Friday, April 23, 2010

Obituary - Drenik


Burlington County Times

April 21, 2010

Verann (Harkins) Drenik of Cinnaminson passed away suddenly on Friday, April 16, 2010.

Verann was the beloved wife of the late John Drenik for over 50 years.

She is survived by her children, Debra Hammond (Jim), Michelle Hartsough (Ed), Denice Flynn (Kevin), John Wesley (Susan) and Verann Wesley (Chuck); and 11 grandchildren. She was the sister of Michael, Jerry, and Renee O'Hara (John).

Verann was hired to teach art at Delran High School when the school opened in 1975, and worked there for 20 years until retiring in 1994.

Friends and family are invited to attend Verann's life celebration from 7 to 9 p.m. Sunday evening at Snover/Givnish Funeral Home of Cinnaminson, 1200 Route 130 North. Her funeral Mass will be on Monday at 10 a.m. at Saint Charles Borromeo Church, Branch Pike and Pomona Road, Cinnaminson. Interment will be held privately.

In lieu of flowers, donations in Verann's name may be made to the charity of your choice.

Snover/Givnish of Cinnaminson

Thursday, April 22, 2010

The Governor Who Roared In New Jersey By George F. Will



MORRISVILLE, Pa. — The bridge spanning the Delaware River connects New Jersey's capital with this town where the nation's most interesting governor occasionally eats lunch at Cafe Antonio. It also connects New Jersey's government with reality.

The bridge is a tutorial on a subject this government has flunked — economics, which is mostly about incentives. At the Pennsylvania end of the bridge, cigarette shops cluster: New Jersey's per-pack tax is double Pennsylvania's.

In late afternoon, Gov. Chris Christie says, the bridge is congested with New Jersey government employees heading home to Pennsylvania, where the income tax rate is 3%, compared with New Jersey's top rate of 9%.

There are 700,000 more Democrats than Republicans in New Jersey, but in November Christie flattened the Democratic incumbent, Jon Corzine.

Christie is built like a burly baseball catcher, and since his inauguration just 13 weeks ago, he has earned the name of the local minor league team — the Trenton Thunder.

He inherited a $2.2 billion deficit, and next year's projected deficit of $10.7 billion is, relative to the state's $29.3 billion budget, the nation's worst. Democrats, with the verbal tic — "Tax the rich!" — that passes for progressive thinking, demanded that he reinstate the "millionaire's tax," which hit "millionaires" earning $400,000 until it expired Dec. 31.

Instead, Christie noted that between 2004 and 2008 there was a net outflow of $70 billion in wealth as "the rich," including small businesses, fled. And he said previous administrations had "raised taxes 115 times in the last eight years alone."

So he closed the $2.2 billion gap by accepting 375 of 378 suggested spending freezes and cuts. In two weeks. By executive actions. In eight weeks he cut $13 billion — $232 million a day, $9 million an hour. Now comes the hard part.

Government employees' health benefits are, he says, "41% more expensive" than those of the average Fortune 500 company. Without changes in current law, "spending will have increased 322% in 20 years — over 16% a year." There is, he says, a connection between the state being No. 1 in total tax burden and being No. 1 in the proportion of college students who, after graduating, leave the state.

Partly to pay for teachers' benefits — most contribute nothing to pay for their health insurance — property taxes have increased 70% in 10 years, to an average annual cost to homeowners of $7,281. Christie proposes a 2.5% cap on annual increases.

Christie thunders. AP

Christie thunders. AP View Enlarged Image

Challenging teachers unions to live up to their cloying "it's really about the kids" rhetoric, he has told them to choose between a pay freeze and job cuts. Validating his criticism by their response to it, some Bergen County teachers encouraged students to cut classes and go to the football field to protest his policies, and a Bridgewater high school teacher showed students a union-made video critical of him.

An American Caesar

Christie notes that the $550,000 salary of the executive director of the teachers union is larger than the total cuts proposed for 190 of the state's 605 school districts.

He has received some support from the Democratic president of the state Senate, Stephen Sweeney, a leader of a local ironworkers union. This suggests waning solidarity between unionized private-sector workers weary of paying ever-higher taxes to enrich unionized public employees.

New Jersey's governors are the nation's strongest — American Caesars, really — who can veto line items and even rewrite legislative language.

Christie is using his power to remind New Jersey that wealth goes where it is welcome and stays where it is well-treated. Prosperous states are practicing, at the expense of slow learners such as New Jersey, "entrepreneurial federalism" — competing to have the most enticing business climate.

Christie's predecessor addressed a huge unionized rally of public employees, vowing to "fight for a fair contract." Who was he going to fight? The negotiator across the table would be ... himself. Saying "subtlety is not going to win this fight," Christie notes that New Jersey's police officers, the nation's highest paid, can retire after 25 years at 65% of their highest salary.

In the state that has the nation's fourth-highest percentage (66) of public employees who are unionized, he has joined the struggle that will dominate the nation's domestic policymaking in this decade — the struggle to break the ruinous collaboration between elected officials and unionized state and local workers whose affections the officials purchase with taxpayers' money.

Lying About Jobs



Politics: It's bad enough having a jobless recovery with jobs "saved or created" in nonexistent congressional districts and ZIP codes. Now the administration is measuring stimulus progress by moving the starting point.

We, and others, have commented on how hard it was to measure a job that was "saved" by the administration's stimulus package.

You can't prove that a teacher, say, would have lost his or her job in the absence of federal stimulus money. Then there's always the question of what happens when the stimulus money runs out.

Administration claims of "saved or created" jobs were always suspect, especially as the unemployment rate rose above a promised stimulus ceiling of 8% to near double digits. As people keep asking where are the promised jobs, the administration has hit upon a new deceit — change the point from which you measure progress.

A report was touting the success of the administration's stimulus package even before it was sworn in. Released on Jan. 10, 2009, the report showed joblessness peaking at just below 8% under the American Recovery and Reinvestment Act.

Without stimulus, we were told, there would be 133.9 million jobs in the U.S. in the fourth quarter of 2010. That's the baseline. With stimulus, we would have almost 3.7 million more than that.

Today, there are 129.7 million jobs. The folks at looked at the data and found that to justify the administration's current claim of 2.8 million jobs saved or created, they had to lower the baseline by 7 million jobs to only 126.9 million.

This is a little like a football team making a first down, not by advancing the ball 10 yards, but by having the referees moving the first-down marker.

Indeed, a chart in the April 14, 2010, report on the stimulus shows that's what the administration has done. It has moved the yard markers by altering and lowering its original baseline projections.

The administration continues paying a shell game with its "saved or created" job claims. First, it went from "creating" jobs to "saving or creating" them. Then it listed jobs saved or created in nonexistent congressional districts and zip codes. Now it's altering its own baseline projections to show progress where there is decline.

If the administration was asked if the employment glass was half-empty or half-full, it would probably pour the water into a smaller glass to make it look fuller.

There are hundreds of jobs now held by those congressmen and senators who supported this failed stimulus and its successors and who cheerfully parrot the administration line that it is working.

These jobs should not be saved this November.

Tuesday, April 20, 2010

Gaming The Health Insurance Mandate By Merrill Matthews



Democrats claim their newly passed health insurance reform will eventually provide health coverage for more than 30 million uninsured people. Don't bet on it.

The key to achieving that goal, Democrats believe — along with expanding Medicaid and subsidies for buying coverage — is the individual mandate, which requires individuals to have health insurance or pay a fine. The mandate is supposed to push nearly everyone into the pool to minimize free-riding on the system. But what if millions of Americans decide it's a better deal to pay the fine and remain uninsured until they need coverage?

It appears that's exactly what's happening in Massachusetts, which passed its own ObamaCare-like reform with an individual mandate in 2006.

Last year, Charles Baker, former CEO of Harvard Pilgrim Health Care, one of Massachusetts's largest health plans, noticed some health insurance brokers posting comments on his widely read blog. They were suspicious that people were applying for health coverage after a medical condition developed, got the care they needed, and then dropped the coverage.

Coverage for an individual, noted Mr. Baker, now a Republican candidate for governor, might be $2,000 to $3,000 a year, while the penalty was only about $900. So he asked his finance people to see if they noticed any discernible patterns. Boy, did they.

From April 2008 to March 2009, 40% of the individuals who applied to Harvard Pilgrim stayed covered for less than five months. Yet claims were averaging about $2,400 a month, about six times what one would expect.

Blue Cross and Blue Shield of Massachusetts has now confirmed it is experiencing similar problems. The company says that in 2009, 936 people signed up for three months or less and ran up claims of more than $1,000.

The disparity between the cost of expensive coverage and the fine for not getting it encourages individuals buying their own coverage — i.e., those not in an employer plan — to game the system by paying the fine and remaining uninsured until they need coverage.

Insurers have long recognized this problem, known as "adverse selection," which is why every type of insurance normally restricts people from obtaining coverage after an incident has occurred. Someone can't, for example, buy a homeowners policy for a house that is already on fire. But Democrats have decided to do away with that basic actuarial principle with regard to health insurance.

That means it's all about the penalties. Under the existing Massachusetts law, Bay Staters face a penalty of perhaps a half to a third of the cost of the premium. And yet, as Mr. Baker indicates, there appears to be a lot of gaming going on.

ObamaCare, by contrast, has a minimum individual penalty of $95 in 2014, $325 in 2015, rising up to 2.5% of income (or $2,085 maximum) per family in 2016. So the first-year spread between the penalty and the cost of coverage for an individual may be 20-to-1 or 30-to-1. Think that might encourage even more gaming than they are seeing in Massachusetts?

In supporting the individual mandate, Democrats frequently cite the fact that nearly every state requires drivers to purchase auto insurance. But that mandate hasn't gotten everyone insured. Auto insurance mandates usually have fairly low penalties, and they are often sporadically enforced. And so people game that system, too.

Indeed, the problem of uninsured drivers is so bad that many states require drivers to buy uninsured motorist coverage to protect them from all of those drivers who are required to have auto insurance but don't.

The growing adverse selection problem has some Massachusetts officials considering other options; the governor has proposed legislation for a semi-annual open-enrollment period. That's where people would have a limited time to enter the system or change health plans. Open enrollments don't solve all the problems, but they help.

To be sure, the higher penalties in Obama-Care's out years will discourage some gaming of the system, but they won't eliminate it — not as long as there is a gap between the cost of coverage and a penalty. And that's only if Congress keeps the current penalty schedule.

The Congressional Budget estimates the government will collect $17 billion in penalties from individuals over 10 years. But members of Congress don't like penalizing their constituents, and there will be a lot of pressure to delay or reduce the penalties, just as there was when the 2003 Medicare prescription drug benefit was being implemented.

But then the Patient Protection and Affordable Care Act was never about creating an actuarially or financially sound health care system; it was about creating a new entitlement where everyone has coverage — when they need it.

• Matthews is executive director of the Council for Affordable Health Insurance and a resident scholar with the Institute for Policy Innovation.