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Highlights—April 6, 2013

  • Yahoo! IBM Pension and Retirement Issues message board: "IBM Annual Report" by "ibmmike2006". Full excerpt: I just received my Annual Stockholders report. There are Executive Compensation discussion. What came to light, is how IBM pays the 4000 Executives, about 1% of the IBM workforce specifically the "Performance Service Units" aka "Company Stock".

    The "pie chart" shows 10% salary (taxed at 44% ordinary Income) and 90% in Annual Incentive and "Performance Share Units" taxed at 15% capital gains tax rates thanks to a "tax Loophole" corporate executives have enjoyed for over 30 years.

    Before I was forced out along with 150,000 others older workers, the pay raises were miserable. Barely above inflation if I even got one." But, I noticed the corporate executives were buying back the company stock from the profits, boosting the stock price(with less shares) yet the employees, especially the long-term employees were getting nothing.

    So, with a 90% "tax incentive sweetheart deal" for IBM's 4000 employees to be paid in "Performance Share Units" aka stock (taxed at 15%) and "Stock Price Boosting" schemes, we, the non-corporate executives were not getting compensated for the longer hours, on call 24/7, and reduced benefits. If you read the details in the annual report on how "PSU" units are administered "quarterly reviews" to make sure, the 90% PSU compensation meets the end of year compensation level of $18 million for the CEO. In other words, the stock value (# of shares times price) will match the compensation target established at the beginning of the year regardless of stock price at the end of the year).

    This tax loophole has been hiding in plain sight. Not only IBM but in every corporation in America that compensates with company stock.

    Now you might have IBM and other stock in your 401K, in mutual funds or in annuities and IRA's and think that having corporate executives paid 90% in stock you hold is a good incentive and will boost your 401K or IRA value. But let me remind you, when you cash in any proceeds from an IRA or 401K, the tax rate is as high as 44%, NOT 15%.

    Recently I read a book, Winner take all Politics where the author disclosed just who are the most wealthiest 0.1% of American households; about 140,000 households of the 140 million. Nearly 50% of those 140,000, about 70,000, are former and current corporate executives. 19% of the 140,000 households are Wall Street bankers. What do they have in common? Taxed at 15% with compensation schemes like "PSU", stock buybacks, and other ruses that qualifies their income to be taxed at 15%. While the non-corporate executives (the 99%) are taxed at ordinary income tax rates of 39% federal and 5% state - 44%.

    As Leona Helmsley stated "Only the little people pay taxes". She was right. But is it right? I THINK not.

    I remember sitting across my kitchen table with a future congressman wanting my vote in the primary who said a priority for her term was lowering the capital gains taxes from 20% to 15%. I told her I did not know of that many people who had a capital gains tax problem, and she told me "lowering the capital gains taxes to 15% will create jobs". She was right; with the 60,000 plants closed in the USA in the last decade, IBM "downsizing from 150,000 to less than 90,000 in the USA today, the jobs were created OFFSHORE in India, China, Brazil, Russia, and Vietnam and there is a tax Incentive for corporations to shut down plants in the USA and get a check from the IRS that has been blocked by Congress and still not repealed.

    Our country is faced with a revenue problem. The spin is we have a spending problem, which is true; with price fixing nationwide of health care costs, with IBM computer networks at 7% annually doubling the cost every 9 or 10 years along with medical bill bankruptcies of one million families every year.

    But the real problem are the tax avoidance schemes of corporate executives being paid in stock taxed at 15% when converted to cash like the neat quaint name of "Performance Share Units" of the 4000 IBM corporate executives with 90% of their annual guaranteed compensation taxed at 15%.

    Look no further than Washington DC of why the 1% are taxed at 15%. While the rest of us, the 99%, are taxed at 44% and carrying the tax burden of the country. Nice tax loophole.

    So, as I contemplate attending the stockholders meeting in Huntsville, AL, I wonder what I would say to the new CEO. I think I will have to THINK about that.

  • Yahoo! IBM Employee Issues message board: "Re: Two PBC 3s - Retirement Eligible - 30+ Years with IBM - Second Choicer" by "alwaysontheroad4bigblue". Full excerpt: I was one of the people let go in March 2012 so my 12 months of employee medical just expired. What surprised me is that I didn't receive any notice of having in the past few weeks about choosing between FHA-paid retiree coverage versus paying the full monthly cost of continued COBRA for 6 months. For the twelve months of IBM subsidized COBRA I paid $56 a month. This was for a high deductive PPO with a HSA. In this plan, I paid the first $5500 or so of costs completely out of pocket.

    Starting with the April 1st payment, I'm now being charged $788 per month for the same plan. That's for me and my wife. I imagine after the six months up, to continue coverage through the retiree health plan, which IBM has put in s a separate risk pool (i.e. much higher risk since it's all old people), that my monthly cost for the high-deductible plan will go to around $1300/month.

    Isn't that something? $1,300 a month and you still pay the first $5,500 i medical costs yourself?

    I'm very interested to see what the health care exchanges will be offering this Fall...and, what kind of subsidy there will be for those of us on a meager IBM pension.

    Ah, I remember the presentations back in the 70's and 80's on "foils" where we were told we'd have lifetime retiree medical! Between the pension ripoff, and the retiree medical ripoff, IBM"s going back on their promises has cost me tens of thousands, if not hundreds of thousands of dollars!

    • Yahoo! IBM Employee Issues message board: "Re: Two PBC 3s - Retirement Eligible - 30+ Years with IBM - Second Choicer" by Sam Cay. Full excerpt: The key here is how old you and your wife are. Once you hit Medicare age the IBM supplemental plan should be much lower. The problem you are in along with others is the bridge between pre-medicare to medicare. Good luck
    • Yahoo! IBM Employee Issues message board: "Re: Two PBC 3s - Retirement Eligible - 30+ Years with IBM - Second Choicer" By "madinpok". Full excerpt: Something doesn't sound right with the numbers you gave.

      Under the TMP, my understanding is that you should have been paying the same price that you paid as an employee. You said that is $56 per month. Was that for self-only coverage and did not include your wife?

      As an employee, you paid about 20% of the cost of the medical premiums, while IBM paid the other 80%. So the full cost of the premium would have been $56 x 5, or $280 per month.

      Now that the TMP has ended, you should be paying the full $280 per month for the next 6 months. So I'm not sure how it jumped to $550 per month, unless perhaps you went from self-only coverage to self+1 when the TMP ended.

      Either that, or my assumption about IBM paying 80% of the cost for employees is wrong.

      When you eventually switch to the FHA, the premiums should be $1116 per month (not including the vision or dental plan).

    • Yahoo! IBM Employee Issues message board: "Re: Two PBC 3s - Retirement Eligible - 30+ Years with IBM - Second Choicer" by "fhawontcutit". Full excerpt: I'm very interested to see what the health care exchanges will be offering this Fall...and, what kind of subsidy there will be for those of us on a meager IBM pension. Always, madinpok and I have posted that the exchanges may not be available to you if you have access to an employer-provided retiree plan.
    • Yahoo! IBM Employee Issues message board: "Re: Two PBC 3s - Retirement Eligible - 30+ Years with IBM - Second Choicer" by "teamb562". Full excerpt: ...and I've said before, there is no way ibm can charge us more for their retiree plan then for an equivalent public plan. In addition, my pension puts me well within 400% of the poverty level so I would easily quality for a subsidy. Seems ibm would have to take this into account for the exciting Fall 2014 health plan season.
    • Yahoo! IBM Employee Issues message board: "Re: Two PBC 3s - Retirement Eligible - 30+ Years with IBM - Second Choicer" by "fhawontcutit". Full excerpt: As madinpok and I have repeatedly stated, we have found NO evidence that retirees who have access to employer coverage will be able to go to the exchanges and be eligible for subsidies. In fact, I posted some stuff on IBMPENSION that said you can't.

      Retiree-only plans are exempt from the PPACA, so the protections of the PPACA DO NOT APPLY to retiree-only plans. See Ellen Schultz's WSJ article: http://online.wsj.com/article/SB10001424052748704011904575538231154919018.html. Excerpt: Thanks to a little-noticed clause in a 1996 law, retiree-only health plans are exempt from the Patient Protection and Affordable Care Act that went into effect last month.

      Now if you have evidence that people who have access to employer-provided retiree medical plans can go to the exchanges and be eligible for subsidies, please post it. madinpok and I have not been able to find any evidence that this is the case.

    • Yahoo! IBM Employee Issues message board: "Re: Two PBC 3s - Retirement Eligible - 30+ Years with IBM - Second Choicer" by "Paul S". Full excerpt: So for us second choicers, when our COBRA and then the FHA runs out, we're still not eligible to go to exchanges? Because we could still theoretically pay out of pocket for medical expenses. Cuba is looking better all the time!
    • Yahoo! IBM Employee Issues message board: "Re: Two PBC 3s - Retirement Eligible - 30+ Years with IBM - Second Choicer" by "fhawontcutit". Full excerpt: Paul, It's a question that has come up on the IBMPENSION board and so far, no one has posted evidence that retirees who have access to a retiree health plan can go to the exchanges.

      I'm not saying you can't. I'm just saying I can't find evidence that you can. I think people are making an assumption here that so far has not been backed up with evidence.

      If anyone has info, please post it. I'm sure all of us would like an alternative to the FHA rates.

    • Yahoo! IBM Employee Issues message board: "Re: Two PBC 3s - Retirement Eligible - 30+ Years with IBM - Second Choicer" by "teamb562". Full excerpt: Thank you for the response, no, I have no proof other then what appears obvious to me. Why would I stick with a ibm retiree FHA ream job if I can get: 1) a subsidy, 2) cheaper insurance and 3) better insurance from Obamacare? What will stop me from applying for PPACA this Fall? What am I missing here. I'm not the brightest star but if there are two Toyota's for sale and one is cheaper and higher quality, guess which I'm buying.
    • Yahoo! IBM Employee Issues message board: "Re: Two PBC 3s - Retirement Eligible - 30+ Years with IBM - Second Choicer" by "fhawontcutit". Full excerpt: What *may* stop you is an inability to access the exchange. Please don't think "obvious" has anything to do with the PPACA. Wanting something to be true and thinking it's "obvious" doesn't make something true.

      Also, even if you can access the exchanges, remember that insurance companies can charge older people 3 three times what they can charge a younger person.

      Again, I'm not saying you can't access the exchanges. I just haven't seen any evidence that you can.

    • Yahoo! IBM Employee Issues message board: "Re: PPACA for active employees" by "teamb562". Full excerpt: Well, OK, I guess just refuse to believe this. It seems an outrage. But here, I can qualify easily based on the 9.5% rule. The cheapest retiree plan I have available to me $550mo/$6600yr. 9.5% of my income (pension) is $2660. So, I guess the question now is how FHA dollars factor in. Perhaps we finally have a clear-case for spending down FHA dollars quickly at 100% (free health care) then go on PPACA due to the 9.5% rule. Thanks for the discussion on this issue.
    • Yahoo! IBM Employee Issues message board: "Re: PPACA for active employees" by "fhawontcutit". Full excerpt: The problem is the "affordability" rules are defined by the PPACA.

      Retiree-plans are exempt from the PPACA -- so the definition of "affordable" is defined by a law that your retiree plan is exempt from. What's the definition of "affordable" for a retiree plan?

      Also, go back and read the Q+A from the article I posted. The question was about someone who "WORKS" for a company (present tense). If didn't say anything about a retiree who WORKED for a company.

      Please provide proof that if you have access to a retiree plan you will still be able to go to the exchanges. As I repeatedly have stated, madinpok and I have found no evidence for this to be the case.

      There is a very good reason for them to keep you from the exchanges. If you go to the exchanges, you are (possibly eligible) for subsidies. A big part of the PPACA debate was its cost. If they wanted to keep down the cost, a good way to do it would be to keep retirees who have access to (not necessarily affordable) retiree plans.

      Look, team. You know I've tried to get people's attention on this issue for years. I'm on your side. I'm just not convinced it's going to be an option for pre-Medicare retirees.

      Of course, IBM could do what 3M did to its retirees and just give them some money to go out to the exchange. It could just fold the retiree plan altogether. I will bet we will be hearing something rather soon. (I'm not privy to IBM's plans -- just recalling that the FHA was announced around April or May, 1999 -- wasn't it?)

      If you think it would be an "outrage"..what would you expect from a law that was heavily lobbied for by the insurance companies and corporations? Who was representing your interest in the PPACA negotiations?

    • Yahoo! IBM Pension and Retirement Issues message board: "Re: ITYS" by "madinpok". Full excerpt: The rule is that you can use the exchange if the premiums exceed 9.5% of *all* of your income AND your income is below 400% of the Federal Poverty Level (i.e. below approximately $44,000). You have to meet both requirements in order to qualify. Some retired IBMers might be able to qualify. But some won't be able to meet these restrictions.
    • Yahoo! IBM Pension and Retirement Issues message board: "Re: ITYS" by "fhawontcutit". Full excerpt: mad, 1) Where is it stated that retirees who have access to employer retiree plans can make use of the exchange? 2) Regarding 400% of the FPL (assuming you can go to the exchange.) IF you are able to access the exchanges (still don't have proof), doesn't the 400% FPL restrict your subsidy, not eligibility? See http://www.kff.org/healthreform/upload/7962-02.pdf
    • Yahoo! IBM Pension and Retirement Issues message board: "Re: ITYS" by "teamb562". Full excerpt: My 2 cents worth (no facts, just anecdotal) on HDHP: I am currently reviewing the ibm FHA retiree health care options to make a selection after my Cobra terminates shortly. The High Deductible plan is pathetic for anyone/any-age in my opinion. The main reason: it caps prescription drugs at $1k per year.

      I called both Blue-Cross-Anthem and CVS. I was informed that if you get something like (god forbid) cancer the monthly drug cost could easily be $3, $4 or $5k. As you all know, anyone, any age can get cancer.

      HD plans are just another way of transferring risk to the patient and therefore are lucrative for insurance companies. If companies force their customers/employees onto these plans, it will solve little. When illness strikes and their benefits run out, they will show up at emergency rooms and yes, we all pay.

      IMO, HD plans should be outlawed or at least plans with low caps on services. So, fsarnie, do you feel lucky, well do yah?? Good luck with your HDHP.

    • Yahoo! IBM Pension and Retirement Issues message board: "Re: ITYS" by "fsarnie@att.net". Full excerpt: I do feel lucky, thank you. I was "lucky" enough to take care of my health and I was "lucky" enough to take a risk and save the money necessary to take care of my own healthcare expenses. This allows me to not be forced into any ridiculous plan that does not cover me in the event of a catastrophic health event.

    • Yahoo! IBM Pension and Retirement Issues message board: "Re: ITYS" by "louise217". Full excerpt: That's a disrespectful attitude you have - you think most people choose to get diseases, or that those who don't do everything they should do in order to live healthily as long as possible should be bankrupted by health costs? If you don't believe that, then should shouldn't have snidely claimed that you were "lucky" to have preserved your health.

      And not everyone has the opportunity you apparently had to save enough money to pay the deductibles required for these plans out of pocket - yet you sneer at those who don't have that kind of money saved up.

      As has already been explained to you - YES - these plans ARE a good fit for a few people; and apparently you're one of those for whom they're a good fit. That does not mean, as you claimed, that they'd be a good fit for most/all people. That does not mean, as you claimed, that people for whom they aren't a good fit can simply get an adequate and affordable plan on the private market if their employer changes over to a plan where a high deductible plan is the only option.

      You are lucky, in fact, to have good health. Lucky to have had a good enough job that it afforded you the ability to save money. Lucky that you were raised in a family that had sufficient means to give your body a good start in life. Lucky that you haven't yet run into a carcinogen that's infected your lungs or your digestive tract, for example. Lucky that you didn't inherit any life-threatening chronic illnesses. It IS good that you've made good choices along the way - not everyone is as future-thinking as you apparently are, but that doesn't mean that those who make bad choices in their life deserve to be bankrupted by healthcare costs.

    • Yahoo! IBM Pension and Retirement Issues message board: "Re: ITYS" by "willbefree25". Full excerpt: teamb, of course no one in his/her right mind would choose the High Deductible plan, unless they are arrogant enough to think they will never get ill.

      Of course I can't find them now, but just recently the prices per person for the Mid Level FHA plan were posted. Wasn't it around $700./mo. a person? Recall that most of us have $60K or less in our funny money scrip company 'bucket'.

      So $16,800 for two a year works out to 3.57 years. IF I started NOW (which I can't), the funny money scrip BS FHA would end 6 months into my finally going on Medicare, dog help me when that happens.

      IN the meantime, IF I got a pre-existing condition, COULD I get BACK on my SO's medical plan? Oh, I COULD trust the politicians not to have re-written the law that says I can't be denied from returning, although no one can predict the price, now can they? And of course I trust politicians, now don't I? HAH! Just like I trust IBM.

      So, to summarize. The High Deductible plan is useless, the Mid Level plan will run out just as I am on Medicare, so the bottom line is:

      I will never use the useless funny money BS scrip company 'bucket' that IBM so generously set up for me, after they changed the rules in 1999 and screwed me and all the other Choicers (sans the First), in lieu of my promised (NOT in writing) lifetime retiree medical when I was hired because...yes, they are...IBM is evil.

      Oh, and yes, we shoulda had a contract. Too late, folks, IBM wins. Again.

    • Yahoo! IBM Pension and Retirement Issues message board: "Re: ITYS" by "ibmretiree2006". Full excerpt: I have been party of a volunteer group looking at healthcare in my state. And one thing that stuck out like a sore thumb was that people who did not have coverage avoided going to the doctor for what they thought were minor issues. Many times those issues were not minor and led to significant health problems. I cannot vouch for the rest of the world but that was something we discovered.
  • Yahoo! IBM Retiree Information Exchange message board: "Medical coverage calculation (FHA)" by "teamb562". Full excerpt: I'm working on a spreadsheet in an attempt to stretch my notional FHA funny-money benefits as far as possible given different scenarios(like how much I contribute myself). I'm not overly concerned with estimating dental and vision due to their lower cost. I am very concerned with estimating base FHA medical increases.

    I do not have any history on the FHA medical plan cost increases over the past several years. I am just now eligible to view these plans (Fidelity) and their cost (wow wee). So, assuming PPACA (Obamacare) does not affect our FHA medical benefits (big if), can anyone please provide some recent history on the approximate year-over-year percent cost increase on any of the FHA plans? Thank you.

  • Yahoo! IBM Retiree Information Exchange message board: "Re: Medical coverage calculation (FHA)" by "madinpok". Excerpt: Here is some data for the FHA employee-only rates. For employee+spouse, just double the numbers.
      2008 2009 2010 2011 2012 2013
    IBM EPO $658.09 $704.62 $704.62 $750.42 $750.42 $759.95
    IBM High Deductible PPO w/HSA $480.26 $593.54 $593.54 $632.13 $632.13 $637.63
    IBM High Deductible PPO $554.35 $514.21 $514.21 $547.64 $547.64 $550.28
    IBM Medium Deductible PPO $574.36 $614.97 $614.97 $654.95 $654.95 $661.23
    IBM Low Deductible PPO $673.02 $773.97 $773.97 $824.29 $824.29 $904.53
  • Yahoo! IBM Retiree Information Exchange message board: "Re: Medical coverage calculation (FHA)" by "teamb562". Full excerpt: Wow, talk about asking and receiving. I sure hope this data was not available on Fidelity where I should have found it myself. Fidelity would not even provide this(I asked them today). Thank goodness we have data hoarders like Mad. Can't tell you how much this is appreciated.

    Well, that data sure is interesting. Over the 5 years, two of the FHA plans increased about 15%, 2 others about 32+% and one actually decreased. It appears the High Ded PPO is the way to go but I need to examine the risk, there must be a catch.

    The rep at Fidelity wished me "good luck" at estimating year-over year future cost increases. She said that IBM is always negotiating, re-negotiating the plans, adding/deleting various coverage's. So that doing any comparison or cost analysis is rarely an apples to apples comparison...therefore fruitless (no pun intended).

    Really nice the way IBM shifted the medical cost risk to us (FHA) and does nothing to provide any cost estimating or guarantees. Yeah, I know, what planet am I on.

  • Yahoo! IBM Retiree Information Exchange message board: "Re: Medical coverage calculation (FHA)"by "madinpok". Excerpt: You're right - the data is not available on the Fidelity/NetBenefits web site. Each year, I add the premiums for the coming year to a spreadsheet for just this sort of purpose.

    Looking at how the premiums have changed over the years, it is pretty clear that IBM is trying to get more and more people to go with the high deductible plan. That is the best deal for IBM, since it shifts more risk to you. The premium cost may make it look like a good deal for you, too - as long as you don't get sick, that is.

    One of the big downsides of the high deductible plan is that it has limited prescription drug benefits. So, if you require a lot of medications, or get cancer or something that requires expensive drugs, it could cost you a bundle.

    To paraphrase Clint Eastwood, "Are you feeling lucky?"

  • Yahoo! IBM Retiree Information Exchange message board: "Re: Medical coverage calculation (FHA)" by "teamb562". Full excerpt: Yes sir, thank you again. I read back through this forum. There has been several discussions on the High Deductible Plan and the $1000 max prescription drug benefit. While I am generally healthy and take care of myself, heck, anyone an get cancer. So, assuming worse case, I get cancer in February and have to pay for very expensive drugs until the following January (change plans), What is my exposure? I assume a lot more then if I'd been paying for better coverage all along. Therefore, it seems to make little sense that anyone would take the risk with Mr. High Deductible (blue-plate special). I would love to hear anyone's rational for choosing this.
  • Yahoo! IBM Retiree Information Exchange message board: "Re: Medical coverage calculation (FHA)" by "netmouser". Full excerpt: I agree. I chose the EPO, its being the "middle" premium cost plan. No deductible and no limit on prescriptions (think cancer and other high cost drugs - we insure because.....who knows what will happen this year, and I want to sleep well at night). The one caution is you are limited to in-network, but in the NY metro region the list of participating doctors/hospitals is about the same per talk to Aetna, so I did not find this a problem. No plans in these pre-retiree plans are great, I would have to pay 20% on anything. Retiree plans are a whole different story, much better.
  • Yahoo! IBM Retiree Information Exchange message board: "Re: Medical coverage calculation (FHA)"by "teamb562". Full excerpt: Thanks for your comment on the EPO option. I am not sure what you mean by pre-retiree vs retiree plans. I don't understand the differentiation. As far as I know, the retiree plans remain the same for FHA people, irregardless of age, retirement status etc. As far as IBM/Fidelity is concerned, I am retired...period and my plan selection will never change. If I am wrong, please clarify. Thank you.
  • Yahoo! IBM Retiree Information Exchange message board: "Re: Medical coverage calculation (FHA)" by "netmouser". Full excerpt: IBM's retiree plans are medicare supplemental or Medicare Advantage. These work with Medicare. The plans are totally different from early retiree plans (before age 65).

    Example retiree IBM plan is the Aetna Traditional Choice Plan A or Plan B - these are secondary to Medicare when bill paying. You need to sign up for Medicare A & B, and Part D if you want prescription coverage. Because you buy the Medicare plans, the IBM premium is low compared to pre-retiree plans.

  • Yahoo! IBM Retiree Information Exchange message board: "Re: Medical coverage calculation (FHA)" by "exitasap". Full excerpt: EPO is actually an excellent plan for catastrophic hospital expenses, for a slightly higher premium and no deductible. For long in-patient stays, you pay a low co-pay -- regardless of the length of stay, test procedures, doctor visits, etc. I forget the numbers now, but I recall for a 10-day hospitalization our cost was 1% -- not 20% customary for the regular PPO plan. And, we had just switched to the EPO for the year of need, dumb luck.
  • Yahoo! IBM Retiree Information Exchange message board: "Re: Medical coverage calculation (FHA)" by "fstephens". Full excerpt: USING FHA MONIES, the High Deductible Plan is one of the most costly to the end user; unless they never have to use it. The price of the plan may be a little lower, but if you need to use it, it becomes very costly versus the more expensive plans.
  • Wall Street Journal: Visa Demand Jumps. Employers Set to Quickly Reach Cap on Skilled Foreign Workers. By Miriam Jordon. Excerpts: For the first time since the financial crisis, U.S. employers are expected within days to reach a limit on the yearly allotment of applications for coveted skilled-worker visas, a sign of the strengthening economy that means some employers will rely on a lottery to fill key positions. ...

    The rising demand comes as the Senate moves closer to a broad immigration bill that would, among other things, revamp a series of work-visa programs. Last week, the AFL-CIO and U.S. Chamber of Commerce agreed on a new low-wage-visa program, a major breakthrough in talks. The Senate bill also includes a proposal to increase the number of H-1B visas granted each year. ...

    U.S. high-tech companies for years have called on Congress to increase the cap on visas for skilled foreigners. Facebook Inc. Chief Executive Mark Zuckerberg is co-founding a political-advocacy group composed of technology leaders to push for federal immigration changes, among other issues. ...

    At a Duke University conference last week, a senior International Business Machines Corp. official said the company fills many important positions with foreign graduates of U.S. universities. Still, IBM struggles to secure visas for all the workers it requires, said Nicole Hedrick, global immigration chief. "We have all these positions we cannot fill," she said.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: 401(k) Comparison" by "nowwicked". Full excerpt: A quick summary of the losses in the past 30 years that I can recall, I'm sure I'll miss some.
    • Pay raises - pretty much meaningless in the past 6 years.
    • Bonuses/commissions - cut to the bone, even for sales reps and a constantly moving/changing target.
    • Pension changes/terminations - multiple versions pending your age and years of service.
    • 401K - reduction in matching based upon time of matching, making IBM money, reducing employee benefit.
    • Healthcare - gone from 100% coverage to less and less each year.
    • Vacation - take it or lose it and most people don't keep up so lose it.
    • Retraining - IBM doesn't plan its workforce around loyal or highly skilled employees. If you can't dance without break, you will be gone and replaced by a new hire or acquisition. Dedicated education is a thing of the past, you must be able to do your regular job on a daily basis while taking education so the depth of skills transfer and learning suffers.
  • Glassdoor IBM reviews. Selected reviews follow:
    • IBM Sales” Current Sales Representative in Raleigh, NC. Pros: IBM is a strong leader in many solution areas and sometimes when a solution is not the top leader the enterprise agreements can help one get their solutions purchased. Cons: IBM changes the territories so often these days one has to wonder if it is not intentional. And if it is intentional then that really concerns me as IBM is shooting itself in the foot on closing opportunities to continue to pay people to move it forward for 3 months and the play musical chairs on the account sets. Advice to Senior Management: Give your sellers a reasonable sales cycle to close the business before changing the account set.
    • Great internship” Former Employee. Pros: Great internship, I learned a lot about myself and the business. I worked with a great group of people and it made my resume look even better to have the IBM brand upon it. Cons: It was a very dreary building and would be hard to imagine myself working there long term. Advice to Senior Management: Work on making the building a better place to be.
    • A once great company” Current Program Manager in East Fishkill, NY. Pros: People in general are very high caliber Cons: IBM used to be a great company to work for but they have established a culture where American employees continual are squeezed. Every year something is cut—benefits, salary, bonuses. This has been very successful for IBM. They have been able to report successful earnings and they think that folks will want to continue to stay and work and be loyal. Advice to Senior Management: Take care of your people and they will take care of the company
    • All promises, no delivery” Former Senior Financial Analyst in Somers, NY. Pros: Flexibility to work from home is only pro. Sub-standard pay for the grunts who do the work. Unreasonable bosses and expectations despite consistently "professional demeanor" exhibited. Cons: You will waste valuable years thinking you can advance but you CAN'T unless you have an "IN"... and then you will be shown the door once your pay gets to a point where they can get someone cheaper. You learn NOTHING but how to work for IBM. Experience there looks good on a resume but no practical benefit to you whatsoever. Advice to Senior Management: Laugh in your employee's faces instead of behind their backs -- at least it'll be honest.
    • Challenging work environment” Former Quality Assurance in Montreal, QC (Canada). Pros: Good pay, growth potential and flexible working conditions. Cons: No job security, work was being outsourced.
    • While a good learning experience, bad managerial decisions and poor morale are destroying what was once great.” Current Senior Engineer in Brno (Czech Republic). Pros: Great to have in your CV. Good opportunity to learn as the portfolio of products is quite big. Easy access to education and certification trainings. Good possibility to balance work/personal life.

      Cons: No interest in keeping good people - inability to provide adequate tools and support, mindset of "go, there are many people waiting for your position"

      Incompetent lower management - people who are not organized with no real leading background keep being appointed managers causing a lot of chaos and stress by not being able to handle the responsibility and organization of work.

      IBM tools - for most applications that are already available, IBM has an alternative that is in most cases slower, more chaotic and much less user friendly, not offering the same functionality as the original. (there are exceptions of course)

      Slow to react to problems and changes due to huge bureaucratic load.

      Shift from customer-centric approach to bureaucratic process-centric approach, which impacts the morale of employees and shows a bad image.

      Advice to Senior Management: Do what you proclaim on all the promoting materials - start promoting creativity and skill, embrace new ideas and start to show some effort to try and keep experienced people instead of constantly hiring new people.

      Start caring about the customer instead of ever trying to be "covered" by insisting on following procedures where they are actually keeping people from helping the customer right away.

      Try to promote capable people into managerial positions, instead of using some of those positions as a "dumpster" for incompetent people.

      Push towards completing projects and applications not only into a workable state, but mostly to a state where they are easy to use, comprehend and friendly.

    • Good benefits & career prospects but not so great for techies” Current Manager in Warwick, West Midlands, England (UK). Pros: Excellent benefits, opportunity to work from home, easy to change role, thus offering lots of diverse IT-related experience. Cons: A little too obsessed with process and profit, particularly the drive to offshore as much work as it can. Advice to Senior Management: Please value your UK-based technicians/lifeblood more
    • Such a waste of innovation, talent and unique offerings - IBM has pushed control to a new level” Former Associate Partner/Partner. Pros: Global : Great capabilities, unique assets, world class brand, knowledge galore, delivery capabilities that are very differentiating. Cons: As a small mature country (Canada), since 2008 the control from US head office in ALL aspects of sales and delivery became a nightmare - smart, dedicated, resourceful people became machine robots - working to feed the control IBM Machine...too bad. Advice to Senior Management: Country leaders need to be giving the chance to exceed sales and profit and create a strong employee culture - on their own merit.
    • Horrible company to work” Current Senior Software Engineer. Pros: Flexibility, working from home (though recently that's being cut). It's a job (?) Cons: Too many to mention: - company is entirely finance driven; - no perks to working here; - relatively miserable pay and bonuses; - no stock options for a long time now; - too much management. Advice to Senior Management: Upper management is completely disjoint from employees and doesn't give a hoot about them.
    • Why Work?” Current Software Developer in Austin, TX. Pros: Working at IBM is like a warm blanket. It feels good and you are sure it is cold outside. The people are great, the environment is OK and the projects are incredible. Cons: There is a 20 word minimum and I would like to put Bureaucracy 20 times. It is a massive company that tries to make one size fits all policies which gets in the way of recognition for some. Advice to Senior Management: Let managers manage or just transparently use an algorithm. Trying to explain why things happen is impossible.
  • Alliance for Retired Americans: Friday Alert. This week's articles include:
    • President Obama May Include Cuts to Social Security COLA in Budget Proposal
    • Patriot Coal Meets Masses in Charleston, WV
    • “Turning Age and Experience Into Opportunity” – Jobs for Seniors Filled by Seniors
    • Medicaid Matters
  • National Public Radio's All Things Considered: Who's Hiring H-1B Visa Workers? It's Not Who You Might Think. By Martin Kaste. Excerpts: The tech industry wants more skilled workers — from overseas. Companies are lobbying hard for Congress to raise the limit on H-1B visas — visas for people with specialized skills — researchers, for instance, or software engineers.

    Brad Smith, Microsoft's general counsel, recently told NPR that more H-1B visas can't help but be good for the country.

    "We need to continue to attract some of the best and brightest people in the world to come and join us in world-leading [research and development] efforts," Smith said.

    But that "best-and-brightest" argument doesn't quite match up with reality — especially when you look at which companies are using the most H-1Bs.

    Who Is Using the Visas? If you scroll through the government's visa data, you notice something surprising. The biggest employer of foreign tech workers is not Microsoft — not by a long shot. Nor is it Google, Facebook or any other name-brand tech company. The biggest users of H-1Bs are consulting companies, or as Ron Hira calls them, "offshore-outsourcing firms."

    "The top 10 recipients in [the] last fiscal year were all offshore-outsourcers. And they got 40,000 of the 85,000 visas — which is astonishing," he says.

    Hira's a professor of public policy at the Rochester Institute of Technology. He's also the son of Indian immigrants and has a personal interest in questions of labor flow across borders.

    For the past decade, he's been studying how consulting firms use temporary work visas to help American companies cut costs. He says they use the visas to supply cheaper workers here, but also to smooth the transfer of American jobs to information-technology centers overseas.

    "What these firms have done is exploit the loopholes in the H-1B program to bring in on-site workers to learn the jobs [of] the Americans to then ship it back offshore," he says. "And also to bring in on-site workers who are cheaper on the H-1B and undercut American workers right here."

    The biggest user of H-1B last year was Cognizant, a firm based in New Jersey. The company got 9,000 new visas. Following close behind were Infosys, Wipro and Tata ‑‑ all Indian firms. They're not household names, but they loom large in tech places like the Seattle suburbs. ...

    Sawade is active in the labor organization WashTech, so he gets complaints from IT workers around the country. The H-1B consultancies are especially big in banking, insurance and pretty much any industry that runs on big computer systems maintained by aging, increasingly expensive American tech workers.

    He laughs at the notion that a cost-cutting insurance company somewhere is in dire need of hotshot foreign programmers with specialized skills. Because the businesses require current employees to train the new hires from India, he says.

    "And maybe the people from India aren't necessarily there to replace them — at least not right away. They're just learning the job," Sawade says.

    Learning the job, he says, so the consulting firm can eventually provide the same service from somewhere cheaper.

New on the Alliance@IBM Site
  • Job Cut Reports
    • Comment 04/02/13: Mystery solved why no RA in GBS so far in 2013. BIG reorg being announced in July. For the non-directs, they are looking for ways to consolidate support functions and do job elimination in some areas. (These would be employees reporting up to George Metz). Look for an RA announcement in May with and exit date of June (3rd week in June) -GBS Update-
    • Comment 04/05/13: @GBSUPDATE Makes sense with Mike Daniels (SVP Services) gone. Failures of Services deliverables - Steve Robinsons the most visible. IBM doesn't even use ISS's own tools. Customers complain about Qrsdar. Quality of deliverables has declined with more and more work offshored. Why would a US company want their network, security, consulting be handled by lowest cost denominator in the Philippines or god forbid China? Internally it's horrifying seeing the costs assigned to deliverables. It may be Blue Money to services but someone has to come up with real revenue. The CIO org now that it's become a development shop is the worst in that space. -Anon-
    • Comment 04/07/13: Anon: Interesting assessment, it is true that IBM's purchase of ISS was grasping the lowest hanging fruit in that arena. Even though it meant destroying IBM's own offering. ISS never lived up to expectations , was a blemish on about 8 execs trying to rein it in and improve deliverables. With Steve Robinson of Q1 Lab fame (Qradar) his allegiance is there not IBM'S security deliverable strategy. That is why Kristen Livejoy was put in place to oversee him. CIO & Blue Money , sheesh they pillage the company to justify their existence. Externally, customers are seeing what they get for what they pay which is why there is concern over mounting loss of contracts. -Event Horizon-
    • Comment 04/03/13: I was told by manager to find a new job since IBM was going with all contractors pretty much. I work in GTS division 7 and am an alliance member but it really has not changed anything. I have been with IBM for 20 years and I am tired of living this way. Just waiting for the ax to fall so that I can get some severance/retraining. Just no enthusiasm for the company anymore never knowing you might be randomly gone any day. I cannot wait to take all my info to the competitor. Its sad but after all this time with IBM, and all the cool folks I have I met, I really want to see IBM fail now. -Frustrated-
    • Comment 04/04/13: It's 2013. Can't believe we still use (Microsoft) Office 2003—technology from a decade ago. So embarrassing when my client had to download a converter to read documents we send them. -Dinosaurs-work-at-IBM-
    • Comment 04/05/13: Latest Business Insider list of 25 top paying software companies does not even figure IBM...why am I not surprised? -getting out soon-
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • Los Angeles Times: Insurers see way to dodge federal healthcare law next year. A little-known loophole in President Obama's landmark legislation enables health insurers to extend existing policies for nearly all of 2014. By Chad Terhune. Excerpts: A new fight is brewing over health insurance companies letting millions of Americans renew their current coverage for another year — and thereby avoid changes under the federal healthcare law. ...

    At issue is a little-known loophole in President Obama's landmark legislation that enables health insurers to extend existing policies for nearly all of 2014. This runs contrary to the widespread belief that all health insurance must immediately comply with new federal rules starting Jan. 1, when most provisions of the law take effect.

    "Insurers are onto this, and the big question is how many will try to game the system," said Timothy Stoltzfus Jost, a law professor and health policy expert at Washington and Lee University.

    Some of the nation's biggest health insurers are looking to take advantage of this delay, and Arkansas officials are encouraging companies to do this by resetting customers' renewal dates for the end of December. There's also concern that some insurers and agents could rush to sell more individual policies before year-end so they could be extended in 2014.

    Some policy experts are expressing concern about this practice for fear that insurers will focus on renewing younger and healthier policyholders and hold them out of the broader insurance pool next year. Their absence could leave a sicker and older population in new government insurance exchanges, driving up medical costs and premiums there.

  • Wendell Potter: Industry Pushes High-Deductible Insurance Plans. Excerpts: Those accustomed to obtaining health insurance through the workplace and choosing among different types of policies may be in for a rude surprise. Increasingly, employers of all sizes are eliminating choice and offering only high-deductible plans — euphemistically referred to in the insurance world as consumer-directed health plans or HDHPs.

    The looming shift has nothing to do with Obamacare or even the widely held belief that certain types of health plans will encourage people to give up costly bad habits like smoking. It is about profit. ...

    There were many reasons why I left my job in the insurance industry, but near the top of the list was the expectation that I be, for all practical purposes, a snake oil salesman. If I were still in the business, I would be part of an industry-wide campaign to persuade employers, policy makers and the general public that high-deductible plans are the new silver bullet.

    Not only will HDHPs reduce health care costs, according to the campaign propaganda, forcing people into them will cause them to lead healthier lifestyles.

    That’s the hype. And the hype is necessary to obscure the real reason insurers and employers are herding more and more of us into HDHPs: they’re perfect vehicles to shift more of the cost of care from them to us.

    Even in 2008, the last year I worked for an insurance company, my colleagues in the sales division were encouraging employers to go “total replacement,” which means eliminating all choices except high-deductible plans. Insurers have long used proprietary “studies” supposedly proving that making people pay more out of pocket for medical care will “incentivize” them to lead healthier lives.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: ITYS" by "fsarnie@att.net". Full excerpt: The sky is falling... Honest question. What is wrong with a HDHP plan?

    HDHP plans DO put healthcare decisions back into the hands of the consumer. Healthcare insurance should only be necessary in the case of major health problems such as accidents or LT illnesses.

    I have home insurance to cover major disasters. I don't have it to cover leaky sinks or other maintenance issues. This is how insurance is intended to work.

    • Annual physicals are covered 100%
    • Use BCBS to get their negotiated rates while still able to offer Docs cash prices.
    • I can go directly to a specialist bypassing the primary care physician if necessary.
    • I use the drugs that my doctor prescribes, not what the insurance co says is in plan.
    • I have saved over $20K in my HSA and the monthly interest is approx $26/mo which pays for all my medical expenses during a normal healthy year.
    • You can choose several HSA investment options if you are so inclined.
    • HSA can be converted at age 59 1/2 to a IRA if needed.
    • Monthly cost savings are substantial and the savings can be directly applied to your HSA.
    • IBM subsidized HDHP monthly cost is $112/mo (wife & self).

    Where is the downside?

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: ITYS" by "orsonbear". Full excerpt: No, the sky is not falling. You can find a lot of articles and related studies that show the downside of high deductible plans. I am not posting any of my research here, but Google is your friend. Most show that people with these plans (themselves and family members) choose not to seek medical care for minor ailments to avoid paying the out-of-pocket expenses. And these untreated small health problems lead to bigger problems.

    Also, if you have a chronic illness, you can be really screwed because many plans have caps on lifetime coverage, number of doctor visits, and hospitalization costs.

    If you are young and really healthy, these plans might be for you. On the other hand, many folks do not have a choice, because this is the only plan that their employer offers (I know someone in this case) or it is the only AFFORDABLE plan that is offered. Certainly not for everyone.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: ITYS" by "louise217". Full excerpt: It's not unfounded that people will forego care. In fact, the issue isn't normal "preventative" annual exams that are covered by many of these plans that's at issue - it's the other care that they might avoid getting. It's your misunderstanding of what "preventative care" entails that's the issue. Here's another study. http://www.ajmc.com/articles/AJMC_11oct_Wharam_e410to418

    Here's another few studies, all of which suggest that some will forego needed care in fear of paying for care. Now, these high-deductible plans DO cut some relatively unnecessary visits to the ER, for example. They serve a good purpose for SOME - but again, MY issue is that the article below was saying that some employers might have high-deductible plans as their only option - and that option won't fit all people. http://link.springer.com/article/10.1007%2Fs11606-011-1970-8.

    http://www.rand.org/pubs/technical_reports/TR562z4/analysis-of-high-deductible-health-plans.html#spending2. There is a clear subset of employees whose behavior can be modified in a cost-efficient way to cut the amount of unnecessary medical care they've been taking advantage of - but there's an even larger group who will be greatly disadvantaged if their only option is a high deductible plan, and some of those people will not get the care they really need because of the cost - and that deferral of care would, in some cases, lead to greater costs in the future when needed treatment isn't gotten in a timely fashion because they can't afford it.

  • Washington Post: The case of the $1,206 toenail clipping. By Ezra Klein. Excerpts: Last week I posted 21 charts showing the absurdly high prices Americans pay for health care. One reader wrote in with a story that is perhaps more compelling than any of them:

    Let me briefly share with you a rather amazing personal experience of overcharging by a Harvard-affiliated hospital here in the Boston area. It’s not a huge matter, but it is so outrageous and almost funny in a way that I thought you might have an interest in using it, maybe in something you are otherwise working on.

    The hospital did a single toenail clipping. The bill is $1,206.

    To avoid misunderstandings, this was not a surgical intervention. It was the same kind of clipping that you do yourself every week, except that only a small piece of only one nail was clipped.

    The whole encounter, including the prior doctor consultation, took about 15 minutes.

    Admittedly, the tiny piece of toenail was sent in for lab analysis, because the doctor thought there might be some infection. (There wasn’t.) But the lab charges, although extremely high, were only part of the issue.

    Here is how the charges broke down in detail. (From Brigham and Women’s, the dermatology department, dating from March 5, 2013.)

    • Office Visit — $248.00
    • Biopsy — $182.00
    • Treatment Room — $328.00
    • AMB Clinic — $117.00
    • Pathology Lab — $165.00
    • Laboratory Services — $166.00
    • Total — $1206.

    I called the billing department of course, and they say that everything seems correctly coded. The billing person agreed personally that the numbers are outrageous but says there is nothing they can do about it. I then called the department of dermatology and spoke to two separate people there, who both also agreed that the charges are ridiculous, but they emphasized that there is nothing they can do, either. I have a call in to the Patient Relations department, and they have promised to return my call within two working days, but frankly I’m not holding my breath for any redress or mitigation from them.

  • Washington Post: Readers respond to the $1,206 toenail clipping. By Ezra Klein. Excerpts: On Tuesday, I wrote about the curious case of the $1,206 toenail clipping. I also asked readers if they had similar stories. Turns out it was just the tip of the iceberg.
    My story isn’t as immediately shocking as the toenail, but it’s more of a Chinese water-torture each month when I have to pay the bill.

    I was diagnosed back in 2005 as needing an oxygen concentrator when I sleep – probably for the rest of my life, which I’m hoping will be another 30 years or so based on my family history. Due to the way my insurance is set up through OPM (at first it was Blue Cross/Blue Shield, now it’s Kaiser Permanente Northwest), I do not have an option to buy the concentrator flat out – I have to rent it through a medical equipment company, and Apria is the one they go through.

    For the same oxygen concentrator that I would be able to buy online for around $700 (my particular model is the Invacare Perfecto2 – available online with free shipping from Active Forever for $706.30 as of this afternoon), Apria charges $137.13 per month – I am charged a copay of 20%, or $27.42. So far, over the past 7 years, they’ve gotten well over $10,000 out of me and my insurance companies (the price has increased some – when I first started, I was paying around $19 per month).

    When I tried to talk to my insurance company about just buying the machine, I was told that it was against policy because renting it assured that someone would “monitor the equipment”. Right. Monitoring the equipment is apparently code for someone coming in twice a year to switch out a little 1 inch filter – at $1,645.56 per year, that’s over $800 per filter. (Yeah, I priced them too – $13.41 each.)

News and Opinion Concerning the "War on the Middle Class"
Minimize "It is a restatement of laissez-faire-let things take their natural course without government interference. If people manage to become prosperous, good. If they starve, or have no place to live, or no money to pay medical bills, they have only themselves to blame; it is not the responsibility of society. We mustn't make people dependent on government- it is bad for them, the argument goes. Better hunger than dependency, better sickness than dependency."

"But dependency on government has never been bad for the rich. The pretense of the laissez-faire people is that only the poor are dependent on government, while the rich take care of themselves. This argument manages to ignore all of modern history, which shows a consistent record of laissez-faire for the poor, but enormous government intervention for the rich." From Economic Justice: The American Class System, from the book Declarations of Independence by Howard Zinn.

  • Christian Science Monitor: Cuts to Social Security? What Obama is proposing. In an effort to reach a bipartisan agreement to reduce federal deficits, President Obama is backing a change in the inflation formula used to calculate adjustments in Social Security benefits. By Mark Trumbull. Excerpts: President Obama is embracing some controversial entitlement reforms in an effort to reach a bipartisan agreement to reduce federal deficits. Most politically combustible: He’s backing the idea of changing the inflation formula used to calculate annual adjustments in Social Security benefits, in a manner that would save federal dollars and be less generous to seniors. ...

    The Social Security idea, called the chained consumer price index or "chained CPI," isn't new. Obama has floated it before, as have bipartisan groups seeking ways to curb a risky buildup of national debt. ...

    After 30 years of retirement a Social Security beneficiary’s annual income would be $1,400 less under chained CPI than under the current gauge, says the National Committee To Preserve, Social Security & Medicare.

  • AlterNet: Tax Dodging by the Rich Cost You $1,026. By Travis Waldron. Excerpts: America’s largest corporations have stashed nearly $1.5 trillion in offshore tax havens like Bermuda, the Cayman Islands, and Ireland — countries where they do little business but claim massive profits due to low tax rates. As a result, corporate tax rates fell to a 40-year low in 2011 even as profits rose to a 60-year high.

    Tax avoidance from corporations and wealthy individuals has a cost for individual taxpayers and small businesses, according to a new report from the U.S. Public Interest Research Group. According to U.S. PIRG, tax dodging cost individual taxpayers $1,026 and each small business $3,067 in 2012.

    Those costs don’t necessarily come from higher taxes; instead, they often come in the form of higher budget deficits or, as they are now, from substantial cuts to public programs and services that benefit middle- and low-income families. “This is a real loss and it’s putting great pressure on the budget and all kinds of investments and programs that the federal government needs to continue to fund,” Michigan Sen. Carl Levin (D) said on a conference call unveiling the report today. Levin has authored legislation calling for the closure of tax loopholes that incentivize the offshoring of profits. “It’s time to close the loopholes, reduce the deficit to protect these important investments in our future, and to bring some fairness back to the tax code,” Levin said.

  • Alliance for Retired Americans Press Release: Seniors React to President’s Proposed Social Security Cuts (PDF). Excerpts: “The use of the chained CPI to calculate cost of living adjustments is simply not fair. It is not an insignificant tweak; it constitutes a significant benefit cut. Worse, it cuts benefits more with every passing year. It will do real damage to seniors and people with disabilities – in the present and future.

    “Not only does the current cost of living adjustment formula not keep up with inflation for seniors, it does not accurately account for the large health care cost increases faced by seniors and people with disabilities. The chained CPI would further underestimate the cost of living adjustments for seniors. We need a higher COLA, one that accurately reflects beneficiaries’ costs, not a lower one.

    “Our members are very upset that the President is willing to compromise on this issue of Social Security, one that certainly does not belong in budget discussions since Social Security by law cannot contribute to the federal deficit.

    “Our 4 million members are watching closely and remaining hopeful that Washington finds a way to do the right thing – that certainly doesn’t mean wrongly balancing the budget on the backs of our seniors.”

  • Huffington Post: Bernie Sanders Will Do 'Everything In His Power' To Block Obama Budget's Social Security Cuts. By Nick Wing. Excerpts: Sen. Bernie Sanders (I-Vt.) on Friday aggressively pushed back on President Barack Obama's budget proposal, calling it a "bitter disappointment" and promising that the entitlement cuts contained in the plan wouldn't pass under his watch. ...

    Sanders insisted Friday that the budget would "hurt a lot of people,” and noted earlier this week that it marked a reversal from Obama's 2008 position.

    “In 2008, candidate Barack Obama told the American people that he would not cut Social Security," he said. "Having him go back on his word will only add to the rampant political cynicism that our country is experiencing today.”

  • Bernie Sanders: The Week in Review. Excerpts: Obama's proposed budget will call for reductions in the growth of Social Security and other benefit programs. As a candidate for the White House in 2008, Sanders noted, Obama pledged not to cut Social Security COLAs. “This is not a minor tweak, as its proponents contend,” the senator added. “Under Obama’s proposal, according to the Social Security Administration, 65-year-old retirees would lose more than $650 a year by their 75th birthday, and more than $1,000 a year would be cut from their benefits once they reach 85. The proposed change would also affect more than 3.2 million disabled veterans receiving disability compensation benefits from the Department of Veterans Affairs. Veterans who started receiving VA disability benefits at age 30 would have their benefits reduced by $1,425 a year at age 45, $2,341 at age 55 and $3,231 at age 65. Benefits for more than 350,000 surviving spouses and children would also be cut.”

    An Early Warning “In the fight over the federal budget deficit, Social Security has so far been untouched. That may soon change,” The New York Times warned in a Sunday editorial that foreshadowed the White House push to cut benefits. “You are right to sound the alarm bells about President Obama’s effort to cut Social Security and benefits for disabled veterans through a chained consumer price index,” Sanders said in a letter to the editor published on Tuesday. “Yes, we must move forward on deficit reduction, but it must not be done on the backs of some of the most vulnerable people in this country." Sanders also urged the president to get behind legislation to raise the cap on income subject to the payroll tax, extending the life of Social Security for generations to come without the need to cut benefits or raise taxes on the middle class. It was, after all, an Obama proposal made during the 2008 campaign that Sanders used as the basis for the new bill to strengthen Social Security.

  • New York Times: The Infinity Pool of Executive Pay. By Nelson D. Schwartz. Excerpts: RELAX. Sit back. And forget, for a moment, those pesky shareholders and bothersome boards, the regulations, the investigations and all the other headaches of being a chief executive today.

    Dodd-Frank rules? Securities and Exchange Commission lawyers? Leave them behind. And let yourself sink into the buttery leather seat of your corporate jet as it soars through the clouds.

    That’s what Steve Wynn did. As chief executive of Wynn Resorts, he sat back and enjoyed more than a million dollars’ worth of personal travel last year on his company’s private jet.

    It gets better: in December, the company took delivery of the first G650 jet to roll off Gulfstream’s assembly line. A $65 million wonder, the plane can whisk Mr. Wynn from Las Vegas, where Wynn Resorts has its headquarters, to New York, where he owns a $70 million penthouse overlooking Central Park, and it should make 2013 another busy year aloft for him. (Wynn Resorts declined to comment.) ...

    For the 100 highest-paid C.E.O.’s among American companies with revenue of more than $5 billion, the typical 2012 perks package was worth $320,635, up 18.7 percent from 2011, according to an analysis by Equilar for The Times. By contrast, median total pay among the 100 C.E.O.’s rose just 2.8 percent, to more than $14 million. ...

    Besides the jump in perks, overall cash compensation also made a comeback, rising 19.7 percent, to $5.7 million. Cash bonuses jumped 25 percent. ...

    Even though unemployment remains high by historical standards and the top 1 percent of earners face higher taxes, executives and boards may figure that the popular outrage that followed the financial crisis and the recession has cooled a bit.

If you hire good people and treat them well, they will try to do a good job. They will stimulate one another by their vigor and example. They will set a fast pace for themselves. Then if they are well led and occasionally inspired, if they understand what the company is trying to do and know they will share in its sucess, they will contribute in a major way. The customer will get the superior service he is looking for. The result is profit to customers, employees, and to stcckholders. —Thomas J. Watson, Jr., from A Business and Its Beliefs: The Ideas That Helped Build IBM.

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