Thursday, May 24, 2018

Addressing Illinois’ Pension Debt Crisis with Reamortization (from the Center for Tax and Budget Accountability)

"Illinois' five state pension systems face a debt crisis after years of intentional borrowing from state contributions. The crisis is compounded by a back loaded repayment plan that calls for unrealistic, unsustainable state contributions in future years, putting funding for crucial public services at risk. Because the crisis is about debt, rather than benefits being earned by current and future employees, attempts to solve the problem through benefit cuts have failed. CTBA proposes resolving the pension debt crisis by re-amortizing our payment schedule, creating a sustainable, level-dollar plan that saves the state $67 billion and gets the pension systems 70 percent funded by 2045. To bridge the higher contributions called for in the first several years of the re-amortization plan, CTBA suggests using bonds to ensure current services do not have to be cut."

Monday, May 21, 2018

U.S. Supreme Court Decision Delivers Blow to Workers' Rights

In a case involving the rights of tens of millions of private-sector employees, the U.S. Supreme Court, by a 5-4 vote, delivered a major blow to workers, ruling for the first time that workers may not band together to challenge violations of federal labor laws.

“Writing for the majority, Justice Neil Gorsuch said that the 1925 Federal Arbitration Act trumps the National Labor Relations Act and that employees who sign employment agreements to arbitrate claims must do so on an individual basis — and may not band together to enforce claims of wage and hour violations.

“‘The policy may be debatable but the law is clear: Congress has instructed that arbitration agreements like those before us must be enforced as written,’ Gorsuch writes. ‘While Congress is of course always free to amend this judgment, we see nothing suggesting it did so in the NLRA — much less that it manifested a clear intention to displace the Arbitration Act. Because we can easily read Congress's statutes to work in harmony that is where our duty lies.’ 

Ginsburg dissents: 

“Justice Ruth Bader Ginsburg, writing for the four dissenters, called the majority opinion ‘egregiously wrong.’ She said the 1925 arbitration law came well before federal labor laws and should not cover these ‘arm-twisted,’ ‘take-it-or-leave it’ provisions that employers are now insisting on.

“She noted that workers' claims are usually small, and many workers fear retaliation. For these reasons, she said, relatively few workers avail themselves of the arbitration option. On the other hand, these problems are largely by a class action suit brought in court on behalf of many employees.

“The inevitable result of Monday's decision, she warned, will be huge under enforcement of federal and state laws designed to advance the well-being of vulnerable workers. It is up to Congress, she added, to correct the court's action.

“In his oral announcement, Gorsuch took the unusual step of elaborately rebutting Ginsburg's dissent, which is five pages longer than the majority's opinion. 

A green light for employers: 

“The ruling came in three cases — potentially involving tens of thousands of nonunion employees — brought against Ernst & Young LLP, Epic Systems Corp. and Murphy Oil USA Inc.

“Each required its individual employees, as a condition of employment, to waive their rights to join a class-action suit. In all three cases, employees tried to sue together, maintaining that the amounts they could obtain in individual arbitration were dwarfed by the legal fees they would have to pay. Ginsburg's dissent noted that a typical Ernst & Young employee would likely have to spend $200,000 to recover only about $1,900 in overtime pay.

“The employees contended that their right to collective action is guaranteed by the National Labor Relations Act. The employers countered that they are entitled to ban collective legal action under the Federal Arbitration Act, which was enacted in 1925 to reverse the judicial hostility to arbitration at the time.

“Employment lawyers were elated. Ron Chapman, who represents management in labor-management disputes, said he expects small and large businesses alike to immediately move to impose these binding arbitration contracts in order to eliminate the fear of costly class action verdicts from juries. ‘It gives employers the green light to eliminate their single largest employment law risk with the stroke of a pen,’ he said. 

Implications for #MeToo: 

“Labor law experts said Monday's decision likely will present increasing problems for the #MeToo movement, and for other civil rights class actions claiming discrimination based on race, gender and religion. There is no transparency in most binding arbitration agreements, and they often include non-disclosure provisions. What's more, class actions deal with the expense and fear of retaliation problems of solo claims. As Ginsburg put it, ‘there's safety in numbers.’

“Yale Law professor Judith Resnick observed that the decision applies to all manner of class actions. ‘What this says is that when you buy something, use something, or work for someone, that entity can require you to waive your right to use public courts,’ she noted.

“Cornell University labor law professor Angela Cornell expects the number of these litigation waivers to skyrocket now. ‘What we see is the privatization of our justice system,’ she said.

“A study by the left-leaning Economic Policy Institute shows that 56 percent of nonunion private-sector employees are currently subject to mandatory individual arbitration procedures under the 1925 Federal Arbitration Act, which allows employers to bar collective legal actions by employees.

“The court's decision means that tens of millions of private nonunion employees will be barred from suing collectively over the terms of their employment" (NPR, May 21, 2018). 

“If Trump were serious about lowering drug prices he’d have to take on the U.S. drug manufacturers”—Robert Reich

“Trump promised to rein in drug prices. It was his only sensible campaign promise. But the plan he announced Friday [May 11th] does little but add another battering ram to his ongoing economic war against America’s allies. He calls it ‘American patients first,’ and takes aim at what he calls ‘foreign freeloading.’ The plan will pressure foreign countries to relax their drug price controls.

“America’s trading partners ‘need to pay more because they’re using socialist price controls, market access controls, to get unfair pricing,’ said Alex Azar, Trump’s Secretary of Health and Human Services, who, perhaps not incidentally, was a former top executive at the drug maker Eli Lilly and Company. By this tortured logic, if other nations allow drug companies to charge whatever they want, U.S. drug companies will then lower prices in the United States. This is nonsensical. It would just mean more profits for U.S. drug companies. (Revealingly, the stock prices of U.S. pharmaceutical companies rose after Trump announced his plan.)

“While it’s true that Americans spend far more on medications per person than do citizens in any other rich country – even though Americans are no healthier – that’s not because other nations freeload on American drug companies’ research. Big Pharma in America spends more on advertising and marketing than it does on research – often tens of millions to promote a single drug. The U.S. government supplies much of the research Big Pharma relies on through the National Institutes of Health. This is a form of corporate welfare that no other industry receives.

“American drug companies also spend hundreds of millions lobbying the government. Last year, their lobbying tab came to $171.5 million, according to the Center for Responsive Politics. That’s more than oil and gas, insurance, or any other American industry. It’s more than the formidable lobbying expenditures of America’s military contractors. Big Pharma spends tens of millions more on campaign expenditures. They spend so much on politics in order to avoid price controls, as exist in most other nations, and other government attempts to constrain their formidable profits.

“For example, in 2003, Big Pharma got a U.S. law prohibiting the government from using its considerable bargaining clout under Medicare and Medicaid to negotiate lower drug prices. Other nations with big healthcare plans routinely negotiate lower drug prices. During his campaign Trump promised to reverse this law. But the plan he revealed [on May 11th] doesn’t touch it. Trump’s plan seeks only to make it easier for private health insurers to negotiate better deals for Medicare beneficiaries.

“In reality, private health insurers don’t have anywhere near the clout of Medicare and Medicaid – which was the whole point of Big Pharma’s getting Congress to ban such negotiations in the first place. In the last few years, U.S. drug companies have also blocked Americans from getting low-cost prescription drug from Canada, using the absurd argument that Americans can’t rely on the safety of drugs coming from our northern neighbor – whose standards are at least as high as ours.

“Trump’s new plan doesn’t change this, either. To put all this another way, when Americans buy drugs in the United States, they really buy a package of advertising, marketing, and political influence-peddling. Consumers in other nations don’t pay these costs. Which explains a big part of why drug prices are lower abroad. Trump’s so-called plan to lower drug prices disregards this reality.

“Trump’s plan nibbles at the monopoly power of U.S. pharmaceutical companies, but doesn’t deal with the central fact that their patents are supposed to run only twenty years but they’ve developed a host of strategies to keep patents going beyond then. One is to make often insignificant changes in their patented drugs that are enough to trigger new patents and thereby prevent pharmacists from substituting cheaper generic versions.

“Before its patent expired on Namenda, its widely used drug to treat Alzheimer’s, Forest Labs announced it would stop selling the existing tablet form of in favor of new extended-release capsules called Namenda XR. Even though Namenda XR was just a reformulated version of the tablet, the introduction prevented generic versions from being introduced. Other nations don’t allow drug patents to be extended on such flimsy grounds. Trump’s plan doesn’t touch this ploy.

“Another tactic used by U.S. drug companies has been to sue generics to prevent them from selling their cheaper versions, then settle the cases by paying the generics to delay introducing those cheaper versions. Such ‘pay-for-delay’ agreements are illegal in other nations, but antitrust enforcement hasn’t laid a finger on them in America – and Trump doesn’t mention them although they cost Americans an estimated $3.5 billion a year.

“Even after their patents have expired, U.S. drug companies continue to aggressively advertise their brands so patients will ask their doctors for them instead of the generic versions. Many doctors comply. Other nations don’t allow direct advertising of prescription drugs – another reason why prices are lower there and higher here. Trump’s plan is silent on this, too. (Trump suggests drug advertisers should be required to post the prices of their drugs, which they’re already expert at obscuring.)

“If Trump were serious about lowering drug prices he’d have to take on the U.S. drug manufacturers. But Trump doesn’t want to take on Big Pharma. As has been typical for him, rather than confronting the moneyed interests in America he chooses mainly to blame foreigners.”

Robert B. Reich is the Chancellor’s Professor of Public Policy at the University of California at Berkeley and was secretary of labor in the Clinton administration. This article is from 

Sunday, May 20, 2018

“We Should Not Have This in Common” by John Dillon

“…Number 45 promises that this will and must stop, but other than finding a moment to make it all about himself (Remember Parkland: ‘I think I would have run in there and stopped the shooter, really, I do.’): he’ll do nothing…

“And so, we stumble along as a nation playing this pattern of horror to surprise; to thoughts and prayers; to blaming the mentally ill, students themselves, the number of doors in a school; to START OVER. 


“Scientific American produced a careful exegesis/study of what guns specifically do in our country and how such weapons alter our lives.  It’s a very worthy and sobering read. 

“Since Wayne LaPierre and Grover Norquist and the K Street lobbyists have fallen like a hard rain on Washington’s willing swamp-dwellers, the numbers of Gun related deaths from increased ownership of guns have not changed in many ways – EXCEPT ONE…”

For the complete article, click here.