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Posted at 11:01 AM ET, 02/24/2011

Scott Walker understands power, part II

By Ezra Klein

More evidence that Scott Walker isn't driven by deficits:

Wisconsin's Republican governor, Scott Walker, says that concern over his state's relatively modest budget crisis motivates his drive to strip public-sector employees of their ability to bargain collectively. And yet, he just decided to put Wisconsin into a fiscal strait-jacket, signing a bill Tuesday that would require a two-thirds supermajority in the state legislature or a state-wide referendum to raise a range of taxes. This is not the sign of a serious budget hawk, whatever you think of Walker's policies on public-sector unions.

By Ezra Klein  | February 24, 2011; 11:01 AM ET
 
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Comments

The people of Wisconsin deserve what they voted for.

God help them as their state is transformed into a libertarian utopia and as they begin to rack up debt in the coming years as they begin to transfer wealth to the powerful and wealthy barons of the 21st century.

I hope the rest of the nation finally learns NOT to vote for Republicans and conservative Democrats. But I am NOT holding my breath.

Posted by: lauren2010 | February 24, 2011 11:13 AM | Report abuse

This is another step down the road to Californization. I don't understand how this is at all necessary; raising taxes almost always amounts to political suicide anyway. Further limitations on the implementation of new taxes though makes it more difficult to make responsible, adult decisions.

I understand that people are opposed to paying taxes, but presumably we're all honorable enough to feel that we should pay for what we've purchased, even if it turns out later that we aren't necessarily happy with what we bought. In the case of government, covering existing obligations until they can be winded down in a manner calculated to limit pain as much as possible seems like the right choice to make.

Doing things, on the other hand, like causing sudden shutdowns and "ripping the band-aid off" approaches like immediate, enormous funding cuts only create shocks that increase misery in the short term. Aren't we all already miserable enough?

Posted by: arm3 | February 24, 2011 11:23 AM | Report abuse

"...begin to transfer wealth to the powerful and wealthy barons of the 21st century..."

hello?

the transfer of wealth to the already rich and powerful has been going in every state in the union for the last three decades.

as to whether or not Scott Walker understands power implies he is a self directed actor in this. he is not.

Walker is getting his walking orders from the Koch, Norquist, Limbaugh triumvirate as are all other Repbulican Governors, state legislators, Republican Congressional leaders as well as at least two member of the Supreme Court.

Walker's understanding of power is limited to the recognition of who has power and how to make himself to those king makers.

Posted by: toconn2 | February 24, 2011 11:31 AM | Report abuse

It sounds like he's just condemned Wisconsin to face the endless budget problems California has.

Posted by: Nylund154 | February 24, 2011 11:34 AM | Report abuse

Apparently he didn't get the memo that the cheese is supposed to be on the outside of your head.

Posted by: willows1 | February 24, 2011 11:45 AM | Report abuse

as archetypal of all the gop, what they say is different from what their true agenda is - reward their corporate masters at the expense of everyone else. there was a time when they at least made an attempt to be disingenuous; now they are convinced they are so invincible, they don't even need to do that. yes, elections have consequences as the 60% of those not voting in the 2010 elections are finding out.

Posted by: sbvpav | February 24, 2011 11:59 AM | Report abuse

Couldn't any future legislature/governor just sign a repeal of this rule if they wanted to raise taxes? If it isn't a constitutional amendment, I don't see how this alters power much. Am I missing something?

Posted by: ClayDavis31 | February 24, 2011 12:01 PM | Report abuse

True, Clay.

Posted by: arm3 | February 24, 2011 12:06 PM | Report abuse

while Scott Walker understands power, President Obama knows how to hide the powerful interests he sits down with so as to seem transparent.

http://www.politico.com/news/stories/0211/50081.html

Do you have issues with this Ezra? Is this the transparency we were promised?

Posted by: visionbrkr | February 24, 2011 12:10 PM | Report abuse

Ezra,

Could you please explain how Scott Walker's $140 Million package of tax breaks for corporations is responsible for creating a $3.6 BILLION deficit?

If Obama can blame his predecessor, doesn't Walker have the same privilege?

Rachel Maddow, you, and the rest of the lefty-moron blogosphere should do a better job of research before you go around promoting dumb talking points.

Posted by: ElGipper | February 24, 2011 12:12 PM | Report abuse

I was just doing a bit of reading about the wisconsin teacher's union and how it owns it's own insurance company (the WEA trust) which collects about a 20% kickback on all the wisconsin teacher's health and welfare funds it controls (a few districts have managed to break away) That union controled insurance company pays a annual kickback to the locals ("marketing fee") when they make "wea trust" a contract demand...
Ezra, how is that different than just stealing? I realize that you float around in the rareified air of Wash. D.C., where ther are tens of thousands, if not hundreds of thousands, of folks living six-figure lives on the backs of "dues paying members", "tax-payers" and the fruit of these sort of kick-back schemes.
I suppose your special cocoon is the comfortable life of re-assuring the general public that they are stupid, anti-intellectual, hicks if they in any way object to being fleeced by Union bosses, politicians and the garden variety thugs who have risen to the top of your neighborhood.
I wonder who pays when you have lunch with Andy Stern? The guy probably has more sweet heart pension deals than we can imagine.
He had upwards of $100 million a month in dues alone, not to mention the millions upon millions in "health and welfare fund administration fees" which were surely flowing in, all flowing through his fingers each month.
The head of the Wisconsin teachers union, Mary bell, keeps her salary a secret, for some reason they don't have to publish a LM-2 report so the general public has no idea how plush her comforter is.
I read that she told the teachers to walk out last week... she should say "I'm sorry" to the parents and children she hurt, she ought to be dis-engaging from the WEA trust kick back scheme and admitting that it is time to stop using children for political gain.
You want a "win-win" tell Andy to Tell Mary(I'll bet a buck they're talking every day) hat the era for health and welfare kickback schemes is over, get the news to her that the first step in the right direction is for her to get down off her high horse and personally apologize for the way she treated the parents and school children of Wisconsin last week. Have her issue a union directive to all teachers and union members that any sort of political use of the students is unacceptable.
Then have her order her state senators back into the capitol.
Once we are there let the political process move forward, school district health insurance funds should not be wrung through a union kick back scheme, the state shouldn't have to be the union's enforcer, yanking dues out of teacher's checks... job one should be what's good for the students, job two what's efficient for local school districts and way, way down the list, just after what's good for the lowliest janitor in the smallest school, shoul come, what's good for Marty Beil, Mary Bell and the rest of the union thugs.
Anybody who walks off their jobs should be fired.
Steve

Posted by: Cheesy1959 | February 24, 2011 12:12 PM | Report abuse

I'm willing to believe Ezra has put more thought into his writing than "ElGipper" who probably is just watching Fox News. But, I agree that there have been a bunch of numbers thrown out ranging from the 100-200 million up into the billions regarding Wisconsin's budget deficit. I believe some of it has to do with the state's budgeting in three year cycles?

It would be great for Ezra to do a post breaking down exactly what the various numbers are referring to, and exactly what the impacts of the various proposals are.

Posted by: genericOnlineID | February 24, 2011 12:22 PM | Report abuse

Cheesy - I'm trying to get this straight. So the union owns an insurance company. The union members apparently pay premiums to the insurance company for insurance coverage. The 20% "kickback" is what, exactly? This means that 20% of the premiums collected go to the union and not to the insurance company? That doesn't seem right. I doubt that such a visible insurance company would be able to hide a 20% premium. Then again, if their premium costs are in line with other insurance companies, that may tell you something about the "kickbacks" received by good ol' fashioned invisible hand insurance companies. FWIW, my employer offers a bunch of different health insurance plans and I chose the union plan even though I'm not union because it was cheap and had better coverage for families.

Also, I find a lot of dissatisfaction with unions inevitably gravitates toward the people at the top and how much they make or don't make. In a sense, a union is a private entity and who cares what the people at the top make? That seems to be the business of the union to decide. And I'm willing to bet that the leadership of a corporation with as many employees as the unions cover would make several times as much as the union higher-ups.

Posted by: willows1 | February 24, 2011 12:25 PM | Report abuse

The bill to change the state's name to WisKochsin is coming up next week.

Posted by: pseudonymousinnc | February 24, 2011 12:32 PM | Report abuse

@willows,

so then why do liberals always talk about what a CEO in a private company makes distorting those facts??

Posted by: visionbrkr | February 24, 2011 12:35 PM | Report abuse

Wow, that's sad. Wisconsin's about to go to crap.

Let's just make it really hard to make any investments, and eat our seed corn. Let's make every state like Mississippi! In fact, let's Mississipize the whole country! If we're not going to believe in science and make thinking elitist, we might as well go completely third world.

Posted by: RichardHSerlin | February 24, 2011 12:44 PM | Report abuse

I'm still amazed by Any Stern's admission that "But this is what we do best in labor: fight back."

Too bad that organized labor is currently fighting back against the democratically elected government. If the government of a Sovereign State enacts a law compelling each union member to eat broccoli, each union member must do so: end of story. Or does that broccoli example not apply in this instance, 'cuz its a union-thing?

Posted by: rmgregory | February 24, 2011 12:46 PM | Report abuse

I urge all of the people concerned about what's happening in Madison to read about the "WEA trust" or "WEA Insurance company" and ask yourselves, "how is a kickback like that good for the teachers, the taxpayers or anybody in Wisconsin beyond the greedy union bosses who personnally profit from the scheme?"
Ezra, I'd bet a buck you read these comments, how can you defend the teacher's union running the local school districts funds through a "union owned insurance company" and charging the school districts 20% more than the exact same coverage purchased from a non-"union owned insurance company".
We're talking about $68-140 million dollars a year according to some of the nembers I've seen.... Wow,Ezra, do you really feel that it would drive us back to "pre-depression" days (as some of the comments here have suggested) if the local school districts had the option of "shopping" for the best insurance policies and rates?
Would it really be the end of the world if all of these teachers received their full pay and then "decided" on their own to give money to the union bosses? if Scott Walker is a "dictator", why do his proposals smack of liberty, while the union bosses demands smack of coercion?
Ezra, next time you have Lunch with Andy, first of all, for God's sake don't let him buy you food with money that was involuntarily deducted from some poor janitor's paycheck or skimmed off some sort of insurance kick back scheme, yuck!.. and second, ask him to please call the New York union thugs out of Wisconsin. Ask him to please leave us alone, our teacher union and public employee union bosses are the best paid, toughest, meanest characters in the state, we have enough trouble trying to tame these lions, we don't need an influx of New York mobsters right now.
Here in Wisconsin we do a quaint little thing, we hold elections, and we let the legislature work, we don't need any New York thugs to "help" us.... mention that to Andy next time.. O.K.?
Steve

Posted by: Cheesy1959 | February 24, 2011 12:50 PM | Report abuse

genericOnlineID:

Ezra puts more time into his posts because he gets paid. But more time x stupid propangandist IQ still equals less intelligence than is reflected in what I've written.

$100 bucks says that Ezra won't break down the figures as you urge. Why? Because it would only reveal what a duped, and dumb left-wing, propagandist he truly is.

Posted by: ElGipper | February 24, 2011 1:05 PM | Report abuse

visionbrkr - But libruls don't say that therefore we should do away with corporations or the right of corporations to exist. That's what is being proposed in WI for the unions. Besides, the remedies libruls support for dealing with the skewed salaries at private companies would apply equally to labor unions. Namely, very progressive income and capitol gains taxes which make the decision to pay someone an obscene salary much harder for an organization.

By the way - I'm still not convinced that the World Net Daily is a good place to read about the WEA Trust.

Posted by: willows1 | February 24, 2011 1:06 PM | Report abuse

willows1,

Non-union Corporations don't have the convenience of the state diverting a percentage of employee salaries directly into their coffers, whether the employees agree or disagree with how the money is spent.

This compulsion is what Walker would end, and the unions understand that it's likely that 1/3 or more of the employees would not agree to this diversion of their pay. It's the closed shop rules aided by government coercion that keep unions in business. Private corporations don't operate like that.

So if you want a level playing field for unions and non-unions, then bring it on!

Posted by: ElGipper | February 24, 2011 1:22 PM | Report abuse

Cheesy1959 -- I'm enjoying your contributions to this discussion.

Here's another idea: how about we apply the ACA's MLR requirements to self-funded health plans? Meaning that they would have to limit their administrative expenses to 15 or 20% just exactly as health insurers now have to. After all, don't we want the plan participants of self-funded health plans to also get "value" for their precious health care dollars?

But of course, in a heartbeat I'm sure we'd see another list of 700-plus waivers granted by the government.

Posted by: Policywonk14 | February 24, 2011 1:24 PM | Report abuse

Willow,
The school boards pay the premiums to an insurance company called WEA Trust, they are required to do so by the local union negotiators as part of the contract. The WEA Trust is the second largest insurance company in Wisconsin, very profitable (because it charges premiums about 20% higher than other insurance companies charge for the same coverage(even though it is a "non-profit")) it's board is made up primarily of union bosses and it spills its ill gotten gains liberally amongst the union thugs who promote and protect it.
The biggest losers in this battle between the people of Wisconsin and big labor isn't the teachers (I bet that a good portion of these teachers would be happy to rid themselves of the money gouging intimidating union bosses) the losers will be the union bosses and they know it, nationwide they are desperate to protect their cash flow...
Willow, these guys are dangerous, think about Jimmy Hoffa, they don't screw around and now, apparently to Ezra's delight, the most mobbed up part of a mobbed up gang of thugs, the New York Teamsters, are sending in teams of people to "help" the protesters....
There is a lot of cash money involved, the same kickback schemes that they are useing to screw the people of Wisconsin are in full swing all over the nation...
In the school districts where the school boards have managed to throw off the chains of the "WEA Trust" the teachers make more money because less money is being syphoned off by the union bosses.
I see this situation as a contest between a small group of brave individuals, who have the support of the citizens, rising up to fight a corrupt group of mobsters.
I wish guys like Ezra could rise up above their free lunch and ask a few tough questions about the union money flows rather than simply re-tweeting each others posts.
I'm old, I've had lots of jobs, I've been hired and fired, I've hired and fired, one detail that has become clear is that these union bosses are corrupt and the longer they have been in power the more corrupt they are.
Doesn't it strike you as odd that we are supposed to believe that these union bosses have everybody's best interest at heart and the school boards, the people from the community, the parents of the children are somehow suspect?
Ezra, and his buddies, who spend their days cavorting in Georgetown lunching with the bosses of the union bosses and the hundreds of thousands of Washington bureaucrats who make six figure salaries for drinking coffee, would have us bellieve that a guy like Andy Stern or the head of the AFL-CIO are better suited to decide how to run an elementary school in little town Wisconsin than the parents and community members elected to the school board.
Maybe I'm wrong, maybe guys who have been handed union locals by their fathers are the real salt of the earth and the reat of us are just here to pay union dues.
Steve

Posted by: Cheesy1959 | February 24, 2011 1:27 PM | Report abuse

@willows1,

as for my opinion I'm against the ending of the unions but i'm for actual true negotiations which doesn't really happen here because if it did we'd be a lot closer to the private sector's benefits. I mean they're now just getting to 12% of the cost of healthcare being borne by the partipants. The private sector has been well past that a long time ago. So basically if Governor Walker didnt' come along they would have just left the status quo continue and they'd continue to push deficits into the future like the former Governor was doing right? Is that OK?

oh i'm not going there in regards to the percentage paid by the WEA trust, but i will say that its funny that most union people will also be single payer advocates but not realize that their own plans have administrative costs that range that high. My state of NJ has had an MLR requirement since 1995 or so and last year our largest insurer met the MLR at an 88.2% ratio premium in to claims out. For all his pomp and circumstance he's not seeing this.

Posted by: visionbrkr | February 24, 2011 1:27 PM | Report abuse

"God help them as their state is transformed into a libertarian utopia"

Are you kidding me Lauren?

Only the clueless would believe Walker is trying to turn Wisconsin into a libertarian utopia.

Posted by: justin84 | February 24, 2011 1:29 PM | Report abuse

Cheesy - But it is hard to get around the fact that union jobs pay better, have better benefits, and generally have more satisfied workers than non-union jobs. So no matter how corrupt the "union bosses" are perceived to be, they get the job done for their people. I won't deny that there are and have been excesses by unions, but it is no accident that real wages have stagnated for thirty years even as the unions have declined. It seems to me that corporations will get away with whatever they can get away with and unions provide a check on that power.

Also, like I said, my healthcare coverage is a union plan that I bought into voluntarily because it was better than the other plans offered. I can't speak to the WEA Trust specifically, but I would need to be convinced of the kickback scheme you alluded to. I did a quick Bing search and couldn't find anything except a tweet by NRO's Jim Geraghty on the subject and it didn't give any details.

Posted by: willows1 | February 24, 2011 2:02 PM | Report abuse

"visionbrkr - But libruls don't say that therefore we should do away with corporations or the right of corporations to exist. "


Actually, Virginia and North Carolina Democrats have historically passed similar legislation to the one proposed by Scott Walker.

Posted by: krazen1211 | February 24, 2011 2:13 PM | Report abuse

As a negotiator of these union contracts, I can say with 100% certainty that the Governor of Wisconsin does not know how much the state would save if the unions left WEA Trust and used another insurance company. His throwing out $68 million is completely false. Here is why:

WEA bases its premium for each district based on the medical history of that district and a few districts in its area. The call this a group. In order to get an accurate estimate of how much a premium will cost, a competing company would need to look at a districts medical history. WEA Trust does not release the medical history of the districts it contracts with for any reason unless that district leaves the trust for another company. In other words, they do not give other companies information on what plan districts are using, how much each plan costs, what the medical history of each individual in that district is until that district has already left the Trust. My take on it is, they are a company, why should they give out info to help their competitors come in with a better offer.

Another point, I was part of a group that did work at leaving the Trust for another company. Said company promised us that no matter what our group history was, they would come with a significantly lower price for a two year grace period (the length of the average collective bargaining agreement). We asked why only two years. They said they would need to raise our rates after two years to get them properly in line with the medical history of our district.

The saving that Governor Walker is talking about are 1)speculation since I am certain a union run insurance company did not open their clients medical history for him and 2) do not take into account the bump in rates after that two year grace period.

Posted by: concernededucator2 | February 24, 2011 2:15 PM | Report abuse

krazen1211- There are Democrats and then there are Democrats.

Posted by: willows1 | February 24, 2011 2:40 PM | Report abuse

@concernededucator2,


yes but you could estimate savings if you knew what the discounted percentage was for services provided by the state plan and if the discount in the state plan is say 10% greater then the WEA plan you could reasonably estimate to save 10% on the claims piece of your costs.

Posted by: visionbrkr | February 24, 2011 3:00 PM | Report abuse

Willow, When I think of non-government unionized workplaces where the union has "worked" the only one I can think of is UPS... at UPS the founder invited the Teamsters in, I think he really wanted what was best for his workers and in a straight up,loading and unloading boxes world where there are super motivated "supervisors" literally yelling "GO!, FASTER!, GO!,FASTER!, GO!" there has to be some sort of rubber between the wheels and the road...
But sadly, in almost any other circumstance you might care to mention the union bosses have literally throttled the underlying business to death.
"Concernededu",
I wouldn't pretend to have been a negotiato in a school board vs. teacher' union matter but common sense tells me that there is something unhealthy about union negotiators funneling healthcare dollars into their own insurance company. There is no way on God's green earth that a union local is your best bet when shopping for insurance.
While it is true that the "WEA Trust" may have built up a subset of medical data regarding the district which it refuses to share with the school board (it strikes me as odd that you don't find such ,,,,privacy for the sake of union boss financial gain,,, repulsive and underhanded, cheating the school board is nothing less than stealing from the community) But I would bet my back teeth, or what's left of them, that United Health Group, with it's several hundred million years of collected usage data can't generate perfectly good insurance quotes....
I bet a better assessment of why "negotiator('s) of these union contracts" look askance at the competing bids and grab at any notion to derail them is that the union local and the "WEA Trust" make sure that some of "WEA Trust's" $25 million in undefined "marketing expense" dollars find their way back into the pockets of the negotiators. I'll wager that these "negotiations" are pretty comfy affairs and that the only time one gets away is when a particularly brave indcividual is willing to stand up and fight a well fed circle of defenders of the status quo. Can you imagine the threats that come with any suggestion about switching? "That's it!, We're Walking!... " A friend of mine told me about one North Western Wisconsin district where a local insurance guy walked in and presented a proposal with huge savings, the school board listened politely, nodded and told him "we're locked in by the contract with the union we can't change anything"
I mean, for Christ sakes, the "union" run insurance company is the second largest insurer in Wisconsin, if that doesn't strike upside the head as a well of corruption then you should wipe that brown stuff out of your nostrils.
The annual savings achieved by the various school districts which have managed to escape the "union approved" insurance trap are listed on various web sites, I have no idea how to post links but it there for anyone who cares to look.
It's idiotic to buy health insurance from union bosses.

Posted by: Cheesy1959 | February 24, 2011 3:00 PM | Report abuse

I just noticed that I mispoke in my last post, I mean't to say that I'm sure UnitedHealth Group CAN generate perfectly good quotes with their huge usage experience database (and actually I have a perfectly good mouthful of teeth which I wouldn't risk on a silly chat board bet)
I also want to thank Ezra for producing this fine billboard upon which we can all affix our graffiti.
Steve

Posted by: Cheesy1959 | February 24, 2011 3:13 PM | Report abuse

Cheesy - I wasn't aware that the U.S. financial system was so heavily unionized in 2008.

Posted by: willows1 | February 24, 2011 3:14 PM | Report abuse

@cheesy1959,

it happens all the time and honestly i think you're making too much of this. Its admin cost. Same that Dems yell at insurers for. I doubt they're funnelling it to union bosses like you suggest. I've got clients that are in joint union and non union shops and the union occasionally comes onto our plan and goes onto theirs. Its really not out of the ordinary. That being said if there is potential savings there (ie better discounts on the state plan) then it makes sense to go there but i don't think there's anything odd going on.

Posted by: visionbrkr | February 24, 2011 3:17 PM | Report abuse

@visionbrkr

How could you estimate what the savings would be if you do not know the comparative plan?

For example.. The WEA plan could be a 500 single/1000 family deductible with a 10% co-pay or maybe it is what is called a point of service plan (can only go to certain doctors in a given area) with a 1000/2000 deductible and no co-pay. Each has a different premium cost. The only way to know the saving would be to compare apple to apples. 1) State doesn't know what the district plan is so they can not say for certain what the savings will be 2) state does not know what the group history is, which is what premiums are based off of, so they can not give an accurate estimate of what the savings will be.

Point is, without knowing the type of plan or the group history, no insurance company can say for certain whether there would be a savings or not.

Posted by: concernededucator2 | February 24, 2011 3:20 PM | Report abuse

@concernededucator2,

at sizes of populations that large type of plan requires a minimal adjustment. Forget about the union plan for a second. Say you had two options (Blue Cross and United Healthcare) and one of them (doesn't matter which) had garnered from providers on average a 10% greater discount than the other. Then you can realistically say you're saving 10% on the claims portion (normally by far the largest percentage of cost) without knowing any of those details. On much smaller employers you'd need those details to parse it out but not on large state entities such as these.


And group history doesn't matter. Its not changing. It was what it was when they were in the teachers union plan and the history stays the same in the state plan.

Posted by: visionbrkr | February 24, 2011 3:32 PM | Report abuse

Cheesy,

I failed to mention that I volunteered my time as a negotiator since I am a teacher. Trust me, we received no money that was funneled in from WEA. In fact I received nothing from it but some stress and headaches which is why I no longer do it.

While I understand that you think withholding medical data is being shady, from my experience it is done at non-union insurance companies as well. No conspiracy theory, just a common practice. The simple reason is to keep competitors from coming in and low balling to get the business.

The point that I was trying to make, which you completely missed, was that there is no possible way that the Gov can say with any amount of accuracy how much would be saved by switching plans. 1) He does not know the plans of all the districts in the state and 2) he does not know their past history, which is what the premiums are based off of.

Posted by: concernededucator2 | February 24, 2011 3:36 PM | Report abuse

I'm not sure I understand why, if it is clearly understood that Governor Walker is waging systemic war on Democrats on behalf of Republicans, why Democrats generally don't organize a counter-offensive and use whatever levers of power they possess to similarly pressure the Republicans? Isn't that the question we really want to ask President Obama and get an answer?

Posted by: DigiMark | February 24, 2011 4:35 PM | Report abuse

Salon.com & theawl.com are both reporting two sneaky clauses in the budget bill as well. One allows the guv to sell Wisconsin's power plants (to a Koch perhaps?). The other allows admin changes to Medicaid & BadgerCare such that the Constitutional legislative process will no longer be required to modify the rolls. The poor & underemployed could be swiped off the rolls by the Dept. of Health. with little public fanfare. Grandiose changes for one little budget bill...

Posted by: question1 | February 25, 2011 10:38 AM | Report abuse

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