortune 500) took well-publicized charges of around $1 billion.

The announcements greatly annoyed Representative Henry Waxman, who accused the companies of using the big numbers to exaggerate health care reform's burden on employers. Waxman, chairman of the House Energy and Commerce Committee, demanded that they turn over their confidential memos, and summoned their top executives for hearings.

But Waxman didn't simply request documents related to the write down issue. He wanted every document the companies created that discussed what the bill would do to their most uncontrollable expense: healthcare costs.

The request yielded 1,100 pages of documents from four major employers: AT&T, Verizon, Caterpillar and Deere (DE, Fortune 500). No sooner did the Democrats on the Energy Committee read them than they abruptly cancelled the hearings. On April 14, the Committee's majority staff issued a memo stating that the write downs were "proper and in accordance with SEC rules." The committee also stated that the memos took a generally sunny view of the new legislation. The documents, said the Democrats' memo, show that "the overall impact of health reform on large employers could be beneficial."

Nowhere in the five-page report did the majority staff mention that not one, but all four companies, were weighing the costs and benefits of dropping their coverage.

AT&T produced a PowerPoint slide entitled "Medical Cost Versus No Coverage Penalty." A document prepared for Verizon by consulting firm Hewitt Resources stated, "Even though the proposed assessments [on companies that do not provide health care] are material, they are modest when compared to the average cost of health care," and that to avoid costs and regulations, "employers may consider exiting the health care market and send employees to the Exchanges." (Under the new bill, employees who lose their coverage will purchase health care through state-run exchanges.)

Kenneth Huhn, vice president of labor relations at Deere, said in an internal email that his company should look at the alternatives to providing health benefits, which "would amount to denying coverage and just paying the penalty," and that he felt he already had the ability to make this change under his company's labor agreement. Caterpillar felt it would have to give "serious consideration" to the penalty option.

It's these analyses -- which show it's a lot cheaper to "pay" than to "play" -- that threaten to overthrow the traditional architecture of health care.

Incidentally, this would mean that the coverage that those employees received would be quite different from what they had been accustomed to, and that was one of the things that the Administration and backers had been claiming all along would not happen, even though the legislation explicitly allows companies and individuals to reevaluate their position at the end of their existing coverage periods (which is an annual occurrence).

Congressional Democrats cancelled their hearings on the matter because the information that the companies provided would have blown the lid off this fact that everyone was dreading - that the government would be saddled with costs that it simply didn't account for and could not afford because companies would shift the burden onto the government.

Hewitt, which produced the Verizon review, also provides such health care processing for a wide range of Fortune 500 companies, and if they reached the conclusion for Verizon, you can be sure that other large companies were going to reach similar conclusions and make similar considerations. So, while Verizon is saying that for now they're not going to drop coverages and shift employees into the exchanges, if they see that the costs are increasing as a result of the HCR changes, they may take the penalties rather than see their companies get hit with higher health care costs (which will get passed on to their employees).

UPDATE:
As if all that wasn't enough, the paperwork obligations of all businesses will increase significantly due to provisions of the recently enacted health care bill beginning in 2012.

Right now, the IRS Form 1099 is used to document income for individual workers other than wages and salaries. Freelancers receive them each year from their clients, and businesses issue them to the independent contractors they hire.

But under the new rules, if a freelance designer buys a new iMac from the Apple Store, they'll have to send Apple a 1099. A laundromat that buys soap each week from a local distributor will have to send the supplier a 1099 at the end of the year tallying up their purchases.

The bill makes two key changes to how 1099s are used. First, it expands their scope by using them to track payments not only for services but also for tangible goods. Plus, it requires that 1099s be issued not just to individuals, but also to corporations.

Taken together, the two seemingly small changes will require millions of additional forms to be sent out.

"It's a pretty heavy administrative burden," particularly for small businesses without large in-house accounting staffs, says Bill Rys, tax counsel for the National Federation of Independent Businesses.

Eliminating the goods exemption could launch an avalanche of paperwork, he says: "If you cater a lunch for other businesses every Wednesday, say, that's a lot of information to keep track of throughout the year."

This isn't some mere drafting error, but a significant burden on all businesses that will require countless more paperwork that does nothing to improve efficiency or productivity. In fact, the net result will be reduced productivity as more effort will necessarily be expended to fulfill the filing requirements.

Disgraced Democrat Monserrate Expropriates Obama Logo For Campaign Bid

This is exactly the kind of thing we've come to expect from the disgraced New York Democrat Hiram Monserrate. He's gone and used President Barack Obama's logo and slogan in his own election campaign bid to regain the seat that was previously his.

The State Senate kicked him out after he was found guilty of a misdemeanor assault of his girlfriend. A special election is to be held, and this is what Monserrate has come up with. Organizing for America, Obama's campaign group that was folded into the DNC, isn't sitting back:

But Organizing for America, the grassroots group that's become the Obama arm of the Democratic National Committee, wants to stop Monserrate.

"The use of the logo is neither approved nor supported by Organizing for America. The campaign did not seek nor do they have permission to use it. We are asking them to remove it from their materials," said a spokesman for Organizing for America in a statement first reported by Politico.

A Monserrate spokesman didn't immediately respond to a request for comment.

Given how Monserrate has little to no regard for the law or his constituents, it isn't surprising that he's more than willing to use Obama's logo as his own.

Here's to hoping that Monserrate's constituents send him packing and don't vote him back into office as he's responsible for turning the circus quotient in Albany up a few notches in just the past year.

New House Ways and Means Committee Head Has Tax Troubles of His Own

When Democrat Charles Rangel "temporarily" stepped down from the chairmanship the House Ways and Means Committee amid the longstanding and mounting ethics probes and investigations into his tax, legal and ethics troubles, Speaker Nancy Pelosi and fellow Democrats tapped Democrat Sander Levin of Michigan to fill the seat.

Well, it turns out that Levin had tax troubles of his own that only were repaid following an inquiry by Roll Call.

Like so many other politicians, including Rangel, Levin took a tax credit for real estate properties that he should not have been qualified to take.

Levin, who owns a home in Chevy Chase, Md., received a $690 credit on his most recent property tax bill, the result of Montgomery County program that provided one-time credits to residential property owners in the 2009-10 tax year.

Levin, who purchased the home in 1977, received the tax credit although it was intended for only “owner-occupied” properties, and he does not live in the home. The credit reduced his tax bill to just under $9,500.

“This is not a tax credit that Rep. Levin applied for and in an abundance of caution he has paid the full amount to Montgomery County to correct their mistake,” Levin Chief of Staff Hilarie Chambers wrote in an e-mail Friday.

Chambers said the Michigan lawmaker moved out of the home in September 2008, following the death of his wife. His daughter and her family now occupy the home, and he stays at a Silver Spring condominium owned by his daughter when he is in the Washington, D.C. area.

Levin repaid the credit Friday, Chambers said, after being contacted by Roll Call.

“Since Mr. Levin was not residing in the property for the full year and it is not his ‘principal residence,’ Mr. Levin has written a check of $690 to the County and clarified and confirmed once again to them that the correct classification of the Morgan Drive property is ‘Not a Principal Residence,’” Chambers wrote in an e-mail.

The status on that property had been changed multiple times, despite the fact that he has not been in that property as his principal residence since 2008 and it is for that period going forward for which he claimed and received the credit.

It is unlikely that he could have obtained the credit as his staffer suggests because you have to fill in the tax information; it doesn't just magically appear as a tax credit. Levin would have been better served to state that there was an inconsistency on his tax records and that he's paid up.

Once again, that a major player on the House Ways and Means Committee has problems paying accurate taxes shows the insanity of the tax code at all levels of government and that those responsible for writing the national tax code are incapable of fulfilling their obligations to pay taxes without error or omission.

In Rangel's case, such tax evasion went on for years at a time and should be considered criminal. Levin's case was likely a case of mistaken classification and at this point considered a one-time issue. However, if more instances of tax troubles come up, Levin's stint as the chair will not last long.

Rangel Broke House Ethics Rules; Wrist Slap Expected

In what should have been abundantly clear last year when the allegations first arose, Rep. Charles Rangel broke House ethics rules. It should come as little surprise that the panel is opting not to censure or take further action against the senior Democrat.

At least four other members of the Congressional Black Caucus who were also on the 2007 and 2008 trips were exonerated by the panel, according to a congressional source familiar with the findings.

The finding is certain to jeopardize Rangel's chairmanship of the House Ways and Means Committee. The tax-writing committee will take a lead as Congress determines the fate of former President George W. Bush's expiring tax cuts.

Rengel's ethics troubles also present an election-year dilemma for House Speaker Nancy Pelosi, who led a Democratic takeover of the House in 2006 on a campaign promise to end a "culture of corruption" in the GOP-led Congress.

The 79-year-old Rengel, D-N.Y., has been in the House 30 years. It was unclear whether the findings would affect whether he seeks re-election.

The committee found that the financing of the Caribbean trips was improper for all the lawmakers involved but that only Rangel was aware that a corporation that routinely lobbied Congress picked up the tab, said the congressional official who was not authorized to speak on the record.

The committee decided against issuing formal charges against Rangel that could lead to punishment such as a censure.

That last bit is key - despite breaking House ethics rules, the panel didn't take action. Yet, the panel is still investigating Rangel for violating federal law in failing to pay all manner of taxes and underpaying state and local taxes in multiple jurisdictions. Still, this is a bad precedent for the Democrats, who are letting Rangel off even though he broke their rules.

Bucking the Establishment

Since when does a newly minted US Senator have to run unopposed in their party's primary? That is apparently the belief of the Democratic party establishment in New York, where top Democrats from Harry Reid and Chuck Schumer on down thinks that Harold Ford Jr should not run a primary campaign against Kristen Gillibrand, who was installed by Governor David Paterson to replace Hillary Clinton when she was confirmed as US Secretary of State.

Democrats, including Chuck Schumer, are busy trying to avert a potentially bruising primary race for the US Senate in New York because of the ongoing concerns over the economy and the likelihood that the GOP will score big nationally - and that money that would be spent on a primary run in New York could be used elsewhere to prop up sagging campaigns in key districts.

Yet, that still doesn't explain why primary race between qualified candidates shouldn't be held. We only have the motivation to avoid a primary battle - and that's not a reason to prevent Ford from running.

Is this Gillibrand's seat? Would it not be in the state's best interest to have the best candidate running for office, and not just one who the establishment and party bosses want to see run?

That's all the more reason to see Ford run a campaign. Ford, who came to New York after losing a reelection battle for his House seat in Tennessee, thinks he can be an independent voice among Democrats. That remains to be seen, but going toe to toe with the party elites shows he has some moxie and spirit:

“If I am elected senator from New York, Harry Reid will not instruct me how to vote,” he said, referring to Mr. Reid’s efforts to keep him out of the campaign.

Mr. Ford agreed to the interview with The New York Times as he tests the response to his possible candidacy. His interest in the race, reported a week ago, has set off intense reaction and furious strategizing among Senate Democratic leaders and White House officials, as they try to discourage his campaign and avoid an ugly and expensive primary in September that could risk losing a crucial Senate seat.

A Ford campaign could become a delicate subject for the Obama administration, however, which is more reluctant to assert itself in New York politics after failing last year in its effort to elbow Gov. David A. Paterson out of his election bid.

Mr. Ford said he had been emboldened by the response he had received from the public in recent days. Everyone — from the cabdrivers who shuttle him around the city to the executives with whom he rubs elbows on Wall Street — has urged him to run, he said.

During a trip from New York to Palm Beach on Thursday, flight attendants and passengers stopped in the aisle to cheer him on, he said. “I didn’t hear anyone say, you better not run against that Kirsten Gillibrand,” he said.

Again and again, during the interview, he returned to the subject of the economy, saying Ms. Gillibrand, an upstate lawmaker who was appointed by Mr. Paterson to fill the seat vacated by Hillary Rodham Clinton, has failed to aggressively focus on creating jobs. He called for a major reduction in the corporate tax rate and a payroll tax holiday to encourage hiring.

Zeroing in on a perception that Ms. Gillibrand too readily defers to Senate leaders, especially Senator Charles E. Schumer, he added: “We have a fundamental difference on independence. We have a difference on the level, the kind and the stature of advocacy New Yorkers deserve. And we have some honest differences on issues.”

He blasted her support for the proposed health care overhaul, which is expected to cost New York an extra $1 billion a year, and for opposing the taxpayer bailout of the financial industry.

“It was a mistake,” he said, noting that most Wall Street firms had already paid back the money. “How can you be against ensuring that the lifeblood of your city and of your state survives?”

The Changing Political Landscape

2010 is shaping up to be quite an interesting election year after all. While many experts would agree that Democrats would expect to lose seats in the House and Senate and perhaps some statehouses, the numbers weren't expected to be a deluge.

That's why yesterday's surprise announcements that Sen. Bryan Dorgan (D-ND) and Sen. Chris Dodd (D-CT/Friend of Mozilo) would not seek reelection are so surprising. They were considered safe seats this year, and now their retirements open the door for challengers. Democrats had expected to lose some seats, but the prospects of holding together a filibuster proof majority in the US Senate now appear dim.

Richard Blumenthal, Connecticut's Democratic attorney general, said Wednesday he would run for Dodd's seat. The ripple effect means that elections down the line will be affected by the incumbent retirements and provide opportunities for fresh blood to come into the political process.

Further, another Democrat, Gov. Bill Ritter of Colorado, will not seek a second term.

Then there's word that Harold Ford, Jr. (D-TN) may attempt to unseat New York Senator Kirsten Gillibrand.

Even David Paterson, the embattled Democratic governor of New York, isn't safe from attacks by the White House on down and that's even with potential Republican challenger Rudy Giuliani saying he wont run.

All this opens the possibility that Republicans can eliminate the filibuster proof majority in the Senate and cut into the Democrats overwhelming numbers in the House as well as improve their numbers at the state and local level.

Yet, all is not well for Republicans. Michael Steele, the RNC chairman, didn't exactly have kind words for the GOP yesterday, and pretty much called Republicans on the carpet for their poor performance over the past 20 years, a rebuke of both Bush Administrations and a squandering of their Congressional fortunes. Scandals, corruption, and a willful disregard for fiscal responsibility all play a role in the GOP fortunes, and that many Republicans are enthralled with creationism and anti-science agendas isn't going to attract new voters and support among those who have found that the Democrats tax and spend agenda is unsustainable.

Democrat overreach in trying to ram through the widely unpopular health care overhaul isn't going to help the Democrats, but knowing that the Democrats are bound to lose seats will only encourage Democrat leaders in Congress to push harder to get a deal done.

The same political calculus is pushing the gay marriage agenda in New Jersey; Gov. Corzine's term ends in just about two weeks, and his successor, Chris Christie has said that he would veto a gay marriage bill. Supporters don't know if they have the numbers to pass the bills in the Democrat controlled legislature, so if they can't get it done now, they'll have to wait at least four years before trying again. The State Senate has scheduled a vote for today.

Yet Another Poison Pill Provision in Democrats' Health Care Plans

Many people, myself included, have health savings accounts or flexible spending accounts so that they can spend for health care as a pre-tax expense. That has the effect of reducing health care costs for the individual, and is an effective tax cut for those who opt for these accounts.

Both the House and Senate versions of the bill all but eliminate the over the counter (OTC) spending allowances.

This is an effective increase in the cost of health care and a tax hike since the year end income statement will be higher than if OTC were allowed.

But Section 9004 of the pending Senate bill and Section 531 of the House bill that passed in November changes the tax code so that “distribution for medicine” from HSAs and FSAs are “qualified only if for prescribed drug or insulin.” Yes, the bills are merciful enough to allow diabetics to purchase insulin under these tax plans, but if you or your family members need Pedialyte, prenatal vitamins or numerous other over the counter health items, you will see a tax hike that could be huge.

Since HSAs and FSA contributions are exempt from both income taxes and 15.3 percent payroll tax for Social Security and Medicare, and since these together can reach more than 40 percent of an employee’s salary, the effective tax increase on these medicines could be more than 40 percent.

And this tax change will almost certainly cost the health care system billions more dollars in unnecessary spending both to the government and private insurance plans. The Joint Committee on Taxation estimates that the tax hike will bring in $5 billion in revenues over ten years – itself a drop in the bucket when compared to the bill’s new trillion-dollar entitlement – but that estimate doesn’t take into account behavioral changes as a direct result of this provision.

OTC drugs are much cheaper those available for prescription, but they could now be more expensive to individual consumers given that prescription drugs would still be eligible for favored treatment in the tax plans, and that insurance companies would be mandated to cover many of them. Consequently, any time a consumer has the slightest headache, the financial incentive would often be to see a doctor and get a prescription rather than go to the store and get medicine off the shelf.

I've managed to take advantage of this program for the past couple of years and have saved quite a bit of money; yet a cost-savings measure like this is being eliminated by the Democrats? Curious. Very curious.

What could possibly be the rationale for so severely restricting HSA and FSA expenditures so as to render them useless for many who would otherwise take advantage of the tax savings by putting money into these accounts (which are use them or lose them annual allowances).

The federal government itself believes that FSAs and HSAs can provide pre-tax savings of at least 26%. That's 26% that the individual is not paying at the end of the day for health care costs.

If those costs are disallowed, that means that the individual will be paying that much more, and the costs will increase to the individual and society in general. In fact, it means that the health care costs will increase.

Take someone who happens to require daily aspirin for a heart condition. Over time the cost for that medication can add up, but a FSA can reduce the cost to someone, particularly if they're on a fixed income. Or, take someone who suffers from allergies. They'd get hit with a higher bill at the end of the year because they couldn't include Claritin or any of the other allergy medications in their FSA costs.

If anything, the curtailment of OTCs in FSAs would result in fewer people using FSAs.

Gitmo Closure Delayed Until 2011 At Earliest

For all the hopeful and wishful thinking by the left that President Obama would close Guantanamo Bay's detention facility for terrorists, it now appears that the facility will not close before 2011 at the earliest.

As a result, officials now believe that they are unlikely to close the prison at Guantánamo Bay, Cuba, and transfer its population of terrorism suspects until 2011 at the earliest — a far slower timeline for achieving one of President Obama’s signature national security policies than they had previously hinted.

While Mr. Obama has acknowledged that he would miss the Jan. 22 deadline for closing the prison that he set shortly after taking office, the administration appeared to take a major step forward last week when he directed subordinates to move “as expeditiously as possible” to acquire the Thomson Correctional Center, a nearly vacant maximum-security Illinois prison, and to retrofit it to receive Guantánamo detainees.

But in interviews this week, officials estimated that it could take 8 to 10 months to install new fencing, towers, cameras and other security upgrades before any transfers take place. Such construction cannot begin until the federal government buys the prison from the State of Illinois.

The federal Bureau of Prisons does not have enough money to pay Illinois for the center, which would cost about $150 million. Several weeks ago, the White House approached the House Appropriations Committee and floated the idea of adding about $200 million for the project to the military spending bill for the 2010 fiscal year, according to administration and Congressional officials.

But Democratic leaders refused to include the politically charged measure in the legislation. When lawmakers approved the bill on Dec. 19, it contained no financing for Thomson.

The Democrats, including many of those who wanted Gitmo closed, didn't provide funding to make the closure possible.

It has always been about the appearance of closing Gitmo and what Democrats claim that the facility represents more than what the facility actually is. Gitmo remains a highly secure environment that protects the US from terrorists captured overseas and does so in a humane fashion. Transferring the detainees to a mainland facility doesn't change the fact that they're being held without trial (one of the issues that the far left continues to rail against, even as the Obama Administration is on the record as saying that while Khalid Sheikh Mohammed and other high value terrorists will not be released regardless of a federal court trial outcome). It simply is a way to make hay with a decision made by the Bush Administration. The Obama Administration realizes that they can't simply release these detainees, even if it wanted to and many localities simply do not want these terrorists in their own backyard.

That, to be sure, has played a role in not providing funding for the Thompson facility.

In sum, the Democrats railed against Gitmo's existence (and as an extension the Bush Administration), but refuse to act to close it because it isn't in their interest to do so. It also lets the Administration claim credit for trying to close the facility while blaming Congress for not providing the means to do so. This way, Gitmo stays open and the detainees go nowhere, but the Administration can claim that it has lived up to its promises to try and close it.

Left-Right Convergence On Opposition to the Health Care Plan

While you've got Democrats in Congress still trying to pin opposition to the health care plan on far right wing tea party groups and Aryan groups just as Democrat Sheldon Whitehouse (D-RI) did over the weekend, it looks like there's a right-left convergence on finding the whole health care plan one big fiasco.

It will do nothing to reduce costs, and will in fact increase costs to many in the middle class.

Jane Hamsher (firedoglake, who also posts at HuffPo) makes many of the same criticisms I have done for weeks about the costs of this plan, and how Democrats have hidden the true cost of this plan in plain sight by imposing taxes and fees immediately, but phasing in the actual health care changes over a period of three years so that it looks like everything is balanced over a 10-year period, when it will most certainly lead to deficits once the cushion disappears.

Top 10 Reasons to Kill Senate Health Care Bill

1. Forces you to pay up to 8% of your income to private insurance corporations — whether you want to or not.
2. If you refuse to buy the insurance, you’ll have to pay penalties of up to 2% of your annual income to the IRS.
3. Many will be forced to buy poor-quality insurance they can’t afford to use, with $11,900 in annual out-of-pocket expenses over and above their annual premiums.
4. Massive restriction on a woman’s right to choose, designed to trigger a challenge to Roe v. Wade in the Supreme Court.
5. Paid for by taxes on the middle class insurance plan you have right now through your employer, causing them to cut back benefits and increase co-pays.
6. Many of the taxes to pay for the bill start now, but most Americans won’t see any benefits — like an end to discrimination against those with preexisting conditions — until 2014 when the program begins.
7. Allows insurance companies to charge people who are older 300% more than others.
8. Grants monopolies to drug companies that will keep generic versions of expensive biotech drugs from ever coming to market.
9. No re-importation of prescription drugs, which would save consumers $100 billion over 10 years.
10. The cost of medical care will continue to rise, and insurance premiums for a family of four will rise an average of $1,000 a year — meaning in 10 years, your family’s insurance premium will be $10,000 more annually than it is right now.

As I've previously pointed out, the Democrats' proposals do nothing to control costs - only shifting around who pays for the premiums, the individual or the taxpayers in general. That was one of the reasons that President Obama pushed a health care reform package in the first place; to reduce the cost of care, but this bill does none of that. It only adjusts who pays for the already skyrocketing costs of care.

The changes may well result in still higher costs, as more people seek out doctors for care at a time when the medical profession isn't seeing a huge influx of new doctors and health care professionals.

Greater demand plus constant supply = higher prices.

If Congress mandates lower reimbursement rates, that means doctors and hospitals will take it on the chin again, and will not recoup their own costs. That will drive doctors out of the profession, creating a vicious feedback loop.

So, at a time when Democrats are claiming that only the far right is opposed to this health care folly, it looks like we're seeing a convergence of opposition based on a shared understanding of what the Democrats in Congress are proposing to do.