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The elder Reid, 70, is fighting for his political survival. He has been a fixture in the state for 40 years, and he's worried that the last thing voters want is a Reid dynasty. He's already badly trailing two Republican candidates who haven't even hit 50 percent in name recognition.


Instead of getting credit for putting down insurrections and wrangling his fellow Democrats into passing a health-care reform bill on Christmas Eve, Harry Reid is getting hosed for it. Republican leaders were licking their lips at the prospect of picking him off. And that was before Reid had to activate a one-man phone tree of apology this weekend for what he called "improper comments" he made during the 2008 presidential campaign about Barack Obama's light skin and absence of "Negro dialect."


Reid, who was in Nevada on Monday to announce an electricity project, said he has "apologized to everyone within the sound of my voice," adding, "I could have used a better choice of words."

Obama and Reid's fellow Democrats have accepted his apology, and on Monday the Las Vegas and Reno chapters of the NAACP put out a statement supporting Reid. But the chant from Republicans for Reid's head continues. The Tea Party Express will begin its next tour from his home town of Searchlight, and on Monday, the group went up with $250,000 in "Defeat Harry" ads statewide.

The younger Reid, 47, is keeping his head down, raising money, trying to fend off any Democratic rivals. He is doing meet-and-greets and tending to his day job as the chairman of the Clark County Commission, the governing body of this boom-and-bust neon desert with nearly 2 million people. He's a man with a Prius and a wife on the school board and three kids.

etc... etc... etc...

A year later, politics is working pretty much as it always did, and it’s Organizing for America that’s on defense.

With little public profile and a difficulty in pointing to concrete accomplishments, OfA, as it’s known, has faced criticism on many fronts: Progressives blast OfA as a soulless, top-down machine that’s alienating the base, even as some state party officials complain that the group is stepping on their toes. Conservative Democrats, too, grumbled over the summer when OfA ran mild, campaign-style ads in their districts backing health care reform, a violation of political etiquette the group hasn’t repeated after complaints from congressional leadership.

Perhaps most troubling for the party, former Obama aides and other Democrats say, OfA simply hasn’t been as effective as they hoped. And as 2010 shapes up to be a difficult year for Democrats, the quiet hand-wringing among party officials over the organization’s capacities has been matched by a new public hand-wringing among Democratic activists, with both struggling to diagnose the ills of the group that was meant to change the game.

“’Fixing health care’ was a tough initial assignment for Organizing for America. It was both too diffuse and abstract,” said Simon Rosenberg, the president of the Democratic think tank NDN, who said that he thought OfA “could get back on track” next year by focusing on the economy and the elections.

OfA officials are waging their own P.R. battle to defend the group’s image. And amid online criticism last week, and after speaking to POLITICO, Deputy Director Jeremy Bird took preemptively to Huffington Post to say that the group had mounted “victory after victory” in 2010, and to claim credit for metrics including “our 3 millionth follower on Twitter.” (The Twitter feed is in the name of Barack Obama, which may have something to do with that number.)

Top officials would only speak to POLITICO on the condition that the press office approve quotes before they could be used on the record In an interview, OfA’s top officials argued that they haven’t gotten the credit they deserved in the health care fight. And they point as evidence to the moment generally viewed as OfA’s greatest debacle, being caught off guard by the a wave of conservative anger expressed at the town hall meetings of members of Congress, as OfA and its allies – ineffectively and perhaps counterproductively – attempted to cast the “tea party” conservatives as corporate shills.

But then the group and its liberal allies frantically mobilized, dispatching Democrats to – by its count – outnumber conservatives at town hall meetings through the country. In the months following, the group says it rallied citizens to take some 2.5 million steps – from phone calls to Congress to mere petition signatures – in support of health care reform.

Executive Director Mitch Stewart also said the organization’s broader effects have been understated.

Obama “talked about changing the way that Washington works. We believe that we’ve done that,” Stewart said in the interview with POLITICO. “Is it ‘snap your fingers and you’re living in utopia?’ No. But do we feel like we’ve made significant progress toward changing the way that Washington works? Yes.”

The impact of a grassroots organization like Organizing for America can be difficult to measure. The group has regularly sought to advertise its potency by announcing the number of telephone calls it’s placed and town hall meetings it has hosted. Harder to measure is whether it had any impact on the conservative Democrats who have weakened Obama’s bill but appear ready to vote for it.

Both critics and admirers of Organizing for America say it is fundamentally shaped by its place as an arm of the White House political operation. Despite some early discussions of incorporating it outside of the DNC, the group was made a formal part of the party infrastructure – limiting its ability to lean on recalcitrant Democrats, and reducing what some had seen as the possibility for it to evolve into an independent movement.

Obama’s aides say they saw no path toward anything other than a group that “no matter where it was, was going to be identified with the president,” said Bird.

The structure imposes its own limits, however, ones that emerged as it became clear that the most important limits to President Obama’s power would be set not by Republicans – whom OfA has had no trouble lambasting – but by conservative Democrats in the House and, especially, the Senate.

“It’s not going to be perfect because of the nature of the entity that’s running it, meaning that it’s hard to be aggressive going after a U.S. senator of your same political party when he’s a voting member of your organization,” said former Obama deputy campaign manager Steve Hildebrand, who has argued that the White House should have fought harder for liberal principles. “What if you took it outside the DNC and made it a little of a distant and a little of a rogue entity, to what extent would it have the political courage to go too rogue? If somebody obnoxious like me was running it, who didn’t live in D.C.?”

Still, Hildebrand said, that within those strictures, he was deeply impressed with OfA’s scale and capacity.

“There’s no other organization that can turn up the volume like that,” he said, referring to a day on which the organization said it direction 300,000 calls to members of Congress.

Others on the left dreamed similar dreams for the group. Micah Sifry, a blogger and the editor of TechPresident, complained recently in a widely-circulated series this week that, despite occasional surveys of its members, OfA operated too much like a White House tool and had stifled organic, bottom-up organizing governance puts total control in the hands of DNC staffers.

“The local base of the Obama campaign had no meaningful say in the creation and structure of Organizing for America, and there is no evidence that OFA is actually driven by anything but what its DNC-paid staff and White House advisers want,” he wrote.

On the opposite end of the organizational spectrum have come complaints from state party officials and Democratic campaign hands who have watched in frustration as an arm of the DNC – an essentially political organization – spends its time and money on a legislative and policy fight.

In October, Rhode Island Democratic Party Chairman Bill Lynch fired off an early warning flare, writing in a letter to other party leaders that it was not “beneficial to have a separate and distinct Democratic political organization working in the state of Rhode Island as opposed to joining forces with our existing state party structure.”

In interviews with POLITICO, numerous state party chairs - some of whom requested anonymity to speak candidly – expressed frustration with on-the-ground OFA organizers, some of whom, these party chairs said, were barely on speaking terms with state parties and who in some cases expressed outright hostility to the existing state party structure.

“There seems to be an unwillingness or lack of an ability to work well with the state party” in Pennsylvania, said T.J. Rooney, state Democratic Party chairman. The chairman in neighboring New Jersey, Joseph Cryan, described himself as “frustrated” with the group.

Inquiries about disgruntled party chairs that made their way back to Washington produced a deluge of official denials: The Nebraska Democratic Party said it had a “fantastic, synergetic relationship” with OFA; the California Democratic Party said it “has enjoyed a very positive working relationship”; the Kansas Democratic Party said it has a “great relationship”; the Alaska Democratic Party said it has “an outstanding relationship”; the Vermont Democratic Party said it has an “excellent relationship”; he Missouri Democratic Party said it has “a very good working relationship with OFA.”
Wrote Dan Parker, chairman of the Indiana Democratic Party: “[O]ur experience has been great.”

“…I love it when the National Party invests heavily in my State because it benefits my State and local Party operations,” Parker added.

Dwight Pelz, the chairman of the Washington Democratic Party, even offered to “send you the talking points” on his own warm relationship with OfA.

“When we got started it was pretty rocky,” said Pelz, who said he’d lost three staff members to make room in the new budget for the new group. He added, however, that there’s an upside. “OFA is keeping people involved,” he said.

Stewart said he has warm relations with most state parties, and attributed the exceptions to a mixture of “local concerns” and the fact that, some “five percent” of the time, the group’s policy goals might be out of step with the largely political imperatives of state parties, as OfA does “things that will either make [party chairs] uncomfortable or [they] are not going to have very warm feelings about.”

Yet many Democratic campaign hands also echo their complaints.

“They are spending a lot of time on health care and don’t seem to be rallying the organization around key races,” noted Joe Trippi, the Democratic consultant who helped build Howard Dean’s campaign into a partial model for Obama. “You’d hope that would change – soon.”

Others complain of a lack of focus.

Susan Smith, an OFA activist from Tampa who is heavily involved in local Democratic politics, complained that OFA "from the beginning has not been really clear about what their mission is" on healthcare and other issues.

She said the group's stances on even key issues like the public option seemed to vacillate from one day to the next. "On one day the public option would be in their paperwork and on their website and the next day people couldn't find it. Then all of sudden, it was back and it was number 8 in an 11-point plan. It's just been very amorphous."

Organizing for America stresses its success at building a grassroots network, training hundreds of volunteers for positions as 15-hour-a-week “community organizers.”*

The group’s key challenge, however, is balancing that focus on the hard core with an effort to keep the larger membership of a list that has more than 10 million email addresses interested. Stewart said that the email open rate – a key measure for online groups – is “extremely healthy if you compare it to any other organization out there,” but declined to go into detail. Critics have complained that the emails – notable during the campaign for offering a straightforward take and, sometimes, breaking news, have grown trite, and interspersed with gimmicks like online holiday cards.

POLITICO reported last month that the response to email appeals had fallen by half over the course of the fall, while discontent among supporters over the details of health care reform grew.

With OfA’s effectiveness in dispute, its clear test will come in this year’s midterms. Stewart declined to discuss its plans in detail, but the group sent a survey to supporters asking them about their willingness to participate in two key activities: voter registration, and working to ensure that Obama’s 2008 voters – many of whom stayed home in Virginia and New Jersey last year – return to the polls in 2010.

“We are in a unique position to help reach out to some of the Democrats or folks who are supportive of the president who are apathetic right now,” Stewart said.

Kenneth P. Vogel contributed to this story.

“Vehicles with protected license plates can run through dozens of intersections controlled by red light cameras with impunity,” the Register’s Jennifer Muir reported. “Parking citations issued to vehicles with protected plates are often dismissed because the process necessary to pierce the shield is too cumbersome. Some patrol officers let drivers with protected plates off with a warning because the plates signal that drivers are ‘one of their own’ or related to someone who is.”

The plate program started in 1978 with the seemingly unobjectionable purpose of protecting the personal addresses of officials who deal directly with criminals. Police argued that the bad guys could call the Department of Motor Vehicles (DMV), get addresses for officers, and use the information to harm them or their family members. There was no rash of such incidents, only the possibility that they could take place.

So police and their families were granted confidentiality. Then the program expanded from one set of government workers to another. Eventually parole officers, retired parking enforcers, DMV desk clerks, county supervisors, social workers, and other categories of employees from 1,800 state agencies were given the special protections too. Meanwhile, the original intent of the shield had become obsolete: The DMV long ago abandoned the practice of giving out personal information about any driver. What was left was not a protection but a perk.

Yes, rank has its privileges, and it’s clear that government workers have a rank above the rest of us. Ordinarily, if one out of every 22 California drivers had a license to drive any way he chose, there would be demands for more police power to protect Californians from the potential carnage.

But until the newspaper series, law enforcement officials and legislators had remained mum. The reason, of course, is that the scofflaws are law enforcement officials and legislators.

Here is how brazen they’ve become: A few days after the newspaper investigation caused a buzz in Sacramento, lawmakers voted to expand the driver record protections to even more government employees. An Assembly committee, on a bipartisan 13-to-0 vote, agreed to extend the program to veterinarians, firefighters, and code officers. “I don’t want to say no to the firefighters and veterinarians that are doing these things that need to be protected,” Assemblyman Mike Duvall (R-Yorba Linda) explained.

Exempting themselves from traffic laws in the name of a threat that no longer exists is bad enough, but what government workers do to the rest of us on a daily basis makes ticket dodging look like child’s play. Often under veils of illegal secrecy, public-sector unions and their political allies are systematically looting the public treasury with gold-plated pensions, jeopardizing the finances of state and local governments around the country, removing themselves from legal accountability, and doing it all in the name of humble working men and women just looking for their fair share.

Government employees have turned themselves into a coddled class that lives better than its private-sector counterpart, and with more impunity. The public’s servants have become our masters.

Good Enough for Government Work

There was a time when government work offered lower salaries than comparable jobs in the private sector but more security and somewhat better benefits. These days, government workers fare better than private-sector workers in almost every area—pay, benefits, time off, and job security. And not just in California.

According to a 2007 analysis of data from the U.S. Bureau of Labor Statistics by the Asbury Park Press, “the average federal worker made $59,864 in 2005, compared with the average salary of $40,505 in the private sector.” Across comparable jobs, the federal government paid higher salaries than the private sector three times out of four, the paper found. As Heritage Foundation legal analyst James Sherk explained to the Press, “The government doesn’t have to worry about going bankrupt, and there isn’t much competition.”

In February 2008, before the recession made the disparity much worse, The New York Times reported that “George W. Bush is in line to be the first president since World War II to preside over an economy in which federal government employment rose more rapidly than employment in the private sector.” The Obama administration has extended the hiring binge, with executive branch employment (excluding the Postal Service and the Defense Department) slated to grow by 2 percent in 2010—and more than 15 percent if you count temporary Census workers.

The average federal salary (including benefits) is set to grow from $72,800 in 2008 to $75,419 in 2010, CBS reported. But the real action isn’t in what government employees are being paid today; it’s in what they’re being promised for tomorrow. Public pensions have swollen to unrecognizable proportions during the last decade. In June 2005, BusinessWeek reported that “more than 14 million public servants and 6 million retirees are owed $2.37 trillion by more than 2,000 different states, cities and agencies,” numbers that have risen since then. State and local pension payouts, the magazine found, had increased 50 percent in just five years.

These huge pension increases have eaten away at public finances, most spectacularly in California, where a bipartisan bill that passed virtually without debate unleashed the odious “3 percent at 50” retirement plan in 1999. Under this plan, at age 50 many categories of public employees are eligible for 3 percent of their final year’s pay multiplied by the number of years they’ve worked. So if a police officer starts working at age 20, he can retire at 50 with 90 percent of his final salary until he dies, and then his spouse receives that money for the rest of her life. Even during the economic crisis, “3 percent at 50” and the forces behind it have only become more entrenched.

In the midst of California’s 2008–09 fiscal meltdown, with the impact of deluxe public pensions making daily headlines, the city of Fullerton nevertheless sought to retroactively increase the defined-benefit retirement plan for its city employees by a jaw-dropping 25 percent. What’s more, the Fullerton City Council negotiated the increase in closed session, outside public view. Under California’s open meetings law, known as the Brown Act, even legitimate closed-session items such as contract negotiations are supposed to be advertised so that the public has a clear idea of what’s being discussed. But the Fullerton agenda for that night only vaguely referred to labor negotiations.

Four of the five council members—two Republicans and two Democrats—seemed to support the deal. But Republican Shawn Nelson, a principled advocate for limited government, didn’t appreciate the way the council was obscuring not only the legitimately secret details of the negotiations but the basic subject matter. He called me at the Register (where I worked at the time) and, without revealing details of the closed session, shared his concerns about the way the public had not been alerted. After I wrote about the secret, fiscally reckless deal, the recriminations came down in a hurry: on Shawn Nelson.

Not surprisingly, the liberal council members were furious that the public had been informed about what was going on. But some conservative Republicans, including a prominent state senator, Dick Ackerman of Irvine, were angry as well, because Nelson’s willingness to talk embarrassed a Republican councilman whom the GOP was backing for re-election. When I later bumped into Ackerman at the Republican National Convention in St. Paul, he laid into me about Nelson’s supposed violation of the Brown Act. Some officials and bloggers actually called for Nelson to be prosecuted. Local union mouthpieces and fellow council members portrayed the whistleblower as a common criminal, even though he was merely acting in the spirit of the open meetings law and showing the kind of fiscal responsibility you would hope to see in public officials.

In its embarrassment, the city council voted against the deal at the last minute, but only after council members publicly chastised Nelson, accused me of libel, and vowed to come back for more when the timing was right. One Republican councilman couldn’t figure out what the fuss was all about, given that the council enhances public employee pay and pensions all the time.

Pension Tsunami

Although Americans may have a vague sense that the nation has run up a great deal of debt, the public employee benefit problem is not well known. Yet the wave of benefit promises is poised to wash away state and local government budgets and large portions of the incomes of most Americans. Most of these benefits are vested, meaning that they have the standing of a legal contract. They cannot be reduced. And the government employees’ allies, such as California’s legislative Democrats, are cleverly blocking some of the more obvious exit strategies.

For instance, when the city of Vallejo went bankrupt after coughing up 75 percent of its budget to police and firefighters, the state Assembly introduced legislation that would allow cities to go bankrupt only if they get approval from a commission. Such a commission would of course be dominated by union-friendly members. The result: Cities would be stuck making good on contracts they cannot afford to fulfill.

When the economy was booming, these structural problems could be hidden. But not now. As debt loads become unsustainable, you can expect cuts in services, tax increases, pension-obligation bonds, or some combination of the three.

In California unfunded pension and health care liabilities for state workers top $100 billion, and the annual pension contribution has shot up from $320 million to $7.3 billion in less than a decade. In New York state, local governments may have to triple their annual pension contributions during the next six years, from $2.6 billion to $8 billion, according to the state comptroller.

That money will come from taxpayers. The average private-sector worker, who enjoys a lower salary and far lower retirement benefits than New York or California government workers, will have to work longer, retire later, and pay more so that his public-employee neighbors can enjoy the lifestyle to which they have become accustomed. The taxpayers will also have to deal with worsening public services, since there will be less money to pay for things that might actually benefit the public.

In July 2009, Orange County, California, Sheriff Sandra Hutchens proposed more than $20 million in budget cuts to close the gap caused by falling tax revenue. Her department slashed 40 percent of its command staff, cut a total of about 30 positions, and made changes that affected about 200 positions through reassignments, demotions, new overtime rules, and other maneuvers. “These are services that we believe are quite important to maintaining public safety, that we’re just not going to be able to continue,” department spokesman John MacDonald told the Los Angeles Times.

The sheriff failed to identify another reason for the tight budget: In 2001 the Orange County Board of Supervisors had passed a retroactive pension increase for sheriff’s deputies. That policy nearly doubled pension costs from 2000 to 2009, when pension contributions totaled nearly $95 million—20 percent of the sheriff’s budget. So the sheriff decries an economic downturn that is costing her department about $20 million, but she doesn’t mention that a previous pension increase is costing her department more than double that amount. It’s safe to say that had the pension increase not passed, the department would have money to keep officers on the streets and to avoid the cuts the sheriff claims are threatening public safety.

Chief’s Disease

One would think that a “3 percent at 50” retirement would be a good enough deal for most people.

Most workers in the private sector would probably jump at such an opportunity. But many public safety officials aren’t satisfied with a system that allows them to retire with 90 percent or more of their final year’s pay at young ages. They feel compelled to game the system in ways that stretch or break the law.

A large percentage of public safety officials —more than two-thirds of management-level officials at the California Highway Patrol, for instance—come down with something widely known as “Chief’s Disease” about a year before their scheduled retirement. “High-ranking [CHP] officers, nearing the end of their careers, routinely pursued disability claims that awarded them workers’ comp settlements,” John Hill and Dorothy Korber of the Sacramento Bee reported in 2004. “That, in turn, led in many cases to disability retirements. As they collected their disability pensions, some of these former CHP chiefs embarked on rigorous second careers—one as assistant sheriff of Yolo County, for example, another as the security director for San Francisco International Airport.”

When Mike Clesceri was mayor of Fullerton (a part-time position filled by a city council member), he also worked as an investigator for the Orange County District Attorney’s Office. As his retirement approached, Clesceri claimed to have an extreme case of acid reflux, which would help him net a tax-free pension of $58,000 a year, plus cost-of-living increases. Even while retired with that alleged disability, Clesceri pursued a local police chief’s job, retained his mayorship, and ran a tough re-election campaign. He even had the time to have his brother-in-law, an attorney, send threatening letters to members of the community who commented on the absurdity of his disability pension. As Clesceri explained in a newspaper column, the disability only applied to his job at the D.A.’s office.

The exposure of this abuse ultimately galvanized the public to boot Clesceri off the Fullerton City Council. The problem is most of these situations never get aired publicly.

Other state employees go to great lengths to find the highest-paying job they can in their final year, thereby locking in their permanent retirement benefit based on a salary they made only once. Bee reporters Hill and Korber told the story of Sharon McGraw, a Sacramento-area accounting manager for the state who moved from her suburban home to a tiny apartment in the San Francisco Bay area so she could temporarily take a high-paying job that would increase her pension benefit by $18,000 a year.

Then there’s the bizarre story of Armando Ruiz, a part-time trustee for the Coast Community College District in Southern California. Ruiz also worked full time as an administrator with the South Orange County Community College District. Ruiz wanted to run for re-election as a trustee and use the “incumbent” label on his ballot, but he also wanted to take advantage of a strange California law that dramatically increases an employee’s pension payout if he retires from two jobs on the same day.

“Ruiz ‘retired,’ effective Oct. 31, as a part-time trustee of the Coast district and as a full-time counselor at Irvine Valley College,” Register columnist Frank Mickadeit reported in 2008. “Even though the trustee gig pays just a $9,800 annual stipend, he was able to calculate his state pension as if he had been paid $106K a year for that ‘job’ plus the $106K a year he got for his real job at Irvine. So, based on a $212K salary he never really made, his pension will work out to about $108K a year for life. Otherwise, the pension would have been $59K—$54K for the real job; $5K for the trustee job. Even though Ruiz was officially retired from the Coast district board, he was still listed on Tuesday’s ballot as an incumbent. A cynical person might say that by waiting to ‘retire,’ just days before the election Ruiz knew it would be too late to change the ballots. And incumbents rarely lose such elections.”

The only good news from that scam: After Ruiz’s maneuver was exposed, the state legislature repealed the incomprehensible pension-spiking rule. But the pending pension crisis, with its thousands of abuses undetected by outside scrutiny, continues to loom over our heads.

The Public Sector Menace

In the summer of 2009, various Democratic candidates for California attorney general came before the Police Officers Research Association of California, a union lobbying organization, to ask for its support. According to one attendee (who asked to remain anonymous, given the obvious repercussions for his career), the organization had two basic questions for Assemblymen Ted Lieu (D-Torrance), Alberto Torrico (D-Newark), and Pedro Nava (D–Santa Barbara), each a candidate in the 2010 attorney general race. The first: Did they support the death penalty for cop killers? The second: Would each candidate, as attorney general, make sure the official summary of a state pension reform proposal would be slanted to destroy its chances of passing?

In California crafting ballot language is one of the most important jobs of the state’s attorney general. The police union officials reminded the candidates that 90 percent of voters read nothing more than the ballot title and summary, and they emphasized the importance of putting the kibosh to the measure. My source was appalled, not just by the directness of the question but by the eagerness with which the candidates, especially Torrico, answered it. They all promised they would help kill the measure.

Public-sector unions have a growing influence in state and federal governments, and in the overall labor movement, but they are a relatively recent phenomenon. Civil service unionization in the federal government wasn’t allowed until President John F. Kennedy issued an executive order legalizing it in 1962. In California it didn’t become legal until 1968. Yet now California may be spearheading the re-unionization of the country.

In a 2003 study of union membership rates, the sociologists Ruth Milkman and Daisy Rooks explained that “California stands out as an exception to the general pattern of the past decade. Against all odds, union density has inched upward in the nation’s most populous state, from 16.1 percent of all wage and salary workers in 1998 to 17.8 percent in 2002.”

The study was produced by the University of California Institute for Labor and Employment, itself a testament to union power in the Golden State. Critics call the institute Union University, arguing that the state is funding a left-wing advocacy and research organization that advances union causes. As the Los Angeles Times explained in a 2004 article about the controversy, “For years these programs received the majority of their funding from the budgets of the universities where they are housed. Then in the 2000–01 budget, former Gov. Gray Davis approved $6 million to create the institute encompassing the two centers and charged with carrying out ‘research, education and service involving the world of work, and the public and private policies that govern it.’ ”

In the 2003 study, Milkman and Rooks found that union growth in California’s public sector has far outpaced such growth in other states, for an obvious reason: “Organized labor has more political influence in California than in most other states.” In more-recent studies, the Institute for Labor and Employment found that for the first time in five decades, U.S. unionization rates actually increased in 2008. The reason: increases in California, mainly in the government sector.

At all levels, state and local government employment grew by 13 percent across the United States from 1994 to 2004. The number of judicial and legal employees increased by 28 percent. The number of public safety workers increased by 21 percent. The number of teachers increased by 22 percent.
Michael Hodges’ invaluable Grandfather Economic Report uses the Bureau of Labor Statistics to chart the growth in state and local government employees since 1946. Their number has increased from 3.3 million then to 19.8 million today—a 492 percent increase as the country’s population increased by 115 percent. Since 1999 the number of state and local government employees has increased by 13 percent, compared to a 9 percent increase in the population.

The United States had 2.3 state and local government employees per 100 citizens in 1946 and has 6.5 state and local government employees per 100 citizens now. In 1947, Hodges writes, 78 percent of the national income went to the private sector, 16 percent to the federal sector, and 6 percent to the state and local government sector. Now 54 percent of the economy is private, 28 percent goes to the feds, and 18 percent goes to state and local governments. The trend lines are ominous.

Bigger government means more government employees. Those employees then become a permanent lobby for continual government growth. The nation may have reached critical mass; the number of government employees at every level may have gotten so high that it is politically impossible to roll back the bureaucracy, rein in the costs, and restore lost freedoms.

People who are supposed to serve the public have become a privileged elite that exploits political power for financial gain and special perks. Because of its political power, this interest group has rigged the game so there are few meaningful checks on its demands. Government employees now receive far higher pay, benefits, and pensions than the vast majority of Americans working in the private sector. Even when they are incompetent or abusive, they can be fired only after a long process and only for the most grievous offenses.

It’s a two-tier system in which the rulers are making steady gains at the expense of the ruled. The predictable results: Higher taxes, eroded public services, unsustainable levels of debt, and massive roadblocks to reforming even the poorest performing agencies and school systems. If this system is left to grow unchecked, we will end up with a pale imitation of the free society envisioned by the Founders.

Steven Greenhut (stevengreenhut@gmail.com), the director of the Pacific Research Institute's Journalism Center, was a columnist for The Orange County Register for 11 years.

"I'm not going to go into specifics because it's a whole package, and we have to reach agreement on the whole package," he said. "I think this president's participation in the details is an indication of how critically important he thinks it is for the American peope to do what he said he would do and that is to be sure that every American has access to afforable quality health care. And that's not just rhetoric. He's walking the walk."

Hoyer said there is an understanding in the room about how angry House members are over the inclusion of a tax on high-end insurance plans, but that was not the focus of the meeting.

"We've been talking about the whole gamut of issues that are raised by differences by the Senate and the House, the whole gamut," he said.
Asked if Obama told lawmakers what he wants in the bill, Hoyer showed a little separation-of-powers leg.

"Yes, of course, he's given his opinions," Hoyer said. "Congress is an independent body, but we're very interested in what the president's views are."

With FratesPosted by Patrick O'Connor 04:32 PM

Democrats couldn’t eliminate the tax on union members’ high-cost insurance policies altogether but did put off the effective date until 2018, but only for labor agreements and state and local government workers.


And that seems sure to open up Democrats to charges that it took yet another behind-closed-doors bargaining session with a powerful interest group to close the deal on health reform.


But for a day at least, the White House could claim a significant victory on the road toward passing a health care reform bill, with a deal that averts a standoff on one of the most contentious issues standing in the way of a final compromise.


Other major issues remain under discussion, but according to an official familiar with the talks, negotiators have been sending proposals to the Congressional Budget Office for cost estimates — a sign that lawmakers are close to a deal on other pieces of the tax package. Key lawmakers are set to return to the White House Thursday night for more talks.


President Barack Obama traveled to the Hill on Thursday to speak to House Democrats and sought to rally House members by invoking reform’s historical potential. But his remarks also had a I-know-this-is-tough quality that reflects reform’s unpopularity with voters.


“Now, believe me, I know how big a lift this has been,” Obama said. “But I also know what happens once we get this done, once we sign this bill into law. The American people will suddenly learn that this bill does things they like and doesn’t do things that people have been trying to say it does.

Their worst fears will prove groundless, and the American people’s hope for a fair shake from their insurance companies for quality, affordable health care they need will finally be realized.”


The deal focused on a provision that would levy an excise tax on “Cadillac” health insurance plans. Many labor union members have bargained over the years for such benefits in lieu of pay hikes and didn’t want to bear the brunt of the tax.


Major changes to the legislation include a modest increase in the threshold for taxation to $24,000 a year for family coverage, inserting adjustments for older workers and women and entirely exempting dental and vision plans for all Americans, starting in 2015.


A broad spectrum of union presidents announced their support for the reduced excise tax on a conference call with reporters Thursday afternoon, bringing a major Democratic constituency into line and helping to quell potential problems on the left in the House.

“We will endorse it, and we’ll do that proudly,” said AFL-CIO President Richard Trumka of the health care bill, assuming it stays true to negotiations. “We’ve been at this for 60 years, and we are extremely proud of the constructive role that labor’s played in advancing health care reform.”


The call, led by Trumka, included some of the labor leaders who fought hardest against the excise tax that remains in the legislation, such as Gerald McEntee of American Federation of State, County and Municipal Employees and Larry Cohen of the Communications Workers of America.


“I didn’t have any tremendous hopes for real success in this, but I was proven wrong,” said McEntee of the bill.


White House officials and labor leaders defended the agreement against a fresh round of Republican criticism that the bill was weighed down with special-interest deals and was a targeted attempt to mollify a key constituency. They sought to highlight aspects of the deal that would benefit more than just union members, including the higher threshold at which the tax would kick in and the exemption for dental and vision plans.


“It is fairly telling that opponents of reform are criticizing a transition period for workers and are silent about a similar transition period for their friends — the insurers,” said White House Communications Director Dan Pfeiffer. He was referring to the phase-in of the reforms and taxes affecting insurers and other industry groups between 2011 and 2018.


The changes slice $60 billion off the $150 billion the tax was expected to raise, Trumka said. He also defended the special exemption for union plans, saying that most of the changes labor had won would apply to all workers.


House Democrats peppered union leaders with questions about the deal at a closed-door session in the Capitol complex Thursday.


“My concern is that this [threshold] isn’t high enough to pass muster,” said one Democratic member who has been regularly briefed by House leaders on the White House negotiations. Asked whether the Democratic Caucus would reject the deal, the member said: “It’s possible.”


Connecticut Rep. Joe Courtney, who has led opposition to the excise tax, said after reviewing details of the deal: “It reflects a more intelligent direction, ... but I really am reserving judgment.”


The deal might also raise eyebrows in the Senate. Earlier Thursday, Sen. Russ Feingold (D-Wis.) sent Reid a letter asking that all “sweetener” provisions be struck from final legislation — a reference to agreements with Sen. Ben Nelson (D-Neb.), Sen. Mary Landrieu (D-La.) and others to help secure their votes.


“These ‘sweeteners’ are unjustifiable and only detract from our collective goal of putting America’s health care system on a better and more sustainable path,” Feingold wrote. “Several provisions were included in the health reform bill that create, rather than diminish, inequity. ... Simply put, they are intended to provide an undeserved windfall to specific states.”


Feingold’s letter became easy fodder for Republicans seeking to use the right words to attack the union bargain.


“Sen. Feingold says it well — that they should strike the unwarranted measures that win the support of certain members and special interests,” said Don Stewart, spokesman for Senate Minority Leader Mitch McConnell of Kentucky. “It’s emblematic of the whole debate, so it’s not a surprise. They’re not trying to get the support of the American people; they’re trying to get the support of the union lobbyists.”


To help make up for the lost revenue, Democrats are targeting at least two industries that already put up contributions to health reform’s bottom line. The hospital industry has been asked to offer an additional $15 billion in concessions on top of a $155 billion deal last summer with the White House, according to one source.


And the pharmaceutical industry has agreed to provide an extra $10 billion to its already negotiated $80 billion deal over 10 years.


Democrats are also negotiating further adjustments to the Medicare payroll tax rate, which was already increased under the Senate bill. Lawmakers and the White House are looking to apply the tax to investment income for high-income earners.


Maintaining the excise tax, which health care economists say can help control spiraling health care costs, was a top priority for Obama. But it has been fiercely opposed by top labor leaders and rank-and-file House Democrats.


House Speaker Nancy Pelosi (D-Calif.) said the push to send a final bill to CBO by Friday wasn’t because of political pressure generated by the Massachusetts Senate race, where Republican Scott Brown has said he would be the 41st vote to scuttle health reform if elected.


“No. The fact that CBO takes so much time is really more the issue,” she said. “When we’re ready to send something, we will. We’d like to do it as soon as possible, as soon as it’s ready. Most of this legislation CBO has seen.


“There are no real surprises in here because the makings of the reconciliation have been in the public domain, in our case for months, in the Senate’s case for several weeks, so much of that has been crafted,” Pelosi said.


House Majority Leader Steny Hoyer (D-Md.) said finishing by Friday was the goal. “That’s been the goal. But it’s a goal, it’s not a deadline,” he said.


Chris Frates, Patrick O’Connor, Meredith Shiner and Kasie Hunt contributed to this report.