special guest column by Rep. John Garamendi

I want to vote for a comprehensive bipartisan plan to address the fiscal cliff. I’m willing to take a tough vote. I’m willing to make sacrifices. I’m willing to feel the heat. But I’m not willing to solve the fiscal cliff by throwing seniors over the cliff. I draw the line at cutting benefits in Medicare and Social Security.

This week, House Republicans unveiled their fiscal cliff counterproposal. While they continue to call for an extension of the Bush tax cuts for millionaires and billionaires, they propose offsetting this cost by gutting Medicare benefits, including raising the age of Medicare eligibility to 67. I won’t go there. As California’s Insurance Commissioner for eight years, I know this would be horrible policy, throwing millions of seniors into the rapacious hands of an insurance industry interested only in profits for its shareholders.

Medicare is a promise we made to seniors more than four decades ago. When President Johnson signed Medicare into law, one in three seniors lived in poverty. Half of seniors had no health coverage at all. Today, less than one in ten seniors live in poverty and almost all have guaranteed access to affordable coverage. With medical expenses as high as they are, that’s a remarkable improvement, and we have Medicare and Social Security principally to thank for it.

The seniors being kicked off Medicare under the GOP plan will face uncertainty, delayed treatments, and more expensive care – if they can even afford health care at all. Do we really want our emergency rooms clogged with seniors who couldn’t afford their heart medication and suffer a preventable heart attack? Is it really in anyone’s interest to see grandmothers and grandfathers sent to an early grave because they were forced to choose between having a roof over their head or paying out of pocket for lifesaving diabetes medication? This is, to borrow a phrase from Mitt Romney, severe conservatism, and it’s the opposite of a reasonable bipartisan fact-based compromise.

If the House Republican plan to increase the age of Medicare eligibility to 67 moves forward, health care delivery in America would become more expensive for everyone. Seniors remaining on Medicare would see a substantial increase in their premiums because seniors ages 65 and 66, in the aggregate, are a lot healthier than seniors 67 and above. By moving 65 and 66 year olds into the expensive private market, states, local governments, employers, and the general public would pick up the multi-billion dollar tab. For example, businesses who provide health insurance and have older workers would bear the full cost of health insurance – effectively shifting the cost to these employers and their employees.

If the goal is to keep the Medicare system running as efficiently as possible, we should be looking into ways to lower the age of Medicare eligibility, not ways to increase it. The Republican plan chips away at Medicare affordability – one of its greatest strengths – seemingly by design. I’m willing to compromise, but I’m not willing to compromise the health and economic security of seniors and everyone who hopes to become a senior.

I approach this from the perspective of someone who regulated the insurance industry for eight years. I know how they operate, and I know how health care delivery operates in America. I know changes need to be made to Medicare to make it more solvent in the years and decades to come, and I know we can make those changes without harming benefits. For example, we can empower Medicare to directly negotiate drug prices or we can import drugs from Canada and other countries with robust safety standards. We can improve electronic records and crack down further on Medicare fraud. We can ramp up the prevention and early treatment provisions in current law. Each of these ideas has support among most Democrats and many Republicans. Let’s make these ideas the starting point in extending the solvency of Medicare (beyond the eight additional years from the Affordable Care Act) and in preventing our national debt from becoming unmanageable in the long-term (as was done under President Clinton).

Compromise to address the fiscal cliff is not an end; it is a means to an end: preserving the health and well being of all Americans. We can fashion a bipartisan deal that keeps seniors’ retirement security preserved. We can take a step back from the fiscal cliff without breaking our promise to seniors.

We can get this done and done right, but raising the age of Medicare eligibility to 67 is a nonstarter for me, and it’s a nonstarter for many of my Democratic colleagues.



Rep. John Garamendi wrote this blog for Labor’s Edge.

By Steve Smith, California Labor Federation

We’ve seen a lot of big numbers this election. The Koch Brothers Super PAC spent $4 million to back the deceptive Prop 32. Billionaire Charles Munger Jr. kicked in $35 million against Prop 30 and for Prop 32. A shady Arizona group that refuses to disclose its donors funneled $11 million into our state to attack California schools and workers. But now, there’s only one number that matters: 35,000. That’s the number of union volunteers fanning out across the state, in communities big and small, to fight the big money interests behind the attacks on Prop 30 and the fraudulent ads backing Prop 32.

The California labor movement has mounted its largest Get Out the Vote effort in history this year, contacting millions of voters one-on-one about the stakes in this election. These volunteers aren’t members of the 1%. They’re everyday working people taking time in the evenings and on the weekends to improve their communities by standing up to the powerful special interests who have spent tens of millions of dollars this year in an effort to rig the system even further to their own benefit.

On Saturday, precinct walks and phone banks across the state were overflowing with volunteers ready to deliver a final message to voters about the importance of passing Prop 30, which protects our schools from another $6 billion in devastating cuts, and defeating Prop 32, a truly deceptive measure to silence working people while giving more power to corporate special interests.

In Sacramento, over 200 volunteers were up bright and early to walk precincts across the region. California Labor Federation Executive Secretary-Treasurer Art Pulaski joined California Teachers Association President Dean Vogel and SEIU Local 1000 President Yvonne Walker at the Sacramento Labor Council to fire up the volunteers before they hit the streets. Volunteers were talking to voters about 30 and 32 as well as the importance of electing working family candidates like Dr. Ami Bera, Ken Cooley and others.

Pulaski told the crowd that while the billionaires may have deep pockets, it pales in comparison to the grassroots power of the labor movement:

We’ve got thousands upon thousands of workers across the state volunteering to get out the vote. And that’s going to make all the difference on Election Day.

Donchele Soper, a PG&E employee and member of IBEW 1245, handed out packets to volunteers, helping get them prepared for the day’s precinct walks. She’s been working tirelessly alongside teachers, iron workers, machinists, home care providers and many others to get out the vote.

We need to all work together. It’s hard, long work but we know what a difference we make when we stand together.

In Burbank, Paul Ahrens of IATSE Local 44 joined over 100 volunteers at IATSE Local 80 to pound the pavement Saturday.

The only way we beat their money is people power. It’s so important for people who care about our state to come and have personal contact with those in our communities. This is crunch time and we’re going to get it done.

In Stockton, hundreds of volunteers hit the streets to get out the word on the dangerous Prop 32 and in support of Prop 30 and congressional candidate Jose Hernandez.

Volunteer Matt Richard, a sheet metal worker with Local 104, said he wanted to do his part to stand up for all working people this election.

I’m here to help fight against the war on workers. I’m fighting for everyone to have a living wage, the right to retire and to live with dignity.

In Oakland, Ann Worth, member of Local 510 Sign Display and Allied Crafts, joined the precinct walk because she understands the importance of talking face-to-face with voters:

If you can actually talk to someone you know that means a whole lot more than phone calls, fliers and robocalls. Door to door is the best, because people can relate to you and see who you are. Unions have the clout that they do today because we are out there, hitting the pavement and making personal connections so that we can establish a healthy discourse about important issues and build our communities along the way.

Josh Sperry, Engineers & Scientists of CA IFPTE Local 20, walking precincts in Alameda with two of his children to spread the message of Yes on Prop 30:

Prop 30 is incredibly important to me because already one of my kids is in public school and the other two are on their way there. If we dont pass Prop 30,  the quality of schools will be decimated by the budget cuts. We love our school, we do what we can with the PTA but we need to stay funded.

Back in Sacramento, Vogel, Pulaski and Walker joined a phone bank at Sacramento City Teachers Association (SCTA), where dozens of teachers filled a crowded room phoning other teachers to get out the vote for Prop 30. While the vote on 30 will be close, these phone calls, along with precinct walks and other volunteer voter contact, could prove decisive on Election Day.

Joe Barnett, a 6th grade teacher in Sacramento, says phone banks are overflowing daily at SCTA, yet another signal that working people are galvanized to make the difference this year.

There’s been a phenomenal turnout. We’re getting people on a one-on-one basis to explain the deceptive nature of Prop 32 and the value of Prop 30 to our schools. We teach everyone’s kids. Doesn’t matter if you’re a doctor’s child or a janitor’s child, we want to give you the very best education possible. We recognize that working women and men need to come together to protect our own rights. If not, we’ll be overcome by the amount of money that’s going to the top. And as that money goes to the top, those at the top use it to buy even more political power.

The anti-worker billionaires, even with their incredible wealth, may have bit off more than they could chew in attacking workers and schools this year. The labor movement’s grassroots voter contact program is reaching millions of voters in-person to support Prop 30 and defeat Prop 32. And, as the billionaires, Super PACs and corporate special interests are finding out, that’s something no amount of money can buy.

There still time to volunteer to help get out the vote! Find a phone bank or precinct walk in your area.

by Steve Smith, California Labor Federation

Many ballot propositions are deliberately written to be confusing. There’s usually a hidden agenda. Case in point: Prop 32.

Its backers say it’s about “stopping special interests.” That sounds nice, right?  But, as usual, the devil’s in the details.  When you take a closer look, it’s clear that Prop 32 isn’t what it seems. While it eliminates the collective voice of union members in politics, it’s riddled with exemptions for corporate CEOs, billionaires and corporate special interests.

In a recent op-ed in The Guardian (UK), San Francisco State professor John Logan wrote Prop 32 isn’t genuine reform, rather a “bill of rights for billionaires.”

To understand what’s really going on, you have to pull back the curtain to see who these billionaires are and what they really stand for.

All the funders and backers of Prop 32 are exceedingly wealthy. They write six-figure checks to advance their political agendas without blinking en eye. They live a life of privilege that most of us will never know. And they’re downright hostile to the interests of working people.  

There’s former Oracle executive Thomas Siebel, who’s already chipped in a half-million dollars. While not a household name, this guy is worth $1.8 billion, and he’s not afraid to spend it to push his extreme agenda. In 2008, he introduced Sarah Palin at a rally by saying, “Sarah Palin represents the best in each and every one of us.” He called her “an optimist, thoughtful, energetic, engaging … the embodiment of pure, unadulterated good.”

Siebel is also a big donor to former Bush strategist Karl Rove’s Super PAC, which receives a special exemption under Prop 32. And he’s chomping at the bit for Super PACs like Karl Rove’s to take over California if he can get workers out of the way.

Then there’s billionaire Charles Munger Jr, who’s already in for a cool $450,000. Munger is a longtime Republican activist who uses his inherited fortune to try to rig the system to his favor. He also gives big money to Republican candidates.

Bill Bloomfield Jr. has ponied up $300,000. Bloomfield is a real estate tycoon and Republican candidate for Congress. Like most of the funders, Bloomfield owns a number of companies that are LLCs, which, of course, are exempt from the provisions of Prop 32.

And let’s not forget about the Lincoln Club of Orange County. The Lincoln Club is the brainchild of this measure, as well as previous anti-union measures Prop 75 and Prop 226. They’re a group of corporate bigwigs and business executives in Newport Beach. And in addition to trying to bust unions and do corporations’ bidding, the Lincoln Club is known for something else. They were the driving force behind the Citizens United Supreme Court decision that gutted federal campaign finance reform and led to the rise of the Super PACs. The Lincoln Club describes its role in the Citizens United case as “instrumental.”

The irony is overwhelming. Here is a group of wealthy anti-union business executives that’s now trying to fool the public into thinking they’re about improving government by stopping special interests.

And the rest of the donors are all card-carrying members of the 1%. They have names like William H. Draper III and Preston B. Hotchkis. They’re multimillionaire developers and Wall Street hedge fund managers. They could care less about working people. What they care about is making more money.

Prop 32 isn’t the end game for these billionaires and corporate special interests. It’s only the beginning. If they succeed in tricking voters this year, they will strike with frightening efficiency to consolidate power. If you’re a billionaire, that’s good news. If you’re a member of the 99%, that notion ought to scare the hell out of you.

If these guys are able to push workers aside to pursue their agenda, it means everything from overtime pay and prevailing wage for workers to funding for schools and public safety is at risk. It means there won’t be anyone left to stand in their way when they try to strip away laws that protect worker safety and our environment.

Prop 32 is a sucker punch. If the billionaires land it, the next punch will follow quickly. And that would likely be a knockout to California’s middle class.

To learn more, go to Learn more.

by Steve Smith

Zombies are everywhere these days. They’re on popular TV shows. They’re in the movies. They’re in our nightmares. But what many Californians don’t know is that zombies are a primary reason of our ongoing budget crisis.

Yes, that’s right. We call them Zombie Loopholes, and they’re devouring our state’s budget.

Today, the California Labor Federation launched a new website to highlight the devastating impact that budget-killing corporate tax breaks are having on our state. ZombieLoopholes.com brings a number of wasteful corporate tax breaks that are bleeding our state of billions each year out of the shadows so the public is aware that they’re contributing to deep budget cuts to school funding, services for seniors and public safety.

With the state facing another budget crisis and more cuts to services we value, you’d think eliminating Zombie Loopholes would be a top priority. Think again. Republicans have repeatedly refused to even consider getting rid of these loopholes, despite the fact that there’s almost no evidence they help our economy or create jobs. In fact, they’re just big fat giveaways to corporate bosses and multi-millionaires, secretly inserted into previous budget deals by Republicans.

Unlike the fake zombies on TV, these zombie loopholes really do harm us. And, thanks to our zombie-protecting two-thirds majority rule to get rid of any tax break no matter how wasteful, these zombies are EXTREMELY hard to kill.

So if politicians won’t do anything to stop the zombies, maybe heightened awareness among the public will do the trick.

California Labor Federation Executive Secretary-Treasurer Art Pulaski:

While, fortunately, it doesn’t appear a ‘zombie apocalypse’ is anywhere on the horizon, Zombie Loopholes pose a very real and immediate threat to schools, public safety and other essential services our families and communities rely upon. This new website brings these zombies out of the shadows so the public can see for themselves how much the state is wasting each year on ineffective corporate tax breaks.

Today, we’re ramping up a big effort to raise awareness about zombie loopholes that will include a social media campaign and online petition that will be delivered to California legislators.  The website and social media efforts renew our call for the legislature to conduct a thorough review of corporate tax breaks — eliminating those that are not benefitting the state’s economy — before any additional cuts are made to services.

The site highlights four Zombie Loopholes and the related revenue those loopholes are ripping from the state that could go instead to closing our budget gap and funding education, services for those with disabilities and other vital programs.  The site’s “survival guide” offers an emergency plan for the legislature to deal with these Zombie Loopholes.

On ZombieLoopholes.com, each tax break has been assigned a “kill capacity” equal to the amount of revenue it’s draining the state that could be used for vital programs and services:

Elective Single Sales Tax Zombie Loophole

   Kill Capacity: $1 billion for schools, public safety and essential services

Oil Severance Tax Zombie Loophole

   Kill Capacity: $2 billion for schools, public safety and essential services

Change-of-Ownership Zombie Loophole

   Kill Capacity: $2 billion divided between local government and schools

Enterprise Zone (EZ) Zombie Loophole

   Kill Capacity: Quality, good-paying jobs and $500 million a year for schools, public safety and essential services

The loopholes highlighted on the site were recently identified in a report by California Tax Reform Association Executive Director Lenny Goldberg, which found that wasteful corporate tax breaks are costing the state more $6 billion per year.

Pulaski:

Our state doesn’t have to be entombed in perpetual budget crises. Zombies may not be real, but the choices the state has to balance the budget are. We can either continue allowing these zombie loopholes to drain the life out of our state’s economy or we can eradicate them now and begin investing in California’s future.

Don’t let California become a casualty of Zombie Loopholes. Join the fight by signing the petition. ‘Like’ the Facebook page. Help us spread the word. Our best defense is standing together.

by Senator Mark Leno

With most of the attention focused on the rising level of CEO pay while executives are actively working, an even more important aspect of executive compensation has been overlooked. What a top corporate executive makes when he or she retires from a publicly traded corporation is an ongoing expense to the company every year for the rest of their lives, as opposed to their yearly pay, which is a one-time payment.

Many people don’t realize that over the course of the last few decades, corporations have essentially spiked their top management’s retirement pay as they exit, adding bonuses, stock options, perks and other incentive compensation to their retirement benefit calculations, exponentially increasing the total amount of money they will receive once they are no longer providing any services to the company. This has occurred at the very same time these corporations have restructured and eliminated pension benefits for average workers, and as public pensions are decried as exorbitant and unsustainable.

This has all been done under a cloak of darkness, as there is no requirement for companies to disclose how much a retired executive actually receives once they retire. All the Securities and Exchange Commission currently requires is an estimate, often severely low-balled by company accountants, of what an executive might make once they retire. No reporting is required once they actually do retire. Without this disclosure, the obligations of publicly traded corporations to pay these benefits are essentially concealed from the public and from the shareholders who own the company. What has occurred is a massive run up in unfunded liability at a time when our economy can least sustain it.

To bring some sunshine into the uncharted realm of retirement pay, I have introduced SB 1208, the Corporate Executive Retirement Sunshine Act, which will require corporations operating in California to annually report to the California Secretary of State how much their top five most highly compensated retired executives are paid, including all compensation, shares issued, options for shares granted, similar equity-based compensation, perquisites and personal benefits.

The bill was inspired by Wall Street Journal investigative reporter Ellen Schultz’s book, Retirement Heist: How Companies Plunder and Profit from the Nest Egg of American Workers. It contains hundreds of examples of how companies have raided previously overfunded pension plans to boost earnings and provide golden parachutes to executives while eliminating pension and health benefits for average workers. This video clip of her being interviewed recently by John Stewart demonstrates the scope of the problem.

A great deal is at stake for working Californians. Retirement security is central to maintaining a strong workforce and middle class. As workers lose retirement benefits, they must rely more heavily on public institutions for support, including assistance with housing, transportation, and health care. If companies cannot sustain the level of benefits they have promised their top retirees, and those companies experience financial hardship or go bankrupt, taxpayers will be called upon to bail them out and our unemployment rolls will swell.

The erosion of pension security that has occurred over the same time that executive retirement pay has dramatically increased has amounted to a shifting of responsibility for the welfare of Americans from corporations to taxpayers. For these reasons, California has every right to peek under the closed tent of retirement pay. We will be shocked by what we see.

SB 1208 will be up for a vote on the Senate floor as early as this Tuesday. A number of moderate Democratic Senators have not yet committed to supporting it. Please contact them early Tuesday morning before the vote to make sure they understand how important this issue is. Go to www.senate.ca.gov for a list of room numbers, phone numbers and e-mail addresses, and make your voice heard.

This article originally appeared on the California Labor Federation’s blog, Labor’s Edge.

by Steve Smith, California Labor Federation

Assemblymember Allan Mansoor (R-Costa Mesa), elected in 2010, has so far made a career out of demonizing workers and attacking workers’ rights. From collective bargaining to pensions, Mansoor never saw a cherished worker right he didn’t hate. Last year, he even took time to honor anti-union Midwest legislators, whom he calls “courageous” and with whom he stands “in solidarity.”

It’s not surprising, then, that he’s become something of a shill for the campaign to silence workers’ political voice through this fall’s corporate power grab initiative. According to the Pacifica Institute, Mansoor vocally supports the measure, which proponents deceptively call the “Stop Special Interest Money Now Act,” arguing that it will limit “the influence of special interest money.” (Of course nothing could be further from the truth. It’s nothing other than a muzzle on workers that will make our system even more corrupt, but more on that later.)

What is surprising, though, was what happened on the Assembly floor last week. Following his busy week of trying to balance the budget on the backs of retired workers, Mansoor was presented with AJR 22: a resolution calling on Congress to overturn the notorious Citizens United decision and enact real campaign finance reform. Given the explosion of special interest campaign spending as a direct result of the Citizens United decision, and Mansoor’s stated desire to get “special interests” out of politics, he would be the first to stand up and vote yes, right?

Wrong. He voted no.

So, if Mansoor’s really a champion of getting special interests OUT of politics, why would he be against overturning Citizens United, a decision that has done more to expand corporate special interest influence than anything in history?

Two reasons.

One, a constitutional amendment to overturn Citizens United would probably mean less corporate spending on behalf of anti-worker legislators like Mansoor. AJR 22 seeks to address the overwhelming corporate electioneering Citizens United left us with; in other words, the resolution simply endorses the reform concepts he claims to support. His opposition exposes his hypocrisy and confirms the value of AJR 22’s message.

Two, this corporate power grab initiative has nothing to do with campaign finance reform and everything to do with silencing working families. The initiative contains a loophole that would allow corporations to spend without limits on electoral campaigns. Here’s how the scheme works: While the initiative bans the use of payroll deducted funds for politics from both unions and corporations, only unions actually use payroll deduction to collect dues (a portion of which are used for politics). Corporations almost never use payroll deduction to fund their political spending; they use their massive profits.  So as you can see, the measure is a total sham, and its real agenda is to strip workers of their collective voice.

But this isn’t just a fight between unions and corporations. There’s something much scarier lurking under the surface. This measure wouldn’t just silence workers; it would lead to corporations spending even more money on sometime secretive, often negative, “independent expenditure” ads that drastically complicate a voter’s ability to determine the truth.

Nothing could illustrate the fundamental flaw in the corporate power grab measure better than a politician like Mansoor supporting it.

Under the current system, we know that of all the corporate special interests who funded Mansoor’s last campaign: the top four were real estate companies, the insurance industry, lawyers/lobbyists, and pharmaceutical corporations. If Mansoor’s initiative passes, all of these groups could still spend massive sums on his behalf, but we might not know much, if anything, about who they are-certainly not by looking at Mansoor’s campaign reports.  But you’d better bet Mansoor would know who’s backing his campaign with massive checks allegedly spent “independently.” As you can imagine, the potential for “pay to play” politics would be greater than ever under this dishonest measure.

Big PHARMA, for example, would no longer be encumbered by the transparency and spending limits current law demands when corporations donate directly to candidates. Through Super PACs, business associations and shadowy political front groups, these corporations could spend unlimited amounts to support his candidacy.

So as this fall approaches, and the fight to stop the corporate power grab intensifies, keep an eye on your legislator.  Keep an especially close eye on the ones behind the initiative, and be even more mindful of those who oppose true campaign finance reform efforts-including AJR 22. Those who adopt Mansoor’s approach of opposing AJR 22 while supporting the corporate power grab couldn’t be more clearly stating where they stand- with corporate special interests, against workers, and against transparency and fairness.

Broad statements against “special interest spending” mean nothing when a politician’s actions speak otherwise, and Mansoor’s recent actions have spoken far louder than his words.  Even more importantly, Mansoor’s hypocrisy provides a window into what’s shaping up to be one of the most deceptive – and potentially destructive – efforts ever to further corrupt our political system in favor of big corporations.