Monday, February 28, 2011

Response from Senator Liljenquist

Last week, we challenged Senator Dan Liljenquist, the man behind Utah's pension (2010) and Medicaid (2011) reforms to explain an indisputably inaccurate post drawing a comparison between what's happening in Wisconsin, and his own reforms here.  Liljenquist is often touted as an "expert" on these two issues, and how they relate to state budgeting.  That's why it was such a shock to see him get it so wrong.  Under a bit of pressure, Liljenquist finally posted comments from both Craig and I on his post, and responded in a single tweet:
@SenatorDanL: @ I know the wrath of unions and their ostrich like insistence that nothing is wrong. I'm with Gov Walker.
Liljenquist didn't object to our challenges to his rendition of the budget issue in Wisconsin. He isn't objecting to the fact that these "wrathful" unions have agreed to all of the concessions asked of them by the state of Wisconsin.  He didn't objecting to the implication that the fight in WI seems less about the budget, and more about a concentrated conservative push to undermine workers unions and pin state budget problems on the backs of teachers, firefighters and laborers.  He didn't challenge the notion that WI Governor has helped to create a budget crisis with corporate hand outs.  He didn't challenge the fact that state budgets are suffering the effects of a high unemployment, a housing crisis, and an economy in serious need of investment rather than further growth stifling cuts.

But he is, clearly, comparing what's going on there to what he is pushing for here.  So can we assume he intends to create, with the support of the entire legislature, to create the same budgetary environment in Utah?

It's disappointing.  Having spoken with Liljenquist a few times, I was impressed.  Perhaps I just wanted to give him the benefit of the doubt, hoping he was coming from was a position of true concern for the future of all Utahns, as far as that future is tied to how we budget.  Unfortunately, it seems Liljenquist is nothing but another ideologue with an axe to grind.  Liljenquist is fond of saying "Do the math."  I encourage everyone to do exactly that.  Liljenquist's doesn't add up, or he is willing to mislead to justify his agenda.  Also worth noting, these reforms amount to changing the rules mid-game.  The state, like Wisconsin, is in effect renegotiating a contract made with Utah workers regarding promised earnings because they, legislators, did not budget well enough to meet their end of the bargain in a recessive economy.  That's irresponsible, and now Liljenquist wants to place the blame on you!

With that in mind, the cries of "Medicaid is bankrupting us!" play out more as an weak excuse than a noble call to action.  Last year, that same excuse was made to justify rushed pension reforms.  What's next, Senator?  Education?  Transportation?  Probably.  And speaking of ostriches, notice that missing from any/all of this debate is any discussion of Utah's revenue stream architecture.  Liljenquist would have us believe Utah has stumbled upon perfection in that arena, and any short coming must obviously be the fault of people who want retirement security or reliable medical services.

Both pensions and Medicaid are important parts of budgetary planning, and no one -- ever -- should defend the status quo as the best that can be done, including tax structure.

In light of all of this, Utahns should be very suspicious about how these reforms are taking shape, and what, exactly, Senator Liljenquist's true motives really are.

29 comments:

  1. Hey it's unfair to say they never look at the revenue stream. Why just today the legislature took a baby step toward another way to budget this state on the backs of the poor and the working class:

    http://www.deseretnews.com/article/705367624/Senate-approves-bill-to-raise-sales-tax-on-food.html

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  2. I appreciate your comments. It's obvious that you have logically come to the same conclusion that everyone else has that's researched this issue. Unions didn't cause the problem, but the politicians have unfairly blamed the middle class worker for the budget problems of the state. I blogged about it here: http://wp.me/FFwq

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  3. You wrote that Utah's reforms amount to changing the rules mid-game. Other than so-called double dipping, what changes were made that impacted current state and local government employees? Aren't the major changes going to impact new hires? If so, how is that changing the rules mid-game? If changes impact current employees, could you specific what changes you are talking about?

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  4. You argue that concerns about Medicaid are overblown. The Legislative Fiscal Analyst disagrees with you. According to LFA's calculations, Medicaid currently accounts for 7% of all state general and education funds. By 2020, that percentage is projected to be 13%. That's a huge swing in just ten years.

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  5. Double dipping or the act of continuing to work after retirement and continue to pay into the pension fund for the purpose of earning more retirement credits IMPROVES the financial position of the pension fund, Not the other way around.

    Utah already had rules in place to prevent pension spiking, so that was is a null issue, And when they did the reform they used unrealistically low(even by conservative standards) return projections to overstate liability to the state.

    They also lowered the matching amount from 5% to 3% when they switched new employees from the pension to the 401K, and lowered the employee contribution from 8% to 4%.

    This has entirely been about thievery, They want to steal from the state employees so that they can provide tax welfare to the rich.

    "By 2020, that percentage is projected to be 13%."

    I have heard believable numbers in this area so I won't argu the numbers, However it should be noted that medicaid has the cheapest cost and highest amount of healthcare delivered per dollar spent of any method of heathcare financing in the Nation.

    This 13% figure is more indicative of a deeper problem with how we do health care in this Nation then it is of medicaid itself being a problem. We need single payer, and the way the private system is going the sooner the better.

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  6. Medicaid is single payer so you can't blame its increases on not being single payer. Medicaid and Medicaid are notorious for shifting costs to the private sector so you cannot attribute its lower costs simply to being single payer.

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  7. Not true about the double dippers paying into the pension fund the second time around. Once they began collecting retirement, neither they nor their employer longer paid into URS. What they normally got instead was a 401(k) contribution in lieu of contributing to URS.

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  8. Also, you sidestepped my point about changing in mid-game. The changes to URS apply to new employees, not existing employees.

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  9. Medicaid isn't single payer, nor is Medicare, you could argue that Tricare is but only when vets are visiting Tricare ran hospitals or other tricare owned facilities.

    Major feature of single payer is systems of bulk payment for services, and global budgeting. Medicaid and Medicare don't have such things, and can't under the current mostly private health care system we have.

    Medicare and Medicaid both bill and pay per service with all of the doctor side administrative complexity that in-tales.

    Medicare and Medicaid save over the private system due to much simpler management mechanisms in their internal operation, no need to turn a profit, no need to run and maintain an investment pool of premiums, no need to have all of the billing complexity related to collecting monthly bills, no need to advertise, no need of a sales department, simple enrollment process that doesn't spend huge amounts of time keeping pre-existing condition patents off the rolls, no bloated profit taking, etc.

    Double dipping generally refers to what I stated above, what you are describing would further prove the point that it has no negative effect on the pension fund.

    Whats the point of a 401K passed 65 anyway, who would want their money locked up in one of those volatile accounts any longer then they have to.

    I would think after the $18,000,000,000,000 dollars lost in 401K's after the 2007 gramm leach bliley act created crash that we would be figuring out how to fix this nations retirement system not doubling down on a clearly flawed model that has destroyed the retirements of millions of people.

    "The changes to URS apply to new employees, not existing employees. "

    "They also lowered the matching amount from 5% to 3% when they switched new employees from the pension to the 401K."

    That may not sound like much but it is big, if this was about a broken pension plan the match would be the same between the two plans. But it is not, they want to lower how much their paying in a round about way to further an ideological agenda.

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  10. Single payer does not mean government owns the hospitals. Canada has single payer, but hospitals and doctors do not work for the government like they do in the UK which has the National Health Service. In Medicaid and Medicare, fees for service are set by the government. Therefore, Medicaid and Medicare are clearly single payer.

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  11. Regarding double dipping, you went from making an incorrect statement to a strawman argument. First, you argued that double dipping improves the pension fund balance, but that is incorrect since no additional funds go into the pension fund when the employee is "rehired".

    Second, it is a strawman argument to argue that double dipping doesn't hurt the pension system when the real complaint was that it hurts taxpayers. When a current employee "retires" and collects retirement pay but then is "rehired" at his/her previous salary (or something close to it), it costs taxpayers more than if that person had continued working without "retiring".

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  12. You still haven't explained how they changed the rules in mid-game for CURRENT employees. You can't talk about changing the rules in mid-game for NEW employees since they are just starting the game.

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  13. "Single payer does not mean government owns the hospitals."

    No, single payer means the doctors and hospitals receive payment for a single payer. So tricare hospitals are an example of this, they only have to deal with payments from tricare.

    Medicare and Medicaid are not single payer because the hospitals and doctors they use receive on a fee for service basis payments from many payers, hense they are not single payer. That is a big chunk of wasted cost, tracking each payment for each service from each payer, the average doctor in the US has 4 personal just for insurance billing, the average US hospital has on average 1 administrative personal for insurance billing PER BED. It takes more then an insurance company being government run to make single payer.

    And no double dipping is exactly what I described originally, And if in Utah they get a 401K afterwords as you say then clearly they are not pulling funds from the pension any faster then they otherwise would have, and the payments to a 401K will have no negative effect on the pension as clearly THEIR UNRELATED.

    Secondly, Getting money from the pension fund does not hurt tax payers in the slightest. It money put into the system by the pensioners in the first place. Being able to rehire someone whom you don't have to train that already has a good productivity level due to experiences is actually a benefit to the tax payer.

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  14. Google "Medicare" and "single payer" and you'll find that just about everyone who understands healthcare considers Medicare to be single payer. In fact, those who promote single payer healthcare in the U.S. point to Medicare as an example of single payer.

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  15. Double dipping, as defined in Utah at least and as understood by policy makers, consists of a government employee "retiring" and then getting rehired and receiving TWO sources of income: retirement and salary/benefits. That's why it's called double-dipping, ie two sources of income at the same time.

    Keep in mind that in Utah any state or local government employee hired after the mid 1980s does not contribute to the retirement system. THE UTAH RETIREMENT SYSTEM IS 100% FUNDED BY TAXPAYERS, NOT EMPLOYEES. Therefore, both sources of revenue are from taxpayers, not from the employees' own contribution.

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  16. ", consists of a government employee "retiring" and then getting rehired and receiving TWO sources of income:"

    Ohh so he receives money from a pension that he has put money into all his life, that is to say he is legally entitled to because he invested into and worked hard for it, And said person goes to work again and has the unmitigated gull the shear impertinent expectation that he should receive a pay check for additional labor he performs for the State Good God man you have found the crime of the century, People being compensated for their labor my god think of the children.

    Yes I am familiar that many people associate medicare and single payer, that doesn't make it so. I watch this Nations single payer movement very closely cheering it on when I get the chance. Single payer is called single payer because doctors and hospitals only have to bill a SINGLE PAYER. One ultimate payer, one set of rules to follow, One bulk payment to receive per month, One global budget for beds and basic infrastructure per year. No need to track hundreds or thousands of payments from dozens or hundreds of different payers each with their own rules and anti-fraud practices, each wanting to not pay, each looking for I's without dots on them etc.

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  17. You are incorrect the "he has put money into all his life". In Utah, it's the taxpayers that fund this, not the employee.

    Moreover, you intentionally miss the point. There is nothing to stop the employee from working. He can keep on working, just delay receipt of taxpayer-funded retirement until he has actually retired.

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  18. Most single-payer countries have some private insurance as well. So by your definition, these single-payer countries aren't really single payer.

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  19. "it's the taxpayers that fund this, not the employee."

    No you are incorrect here, That is deferred pay that employee has every right to take. The employee's contributions are taxable income that is part of his wages. This is money put aside OUT OF THE EMPLOYEES own wages over the life of his career. It stopped being "tax payer" money that moment it was transferred as wages to the employee. And this is a clear distinction, no "fungible" dollars game here.

    And again this has no fiscal disadvantage for the State, be the state paying that employee for continued labor after his retirement or paying a new person todo the same job the cost is the same.

    "So by your definition, these single-payer countries aren't really single payer. "

    Incorrect, so long as duplicate coverage is illegal its single payer by my definition. Yes supplemental insurance and other forms of "above utilization" insurance exist, and by all means feel free to play word games all you like on that.

    Also systems that have an opt out of the public option like France and Germany are considered all-payer systems not single payer. Tho France has some features that are highly reminiscent of single payer it is in fact an all-payer system.

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  20. You obviously don't understand how state retirement works in Utah. In Utah, the EMPLOYER, not the EMPLOYEE, pays for the retirement system. You may argue that it BELONGS to the employee, but it is the taxpayer that funds it.

    Your other argument is a strawman argument. Those opposed to double dipping aren't saying the employee shouldn't continue to work. We're saying that the employee should not get retirement pay and a wage. One or the other, not both. So if the employee wants to continue working, fine. Just don't collect retirement until you retire.

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  21. No, you obviously don't understand how a pension fund works.

    When a person receives their bi weekly paycheck a Chunk of that paycheck is held aside and deposited into the pension fund for that person. That pension is ENTIRELY funded by that bit of money that is held aside, that bit of money of the employees money not the tax payers money.

    The pension fund then invests that bit of money along with all of the other bits of employee(read not tax payer money) that has been deposited.

    In Utah not a single dime of tax payer money is used, not a single dime of sales tax, not a single dime of property tax, not a single dime of income tax, not a single dime of any fee/fine or assessment is used to payout the pension.

    This pension fund is entirely funded by the contributions of the employees of the state, these contributions are then gainfully invested for them until such time as they meet the age requirement to begin withdrawals from the pension as per defined by their contract with the state with regards to the pension.

    The only strawman here is you, The only reason to prevent employees who are rehired from collecting from the pension plan is to either discourage trained and experienced workers from working for the state, or lower pension payouts enough such that the State can lower their contribution match(the same as lower all state employees pay rates because after its transferred to them via their paycheck its their money not tax payer money).

    What you want is to have your cake and to eat it to, You want to deprive people of what they have justly earned, They save their money all their lives via contributions from their hard earned pay with the agreement that at the retirement age they can start withdrawing from the pension fund.

    Who are you to denie people their retirement? Either way they are cost neutral to the State, ITS THEIR BLOODLY MONEY IN THE PENSION PLAN NOT THE TAX PAYERS.

    This is no different then me voting to disallow people from accessing their 401K accounts so long as they are employed anywhere. It would be a vile miscarriage of justice, No different then the vile miscarriage of justice you are advocating for.

    You sir disgust me.

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  22. You also forget what retirement plans are all about. They are intended to provide funds when workers can no longer work or working becomes too difficult. It's called retiring with dignity. But you would like to pervert this system by allowing state employees to retire in their early 50s and then get rehired AND collect retirement (double dipping). That defeats the whole purpose of retirement plans in the first place which is to provide income when the worker is no longer able to earn income or has a difficult time doing so. Early 50s is way too early to retire with dignity unless the worker is physically unable to work. In this case, they wouldn't be rehired anyway.

    If state employees want to continue to work, fine. Just don't collect retirement until you are ready to retire with dignity.

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  23. Go to the following link.

    http://www.urs.org/urs4emp/pdf/contribution_rates1011_pr.pdf

    This URS document shows that state/local employees do not pay into their own retirement system. Taxpayers do. Nearly all state/local employees are on the non-contributory system. Here are the contribution rates according to URS

    employer/taxpayer: 16.32%/13.37%
    employer: 0%

    You can argue that these funds belong to the employee, but that's a strawman argument. I've argued that these funds come from taxpayers. URS proves me right.

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  24. Typo in last post. Should read

    employee: 0%

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  25. Clearly you are unable to read, as that document shows numbers above 0% in the employee column in all places it should.

    Second the employer match amount is just another form of compensation, after its transferred to the employee on their paycheck its no longer tax payer money. Or in other words the pension is 100% funded by the employee just as I said.

    And no this isn't about some gilded age idea of retiring when you body is to broken to be useful anymore. This is peoples savings, This is their hard earned money, And you want to steal it from them, You want to take from them what they have justly and rightly earned for the purpose of lowering the employer matching amount enough to lower your own taxes.

    Your angry that your retirement isn't as good, and having that "fairness" streak in yea you want make everyone the same as yourself. If your 401k had the weed eater taken to it in 2007 then you want the weed eater taken to peoples pensions under some perverted belief that it will make you the same.

    You only consider the ends and not the means when making the choices of what you wish todo. Theft, Lieing, Manipulation, Perverting skewing Statistics are all acceptable for you if you get what you want.

    You buy into the pension reform scam when the State legislature uses a return rate of only 3% to lie about the cost of the pension plan, Knowing full well that it was over 80% funded even at the very bottom of the crash putting it well in the safe range.

    You buy into the scam that the 8% withheld from the employee's paycheck and matched upto 5% by the state isn't their money, that it somehow doesn't count just because it doesn't fit into your perspective of the world. I have seen the paycheck stubs I work with people covered by the States pension system.

    You ignore the fact that in many State positions such as police and fire related jobs that retirement often occurs at an earlier age and this is where a good chunk of that rehiring under a paper jocky job turn over comes from.

    Your the worst type of con artist you have bought your own con.

    Btw, It appears that the employee contribution and the employer matching amount of the employee contribution are marked as employer contributions in their reports. It appears that the accountants don't track the difference at URS(probably because they simply receive a simple lump some for each person rather then an itemized payment), the differences where listed instead refer to 401K, IRA's, etc.

    The report and others at the URS site also are not exclusive to State employee's, all local/district employee's are in their to and that is why the numbers are less even the contribution amounts for each local/district employer varies. Particularly the firefighter and police pensions as their contributions are larger and they are able to retire after only 20 years and not the standard 35, this group also makes up over 80% of your double dippers.

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  26. Most Utah retirees are in the non-contributory. Essentially everyone hired after the mid 80s is in that system, and that means they are not paying into it. The taxpayers are. Most public employees are decent people, but people like you who refuse the acknowledge that taxpayers fund your retirement give the impression that public employees are ungrateful for what they get. I understand that most are grateful, but a handful like you are not.

    You are pretty relentless on the personal attacks and strawman arguments. This discussion began on whether or not URS is funded by employees or taxpayers. Here are the facts:

    1. Most Utah government employees are in non-contributory.
    2. Employee share of non-contributory is 0%.

    Case closed on that issue.

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  27. Everyone knows that URS is worse off than the 80% funding figure that you cite. Even 80% is bad, but the situation is worse considering that URS has been using an unrealistically high discount rate (was 8%, now 7.75%) to discount future liabilities. Moreover, since URS uses a five-year window to smooth out asset loses, the current funding ratio does not yet reflect the recent losses. Once that happens, the already low 80% figure will be even lower.

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  28. So you really think government employees are "entitled" to the following:

    - "retire" at age 52 with pension worth 60% annually of their best paying years

    - get rehired at full salary

    - have 16.32% of their income place into a 401(k) at taxpayer expense

    That's pretty rich for public servants, especially considering how secure public sector jobs are. Most private sector employees will have to change jobs, get laid off or fear getting laid off, or work for a company that goes out of business.

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  29. Also, quit lying about stealing state employees' hard-earned money. Last year's reforms don't impact retirement of current state employees (except for the egregious double dipping part). The reforms impact new hires.

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