Jonathan Kantrowitz

A new CBO report issued today says that the current reconciliation bill will save $130 billion!

The Christian Science Monitor has more on the story:

The long-awaited CBO report appears to be a big boost to House Democrats in a sprint to get healthcare reform wrapped up, as soon as this week.

“It is the largest deficit reduction measure in 25 years, since Clinton’s budget in 1993, which ushered in the great economy of the 1990s,” says House majority leader Steny Hoyer.

Many Democrats – from fiscal and social conservatives on the right of the caucus to progressives on the left – have had serious concerns about the Senate version of the bill – even with a package of “fixes.”

But for many conservatives in the caucus, the biggest obstacle was the overall cost of the bill – and claims that it would significantly expand the reach of government into one-sixth of the economy. The CBO, in its forthcoming report, sets the 10-year cost of the bill at $940 billion, but with offsets and cost savings higher than expected.

“The CBO score adds to the momentum,” says Ralph Neas, CEO of the National Coalition on Health Care, a pro-reform group. “A lot of people thought that the new CBO score could be a setback. They were expecting the numbers to be bad, and these are much better than expected.”

* Read the report: Barely Hanging On: Middle-Class and Uninsured

The two recessions that Americans have weathered in the first decade of the 21st century have taken a tremendous toll on people’s ability to afford health insurance—and employers’ capacity to offer it. A new report from the nonpartisan Robert Wood Johnson Foundation (RWJF), documents that while the situation has been tough for everyone, it’s America’s middle class that has been hardest hit.

The report shows that the number of middle-income earners who obtained health insurance from their employers dropped by 3 million people from 2000 to 2008. Just 66 percent of people in families earning roughly $45,000 to $85,000 are now insured through their employer—a drop of seven percentage points from 2000 to 2008.

Employer-sponsored insurance (ESI) has long been the mainstay of health coverage for middle-class families, who typically do not qualify for government insurance programs. Among middle-income Americans, only about half of the decline in employer-sponsored coverage from 2000 to 2008 was offset by government insurance programs. For people who earned less money, declines in ESI were even steeper, but those numbers were mostly offset by increases in coverage through government insurance programs like Medicaid.

The result is that America’s middle-class became uninsured at a pace faster than those with less or more income. In total, 13 million middle-income earners were uninsured in 2008—about 2 million more than in 2000.

“America’s uninsured crisis means that hard-working people with average incomes are being squeezed,” said Risa Lavizzo-Mourey, M.D., M.B.A., president and CEO of the Robert Wood Johnson Foundation. “The fallout from rising health insurance costs hits everyone. Employers must choose between either passing on costs to workers who cannot afford the increase and therefore drop coverage, or paying more for their employees’ coverage at the cost of creating and preserving jobs.”

The most recent estimates from the U.S. Census Bureau indicate that 46.3 million people are uninsured, but these figures were compiled before the downturn in the current economy. Experts assume millions more have become uninsured since the 2008 data, due to job loss and rising costs of health insurance since that time.

The report released today—Barely Hanging On: Middle-Class and Uninsured—chronicles state-by-state health coverage trends. In the first decade of this century, nearly every state has seen increased numbers of uninsured residents, greater costs for individual and family policies for health insurance and significant erosion in private coverage. The report was prepared by the State Health Access Data Assistance Center (SHADAC) at the University of Minnesota. Researchers averaged data from the U.S. Census Bureau from 1999/2000 and 2007/2008 and data from the U.S. Department of Health and Human Services. The report shows:

* More middle-class Americans are uninsured.
Nationwide, the total number of uninsured, middle-class people increased by more than 2 million since 2000, to12.9 million in 2008.
* The average employee’s costs for health insurance rose, while income fell.
Nationwide, the average cost an employee paid for a family insurance policy rose 81 percent from 2000 to 2008. During the same period, median household income fell 2.5 percent (adjusted for inflation).
* Fewer people were offered, eligible for, or accepted insurance coverage through their jobs.

As costs of health insurance premiums rose, some employers stopped offering coverage benefits to employees, or changed the criteria for employees’ eligibility. While most employers still paid the lion’s share of their employees’ insurance premiums, rising costs have been passed on to workers—with some choosing to drop insurance.

Nationwide, the percentage of people who worked for firms that did not offer insurance increased to 12 percent in 2008. The number of workers who were ineligible for ESI—even though their employer offered it—was 22 percent in 2008. That means more than one in five people who work in firms that offer health insurance weren’t eligible for the benefit. And the percentage of employees nationwide who did not accept ESI increased three percentage points since 2000; 21 percent of employees offered ESI in 2008 did not accept.

“The facts show that everyone is suffering right now, regardless of income,” said Lavizzo-Mourey. “For middle-class families, changes in the cost of insurance far outweigh changes in income. That means a bigger piece of the household budget must go to insurance, or families have to go without coverage, delay needed care and face bankruptcy if anyone in the family gets seriously ill. Business owners can’t afford to shoulder more of the burden of health care costs. And states can’t afford the influx of laid-off workers into public programs. It’s a crisis in need of solutions.”

A new Q poll has these numbers for Governor: Among Democrats, 44 percent of voters are undecided, while businessman Ned Lamont gets 28 percent to Stamford Mayor Dan Malloy’s 18 percent. No other candidate tops 4 percent.

On the Republican side, Foley has emerged as a leader in the primary campaign with 30 percent, but 50 percent are undecided. No other candidate tops 4 percent. Like Linda McMahon, Tom Foley is the only candidate for governor who is on TV, which helps him break away from the Republican pack. Even Foley, however, is largely unknown to Republicans and the big winner is still undecided,.

Secretary of State Susan Bysiewicz leads the Democratic primary for Attorney General with 54 percent, followed by former State Sen. George Jepsen at 10 percent, with no other candidate topping 2 percent and 31 percent undecided.

Undecided gets 66 percent of the Republican vote, with 13 percent for State Sen. Andrew Roraback and no other candidate above 9 percent.

Lamont gets a 43 – 13 percent favorability among Democrats, with 42 percent who don’t know enough about him to form an opinion.

Bysiewicz gets a 59 – 10 percent favorability among Democrats, with 29 percent who don’t know enough.

For all other candidates for Governor or Attorney General, the “don’t know enough about them” number among voters in their own party is 55 percent or higher.

NETWORK, A National Catholic Social Justice Lobby, released the text of a letter to Congress supporting healthcare legislation from organizations and communities representing tens of thousands of Catholic Sisters. This letter (text below), which is being delivered to each Member of Congress, comes just days after a statement in support of passing healthcare reform by the Catholic Health Association.

This is the text of the letter sent to all Members of Congress:

Dear Members of Congress:

We write to urge you to cast a life-affirming “yes” vote when the Senate health care bill (H.R. 3590) comes to the floor of the House for a vote as early as this week. We join the Catholic Health Association of the United States (CHA), which represents 1,200 Catholic sponsors, systems, facilities and related organizations, in saying: the time is now for health reform AND the Senate bill is a good way forward.

As the heads of major Catholic women’s religious order in the United States, we represent 59,000 Catholic Sisters in the United States who respond to needs of people in many ways. Among our other ministries we are responsible for running many of our nation’s hospital systems as well as free clinics throughout the country.

We have witnessed firsthand the impact of our national health care crisis, particularly its impact on women, children and people who are poor. We see the toll on families who have delayed seeking care due to a lack of health insurance coverage or lack of funds with which to pay high deductibles and co-pays. We have counseled and prayed with men, women and children who have been denied health care coverage by insurance companies. We have witnessed early and avoidable deaths because of delayed medical treatment.

The health care bill that has been passed by the Senate and that will be voted on by the House will expand coverage to over 30 million uninsured Americans. While it is an imperfect measure, it is a crucial next step in realizing health care for all. It will invest in preventative care. It will bar insurers from denying coverage based on pre-existing conditions. It will make crucial investments in community health centers that largely serve poor women and children. And despite false claims to the contrary, the Senate bill will not provide taxpayer funding for elective abortions. It will uphold longstanding conscience protections and it will make historic new investments – $250 million – in support of pregnant women. This is the REAL pro-life stance, and we as Catholics are all for it.

Congress must act. We are asking every member of our community to contact their congressional representatives this week. In this Lenten time, we have launched nationwide prayer vigils for health care reform. We are praying for those who currently lack health care. We are praying for the nearly 45,000 who will lose their lives this year if Congress fails to act. We are also praying for you and your fellow Members of Congress as you complete your work in the coming days. For us, this health care reform is a faith mandate for life and dignity of all of our people.

We urge you to vote “yes” for life by voting yes for health care reform in H.R. 3590.

Sincerely,

Marlene Weisenbeck, FSPA
LCWR President
Leadership Conference of Women Religious

Joan Chittister, OSB
Co-Chair Global Peace Initiative of Women
Erie, PA

Sr. Mary Persico, IHM
President
Congregation of the Sisters, Servants of the Immaculate Heart of Mary,
Scranton, PA

Sr. Susan Hadzima, IHM
Councilor for Missioning and Community Life
Sisters, Servants of the Immaculate Heart of Mary,
Scranton, PA

Mary Genino (RSHM)
Religious of the Sacred Heart of Mary
Western American Province.

Nancy Conway CSJ
Congregation Leadership Team
The Congregation of St. Joseph

Debra M. Sciano, SSND
Provincial Leader
Milwaukee Province, School Sisters of Notre Dame

Josephine Gaugier, OP
Adrian Dominican Sisters
Holy Rosary Mission Chapter Prioress
Adrian, MI

Kathleen Nolan, OP
Adrian Dominican Sisters
Office of the General Council

Marlene Weisenbeck, FSPA
President
Franciscan Sisters of Perpetual Adoration
La Crosse, WI

Corinne Weiss
Servants of Jesus Leadership Team
Saginaw MI

Adrian Dover OP
Prioress
Dominican Sisters of Houston, Texas

Rose Mary Dowling, FSM
President
Franciscan Sisters of Mary

Leadership Team
Sisters of Charity of the Blessed Virgin Mary
(from Mary Martens, BVM, Administrative Assistant)

Beatrice Haines, OLVM
President, Our Lady of Victory Missionary Sisters
Huntington IN

Joan Saalfeld, SNJM, Provincial
Sisters of the Holy Names of Jesus and Mary
U.S.-Ontario Province

Jo’Ann De Quattro, SNJM
Sisters of the Holy Names
U.S.-Ontario Province Leadership Team

Sharon Simon, OP
President
Racine Dominicans

Maryann A. McMahon, O.P.
Vice President
Dominican Sisters of Racine, WI

Agnes Johnson, OP
Vice President
Racine Dominicans

Pat Mulcahey, OP
Prioress of Sinsinawa Dominicans

Pam Chiesa, PBVM
President
Sisters of the Presentation, San Francisco

Patricia Anne Cloherty, PBVM
Leadership Team, Sisters of the Presentation, San Francisco

Gloria Inés Loya
Leadership Team
Sisters of the Presentation, San Francisco

Gloria Marie Jones, OP
Dominican Sisters of Mission San Jose
Congregational Prioress and Council

Mary Litell
Provincial Councilor
Sisters of St. Francis of Penance and Christian Charity St. Francis Province

Theresa Sandok, OSM
Servants of Mary (Servite Sisters)
Ladysmith, Wisconsin

Sr Claire Graham SSS
General Director
Sisters of Social Service
Encino CA

Margaret Byrne CSJP – Congregation Leader
Teresa Donohue CSJP – Assistant Congregation Leader
Sisters of St. Joseph of Peace

Sr. Carmelita Latiolais, S.E.C.
Sisters of the Eucharistic Covenant

Joan Mumaw, IHM – Vice President
On behalf of the Leadership Council
Sisters, Servants of the Immaculate Heart of Mary
Monroe, Michigan

Sister Clare of Assisi Pierre, SSF
Sisters of the Holy Family
New Orleans, LA

Sister Marla Monahan, SND
Provincial
Sisters of Notre Dame
(St. Claire Regional Medical Center in Morehead, KY
and St. Charles Care Center in Covington, KY)

Vivien Linkhauer, SC
Sisters of Charity of Seton Hill, United States Province
Greensburg, PA

Dolores Maguire
Sisters of the Holy Faith
Northern California LCWR Region XIV

Sr. Mary Elizabeth Schweiger, OSB
Subprioress
Mount St. Scholastica
Atchison, KS

Marianites of Holy Cross
Sr. Suellen Tennyson, MSC
Congregational Leader

Barbara Hagedorn, SC
Sisters of Charity of Cincinnati
Mt. St. Joseph, Ohio

Francine Schwarzenberger OP
Dominican Sisters of Peace
Denver, Colorado

Sister Maureen McCarthy
School Sisters of St. Francis
U.S. Provincial Team
Milwaukee, WI

Eileen C. Reid, RJM
Provincial Superior
Religious of Jesus and Mary
Washington DC

Sister Cecilia Dwyer, O.S.B.
Prioress
Benedictine Sisters of Virginia

The Congregation of Sisters of St. Agnes
Sister Joann Sambs, CSA
General Superior

Sisters of St. Francis
Tiffin, Ohio
(from Sr. Mary Kuhlman)

Sr. Helen McDonald, SHCJ
Province Leader
Society of the Holy Child Jesus

Leadership Team
Sisters of the Precious Blood
Dayton, OH

The Leadership Team of the Sisters of St. Joseph of the Third Order of St. Francis
Sister Jane Blabolil, SSJ-TOSF
Sister Michelle Wronkowski, SSJ-TOSF
Sister Dorothy Pagosa, SSJ-TOSF
Sister Linda Szocik, SSJ-TOSF

Sr. Gladys Guenther SHF
Sisters of the Holy Family
Congregational President
Fremont, CA

Sr. Dorothy Maxwell, Councilor
Sisters of St. Dominic
Blauvelt New York

Sheral Marshall, OSF
Provincial Councilor
Sisters of St Francis

Marilyn Kerber, SNDdeN
Canonical Representative, Ohio Province

Sisters of St. Louis, California Region
(from Sr. Michele Harnett, SSL)

Ruth Goodwin, OSF
Sisters of ST. Francis of Philadelphia

Sisters of Mercy of the Americas Leadership Team

Sr. Joanne Buckman, OSU
Ursuline Sisters of Cleveland

The Senate on Wednesday passed the Hiring Incentives to Restore Employment Act (HR 2847). The bill passed the House on March 4, and now goes to President Barack Obama for his signature.

The bill contains several tax items, the biggest of which is a payroll tax credit for employers who hire workers who have been unemployed for at least 60 days and who are not replacement hires. For qualifying new employees hired after Feb. 3, 2010, and before Jan. 1, 2011, the employer can claim a credit equal to the employer’s share of Social Security taxes on wages paid in 2010. The bill also provides a credit of $1,000 for employers who retain such employees for at least 52 weeks.

Senator Chris Dodd (D-CT) issued the following statement today after the Senate passed the Hiring Incentives to Restore Employment (HIRE) Act. “Getting Americans back to work in stable, good-paying jobs is our highest priority,” said Dodd. “The HIRE Act is the first in a series of bills that will create jobs for American workers and get our economy back on the right track. This bill will ensure transportation projects can continue to move forward, and it creates incentives for businesses to hire more workers.”

The HIRE Act will also allow small businesses to write off more of their expenditures; extend transportation programs to rebuild the nation’s infrastructure; and expand the successful Build America Bonds program, so state and local governments can more easily finance infrastructure projects.

Congresswoman Rosa DeLauro (CT-3) announced the specific benefits that health care reform will bring to the citizens of Connecticut’s 3rd District today.

The health reform legislation pending in Congress will ensure that quality, affordable health care is available to every American, and will hold insurance companies accountable and end the unfair practices of denying coverage because of a pre-existing condition, raising premiums, and imposing lifetime coverage limits. This plan will put Americans and small businesses back in control of their health care choices, and help reduce the sky-rocketing cost of health costs. Ultimately, this bill will fix our broken health care system and expand coverage to more 30 million Americans who currently cannot afford it.

Here are just some of the benefits the citizens of Connecticut’s 3rd District will see from this reform:

· 467,000 residents will see improvements in their current health care coverage.

· Up to 136,000 families will get tax credits to help make health insurance more affordable.

· 7,700 residents with pre-existing conditions will be able to obtain coverage.

· Up to 15,400 small businesses will get tax credits to help make health insurance more affordable for their employees.

· 58,000 young adults will be able to stay on their parents’ health insurance policy until their 26th birthday.

· 19,500 currently uninsured citizens will have access to health care coverage.

· 1,000 families won’t have to file for bankruptcy due to unaffordable health care costs.

· 47 community health centers will receive millions of dollars in new funding to see thousands of new patients.

Congresswoman DeLauro said, “With this legislation, we have begun to wrest power away from insurance company bureaucrats and give it back to people and their doctors. The Republicans have shown where they stand by voting in the Budget Committee to allow the insurance companies to continue to discriminate against those with pre-existing conditions, to drop your coverage because you get sick, or to arbitrarily raise your premiums. They stand with the insurance companies, when they should be voting to hold these insurance companies accountable and ensure that every family has access to quality, affordable health insurance.

“Our health reforms will do a lot of good for a lot of people, all the while working to reduce the costs of health insurance for all American families. This bill will put health care decisions where it belongs—back in the hands of American people, not the government or the insurance companies. Thousands of my constituents and millions across the country will see the benefits of this bill, and I am proud to have fought for it and I look forward to it seeing it become law.”

by Jeffrey Laurenti, senior fellow and director of foreign policy programs at The Century Foundation, a public policy research organization.

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“It’s time to take a stand,” economics Nobel laureate and New York Times commentator Paul Krugman advises this week. “Something must be done.”

No, Krugman is not talking about health care reform this time. He is calling for action against a threat to global economic recovery as dire as the creative schemes for financial destruction he regularly rails against Wall Street for hatching.

This threat, he says, is hatched from abroad: the Chinese government’s policy of keeping its currency, the renminbi, immovably pegged to the dollar – and grossly undervalued. And Krugman is not alone.

Even the most dedicated free-trade economists are alarmed. Columbia University economist Jagdish Bhagwati calls for “people’s feet being held to the fire” by an International Monetary Fund empowered to deal with willful currency misalignment, according to a Times dispatch from Hong Kong reporting on Beijing’s skillful use of “inconsistencies in international trade rules to spur its own economy at the expense of others.”

John Williamson and William Cline of the Peterson Institute for International Economics warn that “China has again begun to ride the dollar down,” using an artificially low exchange rate for the renminbi to gain a huge price advantage for Chinese goods in international markets-effectively a price discount on their goods, they calculate, of up to 40 percent.

One consequence is the rebound in the Chinese economy after the 2008 economic meltdown stabilized last year – it expanded an astonishing 8.7 percent, and manufacturing employment has surged – while American job levels have stagnated. True, China’s own domestic stimulus spending deserves much of the credit; China’s exports have contracted with the collapse of Western consumption spending – but not nearly as much as U.S. manufacturing.

The massive economic imbalances between China and the United States that result, Williamson and Cline insist, “pose systemic threats” to the global economy. The director of their institute, Fred Bergsten, describes Chinese economic planners’ unshakable determination to keep the renminbi cheap as “an off-budget export and job subsidy” and laments the “devastating impact on the global trading system” from the continuing “currency misalignments.”

Chinese officials have been quick to cry “protectionism” whenever their currency-contrived conquest of American industries triggers demands for remedial measures in Washington. Their bark frightened off Bush administration officials already predisposed to unfettered free trade. But that dog may not hunt as readily in Obama’s Washington, where far less threatening trade measures are drawing skeptical scrutiny now that labor unions have a seat at the trade table.

The administration, rightly, does not want to undermine the architecture of the painstakingly constructed international trading system, where impartial multilateral panels adjudicate charges of unfair trade practices. But it can and should find a way to support initiatives that roll back currency misalignments that fuel unsustainable imbalances. The IMF scrupulously and impartially collects the relevant economic data; those data provide the basis for compensatory measures.

In a rare example of bipartisan initiative in our filibuster-snarled Senate, two Democratic senators, Max Baucus and Charles Schumer, and two Republican colleagues, Lindsey Graham and Charles Grassley, have been pressing legislation to correct currencies that are in “fundamental misalignment.” As Krugman suggests, a carefully calculated currency correction (he estimates, in the China case, 25 percent) – imposed as a surcharge based on IMF data on products from countries incapable of rectifying their currency imbalances – can help fix the problem.

Chinese officials may be tempted to contest such an initiative in a World Trade Organization tribunal rather than respond constructively to the invitation to correct the currency misalignment. The United States can strengthen its case before international public opinion if it dedicates any revenues realized from a currency surcharge not to its own industries or its government budget, but to development projects of the World Bank or United Nations agencies.

In a mano-a-mano test of wills with China’s economic policymakers (who may be counting on stealth allies in American business that have invested heavily in outsourcing production to China), gestures like the use of currency surcharge revenues can make a difference. After all, this is not simply a Chinese-American wrangle. Many other countries have a stake.

The Europeans and countries throughout the developing world are deeply concerned about China’s manufacturing steamroller, powered by its currency discount – just as they are by Chinese obduracy in rejecting any limits on climate-change emissions. China’s leaders risk unifying the international community against them in the economic arena as thoroughly as high-handed American conduct in the political sphere once isolated the United States. The Obama administration should not let this opportunity slip.

Mike Fedele has a plan.

Here’s his plan it its entirety – hard to believe some of these ideas are practicable, especially changing existing contractual arrangements with state employees, and even if he accomplishes all, (including $3 Medicaid co-pays!) it won’t come near covering the $4 billion deficit – but read his lips – he’s promising no new taxes:

 Imposing a Four-Year Hiring Freeze. Institute a hiring freeze for every department and every agency with no exceptions or exemptions without my written approval. There are currently approximately 80,000 full and part-time state government employees.

 Proposing legislation to bring oversight of UConn/CSU hiring practices under executive control. A majority of all new State hires since July 1st have been in higher education. We simply cannot afford unlimited and unrestricted hiring in public higher education. We’ve made significant investments in UConn 2000, 21st Century UConn and a similar program for the CSU system. We need to bring their hiring practices under Executive oversight – and hold them to the same “essential-hires-only” standards as other Executive branch agencies; for example, restricting new hires to classroom-only staff.

 Imposing a Four-Year Spending Freeze. Our government must live within its means just like Connecticut families do. Most families in Connecticut have seen their incomes decline during this recession, while state government costs have grown to unsustainable levels. We are at a tipping point. We cannot continue to ignore the fact that government’s expenses exceed its revenues.

 Proposing a Two-Year Moratorium on All But Essential Borrowing. The budget put in place last fall by the Legislative majority raised taxes and required borrowing of nearly $1 billion. This prompted Connecticut’s credit outlook to drop – potentially costing Connecticut taxpayers $80 million per year. I will prohibit all but essential state borrowing for two years and thereafter approve only what the state can afford to pay back. Only essential bonding – for public safety, health, education and borrowing necessary to complete prior multi-year projects – would be permitted, in addition to economic development projects that create net new jobs.

 Eliminating all Earmarks. I will replace local pork projects with a competitive process that requires demonstration of state-wide benefits and jobs. We should not be borrowing funds and paying them back over twenty years for municipal skate parks, community festivals, gazebos and other local projects. These projects should be funded more appropriately with local resources. Long-term bonding should be reserved for water treatment facilities, school construction and similar large infrastructure projects that demonstrate their benefits over the twenty year period of the bonding.

 Eliminating “Discretionary” Funds in the State Budget. I will take steps to make sure that projects for local legislators are no longer doled out by legislative leaders because they have “discretionary” money from a budget deal. Discretionary funds belong to the taxpayers not the politicians.

Restructuring State Employee Pensions, Salaries and Practices Can No Longer be Deferred

As Governor I will negotiate state employee benefits so they are more in line with those in the private sector. Quite simply, state employees should not enjoy benefits that far exceed those available to the average working person in our state.
Pensions, salaries and practices are important issues to state employees and as Governor I will assure that restructuring efforts are justifiable, equitable, and workable and have a meaningful influence on the state budget.

 Pensions. The state employee pension system is dangerously underfunded by $9.3 billion, while $1.26 billion is being paid annually to 42,414 state retirees. Connecticut was ranked the fifth-worst state in the nation for underfunding its state pension. If left unchecked, unfunded pension liability will have significant consequences for taxpayers. It’s the equivalent to a ticking time bomb – and the clock is ticking.

As a result, I propose that all new employees be enrolled in a defined contribution plan (401k) as opposed to the current pension plan. For existing employees:

o Cap current defined benefits at $150,000 of salary that can be used toward the defined benefit calculation. Any salary over $150,000 would go toward a defined contribution plan (401K). Some state employees earn in excess of $400,000 per year.
o Prohibit the use of overtime and longevity pay in calculating salary for purpose of defined benefit pension payout.
o Require that pension calculations be based on the three last year’s employment, not three highest years.

 Health Care. Connecticut currently spends $1 billion on active and retiree health insurance. The state is also responsible for future health insurance and other retiree benefits totaling $24.6 billion. The following cost-savings actions should be implemented:

o Retiree health insurance should be available only to those who reach full normal retirement while working for the state – not those who serve for 10 years and then leave for another job.
o Reform plan benefits to be aligned with private sector benefits
o Reform plan benefits to be more encouraging of healthy lifestyles and disease prevention.

 Work Practices/Schedules. Changes to state government work practices and schedules should be implemented to reduce payroll costs. Examples include:
o Change correctional officer schedules to match common practices in other states across the country. This alone will achieve estimated savings of $39 million annually.
o Reduce number of paid state holidays – which drives up overtime costs. Eliminating just one of the state’s 12 holidays would save $3.2 million annually (Lincoln’s Birthday, for example).
o Eliminate the mandate to use state police on road construction sites.

 Salaries. Modifications to state compensation programs and benefits should be reviewed for cost reducing potential including:
o Require coalition bargaining for salary increases (move unions onto same schedule and comparable percentage for increases. Also forces the state and arbitrators to deal with the full costs of increases for all full-time state employees as opposed to the current piecemeal approach).
o Eliminate longevity payments for State employees – which are bonus payments based on working for the State for ten years. State employees already get merit increases and cost of living increases each year that far outpace the rate of inflation. (State spends $43 million annually on state employee longevity payments).
o Reform sick and vacation accrual and payouts so retiring state employees don’t get windfall payments for unused sick and vacation time.

 Labor Process Changes. Contract negotiation methods and related issues should to be reassessed so that outcomes reflect a sound strategy for the long term and not a temporary fix that becomes an even bigger problem just a few years later:
o Require both chambers of the General Assembly to vote up or down on union contracts and provide the Governor the authority to veto them.
o Require arbitrators to consider the State’s ability to pay as a paramount concern in deciding contract awards.
o Require that arbitrators cannot factor in the Rainy Day Fund when considering the State’s ability to pay.
o Require arbitrators to consider the state’s constitutional spending cap in considering state’s ability to pay.
o Increase state’s ability to transfer and retrain people in a layoff situation in order to reduce workforce through attrition and avoid layoffs.

Making our Government More Efficient

As Governor, I will examine every aspect of state government to reduce wasteful spending and streamline state agency operations.

 Merge State Agencies. Many state agencies have similar missions and could be merged to achieve reductions in staff and leased office space – all state agencies should be evaluated for consolidation. Some examples include:
o DECD, CDA, CI – combine into one agency offering all existing programs through one point of contact. All of these agencies offer financial and technical assistance to employers.
o Agriculture – merge with Tourism (CT Grown), Consumer Protection (milk and farm regulation) and DEP (aquaculture –shellfish).
o Banking and Insurance – move to new “Department of Business Regulation.” While regulated industries pay costs of these agencies, the merger would reduce the cost of doing business in Connecticut and reduce the size of government.
o Combine Department of Education and Department of Higher Education.
o Eliminate the CSU central administration. All four state universities have presidents and individual administrations.

 Eliminate Inefficiencies in Government. Every common sense measure to eliminate inefficiencies in state government should be explored. The days of “this is the way we always did it” will be over. And the mindset that it’s too hard to do will have to change. Some examples include:
o Adopt best practices. For example, Corrections Re-entry programs to reduce recidivism enabled the closing of one prison. Connecticut still has statutory authority to send prisoners out of state to save money.
o Use technology to improve services and save money – government is the only entity that adopts new technology and then hires more people. The exact opposite should occur – technology is implemented to reduce staff.
o Approve master contracts with technology companies that offer one-stop shopping which will allow government to keep pace with changing technologies.
o Eliminate expensive office space leases. State government spends more than $60 million per year on leased properties. As the size of government is reduced, eliminate expensive leases by consolidating employees into state-owned space.

Reforming our Approach to Big Ticket Items Like School Construction and Human Services

Closing budget deficits will require systemic and fundamental changes to the structure and delivery of state programs.

 School Construction Process. The state’s local school construction program has been an important component in maintaining schools and has given towns the ability to construct schools for the 21st century. School construction accounts for 75 percent of all annual bonding (higher education and local school construction).
In FY 2009, the state borrowed $639 million for this program and is expected to borrow another $688 in FY 2010. I propose to make practical cost-saving changes to modify the program. While the following efforts will not have an immediate influence on the state budget, they will begin to drive down the state’s long term indebtedness.
o Require the Department of Education to develop standard architectural and engineering plans that can be adapted easily to different sites and sizes. This will avoid the state repaying for these services every time a town constructs a new school. Any additions or modifications to the standard plan would be the sole responsibility of the town.

Place a cap on how much the state can bond for school construction in any given year. No one can argue that a cap of $450 million is unreasonable and it will help restore our bond rating.

A cap may mean we can only afford to build fewer schools in a given year – the schools last in the pipeline would have to wait to start construction until the next year.

 Human Services Programs. Connecticut has a substantial social services network that provides services to the needy. A large percentage of the state’s budget is dedicated to these services and cannot be excluded from consideration of reducing budget expenses. Our Medicaid budget alone is close to $4 billion.

As mentioned earlier, the approach of being tough-minded must always be tempered by being responsible to those genuinely in need and I have no intention of harming elderly or poor individuals with high co-pays on prescription drugs.
Having said that, we should require cost sharing for certain Medicaid services as allowed under federal law. Forty-five states require $3 co-pays for certain medical services or prescriptions – or both. Connecticut is one of just five states that requires neither.

We should also identify where Connecticut is more generous than other states and determine if that is affordable. For example, Connecticut is one of only a few states that provide over-the-counter drugs to Medicaid recipients – a benefit that not even the best private health plans offer.

Just like we need to bring state pensions and benefits more in line with the private sector, we should review Medicaid services and bring them more in line with what other states provide.

One other example: private sector providers deliver quality services at half the cost of state-run services – group homes – and other facilities.

If we truly care about serving those in need – we should serve them as cost-effectively as possible so we can serve more of our neediest citizens with the scarce dollars we have.

I will also examine the budget to remove all earmarks in social services budgets. While these are well intentioned services, we cannot afford to provide certain towns with special benefits that are not available statewide. An example is the LEAP program, a $1 million earmark to provide youth services – an admirable goal – but is only available to one town. While these dollar figures are small, we must evaluate all possible budget cuts during this budget crisis.

New Haven will be thrilled to lose its great LEAP program just because no other city has it.