Brendan Williams

Guest column by Brendan Williams, former Washington State legislator

When 61% of Ohio voters rejected Issue 2 and repealed an anti-labor bill signed into law March 31 by Republican Governor John Kasich on Election Day, considerable attention was paid to the fact that the repealed bill sought to impose draconian curbs upon the ability of public workers to collectively bargain.  Indeed, it flatly prohibited bargaining in certain cases, including in publicly-funded charter schools.

Less noticed, perhaps, was that among those new provisions overturned was Section 4117.08, which stated, “The provision of health care benefits for which the employer is required to pay more than eighty-five per cent of the cost is not an appropriate subject for collective bargaining.”

In other words, Ohio voters rejected the idea that it should be impossible for public workers to pay less than 15% of their health care costs.  Following this repudiation, the state and public workers sat down to bargain again.  In a deal announced November 16 by the Ohio Civil Service Employees Association, AFSME Local 11, the state agreed to extend the current contract three years from its expiration date of February 29, 2012.

Thus a state with one of the nation’s most anti-union governors has agreed, through 2015, to hold the state workers share of health care premium costs at the level – 15% – to which they rose here in Washington in last year’s legislative session.

That’s a lesson for both Republicans, and supposed Democrats, in the Washington Legislature who keep calling on state workers to pay an even higher share of cost.  It should give them pause when the special session begins November 28.

Even Wisconsin Governor Scott Walker, despite a series of anti-union measures contributing toward a current recall effort directed against him, had not sought to increase health care premium costs for state workers to the level now required in Washington.  A Wisconsin state worker now pays $208 a month for family health care coverage.  In comparison, the choice between three substantive Washington benefits plans would cost a state worker’s family from $236-288 a month.

By “substantive” I do not refer to the new so-called “Consumer Driven Health Plan” that the state is offering combined with Health Savings Accounts.  This Republican idea, which has been offered by Republicans at the federal level as an alternative to universal health care, somehow passed a Democratic Legislature and was signed into law this past session.  It can be regarded as the antithesis of a universal health care system.  By cherry-picking the healthy, this new scheme may end up raising costs for other state workers.

Compare Washington to neighboring Oregon, where state workers are valued.  In Oregon, the state worker share of health care premium costs went up to a historic high of 5% – just one-third of the burden in Washington.  To help ease that burden Oregon state workers will receive a 1.5% cost-of-living-adjustment (COLA) next month, coupled with a 1.45% COLA in January 2013.  A 2.95% COLA looks pretty good compared to the 3% pay cut state workers here were forced to take, along with their increased health care costs.

Connecticut is among those states that went further, giving state workers 3% annual wage increases through 2015 while locking in their health care benefits through 2022.  Even the Republican governor of Missouri’s Office of Administration is recommending legislators grant state workers a 2% wage increase.

Here in Washington, the idea of having state workers pay more toward health care is really a false solution to a revenue shortfall not of their making.

For the remainder of the biennium, requiring state workers to pay 25% – as opposed to 15% – of their health care premium costs would only “save” the state $28 million (in comparison, Gov. Gregoire thinks she can save $16 million simply by reducing the state’s contribution by $25 a worker to reflect actual health care utilization).

That $28 million is compared to a revenue shortfall of $1.4 billion, and the very real possibility of as much as $2 billion in cuts to both bridge this gap and restore reserves.

Yet, strangely, the idea of further gouging state workers generates disproportionate interest from the likes of the Seattle Times’ editorial board and certain conservative legislators of both parties.

The fact that, as of a September 2011 headcount, there were 6,549 fewer state workers than three years prior – with those left doing more for less – has not abated the appetite of those who wish to see them further suffer.  Meanwhile the Wall Street architects of our economic collapse prosper.  We can expect further calls for contracting out, despite findings like those of the Washington, D.C.-based Project on Government Oversight that the average contracted project costs government 83% more than its government-run equivalent.  A proposed cut like $5.4 million for medical interpreters would result in outsourcing such work to those, via telephone, not on the scene – jeapardizing patient safety.

Even assuming another 1,500 or so state workers’ jobs are lost under the proposed budget, and that another $28 million could be flogged out of those remaining – further depressing morale and increasing financial strain, credit defaults, and home foreclosures – the question would remain as to how the rest of the state’s revenue problem would be addressed.

Beyond further attacks upon state workers, we have seen few concrete ideas offered by conservatives.  Thus, the question for a Democratically-controlled Legislature is: Toward what end would we want to continue down the path of treating our state workers worse than John Kasich and Scott Walker?  While others rally will we fold?

Stan Sorscher, EOI Board Member

Guest post by Stan Sorscher

In a somewhat contentious Town Hall meeting, some of my Congressmember’s constituents, including me, were challenging his adherence to “free trade” policies. In his defense he said, “Go watch The Constant Gardener.” So I did.

Many scenes are shot in Africa, with vivid images of urban slums and timeless poverty, where people express dignity, strength and courage every day. A foreign pharmaceutical company is conducting drug trials using legions of Africans as test subjects. The experimental protocol ignores the villagers’ interests, killing many of them, providing none of the protections we would normally expect of clinical trials in a Western democracy.

The African city has no institutions of civil society (other than the inherent good nature of the people) – weak and distant government, bribery, police corruption, overwhelmed hospitals, a primitive public health agency, no scientific community, no free press or journalism, organized social or political activity…except for the local police, who serve the drug company. Every mother, father and child in the clinical trial is reminded of his or her own insecurity. Everyone dreads being singled out for anti-corporate behavior.

Things go badly, as you might imagine.

The movie is a work of fiction. What it tells us about trade is this: Public policies – trade policy included – create winners and losers. In this case, the winner is a multinational company acting with very little intervention from civil society. The losers are people and their communities who have no voice in choosing their own future.

To be clear: I am 100% in favor of trade. The question is not “trade or no trade”. The question is “good trade policy or bad trade policy”. I know a good trade policy when I see it: It will raise my standard of living. A bad trade policy lowers my standard of living.

Western democracies succeed because we have a strong middle class and strong institutions of civil society. We have the political balance to protect clean water and clean air. We regulate drugs, food, banks, and many consumer goods. We invest in public infrastructure, education, and R&D. We provide workplace safety, minimum wage, unemployment insurance, free speech rights, and more.

From the 60′s until now, South Korea enjoyed extraordinary growth using well-designed industrial policies, consistent with their strong cultural values of national identity and social obligation. South Korea’s industrial policies effectively balanced business interests with the public interest. This is the opposite of free trade.

By design, free trade agreements give investor interests highest priority – above the environment, human rights, labor rights, public health and financial regulation. Free trade agreements are full of rights for business, but conspicuously downplay rights for workers, people or the planet.

Under free trade rules, a mining company can overwhelm the resources of a small country, ruin the water supply, and clear forests over the objections of local governments and people. Political power steadily concentrates in favor of those with the most money, while the middle class erodes and communities are weakened.

It would never occur to us to dismantle the balancing controls that make capitalism work well. We would never concentrate unchecked power in the hands or multinational businesses, and investor interests. Would we?

Twenty years ago, many of us recognized the unbalanced design of free trade, but we thought, “It couldn’t happen here!” Our strong middle class and strong institutions of civil society would protect us from harm.

Now, we can see that it worked the other way. As global businesses acquired more political power, living standards have steadily eroded for workers, families, communities and Main Street businesses. We see growing wealth inequality, deindustrialization of our economy, and reduced prospects for our children.

For many Koreans, the US-Korea Free trade agreement represents a historic break in policy. Under the Korea-US Free Trade agreement, Hyundai, Samsung and other large Korean companies can drop their social duty, and move toward the global view that shareholders and business executives get their piece of prosperity first, while everyone else can wait for their share to trickle down.

Under the US-Korea Free trade agreement, we may soon see South Korean products built with North Korean labor from the Kaesong Industrial Complex. This would make scenes in The Constant Gardener look like a workers’ paradise.

It is happening in America. It will start happening in South Korea. It has long since happened in Colombia – a textbook case of civil society crushed in favor of a wealthy elites and global capital. The US-Colombia free trade agreement will be a bitter pill for most Colombians.

Free trade is not an issue of workers in one country against workers in another. Instead, the issue is civil society in both countries being swept aside by investors and global corporate interests in both countries.

Why did my Congressman recommend the movie? I think the movie touched his heart. He is an advocate for good health care. I think he developed great sympathy for people in Africa, when he was posted there with the State Department. He feels strongly that America’s middle class is under threat.

We need policies for foreign trade that look like the policies that industrialized America, Korea, Japan, Singapore and much of Europe. Those policies were designed to create strong communities, opportunity and fairness, shared prosperity and investment in the future. For the most part, those policies focused on domestic investment and respect for the environment, human rights, labor rights, public health and financial regulation.

Free trade makes sense to market ideologues and it works sensationally well for the top 1% in each country, at least in the short term. Free trade is bad for workers, bad for communities, bad for long-term prosperity, and bad public policy.

(Here’s a four minute video version of this post):

John Burbank, Executive Director

Reprinted from The Everett Herald

It isn’t any surprise that people are pessimistic and negative right now. If we have jobs, we are worried about keeping them. If we don’t, we are worried about making ends meet, especially as unemployment insurance has run out for tens of thousands of jobless workers in our state.

We see the stock market lose billions, then gain billions, then lose billions again in the space of several hours. Tuition has broken the $10,000 barrier at the University of Washington, and $3,500 at Everett Community College. More and more people are working without health insurance, while the state has steadily defunded basic health coverage. Class sizes are increasing, actual courses are decreasing, and physical education and arts and music are left shriveling on the vine of wilted revenues.

But we are not all in this boat together. We are not all sharing the doubt, fear and suffering. The corporate elites of Boeing and Microsoft and Amazon and Starbucks are doing just fine. The largest businesses in the United States are enjoying record profits. Paul Allen has his islands and submarines. Jeff Bezos can fund his Bezos Family Foundation, which focuses on education and young people, while defunding public education across the country by threatening to leave any state that tries to collect sales taxes on Amazon sales.

After Sept. 11, 2001, we as a people had a moment of solidarity with each other and with our country. We were ready to answer the call to protect our country, to build our democratic society and to realize the greater good. We collectively blew up that moment of patriotism by answering George W. Bush’s call to go shopping.

We allowed that president to lead us down a road of lies and into wars which the current president still hasn’t gotten us out of. Instead of funding our schools, our roads, our health coverage, and yes, our wars, we gave Bush a pass to cut taxes again and again, especially on the wealthy.

The current president, despite all he says, is continuing that tradition. Instead of workers’ wages keeping up with productivity increases, or at least inflation, we have allowed them to fall behind, while increasing workers’ payments for health care, retirement accounts, and their kids’ higher education. Instead of acknowledging Social Security as the backbone of retirement income, especially with the cratering of 401(k) accounts and the extinction of defined benefit accounts, we allow ourselves to be deluded into undermining Social Security as well. Instead of realizing what the current President promised as universal health care, more and more Americans have no health insurance and our elected leaders appear willing to make us wait until we are 67 years old to get Medicare.

We are not a stronger or better country now than 10 years ago. The multinational corporations that are based in America, like Boeing, Microsoft and GE, are stronger and wealthier. But we aren’t. We are a divided and fearful nation. So maybe we should look north, across the border, for inspiration.

The second largest political party in Canada is the New Democratic Party (NDP). It is largely supported by workers and unions. This party made universal health coverage a reality in Canada. It has ensured affordable higher education. Thanks to the NDP, all workers can balance work and family with family leave insurance. For the NDP, family values are not just rhetoric — they are part of the fabric of life and law in Canada.

Three weeks ago, Jack Layton, the leader of the NDP, lost his fight with cancer. Layton wrote a letter to his fellow Canadians just two days before he died. He signed off with this salute: “My friends, love is better than anger. Hope is better than fear. Optimism is better than despair. So let us be loving, hopeful and optimistic. And we’ll change the world.”

That is something for all of us to consider, whether we live north of the border, or in these United States. We can reclaim the spirit and solidarity of Sept. 12, 2001. But we won’t do it by undermining our own government and the public services it provides. That was the agenda of greed and you-are-on-your-own enabled by the attacks of Sept. 11, 2001.

If we want a future of opportunity and security for our children, we must put what is best for all of us first. It is not me, it is us.

[CORRECTION: The original version of this column incorrectly stated that Jeff Bezos funds an environmental camp on Bainbridge Island. That camp is actually funded by Paul Brainerd.]

Click for full report

For 30 years Washington state and the U.S. as a whole have experienced a decline in the middle class. If you listen to the pundits on TV, it sounds like it was inevitable – or at least unavoidable. Nothing could be further from the truth.

The rise of the middle class in the post-WWII era wasn’t an anomaly. It was the direct result of policy choices at both the federal and state level to grow a middle class. Likewise, the current decline of the middle class is due to policy choices at the federal and state level – although the continuing effects of the Great Recession are making it worse.

In the report Under Attack: Washington’s Middle Class and the Jobs Crisis, EOI and Demos collaborated to examine the decline in middle income jobs, rising inequality, a decline in benefits that meet the basic needs of a changing workforce, and the rising cost of the American Dream, including home ownership and a college education.

This generation will likely be the first to have a lower standard of living than their parents. For example: from 2001 to 2011, tuition at the University of Washington increased by between 6% – 20% per year – from $3,983 in 2001 to more than $10,500 in 2011. Washington now ranks 32nd among the states in percentage of low income students participating in post-secondary education. The top 1% now claims 35% of the nation’s wealth – nearly double that of the past 3 decades – while overall wealth has declined for the bottom 90%.

The growth of the middle class in the 20th century was reinforced by high levels of public investment in infrastructure and education – and everybody, including the wealthy, paid their fair share. Today, wealthy individuals and corporations are paying the lowest tax rates in nearly a century – and state and federal policy choices seem focused on slashing educational opportunity, health and basic services, instead of investing in American infrastructure and talent to bring us out of the recession,

The obsession with the federal deficit is threatening to be the coup de grâce to the American dream. The American people and the people of Washington state deserve better choices.

The U.S. health care system is possibly the most inefficient in the world: We spend twice as much per person on health care as other advanced countries, but we have worse health outcomes, including a lower life expectancy. The government, through programs like Medicare and Medicaid, pays for approximately half of the country’s health care, almost all of which is actually provided by the private sector. Thus, the bulk of our projected rising budget deficits are due to skyrocketing health care costs.

Click to use the interactive chart

The CEPR Health Care Budget Deficit Calculator shows that if the U.S. can get health care costs under control, our budget deficits will not rise uncontrollably in the future. But if we fail to contain health care costs, then it will be almost impossible to prevent exploding future budget deficits.

The Calculator lets you see what projected U.S. budget deficits would be if we had the same per person health care costs as any of the countries listed below, all of which enjoy longer life expectancies than the U.S. (Life expectancies are listed in parentheses.)

The yellow line shows projected deficits based on baseline projections from the non-partisan Congressional Budget Office (CBO). The blue line shows where the deficits would be if health care costs in the U.S. were to rise only due to the aging of the population and stay even with per capita GDP growth (based on CBO’s “Low Health Care Cost” projection).

Use the CEPR calculator »

vs.

It’s true: a ShamWow is more exciting when it’s being shown in the fourth city in six weeks. But we’re unconvinced that super-absorbent towels and other “unique” items deserve a tax exemption just because they’ve been on display at a trade show. Trade in this tax exemption to save medical interpreter services for thousands of patients and families in Washington!

It’s hard enough understanding complicated medical terminology in English – now imagine your doctor doesn’t speak your language. A visit to your doctor is too important to be treated like a high-stakes game of charades. That’s why doctors and patients alike rely on medical interpreters to provide life-saving medical information about treatments and prescriptions. Interpreter services improve the quality of care while reducing costly and deadly mistakes and errors. Ending this unnecessary and unfair tax exemption for sales of products displayed at trade shows would save medical interpreter services for thousands of patients and families.

If you agree, click here to ‘Trade In’ the fertilizer tax break for in-home case for thousands of Washington seniors.

Learn more: Trade-In the Sales Tax Giveaway for Display Items at Trade Shows and Save Medical Interpreter Services »

John Burbank, Executive Director

First you lose your job, then you lose your health insurance. If you take a lower wage job, chances are you won’t get health coverage with it. As a result, there are now more than 1 million people in Washington without health insurance.

Debate all you want about the long-term policy answers. In the meantime, the morally and fiscally responsible choice for our state is clear: save lives and money by keeping people insured.

With health insurance, people get preventative care and can treat conditions like diabetes, heart disease and cancer before they spiral out of control. Without it, people suffer unnecessarily, and we all pay higher premiums and more in taxes because we force people without insurance into expensive emergency room visits at the last minute.

Washington’s Basic Health Plan (BHP) used to address this problem by sharing the cost of health coverage with participants on a sliding scale based on age, family size and income. If your job didn’t pay much and didn’t offer health coverage (the two often go hand-in-hand), you could enroll in Basic Health. You paid your share and got insurance, much like any employer-provided coverage. The state made up the difference between the premiums paid by participants and the actual cost.

For example, let’s say you were married, age 45, and had a couple of kids. You need health coverage for you and your spouse, and together the two of you make $2,500 a month ($30,000 a year). You would pay $180 a month ($2,160 a year) for BHP coverage. On the other hand, once you and your spouse turn 55 your premium is $3,693 — that’s about one-eighth of your total yearly pre-tax income.

How many people get Basic Health? The high point was in 2003, with enrollment at 130,000. That was thanks to a vote of the people, which increased cigarette taxes to extend basic health coverage. That initiative — Initiative 773 — was approved with a two-thirds majority across the state.

But then, during the 2003-2004 recession, the Legislature kept the money from the cigarette tax, but “reprogrammed” it for other purposes. So Basic Health was cut off for 30,000 participants. Sort of a heartless thing to do in that recession, when more people were losing their private health coverage. But that has been the pattern for the Legislature.

Whenever we have a funding shortage, one of the first things to go is Basic Health. In 2010 the Legislature shrank coverage to 64,000. This year the governor and the Legislature cut Basic Health even further — only 40,000 people get coverage. Today if you try to enroll in the BHP, you’ll be on a waiting list behind 141,000 other Washingtonians. Even if you have BHP coverage now, you may not for much longer. Gov. Chris Gregoire’s proposed budget for 2011-13 would end the BHP completely.

In making decisions to cut public services, the Legislature hides behind Initiative 1053. That’s the initiative that says, “raising taxes must be approved by two-thirds legislative majorities…” That hasn’t deterred Reps. Marko Liias, D-Edmonds, John McCoy, D-Tulalip, Mike Sells, D-Everett and Mary Helen Roberts, D-Lynnwood. They are proposing a bill to close tax loopholes enjoyed by Bank of America and Chase Morgan, private jets, elective cosmetic surgery and out-of-state coal. House Bill 1847 would raise about $75 million a year to fund Basic Health. That money, combined with a federal match, would provide coverage for 60,000 people. That still doesn’t take care of all the people on the waiting list, but it is a whole lot better than nothing.

But what about Initiative 1053? The Legislature just needs to read our state’s Constitution. Article 2, Section 22 states, “No bill shall become a law unless … a majority of the members elected to each house be recorded … as voting in its favor.” That’s the Constitution. It doesn’t say two-thirds. It does say that we make laws with a simple majority of legislators. Sounds like democracy, doesn’t it?

The Legislature should pass HB 1847. Sure, the corporations would sue. And then the state Supreme Court would have to rule on the constitutionality of I-1053, which enables 17 senators out of 147 legislators to block any legislation to raise revenue to fund essential services. The Constitution is on our side. Let’s use it to fund Basic Health.

Since the late 1980′s, Washington’s Family Care Act (FCA) has helped ensure workers can use their paid sick days or other paid time off to care for a sick family member. For the most part, it’s worked well — but the FCA doesn’t give state agencies authority to stop employers from retaliating against workers who use the FCA.

Lawmakers are now considering two bills to create modest enforcement provisions for the FCA. We need your help to get this legislation passed and delivered to the Governor’s desk!

It’s easy: just call the state legislative hotline at 1-800-562-6000 and say you’d like to leave a message for your state Representatives and state Senator. (You’ll need to give your street address for your message to get to the right office.) If you prefer, you can also look up your legislators here and send each of them an email.

The best message is in your own words – but here are a few talking points you can use:

• I urge your support for (“House Bill 1828” if speaking with your Representative; “Substitute Senate Bill 5263“, if speaking with your Senator).

• For most employees and employers in the state, the Family Care Act has been working well. Unfortunately, in some cases follow up and enforcement is necessary.

• When people can care for their families, we all benefit from reduced health care costs, and employers benefit from better productivity and higher morale.

• Children and adults get better more quickly when a family member is present. Follow up care is improved when family members are able to hear doctor’s instructions.

Rep. Eileen Cody

On the heels of the worst economic collapse in decades, state legislators are looking for ways to fill a $5 billion+ revenue shortfall over the coming two years. It’s no small task, especially with hundreds of tax exemptions worth billions of dollars making Swiss cheese out of the state’s budget. But Rep. Eileen Cody has one specific proposal that just might work.

House Bill 1847, introduced by Cody last week, proposes closing tax loopholes for Wall Street Banks, elective cosmetic surgery, and private jets. The new revenue would be dedicated to saving the Washington Basic Health Plan – currently funded through April – which provides health coverage for tens of thousands of working families in Washington.

If you agree this is a smart policy idea, then drop your own legislator a line (or give them a call) to encourage them to support Rep. Cody’s bill.

There are more than 550 exemptions on the books in Washington. Many date from the 1930′s, but only a small share have been updated or reexamined since their initial passage. The state’s Joint Legislative Audit and Review Committee has scrutinized 95 of these special deals so far, in an attempt to measure their public value. More than one-third of those examined have been recommended for termination or reevaluation.

At a time when teachers are being laid off, programs shuttered, and every dollar squeezed, tax exemptions deserve the same level of scrutiny as every other government function, and should be prioritized accordingly. Please tell your representative to support HB 1847, and save Basic Health by ending unjust tax exemptions.

Davis rightly notes that spending on health care is a major driver in Washington’s budget. But he overlooks the simple fact that the state doesn’t set the price for health care any more than you or I set the price for fruit. The state can set reimbursement rates for different services, or negotiate to some extent with private insurance providers on the costs of employee health coverage.

But at the end of the day, Washington isn’t really providing health care – it is paying for it. That means if that reimbursement rate isn’t high enough, doctors won’t provide that particular service. (Or the insurance company won’t pay the doctor enough to provide it.) Similarly, if the state isn’t willing to pay a certain premium for employee health insurance, then employees don’t get health insurance.

Davis seems to think that if states just budget less for health care, that will somehow drive down overall health care costs. His proposals? Push more people into the private health insurance market, make more government payments to private insurers, and have more people paying more money for their health insurance. In other words, the same failed ideas that got us into our current health care mess.

If he really wanted to lay out why the U.S. health care system has higher costs and lower performance than other industrialized countries, Davis would write about the well-documented inefficiencies of the private health insurance market, including high paper shuffling costs and big executive compensation packages, among many other cost drivers.

Rather than addressing those underlying problems, Davis just argues that since private sector workers are paying a lot more of their salary toward health care, public sector workers ought to do the same. The truth is, with people losing their health insurance right and left, making health care less affordable for thousands of Washingtonians isn’t going to make people – or the state budget – any healthier.

You can choose not to buy apples and get (cheaper) bananas instead. But what do you substitute for health care?