Month: May 2021

Pennsylvanians pay extra for public pensions

Mary Pat Campbell

Link: https://www.inquirer.com/business/psers-teachers-cost-deficit-shared-risk-sers-pension-20210424.html

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Excerpt:

Forced to cover the higher pension checks, state and local taxpayer funding for PSERS, the big retirement plan for public-school educators, has risen year after year, soaring from just over $600 million in 2010 to $5 billion this year.

Now a little-noticed provision of a reform passed in 2010, known as the “shared risk” rule, has come back to haunt PSERS officials — and teachers, too.

Under the rule, teachers, not just taxpayers, must pay more into the $64 billion pension system whenever profits fall short on investments.

In an embarrassing admission, its board said on Monday that the policy meant many teachers will face a hike in their payments this year. This was the first time this has happened since the law was adopted.

The board for PSERS — the Public School Employees’ Retirement System — acknowledged it had previously endorsed an inflated number for investment returns, a figure it incorrectly thought was just high enough to spare teachers any increase.

Author(s): Joseph N. DiStefano

Publication Date: 24 April 2021

Publication Site: Philadelphia Inquirer

Pay a Living Wage or ‘Flip Your Own Damn Burgers’: Progressives Blast Right-Wing Narrative on Jobs

Mary Pat Campbell

Link: https://www.commondreams.org/news/2021/05/07/pay-living-wage-or-flip-your-own-damn-burgers-progressives-blast-right-wing

Excerpt:

Soon after the Labor Department released its April jobs report, the U.S. Chamber of Commerce blamed last month’s weak employment growth on the existence of a $300 weekly supplemental jobless benefit and began urging lawmakers to eliminate the federally enhanced unemployment payments that were extended through early September when congressional Democrats passed President Joe Biden’s American Rescue Plan. 

“No. We don’t need to end [the additional] $300 a week in emergency unemployment benefits that workers desperately need,” Sen. Bernie Sanders (I-Vt.) said in response to the grumbles of the nation’s largest business lobbying group. “We need to end starvation wages in America.”

“If $300 a week is preventing employers from hiring low-wage workers there’s a simple solution,” Sanders added. “Raise your wages. Pay decent benefits.”

Author(s): Kenny Stancil

Publication Date: 7 May 2021

Publication Site: Common Dreams

Pandemic divergence: The social and economic costs of Covid-19

Mary Pat Campbell

Link: https://voxeu.org/article/social-and-economic-costs-covid-19

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Excerpt:

First, we compute the differences between the output paths for 2020–2030 projected before and after the pandemic (the shaded area in Figure 1) and estimate its present value discounting at a 0% real interest rate (a reasonably conservative assumption in a context where real rates are negative for most developed countries). This yields a total loss of about half of global GDP. 

Next, there is the question of the fiscal stimulus (equivalent to 15% of GDP, according to the IMF fiscal monitor) without which the output loss in 2020 would have been much steeper. How much of the economic impact of the fiscal unwinding is properly accounted for in the revised growth projections (Beck et al. 2021), particularly given that a big part of the stimulus (6% of the 15%) was below the line (loans, equity stakes, guarantees) with a cost that is contingent on the speed and composition of economic recovery in each country? There is no simple answer here. Moreover, we are ignoring potential bouts of financial stress or debt restructurings in heavily indebted countries (Persaud 2021), as well as the second wave of stimulus already in line for 2021 in many advanced economies. All things considered, adding the full 15% of GDP as an indicative measure of the cost of fiscal support does not look unreasonable. 

Third, there is the value of the excess deaths due to Covid-19. There is, of course, no uncontroversial way to put a value on human life. For the sake of argument, we follow a recent estimation for the US by Cutler and Summers (2020) that uses the ‘statistical lives’ value to place it between $10 million and $7 million per life. If we take the considerably more conservative $5 million per life, acknowledging that the statistical value may vary across countries, the cost related to the global cumulative deaths registered so far amounts to 16.9% of global GDP.

Author(s): Eduardo Levy Yeyati, Federico Filippini

Publication Date:

Publication Site: Vox EU

CDC’s slow, cautious messaging on Covid-19 seems out of step with the moment, public health experts say

Mary Pat Campbell
CDC’s slow, cautious messaging on Covid-19 seems out of step with the moment, public health experts say

Excerpt:

When the CDC issued new guidelines recently on when people still need to wear masks, the guidelines were seen as so conservative that they prompted a primetime rant on “The Daily Show.”

“I know science is difficult … but who’s running messaging at the CDC?” asked the show’s host, Trevor Noah.

Some public health experts are asking the same question. Most experts interviewed for this story say the agency has struggled to take advantage of the latest scientific findings to communicate as rapidly as possible with the American public. And when the guidance is issued, it tends to be overly cautious.

….

Still, public health officials say the conservative nature of the agency’s approach to Covid is a marked departure from how it deals with other major public health issues, like HIV and opioid use disorder.

…..

Multiple experts told STAT that they fear the CDC’s recommendations are becoming irrelevant for most Americans. They worry, too, that guidelines, like the CDC’s advice on masking, so seriously underplay the benefits of getting vaccinated that they risk dissuading people from getting a shot in the first place.

Author(s): Nicholas Florko

Publication Date: 11 May 2021

Publication Site: Stat News

The flood insurance debate returns. Here’s what to expect

Mary Pat Campbell

Link: https://www.eenews.net/stories/1063731009

Excerpt:

The most comprehensive proposal being floated so far is one from House Financial Services Chairwoman Maxine Waters (D-Calif.).

That discussion draft would extend the program for an additional five years and limit the government’s ability to raise the price of flood insurance amid growing concerns about affordability (E&E Daily, April 14). Current authorization for the National Flood Insurance Program (NFIP) is set to expire in five months.

….

Jerry Theodorou, director of the finance, insurance and trade program at the R Street Institute, said subsidies mask the real costs of building and living in flood-prone areas and that the Peters-Barr bill would ensure that policyholders aren’t “undercharged.”

Theodorou said the Waters bill instead would kick the can down the road, and he criticized the measure for seeking to cancel the program’s historic $20.5 billion debt.

Author(s): Hannah Northey

Publication Date: 27 April 2021

Publication Site: E&E News

Insuring Another Disaster

Mary Pat Campbell
Insuring Another Disaster

Excerpt:

Leave it to California lawmakers, however, to cast aside thousands of years of complex commercial history in a misguided attempt to fix an admittedly legitimate insurance problem. Thanks to Proposition 103, a 1988 ballot measure, California already has a distorted insurance market that gives the insurance commissioner czar-like powers to approve rate increases and impose rate decreases.

Because of that law, insurers have a tough time adjusting rates to manage their risks. It’s a long, cumbersome, and antagonistic government process to adjust rates. Their other lever for ensuring solvency is to reduce their underwriting risks by, say, not writing fire-insurance policies to homeowners who live in high fire-risk areas or car insurance policies to drivers with multiple DUIs.

….

Instead, California Assemblymember Marc Levine, D-Marin County, has introduced Assembly Bill 1522, which would prohibit insurers from canceling insurance policies solely because a home or business is located in a high-risk wildfire area. It epitomizes California’s economically illiterate edict approach.

Author(s): Steven Greenhut

Publication Date: 29 April 2021

Publication Site: The American Spectator

The Tax Cuts and Jobs Act: 12 Myths Debunked

Mary Pat Campbell

Link: https://www.heritage.org/taxes/report/the-tax-cuts-and-jobs-act-12-myths-debunked

Report link: https://www.heritage.org/sites/default/files/2021-03/BG3600_0.pdf

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Excerpt:

Three years after the passage of the 2017 Tax Cuts and Jobs Act, partisan mischaracterizations have left the law deeply misunderstood. The tax cuts benefited typical American workers through direct tax cuts and higher wages. The changes did not raise taxes on the middle class, did not devastate home prices, and did not reduce charitable giving. Businesses have created domestic jobs, and the new 21 percent corporate tax rate still leaves American employers paying rates higher than most competitors. As the law begins to expire in the coming years, lawmakers will be better able to assess the merits of keeping the tax cuts if they understand 12 common myths.

Author(s): Adam Michel

Publication Date: 23 March 2021

Publication Site: Heritage Foundation

The Gender Gap in Pandemic Job Losses Has Been Wildly Exaggerated

Mary Pat Campbell
The Gender Gap in Pandemic Job Losses Has Been Wildly Exaggerated

Excerpt:


“Labor force participation—defined as all civilians working full or part time, as well as those who are unemployed but looking for work—fell dramatically for both genders between March and April 2020,” noted Gallup. In April 2020, men’s labor force participation was at 97.8 percent of its February 2020 level and women’s labor force participation was 96.9 percent of its February 2020 level—a gender gap of just 0.9* percentage points.

By February 2021, labor force participation for both sexes had ticked back up somewhat. And while women were still seeing a less full recovery, the gap was again less than one percentage point. Compared to February 2020, men’s February 2021 labor force participation was 2.2 percent smaller and women’s was 3.1 percent smaller.

That’s not nothing—“the gap in labor force changes amounts to roughly 493,000 more women than men being absent from the labor force since the pandemic began,” Gallup pointed out in early March. But it’s also not evidence that women have been uniquely devastated by pandemic-related job losses, especially when—contra previous economic downturns—many of the circumstances that initially created the job losses will remedy quickly as life returns to a more normal pace.

Author(s): Elizabeth Nolan Brown

Publication Date: 11 May 2021

Publication Site: Reason

A Misleading C.D.C. Number

Mary Pat Campbell

Link: https://www.nytimes.com/2021/05/11/briefing/outdoor-covid-transmission-cdc-number.html

Excerpt:

When the Centers for Disease Control and Prevention released new guidelines last month for mask wearing, it announced that “less than 10 percent” of Covid-19 transmission was occurring outdoors. Media organizations repeated the statistic, and it quickly became a standard description of the frequency of outdoor transmission.

….

That benchmark “seems to be a huge exaggeration,” as Dr. Muge Cevik, a virologist at the University of St. Andrews, said. In truth, the share of transmission that has occurred outdoors seems to be below 1 percent and may be below 0.1 percent, multiple epidemiologists told me. The rare outdoor transmission that has happened almost all seems to have involved crowded places or close conversation.

Saying that less than 10 percent of Covid transmission occurs outdoors is akin to saying that sharks attack fewer than 20,000 swimmers a year. (The actual worldwide number is around 150.) It’s both true and deceiving.

Author(s): David Leonhardt

Publication Date: 11 May 2021

Publication Site: NY Times

Dems Demanding SALT Tax Cuts Stand to Benefit

Mary Pat Campbell

Link: https://www.dailyposter.com/democrats-gunning-to-end-salt-cap-stand-to-benefit/

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The SALT tax deduction allows state and local taxes like property taxes to be deducted from federal taxes. The deduction is particularly beneficial to wealthy property owners in Democratic states, which typically have higher property tax rates. In 2017, the deduction was capped at $10,000 under President Trump’s tax reform bill, in what many saw as a Republican attack on blue states.

Repealing the SALT cap would cost the government $600 billion in revenue over nine years.  That outlay would essentially negate any financial benefits from  the Democrats’ proposal to raise the corporate tax rate from 21 percent to 25 percent, the party’s preferred alternative to Biden’s proposed 28-percent corporate tax rate. With all of the money from raising the tax rate being funneled back to wealthy homeowners, there would likely be little money left to fund Biden’s infrastructure package.

Author(s): EMMA RINDLISBACHER

Publication Date: 11 May 2021

Publication Site: Daily Poster

Bernie Sanders Is (Mostly) Right About the SALT Deduction

Mary Pat Campbell
Bernie Sanders Is (Mostly) Right About the SALT Deduction

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Excerpt:

“I want to tell you this: If I become majority leader, one of the first things I will do is we will eliminate it forever,” Schumer said during a July 14 press conference on Long Island. “It will be dead, gone, and buried.”

“It” in this case was the cap on the state and local tax (SALT) deduction, which was imposed as part of the 2017 federal tax reform bill passed by Republicans and signed by President Donald Trump. As a result of that law, Americans are allowed to deduct a maximum of $10,000 in state and local tax payments from their federally taxable income; previously the deduction was uncapped, and it overwhelmingly benefitted the richest households while shifting their federal tax burden to everyone else.

…..

Sen. Bernie Sanders (I–Vt.) is correct to point out, as he did in an interview with Axios this week, that the SALT cap creates a serious optics problem for Democrats. Sanders says he will oppose Schumer’s effort to attach the SALT cap repeal to the transportation bill because “it sends a terrible, terrible message when you have Republicans telling us that this is a tax break for the rich.”

Author(s): Eric Boehm

Publication Date: 11 May 2021

Publication Site: Reason

Dem tax rift: Sanders rips Pelosi, Schumer for backing repeal of SALT cap

Mary Pat Campbell

Link: https://nypost.com/2021/05/10/sanders-rips-pelosi-schumer-for-backing-repeal-of-salt-cap/

Excerpt:

​Sen. Bernie Sanders is taking on the leaders of his own Democratic Party — Senate Majority Leader Chuck Schumer and House Speaker Nancy Pelosi — for supporting a repeal of the cap on deductions for state and local tax on federal income taxes.

Pelosi (D-Calif.) and Schumer (D-NY) — who represent two of the highest tax states — back repealing the $10,000 cap instituted by former President Donald Trump on SALT deductions, which Sanders said “sends a terrible, terrible message” to working-class people.

…..

“We could reverse that for 2018 and 2019 so that people could refile their taxes” and get a refund, Pelosi told The Times in March. “They’d have more disposable income, which is the lifeblood of our economy, a consumer economy that we are.”

Author(s): Mark Moore

Publication Date: 10 May 2021

Publication Site: NY Post