It didn’t take long for critics to scoff at the costs of the latest effort to upgrade the fleet of presidential helicopters announced by the Defense Department on Wednesday, May 7. They say the $1.2-billion contract awarded to Sikorsky Aircraft Corporation will be just the beginning.
There are at least two reasons to be skeptical: the open-ended nature of the White House requirements, and recent history.
The Department of Defense outlined its requirements, stating that Marine Helicopter Squadron One, which currently operates 19 presidential helicopters, must provide “safe and timely transportation for the President and Vice President of the United States, heads of state and others as directed by the White House Military Office.”
In addition, each aircraft must be equipped with various self-defense features such as bulletproof glass and body panels, as well as specialized communications equipment that allows the president to maintain “critical command functions” while airborne. Each helicopter must be large enough to carry up to 14 passengers and several thousand pounds of baggage while being small enough to operate from the White House lawn.
Each must have a minimum range of 300 miles and carry a full complement of defensive countermeasures to thwart heat-seeking and radar-directed missiles and also be hardened against an EMP (electromagnetic pulse), either from an enemy or from the sun. It must be able to send and receive encrypted communications and hold secure teleconferences while in flight.
And each must have air-conditioning and a toilet.
Under the contract Sikorsky promises to deliver two prototypes by 2016, with another 21 fully operational aircraft six years later.
Several questions arise. First, why so many? After all, there’s just one president and one vice president. According to Helimart.com, anytime the president flies somewhere by helicopter, four other helicopters are alongside him. They fly in varying formations to keep the president’s aircraft as disguised as possible. This is often referred to as the presidential “shell game.” In addition, with a helicopter’s range of just 300 miles, a longer trip must “cache” additional aircraft along the route.
You don’t have to be an economic victim of the Great Recession to know that America’s middle class is being squeezed in an unprecedented manner. Not only is the U.S. middle class no longer the world’s richest, according to recent research, but millions of families who were once financially secure are now living hand-to-mouth.
What’s going on? A new report from the National Employment Law Project finds that, nearly five years after the recession officially ended, most of the jobs that have been created during the recovery offer lower wages. Such positions made up 22 percent of jobs lost in the recession, but have accounted for 44 percent of employment growth.
Where is the middle class heading?
The labor research and advocacy group also found that, from the outset of the recession in late 2007 to its low point in February of 2010, “employment losses occurred throughout the economy, but were concentrated in mid-wage and higher-wage industries.”
By contrast, mid-wage positions, which composed 37 percent of the jobs cut in the recession, have made up only 26 percent of those recovered. High-wage industries, which made up 41 percent of recession jobs lost, reportedly had a 30 percent recovery growth.
“Today, there are nearly 2 million fewer jobs in mid- and higher-wage industries than there were before the recession took hold, while there are 1.85 million more jobs in lower-wage industries,” NELP said in a statement,
Looking for a job? The ones you’ll find will likely be low wage.
The labor market has been recovering since the Great Recession ended, but many of the jobs created have been in low-wage industries, according to a new report by the National Employment Law Project, a left-leaning group.
Among the fastest-growing jobs: Food services, home health care and retail — all of which pay relatively little.
Better paying blue-collar industries, such as construction and manufacturing, have not recovered to their employment levels before the recession.
Lower wage industries accounted for 44% of employment growth since employment hit bottom in February 2010, the group found.
Going back to the start of the recession six years ago, the nation has added 1.85 million jobs in low-wage industries, but mid-wage and higher-wage industries have shed nearly 1 million positions each.
Oshkosh Corp. announced it would lay off 700 hourly positions starting in June and 60 salaried jobs by July in its defense segment.
Most of the salaried positions are temporary employees and people who are retiring. Following the cuts, Oshkosh Defense will have about 1,850 employees. The cuts reflect the reduction in defense spending by the U.S., which is returning to peacetime operations, said John Urias, executive vice president and president of Oshkosh Defense.
“We have gone to great lengths to minimize and delay the impact of the reduced spending on our Defense workforce,” Urias said. “We explored and implemented a range of alternatives from not filling open positions to bringing in outside contracted work as promised in earlier discussions with the UAW, which represents our production employees, as well as continuing to pursue relevant international opportunities.”
Originally Published: April 01, 2014 3:17 PM Modified: April 03, 2014 11:09 AM
Two defense ground vehicle manufacturers with a Michigan footprint have received production awards worth more than $120 million combined, to build several hundred new vehicles or vehicle components by late 2015.
Sterling Heights-based General Dynamics Land Systems reported today it has received a $74.7 million contract from the U.S. Marine Corps Systems Command in Quantico, Va. for “egress upgrade kits” to improve its fleet of Cougar infantry vehicles.
The company’s Force Protection subsidiary, created when GDLS acquired Ladson, S.C.-based Force Protection Inc. in 2011, will develop and produce 916 egress kits for the Cougar by September 2015 under that contract.
Medicare Advantage plans could see payment reductions of 1.9 percent next year under proposed rates announced Friday by the Centers for Medicare & Medicaid Services.
Insurers, who have led a fierce lobbying campaign against payment reductions, have said the combination of the health law’s lower payment rates, new fees on health plans and other factors, including automatic federalspending cuts known as “sequestration,” mean that Medicare Advantage plans will see their Medicare payment rates drop by 6 percent – or even more — in 2015.
CMS said Friday its preliminary estimate is “the combined effect of the Medicare Advantage growth percentage and the fee-for-service growth percentage.”
America’s Health Insurance Plans said they are reviewing the details of the announcement to determine the total impact of the federal payment rates. In a statement, AHIP President and CEO Karen Ignagni was critical of the proposed rates, saying, “The new proposed Medicare Advantage cuts would cause seniors in the program to lose benefits and choices on which they depend.”
The Obama administration, in an abrupt about-face, said on Monday it would drop proposed changes to Medicare drug coverage that met wide opposition on grounds they would harm health benefits for the elderly and disabled.
Late last week, more than 370 organizations representing insurers, drug makers, pharmacies, health providers and patients urged the Centers for Medicare and Medicaid Services (CMS) to withdraw changes it had proposed for Medicare Part D.
One of the federal government’s most successful and cost-effective healthcare programs, Part D provides drug benefits for the elderly and disabled through private insurers to 36 million enrollees.
Critics said the changes, if adopted in coming months, could not only undermine Part D benefits but impact drug benefits available through Medicare Advantage, a program that allows Medicare beneficiaries to obtain their major medical coverage through private insurers.
“Given the complexities of these issues and stakeholder input, we do not plan to finalize these proposals at this time. We will engage in further stakeholder input before advancing some or all of the changes in these areas in future years,” CMS Administrator Marilyn Tavenner advised in a letter sent on Monday to members of the Senate and House of Representatives.
The proposals were opposed by both Republicans and Democrats in Congress. The Republican Party had already begun to look for ways to leverage popular anger over the changes into campaign attacks on Democratic incumbents who could be vulnerable in November’s election showdown for control of Congress.
Elated critics of the proposed changes said the government had effectively agreed to start over in the face of broad, bipartisan opposition.
The Obama administration’s proposed cuts to Medicare Advantage plans — the private insurance plans that cover almost 30 percent of all Medicare beneficiaries — are fair and reasonable. As it happens, they are also mandated by law. Yet Republicans, sensing a campaign issue, are telling older and disabled Americans that the administration is “raiding Medicare Advantage to pay for Obamacare.” The health insurance industry, for its part, is warning that enrollees will suffer higher premiums, lower benefits and fewer choices among doctors if the cuts go into force.
Some of this could in fact happen, although the industry has cried wolf before and continues to thrive. But the key point is this: Over the past decade, enrollees in Medicare Advantage have received lots of extra benefits, thanks to unjustified federal subsidies to the insurance companies. Now they will have to do with somewhat less, unless the insurers are willing to absorb the cuts while maintaining benefits. Enrollment in these private plans, offered by companies like UnitedHealth and Humana, has more than doubled since 2006, in part because of lower premiums and extra benefits, like gym memberships, that are not included in traditional fee-for-service Medicare.
What made these perks possible was, in effect, a subsidy from taxpayers and other Medicare beneficiaries. The federal government paid the private plans, on average, 14 percent more in 2009 than it would cost to treat the same people in traditional Medicare. The insurers used this extra money to reduce enrollees’ costs and add benefits.
The 2010 Affordable Care Act rightly required that these subsidies be reduced, although it stopped short of completely eliminating them. The reductions began to take effect in 2012, and have not, so far, visibly harmed beneficiaries or the plans. Since enactment of the law, Medicare Advantage premiums have fallen by 10 percent, the opposite of what some expected, and enrollment has increased by nearly 33 percent, according to the administration. But as the law intended, federal payments to the private plans dropped — from 7 percent more than services under traditional Medicare in 2012 to 4 percent more last year. The administration now proposes to further reduce the payments to Medicare Advantage plans in 2015. The loudest criticism has come from Republicans, but plenty of Democrats have chimed in.
10 Stories From The Cold, Hard Streets Of America That Will Break Your Heart
By Michael Snyder, on February 23rd, 2014
If the economy is really “getting better”, then why have millions upon millions of formerly middle class Americans been pushed to the point of utter despair?
The stories that you are about to read are absolutely heartbreaking. I don’t know how anyone can read them without getting chills. In America today, if you lose a good job, there is a good chance that you will get back on your feet before too long. But there is also a good chance that you won’t be able to find a decent job and will plunge into the abyss of depression and desperation that so many millions of other Americans have fallen into. As I wrote about earlier this month, the U.S. economy is definitely not getting any better. For example, if you assume that the percentage of Americans that want to work is about at the long term average, then the official unemployment rate in the United States would be above 11 percent. And compared to six years ago, 1,154,000 fewer Americans are working today even though our population has gotten significantly larger since then. Behind all of these numbers are real flesh and blood people, and you are about to hear from some of them. The following are 10 stories from the cold, hard streets of America that will break your heart…
“While my wife goes to work, I’ve been staying at home to conserve fuel. I’ve been losing weight from eating less, so my family has more on their plates. It feels like the government and big business expect more and more while trying to give back as little as possible. Soon my internet connection will be shut off and since most companies don’t offer paper applications, how will I find work then? Walking around for miles a day, asking for an application that may or may not be available?”
#2 Homeless people wasting away in “Obamavilles” on the outskirts of Baltimore, Maryland…
A sheet of plastic laid over a clothesline. A mini-fortress of milk crates stacked under a tree. A thin mattress on a flimsy crate lying in a dark tunnel.
On the edge of Baltimore’s woodlands, dozens of the city’s transients live in makeshift homes which they consider safer than homeless shelters.
You can see some incredible photos of how these homeless people are living right here.
#3 A 50-year-old woman in Pennsylvania named Karen…
“My husband only makes 10 dollars an hour and drives 30 miles round trip, so it’s taking all we have just to keep the Jeep filled with gas. We stopped going to church and all to save gas. We are homebodies now, afraid to use what gas we have. We save two kids from getting put in foster care just to be hit like this. It’s just a constant trap they try to keep you from receiving any help! I’m so disgusted when my 12-year-old asks me why we don’t have snacks anymore, or why are we eating so much rice, etc.”
“I live right at ground zero. South West Virginia and let me tell you things are bad and getting worse by the day. We don’t do drugs but have family members hooked on meth and or pills or both. Many of these pills are prescribed by local doctors either Suboxone to get you off the opiates, a total joke by the way and tons of Xanax why would anyone need 120 Xanax a month how can you even be expected to function. These pills get traded for cash sex and other items, same goes for the SNAP cards. We have family members going to jail repeatedly for the same crimes making meth, selling pills and stealing anything that’s not nailed down. People who are 30 years old look like they are 55 years old. The jobs here are awful walmat, gas stations, fast food etc. Most of our whole county is on the government dole.”
“I was working as a firefighter for the state of California and was laid off in April 2012, right at the beginning of fire season. At my age, I’m not going to be picked up by another fire department. They want younger guys.
I’ve applied for everything from truck driver, to sales, to nonprofit work. I’ve sent out almost 400 resumes, and I’ve gotten nothing. I’ve done whatever I could to make ends meet.
Through some connections, I got a temp job as a truck driver in Napa Valley — a 3-hour commute from where I live. I lived in my car and worked during grape harvest.”
#6 In this tough economic environment, debt collectors are becoming even more aggressive. Just check out the kind of harassment that one woman named Jennifer Posey has been put through…
“This is Jimmy Lee calling from CheckCare. Just letting you know we’re in full force,” he said. The man had a thick Southern accent that stretched the word “you” into a two-syllable accusation. “We’re going to have warrants out for your arrest in Columbus, Ga.,” the man threatened. “We know you have an apartment on the canal in Clearwater.”
It was when he mentioned her home in Florida that Posey began to feel anxious. “We’re hurting you,” he continued. “We’re hurting your family, your son’s family, your cousin’s family. Whatever we can do to get you to pay.”
Forty minutes later, her phone rang again. “What about that 12-, 13-year-old child you’re trying to raise?” the voice sneered.
Republican lawmakers cried foul Friday night over an Obama administration proposal to cut payment rates to private insurers who administer Medicare Advantage, a popular alternative to the government-run health program for seniors.
Although not a surprise, the proposed cuts come after an intense lobbying effort by the insurance industry against slashing rates, citing the potential for higher costs to seniors, and GOP lawmakers this year are sure to use the cuts as further ammo against the Affordable Care Act and its Democratic supporters.
“The health law cut more than $300 billion from the popular Medicare Advantage program, potentially forcing hundreds of thousands of beneficiaries to find new health care plans, despite the president’s promise,” said Rep. Joe Pitts, Pennsylvania Republican and chairman of a House panel on health. “The cuts announced today will only exacerbate the effect this will have on the health care of millions of our nation’s seniors, leaving them with higher costs and fewer choices.”
About 15 million people, or slightly less than a third of all Medicare recipients, are enrolled Medicare Advantage plans, while the rest rely on the government’s fee-for-service model to reimburse doctors.
CMS officials insisted late Friday that the program is on the right course. It said Medicare Advantage premiums have fallen by 10 percent since the Affordable Care Act passed in 2010, while enrollment has increased to an all-time high 15 million enrollees.
“We believe that plans will continue their strong participation in the Medicare Advantage program in 2015 and beneficiaries will continue to have a wide array of high quality, high value, low cost options available to them while at the same time we are making certain that plans are providing value to Medicare and taxpayers,” said Jonathan Blum, CMS’s principal deputy administrator.
On Sunday, members of the Machinists Union District 837 in St. Louis will vote on a new seven-and-a-half-year contract extension, similar to what Machinists in Washington state barely approved on January 3 to win production of the 777X airliner.
One thing in common is that the St. Louis Machinists are also being asked to move away from a traditional pension plan to a 401k style “defined contribution plan.” In those plans employee contributions into a retirement fund are matched by the company, with the money invested in things like stocks and bonds. That move has been met with anger and resistance in the Puget Sound.
The St. Louis labor agreement was announced Wednesday night and is being recommended by the leadership for passage. Unlike the Puget Sound region of Washington, which is seeing a booming business in airliner production, St. Louis factories are focused on fighter jets and military hardware and are struggling with tighter defense budgets.
Right now production of the F-18 Super Hornet is slated to end in just two years in 2016 unless more orders can be found. Boeing is expected to make the case to the Pentagon that by lowering the relative price of the jets with a new labor deal it can bring in more business and secure jobs. The plant also makes big parts for the C-17 cargo jet for the U.S. Air Force that is slated to shut down in late 2015. Boeing assembles the C-17 in Long Beach, California.
AOL became the latest company to blame Obamacare for cutting back on employee benefits.
The tech firm will now pay its 401(k) company match only to employees who are active on Dec. 31 of that year, as opposed to in their paychecks throughout the year. So those who leave the company before the end of the year will forfeit the match.
AOL (AOL) CEO Tim Armstrong blamed $7.1 million in additional Obamacare costs the company is facing this year. Had the company not made the change in its 401(k) payments, employees would have seen their health insurance costs increase, he told CNN Thursday.
Armstrong did not provide a lot of specifics about what aspects of Obamacare were pushing up the company’s health care costs, but said it was one factor affecting the 401(k) restructuring.
“The Obamacare Act and some of the changes that happened there had increases in our health care costs,” Armstrong told CNN. “We had to make a choice whether we pass those on or whether we took other benefits and reduce them.”
Some employees will still see their premiums rise, depending on the plan they picked, though AOL “ate a huge piece of the increase.”
The news came on a day when AOL announced 2013 was “its most successful year in the last decade,” reporting revenues of $2.3 billion.
AOL chief executive Tim Armstrong blames the new health care law for why his company has made a major change to its 401(k) benefits. (Photo by Pete Marovich/Bloomberg)
AOL chief executive Tim Armstrong Thursday offered a number of unusual explanations for why his company pulled back its 401(k) benefits for employees this year. The first reason: Obamacare. The second: two women at the company who had “distressed babies” in 2012.
The stock, which reached $51 on Thursday morning because of a good earnings release by AOL, fell to 47.15 by the end of regular trading. It’s down another 2.5 percent Friday.
How did this mess begin? The Washington Post reported Tuesday that AOL quietly made a major change to its 401(k) plan by switching its match to a lump sum at the end of the year, rather than contributing with every paycheck. The benefit is only available to employees who are still active on Dec. 31.
Retirement experts widely agree that the change hurts all employees–not just those who leave mid-year–since savers miss out on the benefits of investing more money throughout the year, a strategy known as “dollar cost averaging.”
When he was asked on CNBC this morning why AOL was making the change, Armstrong said it was to spare employees from what he described as the added costs of Obamacare.
All things being equal, it would be better for the country to have less debt. Nobody seriously disputes this, but the fact is that all things are not now, and are never really, equal. Today there is a strong argument that it is a wise time to make a strategic investment in U.S. infrastructure by adding to the country’s debt while interest rates remain extremely low.
The World Economic Forum’s Global Competitiveness Report for 2013-2014 ranked the United States a respectable No. 5 in term of overall competitiveness. But our prospects for the future are clouded by an infrastructure ranking that barely cracks the top 20.
On multiple ratings, the U.S. came out on top in exactly one category: the availability of airline travel. Other than that, rankings on the quality of roads (18th), rail (17th), ports (16th) and other measures show it trailing many of its international competitors.
Earlier this year, the American Society of Civil Engineers issued its annual infrastructure report card, and awarded the U.S. a D+ for infrastructure. You can discount the ASCE’s findings as you please, considering the fact that civil engineers, as a whole, benefit from increased infrastructure spending, but the numbers are hard to argue with.
A few highlights from the report:
One in four bridges in the U.S. today are either structurally deficient, meaning that their condition has deteriorated to the point that they require annual safety inspections to remain open, or functionally obsolete, which means that they were built to such a low standard that they would be illegal to build today.
“Almost half of America’s public school buildings were built to educate the baby boomers – a generation that is now retiring from the workforce,” the report found. Meanwhile, annual spending on school construction fell to $10 billion in 2012, down 50 percent from pre-recession levels.
Congestion alone on U.S. highways costs the economy $101 billion in fuel and lost productivity every year.
Where’s The Moral Outrage’ Over Daily Disaster Of America’s Bridges, Experts Ask
The scene of a bridge collapse on Interstate 5 on May 23, 2013, near Mt. Vernon, Wash. The interstate connects Seattle to Vancouver, B.C., Canada. | Stephen Brashear via Getty Images
WASHINGTON — Bridgegate has been a nightmare for New Jersey Gov. Chris Christie (R), but it could have one upside for the rest of America: The scandal has refocused desperately needed attention on the New York metropolitan area’s traffic bottlenecks and, more generally, the perilous state of America’s bridges.
For years, leading transportation experts have been sounding the alarm over the country’s aging infrastructure, warning that many bridges — primarily those built during or before the Eisenhower administration — struggle to handle today’s traffic demands.
The George Washington Bridge at the center of the Christie scandal is not on the most endangered list, although it is undergoing some major work. But the American Society of Civil Engineers (ASCE) has identified thousands of other bridges in poor condition that could present dangers to commuters.
The state of New Jersey, Christie’s domain, has 6,554 bridges in all, and 651 of them are considered structurally deficient — meaning they are either deteriorating or severely damaged. More than one-quarter of them are considered functionally obsolete, meaning they no longer meet current standards, according to the ASCE. In New York state, 2,168 bridges out of 17,420 have been found to be structurally deficient, and 4,718 bridges are functionally obsolete.
The ASCE estimates that more than 200 million trips are taken across structurally deficient or functionally obsolete bridges every day in 102 metropolitan regions nationwide. One in nine of the nation’s 607,380 bridges are rated as structurally deficient, while the average age of bridges nationwide is 42 years, according to an analysis by the ASCE. In its authoritative report card for 2013, the group gave the country’s bridges an overall C+ grade.
Eight hours may seem a long time to wait for a meal. But the line of cars that formed in a derelict parking lot in Hertford, North Carolina, early last Thursday morning, full of people waiting for a few cans of soup and some pasta from a local food bank, was nothing unusual. Almost every morning now, there is a line like that somewhere in North Carolina.
From a distance, the rows of cars look innocuous enough. But they are a symbol of the desperation that has gotten worse in North Carolina since July, when a swathe of cuts to unemployment benefits made it arguably the worst state in the US to be out of work.
The cars appeared in Hertford shortly before 8am, though the truck bringing the food was not scheduled to arrive until 4pm. Volunteers who hand out the food said it is not uncommon for cars to start lining up before dawn.
“I had a man the other day who said: ‘All I want is a bar of soap,’” said Laura Williams, a volunteer at the storage depot in nearby Elizabeth City. “Another man came in here and said: ‘Can you get me some toilet paper? I’ve been having to use coffee filters.’”
She added: “We get that a lot – people asking for toilet paper. But we can’t stock too much of that as we’ve got to concentrate on canned food.”
Washington has this month been dominated by a political fight over whether to restore a federal benefits program for the long-term unemployed, which was allowed to expire on 28 December, cutting off a lifeline to more than 1.4 million Americans. The White House and Democrats want to reinstate the benefits. Republicans are reluctant.
What North Carolina is currently experiencing is a foretaste of the economic story likely to unfold across the country unless the federal benefits are restored.
The people in line on Thursday constituted a cross-section of America’s poor. Of those who wound down their windows and agreed to talk, the eldest was 77, the youngest 19. They included pensioners, students, people working for minimum wage and some who had recently been laid off. They were there so early, and willing to wait so long, because they wanted to increase their chances of receiving perishable items rather than just canned goods. Get a spot near the front of the line, and you might get some fresh vegetables, bread, or even some frozen chicken.
By 4pm, there were more than 100 cars in the dilapidated parking lot – once a bustling shopping mall. At the very front were Floyd Liston, 59, and his friend, Bobby Bass, 65. Their story was not atypical.
Bass is retired after years working in a cotton mill. Liston, a diabetic, worked all his life but had to give up in 2011 after a routine blister on his foot deteriorated. Married with two daughters, Liston didn’t have health insurance and did not visit a doctor until it was too late. “The infection had eaten all the bone. They told me to go to the hospital and that night they took my leg off,” he said.
In February, in an attempt to address a $2bn debt that it owed the federal government, North Carolina passed a law that slashed both the number of weeks for which a job-seeker can receive state benefits and reduced the amount that it pays out in unemployment, from $535 a week to $350.
In doing so, North Carolina knowingly violated a contract with the federal government, resulting in the automatic cutting off of federal assistance for the long-term unemployed. The changes, which came into effect in July, therefore didn’t just cut the amount of support that people who lost their jobs received from their government by a third, it also meant the maximum length of time they could receive such benefits plummeted from 99 weeks to just 19.
“What happened in North Carolina was one the harshest cuts in unemployment benefits we’ve ever seen in this country,” said Mike Evangelist, a policy director at the National Employment Law Project. “Nothing I know of compares to it.”
The precise impact of the benefits reduction in North Carolina is difficult to discern, said Larry Katz, a Harvard professor. But he and other economists have recently been pointing to figures that hint at an alarming phenomena: people have been dropping out of an already bleak labor market, and in record numbers.
Since July, when the cuts came into force, North Carolina has experienced the largest contraction in its labor force since record-keeping began in 1977. Remarkably, the sharp decline in the workforce in North Carolina, which has a population of 9.75 million, has even altered the national picture.
Timothy Littke, 55, from Lumberton, gave up looking for work in North Carolina in October. He was laid off from his job building hog feeders in June, a month before the benefits cuts kicked in.
He has since relocated to live with his daughter in Pittsburgh. The story of Littke’s departure says much about about deprivation in his old home of Lumberton – a small city in the south of the state which, by one measure, is the poorest in America.
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