The latest developments apparently are the fallout from last week's poor first-quarter financial results, including a 17 percent plunge in Systems & Technology sales.
While reporting the quarterly results to financial analysts last week, IBM CFO Mark Loughridge indicated that employee layoffs are likely this quarter and the company is considering changes -- and possible divestitures -- of its underperforming businesses including its System x, Power system and storage product lines. At the time the CFO specifically blamed much of the quarter's poor results on several big contracts for mainframes and software that didn't close before the end of the quarter. ...
Rometty generally provides employees with a brief video commentary after each quarterly earnings. But this week the usual pep talk included comments that employees need to work harder, according to a story in Thursday's Wall Street Journal, which said it had seen the video.
The story, which described Rometty's comments as "unusually blunt," said the CEO told employees they need to speed up the company's shift to new computing models to get back on track.
IBM employees, speaking on condition of anonymity, said big organizational changes are afoot that impact the full hardware portfolio. At least two IBM labs that support the full range of x86 servers have been notified that they will soon be part of Lenovo, sources said.
This week, support teams at IBM's "SuperLab" in Research Triangle Park, N.C., which develop server firmware and other utilities for IBM's x86 and other server lines, were informed that they'll be transferring to Lenovo, sources with knowledge of the matter told CRN.
Last week, sources told CRN that staff in IBM's product engineering (PE) lab at Research Triangle Park, which supports all of the vendor's server lines, had been informed that they'll be moving to Lenovo. ...
IBM, which last week reported first-quarter earnings that disappointed Wall Street, has already begun shaking things up in its Systems and Technology Group by instituting a hiring freeze, sources said.
Investors are right to be worried. IBM's top line has stopped growing, a hard-to-fix problem given the economic headwinds facing big companies that depend on corporate technology spending. And IBM may struggle to deliver the double-digit profit growth investors crave.
"The stress in their financial model is coming to light," says Brian Marshall, an analyst with ISI Group who rates the stock at Cautious. "They have done a phenomenal job over the last ten years expanding their profitability. But IBM has over optimized the operations and we are now seeing the stress fractures in the financial model. People say there are three truisms – you can count on death, taxes and double-digit earnings from IBM. That isn't the case anymore."
If IBM does not get some acquisitions to boast revenue its days of double digit profit growth are numbered; its track record to date is literally the liquidation of the IBM brand with financial manipulation much like a LBO transaction
Rometty set a new rule. If a client has a request or question, IBM must respond within 24 hours, the newspaper reported she said in that call. She addressed the call to over 434,000 employees worldwide. ...
IBM blamed a poor performance by its sales force for some of the shortfall for the poor quarterly results. But analysts said it was not just one quarter - the company's sales have been weakening consistently, dragging down results with or without the changes in the yen. ...
Rometty said IBM needs to speed its shift to new computing models to get back on track, the Journal reported citing the video.
Selected reader comments follow:
Now the question why aren't more folks joining the union to stop this type of blame game by having well defined work rules?
My lawyer wrote 1 letter to IBM and there was no charge. I think the important thing was that IBM knew I had a hired a lawyer. When I received my separation check from IBM it was for 26 weeks pay. There was no discussion and no documentation from IBM stating the change. I simply received the check. I was happy to leave IBM with any separation package. Dotsy.
When IBM management blows the 1Q2013 she then beats up on the powerless employee. 24 hour turnaround time with Global time differences? Good luck when you have to engage all the project leads, FLEs, FLMs, perhaps middle management (2nd line, Director) PEs, SDMs, DPEs and change management channels to execute for the client.
Abysmal leadership by this CEO: she was riding the wave and it is crashed onshore now. LIFE IS NOT GOOD at IBM. Hasn't been for a long, long time.
The rumor I’ve heard is that IBM, which not long ago changed its 401K contribution policy to push what had been a biweekly payment into an annual one right at the end of the year, may have decided this year (and in the future?) not to make any 401K contribution at all. Since IBM’s U.S. employees can divert up to eight percent of their gross compensation into the 401K and IBM has traditionally made a comparable matching payment, this possible change in compensation policy could save the company close to $1 billion.
In one sense one might ask what’s wrong with that? Companies have to do what they have to do in this economy and workers sometimes suffer. But for IBM it indicates the company is getting near the bottom of its bag of tricks for maintaining earnings growth toward that ambitious 2015 goal of $20 per share. Management seem to be down to three ideas to improve the numbers: 1) savage the 401K plan; 2) sell the low-end server business to Lenovo for a reported $2.5 billion, and; 3) expect a miracle called PureSystems.
Change is inevitable in any business, but at IBM the policies and policy changes are particularly opaque. They are handed down from on-high by a management generally out of touch with reality, yet simultaneously determined to share as little information as possible with employees. At least that’s the way it appears to me. ...
Internally IBM’s culture is a lot like USA society in the 1950′s and early 1960′s. There was an implicit trust in the government back then and we accepted the answers we got from Washington. Most of the IBM community has been conditioned not to think and to accept whatever they are told by management. If the server business is sold most will naively accept whatever explanation is offered. They won’t know this is just one of many businesses that could be sold for the corporation to make its numbers.
Selected reader comments follow:
Otherwise, this post is very accurate. Especially this quotation: “[Policy changes] are handed down from on-high by a management generally out of touch with reality, yet simultaneously determined to share as little information as possible with employees.” It’s this approach that is a HUGE problem and it’s destroying US morale.
I understand that business changes are inevitable; you have to grow revenue and continuously balance the books, but why can’t you be at least partially transparent about what you’re doing and why? Be up front that you’re cutting the US workforce to drive a larger business strategy. Be honest that you don’t even know how to solve the problem of growing revenue and you’re going to try a lot of different approaches and hope one sticks.
At the same time, IBM seems to have this ridiculous expectation that employees should be loyal. They are fairly disgruntled when critical talent (like myself) leaves for a better opportunity. Oh, sorry, were you being loyal to me when you, without any notice, walked a team of contractors out the door without transitioning their projects, so now the regular employees are picking up the pieces because you didn’t think you needed a plan? Were you being loyal to me when you cut the 401K match program and vehemently denied layoffs are coming? Were you being loyal to me when you assured me that you’re not sending US jobs to Asia and Africa, but did it again and again and again?
There is also a lot of mindset that “this is how it is everywhere. This is the best company in the world to work for so just suck it up.” Yeah, that’s why I found a great job with a company that is focused on investing in its US workforce to grow US revenue.
I am really sick of the off-shoring and constant threat to my employment and wondering if the next layoff will finally include me. I am sick of working with incompetent resources overseas and the inefficiency and frustration of it all.
I am sick of arrogant upper management and their stupid ideas which they force down our throats to make their bonuses (e.g., GenO, Liquid Portal, Career Point, etc.). I’m sick of the fact that there is never a kind word said to any of us anymore – forget awards, forget bonuses, forget pay raises. We don’t even get a verbal “good job”. IBM clearly wants us gone. Come on, IBM, pull the trigger. I’m tired of it all.
How does IBM expect sales to increase as they fire their sellers and support staff? Oh, yeah, social media, including Twitter, will be the next wave of selling eliminating face to face customer and seller contact. What IBM management does not realize is that to sell high value (i.e., profit) hardware customers still want to look a sales person in the eye to confirm trust and competency.
Why did IBM miss its numbers? Because social media did not deliver on its hype to be the new wave of selling replacing those previously fired sellers.
With all of the great things that IBM had at its disposal, it has created generations of IBM’ers that for the most part are in survival mode now. While there are many individual managers who excel and truly care of customers, shareholders and employees…they are dwarfed by the majority of folks who talk-the-talk and do not walk-the-walk. IBM leadership as a whole continues to fail in small ways every year and maybe…just maybe…the cracks are beginning to show.
Note to Ginny…to what end is simply achieving the EPS numbers when clients and employees are treated the way they are? IT is a complex business, no doubt. However, when a company as old as IBM cannot make it in the top 100 of all respected companies in the world, and IBM claims to be a global company, all that experience and chatter just seems to be superficial and stems from arrogance; and others are beginning to take notice.
That very year, LEAN or Six Sigma methodology was launched and people were laid off left and right. Work did not get done and contractors were hired to compensate for the loss of trained manpower. Many of the ex-IBMers were brought back as contractors. All these gimmicks, to only trick the stockholders and Wall Street.
Sam Palmisano took 170 million dollars as his Golden Parachute payment! As it is, he made about 35 million dollars a year in salary and bonuses. The general worker in the IT support wing, gets little or no raise at all. I know of people who have gone without any raises for over 6 years!!! With the 401K payments pushed to the end of the year, it means less money in the pockets, month to month anyway. And if any worker is laid off before December 31st, IBM stands to ‘save’ all that money, to pay its executives!! How long can this go on?
North American workers are treated badly. The focus is on outsourcing to folks in India who probably make less than McDonald’s employees. How can IBM in conscience outsource marketing and social media to India when those jobs clearly involve English Language skills that people on another continent don’t possess.
Meanwhile Gini Romney gets a bonus of 40 million and IBM employees will get lay-off slips. It’s a very sad decline, but one that is inevitable if the company doesn’t start treating their employees better, and become INNOVATIVE again. At this point, IBM employees should be job hunting. The company has NO loyalty to them.
The company is a shell of it’s former self, driven by executive greed and the maniacal paradigm of ‘maximize shareholder value’ at the expense of employees and clients, while at the same time benefiting mostly executives. But worse these same executives have, as Bob states, corroded from the inside due to being completely out of touch with the realities of the business. Most of them are not technology savvy, they are finance beans at best. Not a good mixture for innovating a computer company onto the next big technology wave.
If you can, get out as fast as possible. I can assure you the world outside those blue walls is much more appealing on so very many levels. I was pleasantly surprised and have not looked back, other than to read some of my former co-workers posts and realize that it’s only getting worse.
Everything Bob and others detail here is accurate. For the vast majority of IBMers, life at IBM has become career suicide and financially unsustainable: they have gutted training and benefits; pay increases are a thing of the past (I made 5% more than my starting salary in 10 years, despite growing my skills and responsibility); outsourcing and layoffs have destroyed morale. No one is happy. Almost everyone on my project was actively seeking new jobs.
The main thing to remember is that they have been jacking up stock price through cost cutting and acquisitions, not through innovation or growth (unless you call such financial tactics innovation) and have no intention of changing course. With the executive compensation and incentives so heavily weighted by stock value, the company has simply become a oligarchy with a very short vision of the future. When things really get bad, they will cash in and move out, leaving the remaining employees and shareholders with crumbs.
In a nutshell, I'm in my late 40's now with 15 years at IBM. Always a 2+ rating but especially in recent years, never quite feel safe here. Like a lot of us, I've known several older more experienced IBMers throughout my career who have been blindsided with layoffs and I wouldn't wish that on anyone.
I have good experience & skills and feel like I could find a comparable position at another company. I understand that being the new guy someplace also has its risks so I'm unsure what to do.
Outside of compensation, vacation, benefits, etc., what other things do you think I should consider before I jump? Retirement, 401k, and anything else you think is important. Thanks!
Do not get caught up with the supposed benefits and your age, although both have some effect.
Basically, I went to a small company, the vacation is more, the benefits are better, no BS PBC garbage, real work-life balance in that when one is on vacation/weekend it is understood that is YOUR time. The culture, rather than mouthing performance encourages it with action and company-paid training. IBMers w/o a union work 'at will', never forget that, you have no real rights at your job. I have a written contract, I cannot just quit, I must give three months notice, but my company has the same requirement to give me three months notice. IOW, I have a normal employee/employer relationship, not like that of a serf to master, which is the new 'IBM way'.
I can only encourage IBMers to either organize or leave in droves. Sitting around waiting for the axe to fall until IBM finds some cheap labor country replacement for you is just wasting your time.
The 401K can be stolen at any time, there is no more IBM pension, the rest of the 'benefits' are only for the top dogs in reality. Talk to some current IBM retirees at your approximate level and ask them how IBM continues the screw job into retirement on their health 'benefits'.
Again, organize or leave is really the only two logical choices IMHO.
Many days and weeks pasted by, I have not heard from anybody and HR could not tell me where/when my expense is to be reimbursed.
An experience in dealing with reimbursement? I know I can go to court but want to get this over asap. As Amex is chasing after me for the corporate card balance and I need my own money back also, and soon.
This is very frustrating and I can not believe this is the company I knew.
Thanks for any comments and experience.
Unfortunately, you are going to have to reach out to your old manager. There is a process-- I forget what it is called-- where they can get expenses processed: a check cut to you for the cash and an auto-payment to AMEX. I know it exists because I did it for an employees that left before his TEA was processed. He got back to me two months after he left telling me that AMEX wasn't paid and he was incurring late charges. That was back in 2011. I had to go to some online process, which sent him the check and took care of AMEX. It would make it easier if you have a copy of the expenses report submitted. I have since jumped ship, so I can't look for the tool!
Don't let your old manager off the hook-- they can resolve this.
Contract your former manager and let him/her know that you have unprocessed expenses. Tell them you want a HARDCOPY TEA FORM to complete. The manager should be able to get the form pretty easily (by calling the ESC/Expense prompt)
Once you receive the hardcopy expense report - complete it, sign and return to your manager via soft copy WITH YOUR RECEIPTS!!!! You will need your receipts in order for this to processed. I believe an AMEX statement will do - but not sure.
Once your manager receives it, he/she needs to print it and sign it, then scan/send soft copy along with your receipts to IBM travel.
Once IBM Travel receives it, they will manually input it and cut a check to AMEX / Employee. Make sure you note your Amex number/old serial on the Hardcopy form.
We used to be able to go into APU and cut a check for the employee and / or directly to AMEX. But, due to audit concerns they removed that option and nobody can submit a check request for an ex-employee for expenses.
Hope this helps.
I have indeed submitted HARDCOPY paper following the procedure - however, nobody from IBM can tell me when I will receive the check, and where it is - other than submitted to travel. weeks, and months passed by.
looks IBMers handling my paper may be moving faster (after thinking fast today off course) after the first quarter!
Thank you again.
“It was a tense relationship at this stage, the state (had) withheld money, IBM was wanting that money to be paid, there was disputes about scope, things weren't going particularly well,” Mallesons lawyer John Swinson told the inquiry. ...
Swinson yesterday testified the meeting became quite hostile, and IBM executive Bill Doak suggested IBM could shift its focus to resolving legal disputes, rather than working on the project. “It was a veiled threat that IBM would stop work if it didn’t get its way,” Swinson told the inquiry.
In a signed declaration filed in federal court four days before his April 12 retirement, McNamara broke months of silence about workforce reductions at the company.
“EIT has been involved, for months, in efforts to restructure its financing so as to produce a positive cash flow and allow it to remain in business and continue to employ its employees, currently numbering approximately 605,” McNamara wrote.
he privately-held company, which was estimated to have employed 1,100 workers as of late 2012, has been one of Broome County’s most significant employers since acquiring former IBM Corp. operations in Endicott in 2002. ...
Tax breaks. EI was formed in 2002 when elected officials and local business leaders became concerned that IBM Corp.’s microelectronics division would leave the area. A sudden departure would have cost the region 4,000 jobs and left IBM’s 4.1-million-square-foot production facility vacant.
In a deal brokered by officials including Sen. Thomas W. Libous, R-Binghamton, and then-Gov. George Pataki, local entrepreneurs formed EI and purchased 62 buildings on the campus for $65 million, agreeing to invest another $35 million in improvements.
As part of the deal, IBM leased back 1.4 million square feet to house 2,000 remaining workers there. ...
Endicott Mayor John Bertoni said he met early this month with EI executives and is trying to be optimistic about the company. He was unaware of the number of employees that had lost jobs until contacted Wednesday regarding the court document.
After reviewing McNamara’s court document, Broome-Tioga Federation of Labor President Lee Conrad said the company’s former employees “are walking the streets looking for a job while the EI executives fly on a leased jet.”
“The company clearly has taken workers and taxpayers for a ride,” he said, “but not on the jet and not in a good way.”
Selected reader comments follow:
It appears that their "invisible" new outfit and new management to "develop technology for the defense industry", and all the grand plans to bring in "state of the art" ideas to Endicott Interconnect and make Huron Campus a "leader" in the high tech industry, has somehow evaporated. Who knew? Lots of people knew. But they didn't speak up. This area became paralyzed by fear, anxiety, and desperation.
The working people of Endicott's former IBM were tossed into the wind. And, to add insult to injury, IBM left a very large toxic chemical soup underneath some of those 62 IBM buildings as well as underneath nearly 500 residents homes. There were people that opened their mouth and spoke up.
Of course, they were accused of being malcontent and in the minority. Those that raised their voices were shouted down and dismissed; even vilified by their 'friends' and family, in some cases.
That is typical of a large community of people that have had their "American dream" ripped out from underneath them, their prized neighborhood polluted beyond normal habitation. That's what people do. They stand around during the parade of the new emperor of the business world, and they marvel at the beauty and the splendor of the Emperor's new clothes....until someone in the crowd stands up and shouts, "Look! The Emperor has NO CLOTHES!!!" A gasp is made by the great multitudes. One by one, each person secretly sees the truth; but they are still sorely afraid of opening their mouth. And so it goes, in slow motion; an eleven year parade of silent bystanders feigning their joy and applauding with only a few claps. Welcome to the machine.
Welcome to the corporatocracy of the 21st century.
Just like the Borgia Crime family of the Catholic Church in the 14th century. Some things never change.
The Worker Adjustment and Retraining Notification (WARN) Act requires companies to disclose major layoffs early to employees and the public.
The law stipulates companies must provide 90 days notice to employees in the event of a plant closure or mass layoffs. A "mass layoff" is defined as a reduction of 33 percent of a company's workforce. The number must be at least 25 people. If a company lays off 250 or more workers, it must also provide 90 days notice according to the WARN Act. ...
All former EIT employees are encouraged to visit the New York "One-Stop" employment centers for job counseling. There are two "One-Stop" locations in the Southern Tier, one in Binghamton and another in Owego. ...
McNamara said in the statement if the company loses and is forced to pay more than $11.5 million in restitution, the entire company could be at risk for bankruptcy. County Executive Debbie Preston's office was asked for a comment on the lack of public communications involving layoffs from EIT. The county executive's office had no comment. EIT was unable to be reached for comment for this story.
Is the same thing starting to happen to IBM in the sense that a lot of IBM revenue is Enterprise strategic outsourcing and running customer server farms. As the customer adopts cloud computing most of those customer server farms disappear over time and turn into commodity services and storage in direct competition with Amazon, Google and MS cloud services running massive matrixes of commodity hardware servers many running free open software.
If true than most of the IBM portfolio is now headed to the same low margin commodity status they have been shedding over a decade leaving them with consulting, highly competitive commodity cloud services and some splinter hardware segments like mainframes some still running patched 50 year old application software that customers cannot afford to reverse engineer to modern tech.
If you combine this IT cloud tech mega trend with IBM liquidation strategy of low cost labor arbitrage of US and EU high cost labor supplemented by stock manipulation using buybacks to boast EPS you have a very dim outlook because your top line revenue is now declining at the same time the strategy of high cost labor is running out of headcount to eliminate with declining margins to fuel buybacks.
The very small game of musical chairs may also have something to do with a rumored spinoff of all or a portion of IBM's System x x86 server business to Chinese PC and server maker Lenovo Group. IBM has not confirmed or denied those rumors, and Lenovo merely said to the Hong Kong Exchange where its stock trades that it was in talks with someone to possibly buy something.
Rometty announced the executive changes in an email sent out on Wednesday, and it sees Rod Adkins, who has been running the Systems and Technology Group (well, sort of, and El Reg will explain in a moment) for several years, exchange jobs with Tom Rosamilia, who has worked for Adkins running IBM's System z mainframe and Power Systems businesses. This is what the email to IBMers from their CEO said...
The question now is precisely what is IBM going to do with Systems and Technology Group. Officially, with Steve Mills being in charge of the combined Systems and Software Group – a combination IBM usually ignores even though it was done nearly three years ago – he is presumably deciding what IBM needs to do to bolster its Power Systems business and spin off what are presumed to be unprofitable x86 servers to Lenovo or someone else.
Selected reader comments follow:
The proposals, which include cutting back sharply on the number of foreign workers these outsourcing companies can send to their U.S. offices, have won broad support from rival U.S. technology firms, including International Business Machines Corp. and Accenture, lobbyists say.
India's $110 billion IT industry, which performs back-office tasks such as software programming, makes about half its revenue from the U.S.
Indian companies such as Infosys Ltd., Tata Consultancy Services Ltd. and Wipro Ltd. have set up large U.S. offices to be closer to clients, staffing the sites overwhelmingly with Indian expatriates, who earn significantly less than their American counterparts. ...
The bill doesn't name countries. But Indian outsourcing giants sponsor more than half the 65,000 skilled-worker permits, known as H1-B visas, that the U.S. issues annually to workers with at least a bachelor's degree. ...
Many of these firms have as much as 80% of their staff in the U.S. on H1-B and other visas. The draft legislation, which is being debated in the Senate Judiciary Committee this week, would prohibit companies with more than 75% of their employees in the U.S. on such visas from bringing in additional workers. That figure would fall to 65% within a year, and in the years after that the limit would be 50%.
IBM and Accenture declined to comment.
The U.S. firms are seeking to hire more foreign workers for high-skilled jobs but face a visa shortage because of competition with Indian firms. ...
Sen. Richard Durbin (D., Ill.) said in response that the situation was an abuse of the visa regime. "Most people would think, well, Microsoft needs these folks," he said. "And they'd be shocked to know that most of the H-1B visas are not going to companies like yours. They're going to these outsourcing companies."
Advice to Senior Management: INNOVATION left IBM, bring it back please.
Cons: It's a financially driven organization and we are absolutely feeling the pain of not growing the top line. They compensate by squeezing more costs out (our salaries) to grow the bottom line. Many of my peers have had salary roll backs in the last many years as sales objectives are nearly impossible to make.
Advice to Senior Management: Wake up and smell the social/digital/mobile/cloud. It wasn't until 2013 you started to even use this terminology in your communications; face it, your business strategy is a fail, and after 7 straight quarters of falling sales, its time to make some admissions. Blaming this last quarter on poor sales execution is insulting....you've squeezed so much investment and compensation out of the operating model that we've become transactional focused (surprise!)
However, IBM began to pigeon hole me and would not allow me to do new work and I was stuck on a project that I wasn't able to get out of or attempt to correct some problems since it could slow down the rate at which new features were being added.
Cons: -Messing with benefits constantly; -Salaries are low; -Raises are non-existent; -Ability to move jobs within IBM is meager at best despite what they tell you.
Advice to Senior Management: Be honest and trust your employees, no one trusts you because you've had a history of very bad decisions that are seemingly at odds with IBM's supposed values and traits.
Cons: IBM is in a significant cost reduction mode, which makes being there very bad; in the US, the brand is being milked while the company hangs on to whatever customers it has and does anything and everything possible to cut costs—mgt decisions are based one one thing only, which is stock price/options; - So OK place to invest, but not to be/work; - Very difficult processes to get things done to serve/support customers; - Products not competitive/high cost; - Work is increasingly delivered by subs, which means value add is smaller than ever; - Bard to win deals with high margin/overhead on a sub when you're competing against that same firm (or others) bidding; - Difficult (as always) to integrate solutions across service lines, which is one of the only ways IBM is competitive; - Seems that there are now more people not competent than competent, which makes it an uphill battle; - No desire at all on mgt part to have satisfied customers—simply not important, so if it's important to you, that's a conflict; - US morale, especially in sales, is terrible (also true in delivery); - Many looking to leave; Mgt under severe pressure every day, which drives low morale; - Not a single thought past the end of the current week/quarter, so directionality isn't there.
Advice to Senior Management: None. Go to eastern Europe or AP if you want growth or a good experience with the IBM brand.
President Obama has said that improving STEM education is one of his top priorities. Chief executives regularly come through Washington complaining that they can’t find qualified American workers for openings at their firms that require a science background. And armed with this argument in the debate over immigration policy, lobbyists are pushing hard for more temporary work visas, known as H-1Bs, which they say are needed to make up for the lack of Americans with STEM skills.
But not everyone agrees. A study released Wednesday by the left-leaning Economic Policy Institute reinforces what a number of researchers have come to believe: that the STEM worker shortage is a myth.
The EPI study found that the United States has “more than a sufficient supply of workers available to work in STEM occupations.” Basic dynamics of supply and demand would dictate that if there were a domestic labor shortage, wages should have risen. Instead, researchers found, they’ve been flat, with many Americans holding STEM degrees unable to enter the field and a sharply higher share of foreign workers taking jobs in the information technology industry. (IT jobs make up 59 percent of the STEM workforce, according to the study.)
The answer to whether there is a shortage of such workers has important ramifications for the immigration bill. If it exists, then there’s an urgency that justifies allowing companies to bring more foreign workers into the country, usually on a short-term H-1B visa. But those who oppose such a policy argue that companies want more of these visas mainly because H-1B workers are paid an estimated 20 percent less than their American counterparts. Why allow these companies to hire more foreign workers for less, the critics argue, when there are plenty of Americans who are ready to work? ...
The tech industry has said that it needs more H-1B visas in order to hire the “best and the brightest,” regardless of their citizenship. Yet the IT industry seems to have a surprisingly low bar for education. The study found that among IT workers, 36 percent do not have a four-year college degree. Among the 64 percent who do have diplomas, only 38 percent have a computer science or math degree.
"What happens in the fund business is the magic of compound returns is overwhelmed by the tyranny of compounding costs,” John Bogle, founder of The Vanguard Group, tells Smith. ”It's a mathematical fact — there's no getting around it. Why we don't look at it, too bad for us." Smith then looks at his own 401(k) for these costs and finds “all sorts of products with different kinds of fees.” He says broker fees are buried within as well.
“There’s nothing against the law about it,” says Jason Zweig, an investing columnist for The Wall Street Journal, referring to brokers in the piece. “But it is a sort of a ‘you scratch my back and I’ll scratch yours,’ kind of arrangement.’ If you sell our funds, you’ll get a portion of the revenue we earn, through selling them through you.”
In “The Retirement Gamble,” a new film for PBS' “Frontline” series, producers point to the fees investors are charged in their 401(k)s — largely made up of mutual fund fees and commissions — as the biggest obstacle standing in the way of being able to save for retirement.
“The 401(k) is one of the only products Americans buy that they don't know the price of it,” says Teresa Ghilarducci, an economist at The New School. “It's one of the products Americans buy that they don't know its quality. It's one of the products Americans buy that they don't know its danger.”
Advisers are blamed for steering investors into high-fee investments such as actively managed mutual funds in order to boost their own income. Helaine Olen, author of “Pound Foolish: Exposing the Dark Side of the Personal Finance Industry” (Portfolio Hardcover, 2012) says the term “financial adviser” means almost nothing. “It could be a financial planner,” she says. “Or it could be a broker that is a salesman.” ...
John Bogle, found of The Vanguard Group Inc., speaks of his concerns about possible arrangements between fund firms and the reps who sell their products. “The brokers are getting a little religion here,” he says. “They're saying, 'Why should I distribute your funds unless you pay me to? You get these big management fees — I want some of it. You're getting plenty. Give me some.'” ...
The failure of actively managed mutual funds, which have an average expense ratio of 1.3%, to consistently beat their index is also highlighted. “It has been proven right year after year because it can't be proven wrong, Mr. Bogle said. "It's a mathematical certainty.” ...
Wall Street Journal columnist Jason Zweig says, “One of the ultimate dirty secrets of the fund industry is, a lot of people who run other fund companies own index funds in their own accounts and don't talk about it — unless you put a of couple beers in them.”
Good luck figuring what any of that means. Right now, older Americans looking for financial guidance encounter professionals using a bewildering array of letters after their names. There are more than 50 “senior certification” designations now in use, according to a new report from the Consumer Financial Protection Bureau’s Office of Older Americans. ...
The designations are meant to persuade potential clients that the adviser is an expert in helping older people with their financial decisions, but requirements for obtaining the various designations vary widely. The alphabet soup is confusing, and can leave older adults more vulnerable to bad advice and even outright fraud, the report says.
The president has proposed slowing the rate at which benefits increase over time, a change that would ultimately hit the oldest of the old, often single women, many of whom have probably exhausted any other savings. Many members of this group also face higher health costs, have little hope of working again and often live without the support of a life partner.
But advocates for retirees say that what is perhaps the most frustrating about all of this is that Social Security, which is self-financed through payroll taxes, does not contribute to the deficit. Yet it is being lassoed into the broader debate. ...
Workers who retired at age 65 would receive 3.7 percent less in benefits after 10 years than they would under the current system; after 20 years, 6.5 percent less; and after three decades, 9.2 percent less, according to calculations by the Social Security Administration. ...
This is not a popular move. According to a recent ABC News/Washington Post poll, 51 percent of respondents opposed changing the way Social Security benefits are calculated so that benefits increase at a slower rate, while 37 percent supported such a change (11 percent had no opinion). The survey said there were no partisan differences, but among people 65 and older opposition was 64 percent.
The “three-legged stool” of retirement — that is, pensions, savings and Social Security — has already become more of a lopsided two-legged stool, because pensions have been waning for years. And the Social Security leg is providing most of the support for many retirees: about 43 percent of single people and 22 percent of married couples rely on the benefits for more than 90 percent of their income, the Social Security Administration says. More than half of couples and 73 percent of singles draw more than half their income from the program. ...
Social Security advocates say there are a variety of other ways to strengthen the program that would not be as burdensome to retirees. Currently, employees and employers each pay 6.2 percent on the first $113,700 of earnings (self-employed people must pay the entire 12.4 percent). Eliminating the cap on which earnings are taxed would eliminate about 88 percent of the current shortfall, according to the Social Security Administration.
According to the Employee Benefit Research Institute's annual survey, more than half of retirees surveyed this year are not confident that they have saved enough to pay their medical expenses during retirement.
EBRI says the average 65-year-old couple in retirement should expect to pay $163,000 in out-of-pocket expenses for health care, excluding long-term care. And even then, they have only a 50% chance of covering their actual costs. Add to that the annual rate of inflation for medical expenses of 5% to 7% for health care expenses.
Much of the immigration reform debate has centred on the need for more skilled engineers and scientists to help US companies innovate, with Silicon Valley leading the charge.
But official figures show that the leading recipients of H-1B visas are IT outsourcing companies, most of them based in India.
“These companies are using this visa programme to undercut the American worker and undercut American companies hiring American workers,” says Ron Hira, an outsourcing expert at the Rochester Institute of Technology, and the son of Indian immigrants.
Data from the Citizenship and Immigration Service show that the largest recipient of H-1B visas last year was Cognizant, an IT outsourcing company based in New Jersey but which has more than two-thirds of its 150,000 employees in India. It received 9,281 H-1Bs last year.
Next were Tata, Infosys and Wipro, all IT outsourcing companies based in India, with 17,373 visas between them. In total, the top 10 companies received 44,000 H-1B visas – more than two-thirds the number available. The figures were first reported by Computerworld magazine.
The companies use H-1B visas in two main ways: to staff jobs that must be done in the US, such as IT support for the financial services industry in New York, with cheaper, foreign workers; and to bring in workers to learn skills before rotating them back to India, often to train others there, a practice known as “staff augmentation”.
A lot of these IT firms bring someone over here for three years and then they ship them back and bring in someone new, like on a conveyor belt,” he says. ...
Mr Hira contends that many of the top H-1B employers have no intention of ever applying for green cards that would enable their workers to become permanent residents and make a lasting contribution to the US economy. He notes that Accenture, which received 4,037 H-1Bs last year, applied for only eight green cards.
According to the Employee Benefit Research Institute's annual survey, more than half of retirees surveyed this year are not confident that they have saved enough to pay their medical expenses during retirement.
EBRI says the average 65-year-old couple in retirement should expect to pay $163,000 in out-of-pocket expenses for health care, excluding long-term care. And even then, they have only a 50% chance of covering their actual costs. Add to that the annual rate of inflation for medical expenses of 5% to 7% for health care expenses.
You, as usual, are the trash to be thrown out to make things look pretty again. Aren't you tired of it yet? Have you noticed that one year you are the best of the best. Top dog. The cream of the crop. Naturally you are soooo good IBM could never get along without you so your safe. Right? No need to spend a whopping 15 bucks a month on Union Membership. You can spend that 15 buying the boss a coffee at Starbucks and showing him or her what a real ass kissing looks like.
This year your department has to make cuts. Suddenly you're the cream of the CRAP. The boss will not even return your calls or answer your Emails. You show up with that caramel frappuccino with a dash of cinnamon and someone else is already there with one. Not good. You're yesterday's news and on your way out the door and there is no time left to do anything about it. A lot of you are about to feel this way. Not all of you bought the boss coffee, but rest assured it would not have helped as the example shows. Only a Union contract would have helped. Remember that those that are left after this round of firings without cause. Take action. Live Better. Work Union. -Exodus2007-
Guess what? For the past 5 years, you forced all your talent, did not give raises or bonuses and hoped people would believe the lie "we award our top performers". What was not said but realized is those words meant you screw over 95% of the company. Is thus fixable? No, you will march IBM into Betamax, and since you have treated 95% of your workers with work harder, MANY other industries are more than happy to take them and give raises and bonuses. Unless you change your ways, IBM will go the way of Betamax, and honestly you know that, and like Sam, just looking to get as much as you can before you bail out. -Anonymous-
Take Kliff and Somashekhar’s story. Here’s the question: Is the rate hike a good thing? A bad thing? Or no thing whatsoever? If the question sounds absurd to you, then, once again, you need to read the story.
The explanation for why it’s a bad thing is the easiest, and most obvious: Premiums are going up. That is, by any definition, a bad thing.
But look at why premiums are going up. It’s not because of paperwork, or waste and fraud, or even more generous benefits. “The company expects a huge influx of sick people that will drive up costs, according to its filings with the Maryland Insurance Administration,” report Kliff and Somashekhar.
Taken at face value, CareFirst BlueCross BlueShield is saying that there are a lot of sick people in Maryland who are currently locked out of the individual insurance market because they’re sick. Now, because the government won’t let insurers turn sick people away or price them out, they’ll be able to get insurance. Yes, that’ll drive up average premiums, but isn’t getting sick people insurance the whole point? This is just another way of saying covering everyone costs money — and that, of course, is what the law’s subsidies are there to cover.
Or perhaps CareFirst BlueCross BlueShield is simply full of it. This is their opening bid to Maryland regulators, who can — and very well might — reject it. Perhaps they’re just starting high with the expectation that they’ll be forced lower. Or perhaps they’re just starting high in the hopes regulators will agree to it and the company can pocket the profits. Notably, insurers in Vermont and Rhode Island have also released their starting bids, and they didn’t foresee anything like this kind of a rate hike. ...
(Quick digression: This was always the best argument for the public option: It would’ve created a benchmark plan against which private insurers could be judged. CareFirst BlueCross BlueShield has an incentive to argue for a high premium so they can make more money. The public option wouldn’t have had that incentive. If there was a significant spread between the public option and the private insurers, that would be a signal that either the insurers were less efficient, or they were juking the numbers. But there is no public option, and so we just need to wait for experience and competition to deliver that information. Digression over.)
None of this talk of premium hikes, by the way, takes into account subsidies. This is an individual-market insurance plan that will be offered on the exchanges. But most people on the exchanges are getting some level of federal subsidy. So will the average person be paying more after accounting for the rate hike and the subsidies? Or will they be paying much less? It’s hard to say.
Well, they were secret, anyway.
The story has blown up on Twitter. “Unbelievable,” tweets TPM’s Brian Beutler. “Flat out incredible,” says Politico’s Ben White. “Obamacare for thee, but not for me,” snarks Ben Domenech. “Two thumbs way, way down,” says Richard Roeper. (Okay, I made the last one up).
If this sounds unbelievable, it’s because it is. There’s no effort to “exempt” Congress from Obamacare. No matter how this shakes out, Congress will have to follow the law, just like everyone else does.
Nearly half (46%) of adults ages 19 to 64 nationwide either had been uninsured for a time last year or were underinsured. In Florida and Texas, more than half (53% and 54%) of adults were either uninsured during the year or underinsured (Exhibit 1). Adults in these states were at greater risk of being uninsured or inadequately insured than California and New York adults (42% and 43%). In Texas, 40 percent of adults reported being uninsured for some time during the year, compared with 31 percent in California and New York. ...
Cost is a substantial obstacle to Americans’ ability to secure timely health care. In the survey, two of five (43%) adults, or 80 million people, said they had not filled a prescription or pursued needed care because the cost of doing so was too high. As with medical bills or debt, Florida stood out for having the highest rates of forgoing care because of the cost, with fully half (51%) of adult residents saying they had not gotten care for that reason. Still, nearly half of adults in both New York (48%) and Florida (47%) pointed to financial reasons for avoiding health care. And while adults in California reported these problems at slightly lower rates, they fared no better than adults nationally.
The lack of competition in nearly a dozen states could present problems when the insurance exchanges that are part of the Affordable Care Act launch in October. The exchanges are supposed to give Americans who do not get health insurance from their employers the opportunity to choose from an array of private insurance plans. The idea is to generate competition between insurers that will lead to lower premiums. ...
But in states with a dominant insurance carrier, competition and lower prices may not arrive for quite some time.
A recent analysis by the American Medical Association found that a single insurance company held 50 percent or more of the market in nearly 70 percent of local markets nationwide. And in 30 states, a single insurance company covers more than half the people who purchase insurance individually, according to the Robert Wood Johnson Foundation.
The dominance by a single insurance company is particularly pronounced in Alabama, Hawaii, Michigan, Delaware, Alaska, North Dakota, South Carolina, Rhode Island, Wyoming and Nebraska.
The editorial in the Journal of General Internal Medicine (JGIM) was approved by the journal's editors for publication on today's date and will appear on its website next week. The text of the editorial is available here (PDF). ...
“Obamacare is lowering the bar for health insurance,” said Dr. Himmelstein, a professor of public health at the City University of New York and primary care doctor. “The new coverage sold through the insurance exchanges will leave many families paying 40 percent of their health costs out-of-pocket even after they’ve laid out thousands for premiums. And the administration is allowing states to institute co-payments under Medicaid, even for the poorest of the poor.”
Himmelstein continued: “Under the ACA a 56-year-old making $46,100 will pay a premium of $10,585 for coverage through the exchange and still face up to $6,250 in co-payments and deductibles.”
Dr. Woolhandler, the lead author of the editorial who is also a physician and professor of public health at CUNY, said: “Over the past 25 years the financial protection offered by health insurance has steadily eroded. The consequences are grave, not only financially but also medically. For instance, we know that heart attack patients who face high co-payments delay coming to the ER, threatening their lives.”
Woolhandler and Himmelstein (who also serve as visiting professors at Harvard Medical School) were co-authors with Elizabeth Warren of a widely cited study that showed that illness and medical bills contribute to 62 percent of personal bankruptcies; most of the medically bankrupt were insured. Sen. Warren played no role in the JGIM editorial.
“Obamacare is making underinsurance the new normal,” said Woolhandler. “It will reduce the number of uninsured from 50 million to 30 million, but the new coverage is full of holes. Americans deserve the kind of first-dollar, comprehensive coverage that Canadians already have. But that’s only affordable under a single-payer system that cuts out the private insurance middlemen.”
Under the ACA, health insurance premiums and deductibles will not be affordable, Coates argued.
"I think it's a big experiment to drive people to [the health insurance] marketplace but the health insurance marketplace hasn't worked for years now and I don't see any evidence that's going to change," he said. ...
Instead of the Affordable Care Act, which would potentially expand Medicaid to millions of low-income Americans, Coates is campaigning for expanded Medicare for all Americans. That would include an expansion of what Medicare covers. For instance, dental care should be covered, he said.
Research shows that this would actually help provide comprehensive care to everybody and also reduce costs, Coates said. He argues that by eliminating private insurance and using a single-payer model, the United States could save more than $400 billion a year used for paperwork. ...
Coates said the single-payer system differs from socialized medicine because private physicians would care for patients. The U.S. Department of Veterans Affairs, in which the federal government owns the hospitals and pays the medical staff, is a better example of socialized medicine, he said. "The veterans administration is working very well," Coates said. "Being under public control is a very good thing. The attention that Congress puts in to improving the quality of care for veterans is completely appropriate."
Here, you can see a graphic timeline of when key provisions of the new law take effect, with links to the provisions. Individual states play a key role in expanded health insurance availability, primarily through state insurance exchanges and individual state decisions about whether and how to adopt the law's enormous expansion of Medicaid. Kaiser provides state-by-state reports on these and other state health initiatives.
Kaiser also has a 10-question Health Reform Quiz. Your answers will provide a quick guide to what you know and, more likely, don't know about the law. ...
The reality, as outlined in a recent paper from Kaiser, is that "consumers do not understand their health insurance coverage—including benefit limits and exclusions, network designs, and cost sharing features." They don't know how to evaluate insurance choices, either, or how to resolve problems when health claims are denied or where to turn for help. ...
The law provides federal insurance subsidies through these exchanges. The subsidies are tied to consumers' incomes as a percent of federal poverty levels or FPLs. These FPLs rise a lot for bigger families, and large households earning close to $100,000 can still qualify for subsidies. So, it will benefit even middle-class consumers to learn about the new law.
"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.
Since that 2010 decision, corporate and Republican opposition has snuffed out Congressional attempts to require donor transparency and accountability. All the more compelling then that the Securities and Exchange Commission, following an impressive petition campaign, is considering a regulation mandating that publicly traded corporations disclose all their political donations to their shareholders. ...
The fury of the opposition is already evident as trade associations like the United States Chamber of Commerce issue alerts to members that free speech rights are about to be trampled. Not according to Justice Anthony Kennedy in Citizens United, who noted that “shareholder objections raised through the procedures of corporate democracy” would provide accountability by companies now free to hide donations through trade associations.
…many people can profit from slow growth and high unemployment. The after-tax profit share of GDP is at its highest level more than 60 years. For those who own lots of stock and are at the top of the income ladder, times are good. These people may see efforts to lower unemployment as posing a risk. With lower unemployment workers may be able to get a larger share of productivity growth. This may be good for most of the country and mean increased economic growth, but it would mean less for the one percent.
Deficit Falling, Few Know. In February I posted Deficit Is Falling Dramatically, But Only 6% Know That,
There is no deficit problem. The deficit is down about 50 percent as a share of gross domestic product just since President Bush’s fiscal year 2009 deficit and is falling at the fastest rate since the end of World War II. Yet the Washington debate is about how and where to cut us back into recession. Why?
Not weakened it. Eliminated it.
I believe the president proposed the chained CPI in good faith. I don't know if the same can be said about his campaign pledges on that subject, but I think he genuinely believed these cuts were needed. I think his economic advisors thought they were doing the right thing by proposing them. And I think that this now-discredited spreadsheet helped convince them.
Why do I think so? Because I had a run-in with the president's top economic official on this very subject back in 2010, and his position seemed to be strongly influenced by that spreadsheet and the economists who created it.
I hadn't thought about that exchange for a long time. But last night I was catching up on this scandal when it struck me: That's why they're doing this.
They are declaring that they are not ordinary corporations at all. Instead, they say, they are something else: special trusts that are typically exempt from paying federal taxes.
The trust structure has been around for years but, until recently, it was generally used only by funds holding real estate. Now, the likes of the Corrections Corporation of America, which owns and operates 44 prisons and detention centers across the nation, have quietly received permission from the Internal Revenue Service to put on new corporate clothes and, as a result, save many millions on taxes.
The Corrections Corporation, which is making the switch, expects to save $70 million in 2013. Penn National Gaming, which operates 22 casinos, including the M Resort Spa Casino in Las Vegas, recently won approval to change its tax designation, too.
Changing from a standard corporation to a real estate investment trust, or REIT — a designation signed into law by President Dwight D. Eisenhower — has suddenly become a hot corporate trend. One Wall Street analyst has characterized the label as a “golden ticket” for corporations. ...
One of the bedrock principles — and the reason for the tax exemption — was that the trusts do not do any business other than owning real estate.
But bit by bit, especially in recent years, that has changed as the I.R.S., in a number of low-profile decisions, has broadened the definition of real estate, and allowed companies to split off parts of their business that are unrelated to real estate. ...
Steven Rosenthal, a staff member at the Joint Committee on Taxation during the 1990s and now a visiting fellow at the nonpartisan Tax Policy Center, said that the trend raises questions about the purpose of corporate income taxes at a time when there are so many ways around them. The conversions are one of many strategies that businesses use to avoid paying the corporate tax rate of 35 percent.
“What is there about a business owning real estate that suggests we should not tax them?” Mr. Rosenthal said.
S.E.C. officials have indicated that they could propose a new disclosure rule by the end of April, setting up a major battle with business groups that oppose the proposal and are preparing for a fierce counterattack if the agency’s staff moves ahead. Two S.E.C. commissioners have taken the unusual step of weighing in already, with Daniel Gallagher, a Republican, saying in a speech that the commission had been “led astray” by “politically charged issues.” ...
In response to the growing pressure, House Republicans introduced legislation last Thursday that would make it illegal for the commission to issue any political disclosure regulations applying to companies under its jurisdiction. Earlier this month, the leaders of three of Washington’s most powerful trade associations — the U.S. Chamber of Commerce, the National Association of Manufacturers and the Business Roundtable — issued a rare joint letter to the chief executives of Fortune 200 companies, encouraging them to stand against proxy resolutions and other proposals from shareholder activists demanding more disclosure of political spending.
Tax-exempt groups and trade associations spent hundreds of millions of dollars on political advertising during 2012 elections, but they are not required to disclose their donors. Evidence has mounted that a significant portion of the money came from companies seeking to intervene in campaigns without fear of offending their customers, their shareholders — or the lawmakers they target for defeat. ...
While both liberal and conservative tax-exempt groups were active during the 2012 election — spending at least $300 million, according to the Center for Responsive Politics, a watchdog group — the biggest and best-financed groups have tended to back Republicans. ...
The trade associations lining up in opposition to the rule amount to a roll call of the most politically influential — and highly regulated — industries in the country. They include the American Gaming Association, the National Retail Federation and the National Mining Association. ...
In seeking greater disclosure to shareholders, many of the advocates are citing an unlikely source: the Supreme Court’s decision in Citizens United, written by Justice Anthony M. Kennedy. In clearing the way for unlimited corporate expenditures in campaigns, Justice Kennedy suggested that “shareholder objections raised through the procedures of corporate democracy” could provide accountability for the new political powers.
Ms Cain tells the story of Vincent Kaminski to show what can happen to a business when aggressive risk-takers enjoy too high a status relative to more cautious introverts. Mr Kaminski served as managing director of research for Enron, the energy company that filed for bankruptcy in 2001. In that role, he repeatedly tried to sound the alarm about the company entering into business deals that, he thought, threatened its survival. When his superiors would not listen, he refused to sign off on these transactions. The consequence? He was stripped of his power to review company-wide deals.
As the financial crisis began to flower in 2007, Mr Kaminski was interviewed by the Washington Post. He warned that the “demons of Enron” had not been exorcised. In particular, he complained that many who understood the risks that the US banks were taking were ignored because of their personality style. He said: “The problem is that, on one side, you have a rainmaker who is making lots of money for the company and is treated like a superstar, and on the other side you have an introverted nerd. So who do you think wins?”
The study by the Pew Research Center underscored other data showing that the economic growth that has followed the Great Recession has benefited mainly those at the top. The uneven recovery has only accelerated a decades-long trend of growing wealth inequality in the country, despite rising popular and political awareness of the dynamic.
From 2009 to 2011, the average net worth of the nation’s 8 million most-affluent households jumped from an estimated $2.7 million to $3.2 million, Pew said. For the 111 million households that form the bottom 93 percent, average net worth fell 4 percent, from $140,000 to an estimated $134,000, the report said. ...
The biggest difference between the most-affluent group and everyone else, Pew said, is that the wealthiest households have their assets concentrated in stocks and other financial instruments, while others’ wealth is concentrated in their homes. ...
“It has been a very good recovery for those at the upper end of the wealth distribution,” said Paul Taylor, executive vice president of the Pew Research Center and co-author of the report along with Richard Fry, a senior research associate. “But there has been no recovery for the lower 93, which is nearly everybody.” ...
Although Obama won the election, many of the tax and other policies aimed at addressing the complex causes of inequality have not been passed by Congress. Those that have become law so far have done little to close the gap.
The sequester is forcing dramatic cuts in Head Start, Meals on Wheels, Children’s Health Insurance Program, Homeless housing program, Legal Aid, Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), unemployment checks. Too bad for them.
But Congress acted in hours when business flyers faced some flight delays.
Business flyers faced delays on Monday, made noise on Tuesday, legislators thought heard it Wednesday and Thursday: Senate votes unanimously to fix FAA furloughs, Friday: House passes bill to end FAA furloughs, now goes to Obama to sign.
Not just affluent business flyers, CEOs, too. Reuters: Congress passes plan to ease flight delays,
They had also faced anger from airline CEOs whose companies had mounted a grassroots campaign through a website called dontgroundamerica.com, encouraging Americans to send messages to Congress and the White House.
Then lawmakers scurried out of town, taking a week’s vacation while ignoring the low-income victims of the mandatory budget cuts, who have few representatives in Washington to protest their lost aid for housing, nutrition and education. Though they are suffering actual pain, not just inconvenience, no one rushed to give them a break from the sequester, and it is clear that no one will.
Catering to the needs of people with money, such as business travelers, is the kind of thing the country has come to expect in recent years from Congressional Republicans. But Democrats share full responsibility for this moment of cowardice. The Senate version of the bill passed by unanimous consent. That means not a single Democrat opposed bailing out travelers while poor kids are getting kicked out of Head Start or nutrition programs. ...
In the House, only 29 Democrats voted against the gift to travelers, which was made possible by switching some funds for airport improvement into the controllers budget. One of the few willing to brave the Republican attack machine was Steny Hoyer, the Democratic whip, who said he could not support repealing a piece of the sequester while preserving its harmful impact. “Seventy thousand children will be kicked out of Head Start,” he said. “Nothing in this bill deals with them.”
Delays in air travel annoy the kind of people who can inundate Congress with angry letters and e-mail messages. They also afflict lawmakers themselves. But cutting rental vouchers and jobless benefits affects only the voiceless. The more special-interest exceptions that are carved out of the sequester, the more the rest falls on the backs of those who can neither bear it nor stop it, promising many more years of hard-hearted cuts.
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