Monthly Archives: February 2014

Cooking MD’s Obamacare Books?

By Barry Rascovar

Feb. 25, 2014 — UNBELIEVABLE. Maryland’s healthcare exchange debacle has entered the realm of the absurd.

On Friday, the exchange announced it had signed up a mere 3,000 subscribers for private insurance over the past week, bringing the total to a pathetic 33,000. The initial private insurance goal: 150,000.

MD Healthcare Connection

MD Healthcare Connection

Yet on Sunday we learned the exchange had magically surpassed its six-month goals — thanks to a too-convenient mistake by a economic research consulting group connected to a state  university.

Instead of an overall sign-up goal of 260,000 (Medicaid plus private insurance), the number was slashed to 160,000.

How handy: So far 190,000 people have signed up, thanks to 90,000 recipients who were previously on Medicaid and were shifted automatically to the new program.

What a bizarre way to declare victory!

More Bad News

We also learned on Sunday all work on a $19 million small business healthcare exchange ground to a halt three weeks ago, dismaying private insurers.

On Monday, the exchange belatedly announced it had fired — finally — the online sign-up system’s prime contractor at a closed-door meeting Sunday night.

The contractor, Noridian Healthcare Solutions of North Dakota (yes, North Dakota), already has been paid $67 million for producing a deeply flawed computer contraption (1,538 identified “defects” so far) that crashed on Day One. The hits keep coming.

O’Malley’s Response

To give Gov. Martin O’Malley his due, he had Health Secretary Josh Sharfstein tell a legislative committee on Monday the administration will not use those conveniently revised numbers but instead would stick with the original figures that actually were two-year, not one-year, goals.

Good for him.

But where was Lt. Gov. Anthony Brown, the designated point man on healthcare reform? The campaigning candidate once again wasn’t around to answer the hard questions from lawmakers.

And once again there was no indication anyone in the administration wants to launch a thorough investigation to pinpoint accountability for this historic screw-up any time soon.

Not only is it likely the state wasted at least $200 million in taxpayer dollars, but thousands of citizens in need of health insurance were denied that opportunity due to government incompetence — or worse.

It’s the biggest fiasco in recent Maryland history, yet no one in elective or appointed office seems to care enough to take action to find out who’s act fault until after the June 24 primary election.

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Is O’Malley’s Presidential Bid for Real?

By Barry Rascovar

Feb. 23, 2014 — YES, Maryland Gov. Martin O’Malley is running for president, but his target isn’t 2016. It’s 2024.

O’Malley’s evolving presidential bid amounts to preliminary maneuvering aimed at securing his future in the next Democratic administration.

Is O'Malley's presidential bid for real?

Gov. Martin O’Malley makes a point.

Running for president between now and 2016 makes sense if you’re O’Malley. It’s the best way to impress Hillary Clinton and position himself so he gets a high-visibility job in her government.

Look at the situation from O’Malley’s perspective. He loves life as an elected official. He excels at full-time campaigning. He’s shown himself to be an effective government executive.

But when his term in office expires in less than a year, what will he do?

His Next Step?

He had a bad experience as a private lawyer years ago. That isn’t an avenue he’s likely to pursue as a career.

All the other important elective offices in Maryland are filled by Democrats who aren’t about to step aside for him.

So how does O’Malley get himself on the national stage?

–By running for president now to make a good impression

–By bowing out once Clinton announces her candidacy

–By working like heck to ensure her election

–And then waiting for the second President Clinton to offer him a choice job.

The ideal spot — other than vice president — would be secretary of the Department of Homeland Security.

As Baltimore mayor and as governor, O’Malley had taken a leadership role on national security issues. He’s gained local and national expertise. He’d be an effective spokesman for the department and a “do it now” leader in times of emergency.

Gov. Martin O'Malley

Gov. Martin O’Malley on the air

To get that job, O’Malley has to pull off an elusive misdirection play.

First, run for president over the next year or two. This gets him before Democratic audiences all over the country, making the right contacts within the party and making an excellent first impression.

Second, graciously withdraw from the race if and when Hillary Clinton announces. It’s a longshot that she will stay out of the presidential race. Who wouldn’t want to make history as the first female president and part of the first husband-and-wife team to win the White House in separate elections two decades apart?

O’Malley is a longtime Hillary supporter. He was one of the earliest and most enthusiastic backers of her 2008 candidacy. He’ll work like a tiger as her presidential surrogate on the 2016 campaign trail.

That should put him in good position to secure an important post come 2017.

A Washington Role

By then, he’ll be 54, an ideal age for a high-level Washington appointee. From that vantage point he can gain valuable exposure to the inner workings of the federal government  and develop a nationwide following as he works the media and traverses the country promoting the administration’s agenda.

All that would make O’Malley a legitimate presidential contender at age 62.

Right now, he’s the longest of longshots for 2016. This was confirmed by an embarrassing Baltimore Sun poll and then by a Washington Post poll in which Hillary Clinton had ten or twelve times more supporters in Maryland than the Maryland governor.

That speaks volumes about H. Clinton’s enormous popularity among Democrats, but also to local skepticism that O’Malley is ready for prime time. If he can’t come anywhere close to winning his own state in a mock election, how can he be considered a viable candidate two years from now?

It would be Mission: Impossible, and O’Malley knows it.

So Why Run Now?

But O’Malley needs the national exposure he’ll receive campaigning as a serious presidential candidate. He needs the experience, too.

Then, when Clinton is formally in the race, look for a rapid and strategic retreat by O’Malley as he enthusiastically leaps onto the Hillary for President bandwagon.

Does all that maneuvering and misdirection make sense? You bet it does.

In politics as in life, there are times when you must make a detour to reach your ultimate  goal.

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What MD’s Early Polls Tell Us

‘Undecided’ Wins in a Romp

By Barry Rascovar

Feb. 21, 2014 — PREDICTING the outcome of Maryland’s primary races for governor based on polls four months in advance of the election is a little like wagering today on the outcome of May’s Kentucky Derby. The odds are strong you’ll get it wrong.

Early political polls are highly inaccurate. That’s clear from past Maryland gubernatorial elections for open seats. Lt. Gov. Blair Lee III easily outdistanced his rivals early in 1978, according to the polls. Lee lost.

Blair Lee III

Blair Lee III

Twenty-four years later, Lt. Gov. Kathleen Kennedy Townsend was a prohibitive early poll favorite to succeed Gov. Parris Glendening. It never happened.

Kathleen Kennedy Townsend

Kathleen Kennedy Townsend

 Name Recognition Counts

Early poll results depend on a candidate’s name recognition more than anything else. Since neither Lt. Gov. Anthony Brown nor Attorney General Doug Gansler has had high media visibility over the past seven years, it’s not surprising the winner of both the Washington Post and Baltimore Sun early polls is Undecided.

On the Republican side, the big winner once again is Undecided at 68 percent.

The same holds true for attorney general. Still, name recognition counts. State Sen. Brian Frosh, state Del. Aisha Braveboy and state Del. Bill Frick aren’t household names by a longshot. Neither is state Del. Jon Cardin — but his uncle, Ben, the United States senator, is.

That explains Jon Cardin’s preeminence in recent polling, though Undecided wins that race in a romp with 69 percent.

When Voters Pay Attention

In truth, these campaigns won’t begin in earnest till the General Assembly goes home in early April. At the moment, few people are paying attention.

Brown continues to promote a sense of inevitability. He’s got all the establishment endorsements, especially the governor’s. So why not just crown him as the next governor?

Lt. Gov. Anthony Brown

Lieutenant Governor Anthony Brown

Gansler keeps trying to make up for a terrible start last summer (remember “beachgate”?), but any time he says something sensible the Brown camp hysterically denounces it as a hideous crime against humanity.

Attorney General Doug Gansler

Attorney General Doug Gansler

You can’t place much confidence in early polls. Still, Brown is obviously ahead in the first part of this race — despite growing criticism about his lack of leadership in the disastrous Obamacare sign-up program in Maryland.

The X Factor in June

What will people care about in late June when the primaries take place? That could prove pivotal. Are they content with the direction of Maryland under Gov. Martin O’Malley? Or do they want a different look and feel to state government?

Neither candidate is proposing a dramatically new path. Brown and Gansler are liberal Democrats, but the attorney general has displayed greater openness to new ideas regardless of ideology.

Polls won’t decide this election. Turnout and effective advertising will.

The June 24 date for this year’s gubernatorial primary is unheard of in these parts. That’s awfully early. This could lead to abysmally low turnout.

Outstanding Questions

Who does that help? Probably Gansler, since Brown’s strongholds have a history of lower voter participation.

Can Gansler persuade Democrats in rural counties and the Baltimore suburbs to vote heavily for him? If so, he might win. He remains the underdog.

Who will the third candidate in this race, Del. Heather Mizeur, hurt the most? She represents Montgomery County — Gansler country — but she appeals to the most ardent liberal Democrats who otherwise would vote for Brown.

Much is riding on which candidate develops the best marketing plan and produces the best ads. Brown is selling himself as a continuation of the liberal O’Malley years. Gansler is the “change candidate” who must go on the offensive to show that Brown is an empty suit.

Which candidate will capture the public’s imagination? Which candidate will come across as most likeable and knowledgeable in the televised gubernatorial debates?

Art, Not Science

It’s helpful to keep in mind that recent polls only give us a Polaroid snapshot of the governor’s race as of the moment — and nothing more. Many things will change in the coming months. The closer we come to June 24, the more meaningful polls become.

But polling is far from perfect. Pollsters can get it wrong. That’s because accurately gauging public sentiment and voting trends is very much an art and not a science.

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MD’s Quarter-Billion Dollar Healthcare Fiasco

By Barry Rascovar

Feb. 16, 2014 — ACCOUNTABILITY is sorely lacking when it comes to Maryland’s botched rollout of Obamacare. Lt. Gov. Anthony Brown  is nowhere to be found when tough questions are asked. Gov. Martin O’Malley deflects “who’s at fault” inquiries, focusing instead on getting the deeply flawed software partly operable.

The computer system’s main contractor, Noridian Healthcare Solutions, blames its prime subcontractor, who in turn accuses Noridian — a healthcare services company, not an IT firm — of incompetence and conning the state. Given that Noridian has received $65 million to construct a failed system, the subcontractor may have a point.

No Probe Planned

Perhaps Health Secretary Josh Sharfstein will decide in April or May to pull the plug on this IT horror show and start all over with a proven system from another state or join the federal healthcare sign-up exchange. That will cost a pretty penny.

But no one seems in a hurry to find out who screwed up.

Governor O'Malley explains IT fixes to Maryland's healthcare rollout.

Governor O’Malley explains IT fixes to Maryland’s healthcare computer rollout.

Democratic state lawmakers have put off till the summer a Department of Legislative Services analysis of what went wrong. That fits nicely with their support of Brown’s campaign to succeed O’Malley. It will be a long time after the June 24 primary before that DLS report surfaces.

Lt. Gov. Anthony Brown

Lt. Gov. Anthony Brown

Those same lawmakers tried to ignore the ongoing scandal during the current General Assembly session, but public pressure led to a series of hearings that deal with fixing the system rather than assessing blame. This helps Brown immensely, since he’s most likely to be fingered as the state official who was asleep at the switch.

First District Rep. Andy Harris wants the Department of Health and Human Services to probe Maryland’s waste of a quarter-billion federal dollars on a nearly inoperable system but that’s a political stunt by a tea party Republican who is becoming a nattering nabob of negativism.

U.S. Rep. Andy Harris

U.S. Rep. Andy Harris

Meanwhile, the O’Malley-Brown healthcare exchange continues to limp along with 29,000 Marylanders enrolled in private health plans — just one-sixth of the way to Brown’s previously stated goal of 180,000 and one-fifth of the way toward O’Malley’s 150,000 sign-up goal.

It’s a mess, the worst waste of taxpayer dollars in memory. Yet no one is launching a probe. It’s all being handled with kid gloves and diplomacy so as not to hurt Brown’s election bid or O’Malley’s longshot run for the White House.

Impartial Report

What’s needed is the equivalent of the Preston Report. Back in 1985, Maryland suffered a calamitous collapse of its privately insured savings and loan industry. It cost the state and S&L depositors hundreds of millions of dollars.

Gov. Harry Hughes and lawmakers created the Office of Special Counsel to probe “all aspects of the events” leading up to the S&L crisis. A prestigious Baltimore attorney, Wilbur (Woody) Preston, and a small team of his associates produced a package of legislative reforms and a 450-page report that detailed what went wrong and why. It was a honest and thorough assessment.

Special Counsel Wilbur Preston delivers his S&L report in 1986 (Baltimore Sun)

Special Counsel Wilbur Preston delivers his S&L report in 1986 (Baltimore Sun)

That’s what’s required now — an impartial dissection of this costly embarrassment by someone willing to lay out the facts without worrying about whether the blame falls on the lieutenant governor, the governor, the health secretary or the IT vendors.

How much of the blame belongs to O’Malley, who ultimately is responsible for what goes on in his administration? This was, after all, the most important initiative the state has undertaken in ages.

How much of the blame for this healthcare fiasco sits on Brown’s shoulders?

e’s made a big deal of his leadership on this reform, though he’s recently tried to weasel out by claiming he was only in charge of the legislation (also severely flawed) setting up the exchange.

Brown clearly was a figurehead leader — a general who showed up for the public meetings but left everything to his underlings. Even when he said he learned of the computer snafus, he apparently failed to sound the alarm.

Bleak Outlook  

Since Democratic lawmakers aren’t willing to ask the tough questions before the gubernatorial primary, and the governor has shown no eagerness to create a special panel to probe this scandal, we may never learn enough to reach a conclusion.

Even the DLS report is likely to be scrubbed of any finger-pointing at state leaders. That’s especially true if Brown wins the June 24 Democratic primary. Top Democrats in the legislature will circle the protective wagons around the presumptive governor.

What a mess.

We will glean quite a bit about the exchange’s IT failures from the competing lawsuits filed by Noridian and its prime subcontractor, EngagePoint. But that won’t lift the fog surrounding actions of healthcare exchange leaders, the governor and the lieutenant governor.

Sadly, this is one mystery that may never be solved.

 

 

 

 

 

O’Malley’s Latest Pension Grab

By Barry Rascovar

Feb. 10, 2014 — IT TAKES quite a bit for the quiet, diplomatic State Treasurer, Nancy Kopp, to criticize her fellow Democrat, Gov. Martin O’Malley. But she gently laid it on the line in opposing O’Malley’s $100 million budget cut for state pension contributions.

“It’s a question of trust,” Kopp said.

Bond rating agencies will look askance at O’Malley’s effort to permanently reduce by $100 million a year the state’s commitment to funding future pensions. “It will be very difficult to defend” when the agencies question her, she told legislators.

Treasurer Nancy Kopp

“It’s a question of trust”, says Maryland State Treasurer Nancy Kopp

What Kopp didn’t say, but others are filling in the blanks, is that O’Malley’s action is a cold, calculated slap in the face of state workers.

He is reneging on an agreement he made with them just a few years ago.

The irony is that the very same “working families” O’Malley defends so passionately are the ones hurt most by his callous action.

O’Malley Walks Away

Working-class state employees and teachers were asked in 2011 to pay more into the pension fund and accept lower future benefits. Now they are watching the governor walk away from his part of the deal.

That will “be dimly viewed” by rating agencies, noted retirement fund executive director Dean Kenderdine. And for good reason.

What he and Kopp don’t know is how close Maryland could come to losing its coveted Triple-A bond rating because of O’Malley’s pension-funding duplicity.

The good news is that the General Assembly’s budget panels aren’t likely to accept the governor’s high-handed action.

When cuts are made, it’s a near certainty lawmakers will see that O’Malley’s pension grab is countermanded and that the next governor will be required to commit an extra $300 million annually to close Maryland’s yawning pension-fund gap.

From the governor’s perspective, taking another $100 million from the state’s allocation to the retirement fund makes sense.

2015 Budget Book

O’Malley’s FY2015 Maryland Budget

The move doesn’t endanger anyone’s immediate retirement benefits. It helps O’Malley avoid cuts in other programs. It shrinks the state’s long-term structural deficit. And it only delays by a year the retirement agency’s target for reaching 80 percent of full funding.

O’Malley also knows that calculating pension and retirement shortfalls is more an accounting shell game than a science.

Does the state really need on hand today 100 percent of the money required to pay off all future retiree benefits  — 192,000 of them — decades from now?

The laws of probability are prohibitive that Maryland, or any other pension fund, will ever have to make a one-time, all-in payout.

Enough to Pay Current IOUs

Maryland’s $40 billion pension fund has more than enough money to write current retirement checks.

A 2011 law set out a gradual plan for raising the state’s retirement accounts to 80 percent of full funding in a decade or so, and to reach 100 percent in two decades.

That was a sensible approach — but not if O’Malley and his gubernatorial successors override that law and continue to use the pension fund as a grab bag whenever there’s a need for an extra $100 million or so elsewhere in state government.

Barry Rascovar’s other commentaries can be viewed at www.politicalmaryland.com

 

 

Tennessee Leads the Way

Boosting Community Colleges

By Barry Rascovar

MARYLAND is way behind the learning curve. It needs to look to what Republican Gov. Bill Haslam is proposing in Tennessee: free community college for any high school graduate in the state.

While Gov. Martin O’Malley’s State of the State Address lacked creativity and forward-looking initiatives, Haslam delivered a cutting-edge plan to Tennessee lawmakers. He’ll use lottery proceeds to set up a $300 million endowment for the two years of free-tuition guarantees to state high school grads at community colleges or technology centers.

Tennessee Gov. Bill Haslam

Tennessee Gov. Bill Haslam

The “Tennessee Promise” stands in stark contrast to O’Malley’s niggardly attitude toward Maryland community colleges, which actually serve as the education backbone of this state. Instead of making enhanced funding of community colleges a priority, the lame-duck governor wants to reduce mandated funding levels.

It’s another example of O’Malley’s missed opportunities.

Perhaps some of the wannabe candidates for Maryland governor will notice Haslam’s daring proposal in Tennessee, which could put that state in great position to attract new companies. In Maryland, sadly, community colleges remain an undiscovered gem.

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Rob, We Hardly Knew Ye

GOOD NEWS for democracy: Twelve-term Congressman Robert Andrews of South Jersey is making an early exit from Capitol Hill in ten days. Thank goodness.

Andrews is under investigation for using campaign funds for family trips to California and Scotland. In 24 years, he’s had no real leadership role in the House.

Retiring Rep. Robert Andrews of New Jersey

Retiring Rep. Robert Andrews, (D-N.J.)

He’s introduced more bills than any other congressman during that time. His record of success? Six hundred forty-six bills thrown in the hopper; none passed.

Think about that.

A .000 batting average.

O for 646 at-bats, with 646 strike-outs.

No wonder the Washington Post labeled Andrews “America’s least successful lawmaker.”

His departure will hardly make a wave.

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Maryland’s Slick Casino Move 

NO ONE noticed at the time, but Maryland pulled a fast one on casino bidders for the new license in southern Prince George’s County.

Everyone was expecting a long, drawn-out courtroom battle after MGM Resorts International won the coveted license. MGM plans to build a $925 million luxury gambling/hotel mecca overlooking the national’s capital.

MGM Casino at National Harbor

MGM Casino at National Harbor

But neither Greenwood Racing nor Penn National, the losers, will contest the award — despite the fact Penn National could see its Charles Town, WV, casino lose hundreds of millions of dollars due to MGM’s earlier-than-expected start in mid-2016.

Why didn’t the losers gripe in court and prolong the matter? Because of a provision in the state’s request for proposals (RFP). It turns out, the state gets to keep all of the bidders’ down-payments until appeals are concluded.

That would have meant the $18.5 million Penn National put up, and the $29 million Greenwood Racing put up would be locked away in an escrow account for years.

That’s a hefty punishment for profit-making companies to absorb.

The companies decided to forego the longshot bet of winning on appeal. This way, they get all those millions returned immediately so they can re-invest that money in other casino bids or expansion elsewhere.

Meanwhile, the state gets to reap a gigantic benefit — the early opening of what experts say will be the most profitable casino in the mid-Atlantic region, with the state keeping over half of those proceeds.

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Do-Gooders Know Best

By Barry Rascovar

For MarylandReporter.com

Feb. 2, 2014 — RAISING THE MINIMUM WAGE is all the rage among liberal Democrats and liberal advocacy groups. Listening to them it’s clear a much higher minimum will dramatically close the income inequity gap.

Nirvana is just around the corner.

All this is well intentioned. Yes, there is a widening gulf between America’s very rich and the middle and lower classes. Yes, the nation’s minimum wage needs adjustment. Those at on the bottom of American society need extra financial help.

But is the nearly 40 percent jump in the minimum wage proposed by President Obama and his wannabe successor, Maryland Gov. Martin O’Malley, the solution?

Obama State of the Union Address

President Obama’s State of the Union Address — “Raise the minimum wage”

Will prosperity sudden blossom, job-growth flourish and the poor take home enough pay to cover all expenses?

Sadly, the answer is “no.”

Indeed, a rapid and steep rise in the minimum wage may result in the Law of Unintended Consequences coming into play – fewer job opportunities, layoffs, cutbacks in hours worked, higher consumer prices and more delays in business expansion.

O'Malley State of the State Address

Governor O’Malley at State of the State Address — “Raise the minimum wage”

Put yourself in the small businessman’s position.

She employs mainly low-wage workers at two or three retail locations. Wages already eat up most of her revenue. Now those wages are going to rise by over a third.

Chance are this business person will take steps to curb her new overhead – letting some workers go, reducing hours for other employees and raising prices, if competition permits.

Some small businesses may be so hard hit that they can’t  stay open. Even larger operations might see profits dip substantially, forcing them to put growth plans on hold.

Negative Impact From Doing Good

Do-gooders could end up harming the very people they seek to help.

It is encouraging that House Speaker Mike Busch and Senate President Mike Miller recognize caution is required in approaching the minimum wage issue.

One size may not fit all businesses in various parts of the state.

Behind the counter jobs at minimum wage.

Behind the counter jobs at minimum wage.

A $10.10 minimum rate in impoverished and isolated Garrett County goes much further than in Montgomery County, but Garrett business owners may not be able to afford such a large wage boost.

Ocean City’s part-time summer employment base attracts college students, not folks looking for full-time work. Boosting their pay by nearly 40 percent doesn’t help the poor at all. It may, though, force some small entrepreneurs to close up shop.

A Better Method

There’s a far better way to help men and women struggling at the bottom of the economic ladder. It’s called the earned income tax credit – a targeted wage supplement that rewards the working poor.

So why isn’t O’Malley proposing a major boost in Maryland’s earned income tax credit? Because it would require him to pay for it and cut tens of millions from other agencies and programs.

It’s far easier for O’Malley – as he has done throughout his terms as governor – to beat up on the business community and demand the private sector help the poor. It  becomes a private-sector burden rather than a burden on O’Malley’s budget.

There shouldn’t be a debate over raising the minimum wage gradually over a number of years. It’s too low now.

Deceptive Political Mindset

But liberal politicians have seized on this issue as an easy answer to the nation’s persistent slow growth. It isn’t.

They ignore the real purpose of minimum wage jobs – to get young people  starter jobs so they can learn about showing up regularly and on time, to provide supplemental wages for older folks, and to assist those whose full-time job doesn’t pay all the bills.

In most cases, these positions are not for those seeking permanent employment. They are entry-level jobs.

High turnover is expected. The work doesn’t require much brain-power. The jobs are designed to be a start or a supplement, not a career.

Cautious Approach Needed

Attacking income inequality is far more complicated than simply doubling or tripling the minimum wage.

Attacking the business community for pointing out the obvious flaws in this liberal crusade doesn’t help matters, either.

There’s little doubt O’Malley will get a modified minimum wage proposal through the General Assembly this session.

Yet a slow and cautious approach is advisable.

The next group of elected Maryland officials needs to focus more on designing programs that actually stimulate and encourage economic growth.

O’Malley and his liberal followers seem to have fallen into the political trap of calling for superficial solutions that do not come close to resolving the exceedingly knotty problems confronting society.

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Read other commentaries by Barry Rascovar at www.politicalmaryland.com.