By Leo W. Gerard
USW International President

In New York, the oldest and snobbiest financial and advising ventures are called “white shoe” firms.

This, they say, arose from the days when their hoity-toity employees wore white bucks to work. 

These days, white shoe firms bear names notorious outside New York, like Goldman Sachs and Morgan Stanley. That’s because their arrogance, risky investments and confounding dealing in derivatives caused last fall’s Wall Street meltdown, slaughtered white shoe firms like Lehman Brothers, froze credit nationwide, and threw the rest of us into the Great Recession. 

Now unemployment is up to 9.8 percent, a 26-year high. Banks repossessed 88,000 homes in September and filed foreclosure notices on another 344,000, according to RealtyTrac. Suicide hotlines report increases in calls, and a study released in July by researchers at several universities including the University of California documented the connection between unemployment, suicide and murder. Each percent increase in unemployment raised suicide rates by .8 percent and homicide rates by .8 percent, the research team found.

There’s blood on those white bucks. But the guys wearing them don’t seem to notice.

When bankers’ backs were up against the wall, the taxpayers of the United States bailed them out to the tune of $700 billion. Some, like Bank of America, took the welfare then repaid that generosity by doling out billions in bonuses. BofA got $45 billion from taxpayers, then gave $3.6 billion in bonuses to Merrill Lynch workers, just as BofA bought Merrill — which lost $25 billion in 2008. 

Banksters always argue that they must pay massive bonuses to reward and retain their best and brightest. Yet the best and brightest had managed to undermine Wall Street and lose $100 billion at the nine firms that received government welfare in 2008.  Realistically, finding lower-cost replacements for them shouldn’t be a problem since lots of unemployed bankers are pounding New York streets. The New York City Office of Management and Budget determined that Wall Street banks cut 30,000 jobs in 2008.

Still, Wall Street continues to reward incompetence. Morgan Stanley, for example, increased the proportion of its revenues to be paid as compensation and benefits – to total a whopping $6 billion by September — despite three straight losing quarters this year. This is how the London Telegraph characterized the decision in an Oct. 21 story:

“Investment bank Morgan Stanley has more than doubled the share of revenues it will hand out in pay and bonuses to its 62,000-strong army of bankers and brokers despite a 91 pc drop in profits last quarter.”

Right now, they’d each get $96,774, but Morgan Stanley has another quarter to add to that pool of pay.

Investment house Goldman Sachs has set aside $11.4 billion so far for compensation, setting a pace for an average Goldman worker to get $773,000. That would more than double last year’s earnings for the average Goldie.

Contrast that with the U.S. Census report that the typical worker nationwide lost $1,860 for a reduced wage of $50,303. Or compare it to the experience of the woman in the Oct. 21 New York Times story who competed with 500 other applicants for one $13-an-hour clerk job opening at an Indiana trucking company.

When America’s median income workers paid to bail out those white shoe swells, they thought something would change. “There is some failure in the finance industry to appreciate the level of public antagonism toward whatever Wall Street symbolizes,” Orin Kramer, a Democratic fund-raiser who is a partner in an investment firm, told the New York Times’ David D. Kirkpatrick earlier this month.

Dr. Daniel E. Fass, who was chairing a Democratic fundraising event with Kramer, told the Times’ Kirpatrick, “The investment community feels very put-upon. They feel there is no reason why they shouldn’t earn $1 million to $200 million a year, and they don’t want to be held responsible for the global financial meltdown.”

And, indeed, they’re acting like it never happened. JPMorgan Chase & Co. went out this year and made billions doing exactly what caused the crash last year – trading like crazy in derivatives. 

So a parent figure had to step in. The Obama Administration acted this week. The Federal Reserve announced it would crack down on pay packages at the nation’s 28 largest banking companies in ways intended to discourage risky practices. And the Treasury Department announced that it will order pay cuts and perk limitations for top officials at the firms still on welfare. They are Citigroup, Bank of America, American International Group, General Motors, Chrysler and the automakers’ financing agencies.

This new lifestyle will be devastating for some of those on welfare. Their perks could be limited to $25,000 – only half of a typical American worker’s annual salary. And the cash portion of their salaries could be slashed by 90 percent and replaced by stock that cannot be sold for years. The point is to align their personal interests to the firm’s long-term financial health.  It is an attempt to discourage risky investments that seemed profitable for the purpose of immediate bonus payments but later exploded like the AIG derivatives scandal. 

The white shoe crowd, failing to understand that the president was trying to help them clean up the mess at their feet, immediately started whining and complaining. It just wouldn’t work, they said, because pay-pinched executives would run to firms unrestricted by the government. That’s all for the good because, again, there are 30,000 Wall Streeters searching for jobs.

The pay restrictions will set a proper tone. Perhaps Wall Street will hear it before, as the New York Times described it, “populist animosity toward Wall Street and corporate America” grows too great.

If that happened, the blood on their white bucks might be their own.

Congress drove the Big Three CEOs out of Washington, D.C. last week, ordering them not to return with their tin cups until they could guarantee their companies would be viable after a $25 billion bailout.

Just days later, Citigroup, a bank that had already received a $25 billion bailout in October, held its hands out for more. Within 48 hours, federal officials approved giving the bank another $20 billion and providing backing for $306 billion in its risky loans and securities. Even though Citigroup was failing just weeks after getting its first government bailout, Congress didn’t subject its CEO to the public lecturing and demands for business plans that it did the Big Three.

The message here could not be more clear: Washington will bailout out those who shower before work but not those who shower afterwards.

Washington, D.C. is a white collar town. President Bush and members of Congress understand their suited counterparts on Wall Street. In fact, several prominent figures in the banking industry – including Citigroup’s Robert Rubin, a former Secretary of the Treasury, and UBS Investment Bank’s Phil Gramm, a former Texas Senator, – worked in Washington first, aiding and abetting the current crisis by de-regulating the financial markets and everything else they could.

Detroit, by contrast, is a blue collar town. It’s a place where workers at the Big Three earn thousands of dollars — the average production employee making $67,480 last year — not hundreds of thousands, and certainly not Wall Street’s millions. The Citigroup CEO credited with overseeing the bank’s ill-fated investments, Charles O. Prince III, was forced out a year ago as the bank’s massive sub-prime losses began mounting but the board of directors still gave him a $12.5 million bonus, $68 million in salary and accumulated stockholdings, a $1.7 million pension, an office, and a car and driver for up to five years. Heading the board executive committee at that time was Rubin, who would briefly serve as chairman and receive $17 million in compensation as the bank declined further into financial ruin.

Detroit is a place where workers are unionized; Wall Street is not. And right-wing Republicans and conservative pundits have made it clear they want the union workers to suffer. They want federal aid denied to the Big Three so that the firms go bankrupt. Then the companies can renege on pensions they guaranteed to retirees and can break salary and benefit promises to workers in current contracts.

Senate Minority Whip Jon Kyl writes on his web site that Chapter 11 bankruptcy would be best for the Big Three because it would enable them to break their pledges to retirees receiving health care and other benefits earned over decades of service, what he calls “legacy debts”: “Like many other industries, including the airlines, the goal under Chapter 11 is to gain temporary protection, reorganize in a way to reduce legacy debts, and emerge as a more viable and competitive company.”

Conservative columnist George Will, similarly, wrote: “Do nothing that will delay bankrupt companies from filing for bankruptcy protection, so that improvident labor contracts can be unraveled. . .” Will’s fellow Washington Post Columnist Martin Feldstein blamed all of Detroit’s problems on the unions, writing that the basic reason the Big Three can’t compete: “is labor costs imposed by union contracts.” He said if Congress gives the Big Three a loan, it must require “that the unions accept reductions in wages and benefits to levels that allow the firms to compete with imports and with non-union U.S. auto firms. The trustees of retiree benefits should be required to accept reductions in those benefits.”

They want the unions broken. They want retirees’ benefits slashed and union workers’ wages and benefits cut, which, of course, will enable the foreign auto makers – whose U.S. plants are non-union – to reduce their wages. It’ll be an all-American race to the bottom, rather than the preferable opposite, where workers and retirees are treated with dignity and respect for their hard labor.

None of those conservatives, however, is calling for Citigroup’s Charles O. Prince III, who took down Citigroup at a cost of untold billions to taxpayers, to return his $1.7 million pension, office and car and driver.

Unlike Citigroup and the other Wall Street banks, which have their very own inside-the-beltway apologists in the form of Federal Reserve Chairman Ben Bernanke and Treasury Secretary Hank Paulson to argue their case before Congress, the Big Three CEOs had to appear before Congress to plead for themselves.

There, legitimately, lawmakers grilled them about flying to the hearings in expensive private jets and about their multi-million dollar compensation packages. Still, none of the lawmakers has asked Citigroup’s CEO, Vikram S. Pandit, to take $1 for next year’s compensation, as they did the auto executives. Nor have they asked any of the CEOs from the nine banks that shared $125 billion in bailout money in October to sell their private jets, as they did the auto executives.

Conservatives also argued that the Big Three should be left to die because in a free market, that’s what happens to poorly operated companies offering inferior products.

Sen. Richard Shelby, the ranking Republican on the Senate Banking Committee, said, for example, “I do not support the use of U.S. taxpayer dollars to reward the mismanagement of Detroit-based auto manufacturers.”

Shelby made this accusation while part of the Congress that ran up the largest federal deficits known to man and allowed Paulson to broker a deal to sell troubled Wachovia bank to troubled Citigroup – a bank that so far got two bailouts, the first of which arriving within weeks of the failed Wachovia marriage.

Shelby, of course, has a lot to lose if Michigan does well. His home state of Alabama gave tax breaks to foreign car companies Mercedes-Benz, Honda and Hyundai to locate factories there – hardly a free market approach.

So, like many conservatives, he twists reality to suit his circumstances. He’s right that American car companies made mistakes. In October, GM’s sales were off 45 percent from the year before, Chrysler 35 percent and Ford 30. But he’s wrong about that being a result of mismanagement alone, well, unless he thinks his precious foreign car companies made the same mistakes. Toyota was down 23 percent, Honda 25 and Nissan 33 for the same month.

And if aid denial is based on bad products, Wall Street definitely should be the first refused. Its firms built and sold what are now being called “toxic securities,” products so defective that they took down banks, the U.S. economy and international financial stability – creating the deepest economic crisis since the Great Depression. Now that’s mismanagement for you!

When the representatives of blue collars went to Congress hat in hand, lawmakers insisted that to get loans automakers would have to present viable business plans. Congress didn’t impose similar conditions, however, when Bernanke and Paulson went to Congress seeking grants for reckless white collar firms.

In fact, they gave $125 billion to nine big Wall Street banks in October, contending the direct infusion of money would melt frozen credit. It didn’t. The firms apparently didn’t lend the money, and the deal didn’t require them to. There’s a viable business plan for you!

Paulson and Bernanke gave insurance giant AIG $85 billion. And when that didn’t work, they forked over more until it all added up to $150 billion. Now, it’s not clear that will be enough to resolve AIG’s problems. Sen. Jon Kyl, the Republican from Arizona who voted for the Wall Street bailout, didn’t demand a viable business plan for AIG or Citigroup, yet said this about the auto industry request: “There’s no reason to throw money at a problem that’s not going to get solved.”

This year, as Wall Street’s recklessness destroyed the American economy, a million Americans lost their jobs. It’s no wonder no one is buying cars. It’s not just that they can’t get credit. It’s also that they don’t have money to spend or they’re afraid to spend the money they have.

Some of those furloughed had been on Wall Street. Citigroup announced recently it would cut 52,000 jobs by early next year. But of the million jobs lost so far, 100,000, or one in ten, have been auto workers or employees of auto suppliers. Unemployment in Michigan is 9.3 percent – while in the rest of the nation it is 6.5.

Just like Paulson who couldn’t see that Citigroup was too weak to buy Wachovia, the conservatives intent on denying the Big Three loans are shortsighted. They don’t see that 2.3 million jobs in and dependent on the auto industry could be lost. They don’t see the effect of slashing the wages and benefits of people who get their hands dirty for a living.

It would mean even more mortgage foreclosures and even more credit card debt unpaid to those struggling banks. It would mean the Big Three defaulting on the $100 billion they owe to those weak banks and bondholders, some of which is secured, some not.

It’s the big circle of economic life. If Congress spits on the autoworkers and the millions whose jobs depend on the Big Three, the lawmakers may find themselves using more and more taxpayer dollars to scrub new blood off Wall Street.

 

Within hours of Barack Obama’s election, naysayers chastened caution. Don’t go too far, they inveighed. Build trust slowly with restrained, moderate, and gradual actions, they admonished.

In other words: Start with piddling plans.

Basically, they want to abort hope — kill it before it has a chance.

That is all wrong after an election in which it’s believed that a higher percentage of Americans voted than at any time in the past 40 years; a win that brought tears to the eyes of even hardened reporters; a result that drew joyful citizens into streets across the country to celebrate, a balloting that swept even larger majorities of Democrats into the U.S. House and Senate.

This moment during which the nation is suffering great economic peril pleads for political valor. This moment screams for boldness.

Troubled times demand greatness. Franklin D. Roosevelt knew that. He’s the reason U.S. presidents are judged by the sum of their accomplishments in their first 100 days in office.

When FDR was inaugurated in 1933, the country was in the midst of the Great Depression. He didn’t waste time tinkering. After 100 days, he’d given the country the Emergency Banking Act, the Securities and Exchange Commission, the Civilian Conservation Corps, the Federal Emergency Relief Act and the Tennessee Valley Authority.

Obama may not inherit a Great Depression, but he’ll take the oath during an intense recession. Look at the news that arrived the same week as his election: unemployment rose to 6.5 percent after 10 straight months of jobs losses totaling more than 1.2 million; the stock market dropped 1,000 points in 48 hours after the worst October showing in two decades; auto makers travelled to Capitol Hill begging like hobos for handouts to stave off bankruptcy, two dozen major retailers revealed sales declines, most double digit, and the New York Times reported hospitals strained as they register fewer paying patients and increasing charity cases.

These problems won’t be solved with timidity. In his first press conference after the election, Obama said resolving the economic crisis is his top priority. He said, in fact, “I will confront the economic crisis head on.” No weak-heartedness suggested there.

He said a new president can restore confidence and advance an agenda for the middle class. That is exactly what FDR did with the combination of legislation and fireside chats.

During this brief press conference, Obama got it right, emphasizing aid to the middle class. He said it is essential to pass a rescue plan that would create jobs and extend unemployment benefits. He wants aid to state and local governments so they don’t increase taxes or furlough workers.

The federal government should help both small businesses and the huge auto industry, which provides jobs directly and indirectly through its suppliers.

The $700 billion bailout must be reviewed, he said, to ensure that it is stabilizing markets, that it’s not unduly rewarding the Wall Street risk-takers who caused the crisis, and that it’s helping families avoid foreclosure.

In addition, he said it’s essential to implement policies to grow the middle class such as investing in clean energy technology, resolving the nation’s health insurance dilemma, and providing tax relief for working families.

These are the correct priorities. And his plans are audacious. Which means he needs our help.

He called for bi-partisan cooperation in accomplishing these goals. But he’ll need more than that. He will need the kind of support he got in those weeks just before Election Day.

All of those who voted for him, all of those who want to keep hope alive, and all of those who want real change must demand both houses of Congress and both political parties work with Obama to accomplish it. Those who believe in real change must make it clear that they won’t stand by and allow courageous action to be reduced to faint-hearted baby steps.

On election night, Obama told the crowd in Chicago that the victory was theirs: “I know you didn’t do this just to win an election and I know you didn’t do it for me.”

Then he warned of what is ahead:

“You did it because you understand the enormity of the task that lies ahead. For even as we celebrate tonight, we know the challenges that tomorrow will bring are the greatest of our lifetime – two wars, a planet in peril, the worst financial crisis in a century.”

With more than 10,000 volunteers across the country, the United Steelworkers campaigned hard to help get Obama on that Chicago stage to make that speech. We will back him as he works to fulfill his promises of what is a New Deal for the new century. And we urge every American who wants real change to join us to ensure his success, the nation’s success.

 

International President

In a perverse way, the media painted Republicans perfectly when it selected red for their states.

Reporters would never have guessed when they did it that the red party’s candidate would engage in red-baiting. But there was John McCain repeatedly doing it in the debate Wednesday night, trying to convert Barack Obama into a terrifying “spread-the-wealth-around” commie. And earlier this month, the Republican’s brother, Joe “McCarthy” McCain, called two Democratic-leaning Virginia counties “Communist Country.”

When it comes to spreading assets around, however, the royal red Republicans, led by King “I-am-a-capitalist-really” George, take the Triple Crown. Their upside down communism works like this: the middle class pays for the tax breaks awarded the nation’s rich and for the financial recklessness of Wall Street’s ultra-wealthy.

Trickle down

In the Republican world, in the view of John McCain and George W. Bush, it never, ever works the other way. A curse, they would say, on anyone who would dare suggest that the rich should be taxed so that government could “trickle down” a portion of their extraordinary wealth to benefit the majority.

They believe in “free markets,” that is, allowing financial markets to run unrestrained and unregulated, or as some have put it recently – amok. They believe government interferes in markets and therefore should be shrunken and impotent. They believe that when an elite few accumulate wealth in that system, some of it naturally will eventually “trickle down” into the empty porridge bowls of the nation’s vast unworthy masses.

A dreadful thing happened on the way to the fiscal crash, though. That philosophy failed.

The “small government” Bush and Republican Congress increased spending, thus replacing the budget surplus bequeathed them with deficits. And not just any deficits – the largest known to man — $455 billion this year, edging out the $413 billion record debt Bush set in 2004.

The rich won’t be paying for that. No, Bush gave them a tax break, and McCain swears he’ll make that break for the wealthy permanent. The middle class, and their children and grandchildren will be making payments on that debt — which, by the way, was caused in part by the revenue loss from Bush’s tax break for the rich.

That’s spreading the wealth around – from the pockets of middle class to trust funds of the rich.

Over the past eight years, middle class Americans have watched with shock and awe as corrupt and incompetent CEOs left their failing corporations with golden parachutes – like McCain’s top financial advisor Carly Fiorina, who exited Hewlett-Packard with $45 million in 2005 when the board dismissed her as CEO following the company’s stock dropping 50 percent and her furloughing 20,000 workers.

Bail out speculators

Now those same middle class Americans are incredulous as Bush — who had McCain’s support 90 percent of the time over the past eight years — is taking $700 billion of their tax dollars to nationalize banks. Their tax dollars will be used to bail out the Wall Street financiers who wouldn’t cut the middle class a break when they were late on mortgage payments, the speculators whose uninhibited risk-taking caused financial institutions to fail, lending to freeze, stocks to swoon.

Deregulation of the financial industry allowed banks and other sorts of financial institutions to merge and become “too big to fail” and engage in risky purchases without sufficient supporting capital. McCain, who until recently bragged about being “Mr. Deregulation,” endorsed this suspension of rules. Its chief champion served as his campaign co-chairman – former Texas Senator Phil Gramm.

Gramm successfully pressed for repeal of the depression-era Glass-Steagall Act, which was designed to prevent financial institutions from becoming too big to fail, and for passage of the Commodity Futures Modernization Act of 2000 that deregulated those now infamous credit default swaps that took down insurer AIG, costing taxpayers another $85 billion.

Gramm left the senate in 2002 for an executive position with the Swiss investment bank, UBS, the stock for which, by the way, has plummeted right along with that of American banks.

McCain’s mentor

Gramm still advises McCain, though he’s no longer campaign co-chair. He had to resign that position after he called the United States a nation of whiners during an interview in which he also denied the seriousness of the financial crisis. Here’s what McCain’s financial mentor said, “You’ve heard of mental depression; this is a mental recession.”

Sure, when the coins of the middle class are flowing up into your pockets, Mr. Gramm, it doesn’t feel like a recession at all. Spreading the wealth around – from the middle class to the wealthy Gramms and multi-millionaire McCains.

Really, Joe “McCarthy” McCain was right when he called the Virginia counties of Arlington and Alexandria Communist Country. John McCain owns a condo in Arlington, and that’s where he located his campaign’s national headquarters. They’re communist all right, McCain Republican-communist, under which middle class earnings are spread to the rich.

In the debate Wednesday night, McCain accused Barack Obama of conducting class warfare because the Democrat wants to end Bush’s tax breaks for the wealthy and instead cut the taxes of the middle class – 95 percent of American families.

What Obama proposes isn’t warfare; it’s fairness.

Class warfare is what the Republicans have done to the middle class over the past eight years, and what McCain pledges to continue. It’s a war the rich now are winning.

That’s what Obama wants to change.

John McCain should not be traveling in a bus called the Straight Talk Express.
No, that equivocating multimillionaire who kowtows constantly to the wealthy should be riding in one of those private, gilded railroad cars.
That would be symbolically appropriate as well since he is trying to railroad the middle class on taxes.
He is actually proposing a brand new tax on the middle class.
This has gotten so little attention it is astounding. And frightening, frankly, as television reporters and commentators focus instead on inane incidents like the lipstick-on-pigs remark.
McCain intends to tax workers for the value of health insurance that they receive from their employers.
Really.
Although it’s not included in the description of his plan on his web site. It is, however, on the site of the Henry J. Kaiser Family Foundation, a non-profit organization that specializes in health policy.
I understand McCain neglecting to mention this new tax on the middle class. If I were proposing this shocking tax increase, one that will cost the average American worker an additional $110 a month in taxes out of the blue, I would conceal it as best I could too.

Taxing health insurance

So let me provide you with some clarity. This comes from the Kaiser Foundation evaluation of the McCain and Barack Obama health plans. It says McCain would “reform the tax code to eliminate the exclusion of the value of health insurance plans offered by employers from workers’ taxable income.”
The value of the typical plan provided by an employer to a family is $12,106, of which the employer pays $8,824, and the worker pays the remaining $3,282. The median household income is $44,389, which places most American families in the 15 percent income tax bracket.

McCain wants to add the employer’s cost — an additional $8,824 — to that middle class family’s income, then tax it. The hit to the average family is 15 percent of the McCain-added income — $1,323 more in income taxes.
This new tax would affect the 158 million Americans who are insured through their employer.
Right now you should be yelling, “What?” And demanding to know why you haven’t heard about this before. That is because the media keeps focusing on McCain’s proposed health care tax credits — $5,000 for families and $2,500 for individuals.

McCain certainly wants the attention to stay on those credits. It sounds so much better to be giving families tax credits than tax increases. But what you need to know about those tax credits is that they don’t go to you – they’re to be sent to the insurance companies. You never get actual money in your pocket. McCain says it right on his web site: “the money would be sent directly to the insurance provider.”
So if you choose to remain with your employer-based insurance, there’s no guarantee that you’ll ever see any benefit from that $5,000 payment. In addition, giving young healthy workers $2,500 to buy insurance on their own, where it won’t be taxed, will encourage them to leave employer-based plans, quickly raising the costs for everyone remaining and thus eliminating benefits of the tax credits. Finally, the tax credits rise only at the rate of inflation, not the vastly faster rate of medical costs, so, again, their value will quickly erode, according to several studies, including one released last week by health economists from Columbia, Harvard, Purdue and Michigan and published in the journal “Health Affairs.”
New tax

Still, somehow, no one mentions the new tax part of McCain’s plan!
Even the credits don’t sound so great after you hear the whole story.
John McCain wants to kill employer-provided health insurance. He wants every American to go out on his or her own and try to buy insurance. He says that on his site if you read between the doubletalk. He says, for example, “The key to health care reform is to restore control to the patients themselves.. . .Health care. . . should not be limited by where you work.”
Here’s the way the New York Times put it in an April 30 story, in which there was only straight talk: “Mr. McCain’s health care plan would shift the emphasis from insurance provided by employers to insurance bought by individuals.”
Since 2000, the percentage of employers offering health insurance has declined from 69 percent to 60 percent. Many more companies would dump their plans as soon as the federal government offered tax credits to individuals who bought their own. Corporations would disingenuously justify this abandonment the same way McCain does — by saying workers would get the advantage of carrying their individual plans from job to job as they move around the country.
They won’t mention the cost, however. To buy plans comparable to what workers now receive from employers, families are going to have to shell out a lot more money from their own pockets.
The math is simple. To buy the $12,106 plan with the $5,000 family tax credit, a worker is going to have to cough up an additional $3,824. (That is the $8,824 the employer previously paid toward the plan minus the $5,000 credit.)
That is, assuming, of course, that you can get coverage. Insurance companies are notorious for rejecting anyone with pre-existing conditions, including acne, being overweight and diabetes.

McCain wouldn’t qualify

John McCain himself would likely be unable to find an insurer on the private market since he’s had the most serious form of skin cancer, melanoma, more than once.
But he doesn’t have to worry because, as a U.S. senator, he’s covered by a government plan. And he’s certainly not proposing eliminating that!
McCain could resolve the exclusion problem by requiring insurance companies to accept people with pre-existing conditions. But he doesn’t. Instead, he suggests setting up a system in which states would become responsible making sure those people get insurance. He says he won’t shift the costs to the states, but what’s the chance of that? He’s establishing a pool of all of those rejected by insurance companies – thus those with the highest risk. And he’s telling the states to deal with the problem that creates.
Meanwhile, insurance companies would be left to profit big time by providing insurance for the young, the healthy and everyone who doesn’t have anything at all wrong with them. What a deal!
He claims this plan will increase competition and drive down prices – as if an individual worker, on his own, without any real knowledge of the system, has the negotiating power of a major corporation with full-time experts on its staff whose only function is to buy insurance for a pool of hundreds or thousands of workers.
While McCain is planning to increase your taxes if you’ve got insurance at work or to force you into the insurance market at a huge financial loss, he intends, at the same time, to cut taxes on corporations — you know, like those giant oil companies that just raked in the largest quarterly profits of any firm ever in the history of mankind. And he plans to permanently retain those income tax cuts his friend George W. Bush gave to the rich, because, of course, the wealthiest Americans, like McCain and Bush, need a break today.

Lying to American workers

In the meantime, McCain is traveling to states like Michigan, Ohio and Pennsylvania, hard hit by the economic devastation caused by eight years of Bush administration fiscal policy failures. At each stop, McCain is sucking up the middle class – as if his administration wouldn’t cost workers dearly.
He needs to stop lying to America’s workers.
In fact, maybe Mr. Straight-Talk-Express needs to slap on some lipstick. Because sometimes the truth is a bitch.

By Leo W. Gerard

International President

Sarah  ”Joe-Sixpack” Palin pulled her labor union roots out of the frozen Alaskan soil and started shaking them at normally union-allergic Republican crowds from the day John McCain announced her as his running mate.

Recently, she redoubled her efforts to cast herself not as a governor and member of an elite American family earning more than $165,000 a year, but as Joe Sixpack and someone whose membership in a union enabled her to secure health insurance for her family. Her confounding statements reveal John McCain as a hypocrite on the issue of unionization.

McCain, who has condemned unions as “serious excesses” and said government workers are “crippled by the fine print of the latest union contract,” introduced Palin by bragging about her union background — as if he approved. “The person I am about to introduce to you,” he said, “was a union member and is married to a union member.”

After that, Palin repeatedly put her husband, Todd, on display, telling crowds that he is “a proud member of the United Steelworkers Union.” Then, last week, Palin went on talk radio and said that her family was without health insurance or had to figure out how to buy it themselves, until, “Todd and I both landed a couple of good union jobs.”

That makes perfect sense since unionized workers are 28 percent more likely to be covered by employer-provided health insurance than nonunion workers, according to a study by the Economic Policy Institute. And employers with unionized workforces pay a greater share of the cost, lowering deductibles and co-payments for union families, the EPI study found.

What doesn’t make sense is for the anti-union McCain campaign to be boasting about the benefits of union membership. Like many Republicans, McCain has made it clear that he feels about unions the way an Alaskan aerial hunter does about wolves – best when dead.

John McCain denigrates labor leaders as “big union bosses” as if such a thing exists in a country where union membership has steadily declined for decades, a weakening caused by Republican policies implemented against the interests of organized labor and the middle class. McCain helped block the Employee Free Choice Act, which would help even the playing field between workers trying to organize their own workplaces to improve conditions and corporations that hire union-busters to prevent it. He voted to block a bill that would have protected American strikers against companies hiring permanent replacements – a safeguard for workers that is commonplace in other industrialized nations.

But, suddenly, when he needs the middle class vote, John S. McCain is trying to convert himself into John L. Lewis. It’s like his position on regulation. He was Mr. Deregulation until Wall Street collapsed. Now, he’s all for it. And his position on tax breaks for the nation’s wealthiest citizens. He voted against it twice. But now he has promised as part of his campaign platform to make that Bush tax break for the rich permanent. He was either for it before he was against it, or he was against it before he was for it. But in the case of unions, his lip service doesn’t automatically translate into a flip flop.

It’s one thing for Palin to acknowledge that her family was without health insurance until she and Todd joined unions. The McCain health insurance plan is another thing entirely. It won’t be good for the middle class, union members or not. It’s a flop. And McCain’s not flipping on that.

The pain in the McCain health plan is the tax. He plans to create a brand new tax on health care benefits. The value of employer-provided health benefits – the kind Palin got when she joined a union – would be added to workers’ incomes, then taxed. For a worker with a median income and health plan, the extra cost would be about $1,300 a year. But for union members, who earn more and whose insurance plans are better, the added taxes may be more than $3,000 a year.

McCain says he would offset that additional cost with tax credits — $2,500 for individuals and $5,000 for families. It won’t work though. The money is not a rebate for taxpayers but a credit for insurance companies. They money goes directly from government coffers into the pockets of insurers. And there’s nothing to prevent them from hiking up their prices by that amount – something that wouldn’t be out of the question considering the startling rate at which insurers have increased their fees.

Similarly, there’s nothing to stop employers from simply reducing the amount they pay toward insurance coverage by the amount of the “credit.” Maybe unions could stop their employers from cutting payments because of protections in contracts, but the “credits” would become another bargaining issue.

Numerous professional organizations that have analyzed McCain’s plan have projected that it would result in millions of young and healthy people leaving their newly income-taxed employer-provided plans and buying untaxed insurance with their tax credits. That would leave the older, less healthy workers in the employer-provided plan, making it increasingly expensive, and very quickly consuming at any portion of that $5,000 credit that might be left.

It is also projected that many employers will terminate coverage as costs rise, forcing workers to try to buy insurance on their own. And that raises another problem with the McCain plan – he will not require companies to insure people with pre-existing conditions, like allergies, asthma and diabetes. That would greatly increase the pool of 47 million uninsured in this country, including many a Joe Sixpack and his family.

All of this makes it particularly disconcerting for McCain’s emissary to publically celebrate the fact that her union card provided her family with health insurance. Palin needs to announce whether she disagrees with McCain — as she does on drilling in the Arctic National Wildlife Refuge — or whether she espouses the McPain plan to tax health care. Joe Sixpack wants to know.