Category Archives: Federal

The Cooch’s Freak Show Dream Team

Posted on May 21, 2013 by Peter Galuszka| 6 Comments

cooch dream teamBy Peter Galuszka

Ken Cuccinelli just can’t keep away from the bizarre, but perhaps that’s what makes him what he is.

He stages a convention instead of a primary to neuter Bill Bolling. And since a convention is smaller, it draws more GOP hard-righters than  June bugs on a humid night and they succeed in getting Bishop E.W. Jackson and Mark Obenshain selected. They underline the social conservatism that turns millions off and makes Virginia the butt of jokes on late night talk shows.

The Bishop is an even bigger gay basher than Cuccinelli and says that Planned Parenthood is responsible for more fatalities among African-Americans than the Ku Klux Klan. This may be new to a Harvard Law graduate, but women of any color have a legal right to an abortion within limits. The U.S. Supreme Court said so. Look under Roe vs. Wade.

Then there is the attorney general candidate Mark Obenshain of the legacy Republican family. He proposed and withdrew legislation to require any woman in Virginia who miscarries a pregnancy to report it to the police. The idea is so repulsive it is beyond words. A woman may have miscarried to her great sorrow due to medical reasons and then would have to go through the added horror of having to report to the police? Yes, this comes from a cabal that otherwise wants to keep the government out of your lives. Even Josef Stalin wouldn’t think of this.

What does the dream team have to say on the many policy issues facing a troubled state? We have a bunch of lame and poorly thought out tax cuts and Cooch playing hardware store populist. Cuccinelli was against McDonnnell’s mammoth road building tax plan and has since backed away from his opposition.

Is this good news for Terry McAuliffe, who has plenty of issues of his own? Yes, I would think. Cuccinelli doesn’t need the fringe hard right voters. He’s already got them in his pocket. He needs the center and Mark and the Bishop aren’t going to be much help there.

It boggles the mind how Virginia is so schizo. It is attracting hundreds of thousands of newcomers who are running the state’s economy and are dragging it into the 21st century world. Yet the Republicans put up people like this who aren’t dragging us to Virginia’s recent dark past but to medieval times.

Global investors might think twice or three times before investing in this freak show.

→ 6 Comments

Posted in Abortion, Blogs and blog administration, Budget, Children and families, Consumer protection, Courts and law, Crime and corrections, Demographics, Disaster planning, Economic development, Economy, Education (higher ed), Education (K-12), Electoral process, Energy, Entitlements, Environment, Federal, Finance, Governance reform, Government workers and pensions, Gun rights, Health care, Housing, Immigration, Infrastructure, Insurance, Labor & workforce, Land use & development, Media, Money in politics, Planning, Politics, Poverty & income gap, Property rights, Public safety & health, Race and race relations, Regulation, Science & Technology, Social services, Taxes, The Economy, Transportation

Tagged

Data Shows Hospital Billing Outrages

Posted on May 15, 2013 by Peter Galuszka| 4 Comments

Hospital BillBy Peter Galuszka

It’s long been fascinating how Big Hospitals, linked with Medicare, Big Pharma and Big Managed Care, have come up with an extraordinarily convoluted system of setting prices for various hospital procedures.

There is plenty of nonsense about including on this blog about bringing “free market efficiencies” to health care, as if human health is something like a widget or a jet engine fan blade that can be made cheaper and faster if you only got the right consulting firm to hit the right formula and the right software and the right system and the right package and kept the evil government out of it, everything would come up roses.

So to see how stupid and impractical the idea is, I was amused to see the big data base release on hospital cost charges for various procedures by the federal Centers for Medicare and Medicaid Services. It covers what was billed and what was paid by hundreds of hospitals for 100 procedures.

Big Health Care did not want the data released because they prefer working in an office with the shutters drawn as they try to game the Medicare system by overbilling and then cutting secretive deals with Big Managed Care over what they’ll really charge for group policy holders and screw the rest.

President Obama had the CMMS release the data to show what a sham setting hospital prices is, although it is doubtful that ObamaCare that goes into full effect next year will change things much. I believe more and more that socialized medicine is the only way to go.

Anyway, here is a short piece I did for Style Weekly that looks at what Richmond area hospitals actually charge for Medicare and what they get:

If you’re a Medicare patient and need a major joint replaced — perhaps a hip — consider the initial cost.

In 2011, HCA Healthcare’s CJW Medical Center billed Medicare $117,477 and got about $12,926 from the government. Virginia Commonwealth University Medical Center billed $55,327 and got $20,308. Bon Secours Memorial Hospital charged $53,195, and got $12,458.

Sound screwy? It is. For all the talk about a free-market system, setting health care prices is anything but.

Instead of open bidding, think of hospital officials meeting behind closed doors, strategizing how much to charge to get reimbursed. Medicare, which usually represents about half of a hospital’s revenues, sets a fixed rate for various procedures. But hospitals can’t by law offer a specific set of prices for just Medicare.

So they factor in other price variables such as what insurance companies might pay on a percentage basis. A big insurer may pay only 20 percent of charges or what they negotiate privately. That automatically jacks up the asking price. Another variable is getting financial aid to help pick up the bill for indigents.

Moreover, higher prices don’t necessarily mean better quality, says Michael Spine, senior vice president for business development at Bon Secours Health System.

What results is an incredibly skewed set of prices for essentially the same procedures. That’s the takeaway from a survey by the federal Center for Medicare and Medicaid Services, which shows what hospitals billed Medicare — and what Medicare paid — for procedures in 100 categories in 2011. The Obama administration released the survey to drum up support for the Affordable Health Care Act, which takes full effect next year.

A glance at the survey shows that CJW Medical Center was by far the priciest on some procedures, but also reimbursed the least.

Take kidney-tract infections, for example. CJW filed $30,552 while MCV asked for $19,819. Yet MCV got more. For some heart-failure cases, HCA billed $40,274 while St. Mary’s Hospital, owned by nonprofit Bon Secours, billed $18,460. And St. Mary’s was reimbursed more. Go figure.

Because insurance companies base policies around what Medicare is billed and will pay for, just about everyone’s affected. Those without insurance could be stuck with the entire bill, although they can receive treatment free or through discounts.

“Hospital charges vary because they reflect the individual hospital’s mission, the patient population it serves and the subsidies necessary to provide essential public services,” says Anne Buckley, a spokeswoman for VCU Medical Center.

Mark Foust, a spokesman for HCA, says a “patient’s medical coverage — rather than charges — is what primarily drives what he or she pays a hospital.”

HCA and VCU help poor patients with their bills through discount or charity programs. So does Bon Secours, says Spine, who adds that releasing the results of such surveys is an important step in moving from “legacy” pricing to something more transparent.

Next on Obama’s list: releasing surveys of physicians’ fees.

→ 4 Comments

Posted in Children and families, Consumer protection, Crime and corrections, Demographics, Economy, Federal, Health care, Insurance, Politics, Science & Technology, Social services

Tagged

GiftGate: “If I Were a Rich Man . . .!”

Posted on April 27, 2013 by Peter Galuszka| 5 Comments

By Peter Galuszka

Richmond’s “Giftgate” scandal just gets worse.

On Friday, Atty. Gen. and presumed GOP gubernatorial candidate Kenneth Cuccinelli announced that he was amending his required disclosures of gifts to show that he took more goodies from Star Scientific plus previously undisclosed gifts of a $7,750 trip in 2010 to Southwest Virginia from coal giant Alpha Natural Resources of Abingdon and $795 to speak at a coal industry rally in 2012.

While the tardy disclosure is questionable, the gifts are not illegal but they would be in other states.

This, moreover, raises another tricky question. How wealthy should politicians be so they can’t be bought?

Could it be that officials  of more modest personal means such as Cuccinelli might be somehow be more vulnerable to gift-giving by individuals or corporations with a definite agenda, such as Star Scientific and Alpha Natural Resources.

Cuccinelli disclosed income of $134,000 in 2009 and $264,296 in 2005. He makes about $150,000 as the state’s top legal officer and got a $30,000 advance from Crown Publishing for a book. His disclosure was a political ploy to embarrass McAuliffe but in the wake of the gifts, it has backfired.

McDonnell’s net worth is about $1.8 million.

Compare that to two Democrats. Democratic gubernatorial candidate Terry McAuliffe, no stranger to big money fundraising, earned $8.2 million in 2011 from his various business interests. U.S. Sen. Mark Warner was once said to be worth about $200 million, much of it from investments he made in the cell phone industry and high-tech financing a couple of decades ago.

It’s tough to say that politics should be only for rich men. But the curious thing about these two Republicans, supposedly the silk stocking, country club party, is that McDonnell and Cuccinelli “are actually very much middle class guys,” Richmond political analyst Bob Holsworth recently told me.

Nothing wrong with that, of course, but the fact is that both Cuccinelli and McDonnell have spent most of their careers in low-paying public service jobs. McAuliffe and Warner, both accused of being anti-capitalist regulators by the GOP, actually made millions in the free market system that they supposedly disdain.

Painting them as such might be a plus to rank and file voters, but in a strange way, it can put them at risk. Why, for instance, did Cuccinelli feel compelled to accept $13,000 in gifts from Jonnie Williams, the head of troubled Star Scientific, which is the object of shareholder lawyers and a federal probe? These included the use of vacation homes and expensive foreign cars. One vacation cost $3,000 and was a gift. Even an underpaid journalist like myself has paid $2,000 for a week at a beach house with my family. Why couldn’t he have rented his own place?

Williams is involved with a disputed state tax assessment of $860,000 and Cucccinelli has had to recuse himself as he has from another court case involving the fired executive chef who is seeking information that McDonnell’s family used publicly-funded goods like energy drinks, state-owned beach cottages and liquor for themselves.

The Alpha and coal business is rather obvious. Alpha took over Richmond-based Massey Energy in 2011 after the firm’s noxious corporate culture is said to have led to the deaths of 29 miners in West Virginia making it the worst deep mine disaster in the U.S. in 40 years. Massey’s CEO Don Blankenship was famous for bankrolling West Virginia judicial officials and other candidates. He went so far as  to vacation with the State Supreme Court Judge on the French Riviera.

Alpha has a better safety record than Massey but is taking its lumps, having lost $2 billion in one quarter last year. Coal in general has been in the tank thanks to cheap natural gas and some new federal environmental rules plus a slow-down in Asia’s demand for coal to make steel.

Naturally, the beleaguered coal industry wants to beat back what it considers onerous regulations.  It was a major bankroller of Mitt Romney’s campaign last year and Alpha was a big participant. Cuccinelli is perfect because he denies that carbon dioxide is responsible for climate change – a pet issue for King Coal. So, he was instrumental in the right wing’s counter attacks on the “War On Coal” last election.

What bothers me is not that Cuccinelli would flack for them but why did it cost $7,750 for him and his parents, paid for by Alpha, to visit Southwest Virginia. Last year I published a book on Massey and had made many trips to Southwest Virginia, including Alpha’s headquarters and a mine. I paid for it myself and I think it cost me maybe $200 in gas and a night or two at a two star motel at maybe $110 a night. I ate at Hardees where a steak biscuit is about $1.50 although I did splurge at a fancy Abingdon restaurant that had knock-out martinis with blue cheese filled olives.

But it didn’t cost me $7,750 or even one third of that.

Would McAuliffe or Warner have accepted a such largesse? I am sure they have moved and grooved with the rich and famous for years but both men are in a position to say “no thanks.”

And that is what Cuccinelli and McDonnell should have said, even if Virginia has hardly any rules on gifts.

→ 5 Comments

Posted in Abortion, Children and families, Consumer protection, Courts and law, Crime and corrections, Economic development, Electoral process, Energy, Environment, Federal, Finance, Governance reform, Money in politics, Politics

Tagged

McAuliffe: Can a Schmoozer Transform?

Posted on April 17, 2013 by Peter Galuszka| 3 Comments

By Peter Galuszka

On Easter Sunday, I was driving in a cold rain to Charlottesville for a family event. My cell phone started beeping with messages from Democratic gubernatorial hopeful Terry McAuliffe.

He said he was on his way to his own family brunch but wanted to tap me for $5. I got similar messages from two other staffers.

Why bother me at Easter? Political analyst Larry Sabato wondered the same thing. In a tweet that day he complained about finding “11 obnoxious messages for $$$. Now I know the answer to the age old Q; Is nothing sacred?”

And that may be McAuliffe’s biggest problem as he faces arch-conservative Ken Cuccinelli in the off-year governor’s race. In my profile of him in Style Weekly, I note that McAuliffe is trying to rein in an expansive personality that has made him a top political schmoozer and fundraiser for Democrats from Jimmy Carter to Bill and Hillary Clinton.

A decades’ long political operative who has never been in elected office, he can be bombastic and smooth, as his recent dealings with GreenTech Automotive shows. He flirted with Virginia for a hybrid  car plant before going to Mississippi. He has been accused of somehow using the car plant to win special visas for foreign workers and maybe misleading the Virginia Economic Development Partnership about his intentions in the Old Dominion.

Meanwhile, he must overcome some of his misunderstandings of traditional Virginia thinking. However, it’s probably a good thing that he’s going to skip the Shad Planking in Wakefield tonight with its Confederate flags where Cuccinelli will be keynote speaker.

While polls are about 50-50 in the race, McAuliffe’s fundraising prowess has shown brightly. In the first quarter, he raised more than $5 million — more than double the take of Cuccinelli, who has hamstrung by not being allowed raise money during the General Assembly session because of his position as Attorney General. Read on…

(Also, here as a Q&A with McAuliffe)

→ 3 Comments

Posted in Economic development, Economy, Education (K-12), Electoral process, Energy, Entitlements, Environment, Federal, Finance, Gay rights, Governance reform, Government workers and pensions, Gun rights, Health care, Housing, Immigration, Infrastructure, Insurance, Labor & workforce, Land use & development, Media, Money in politics, Planning, Politics, Poverty & income gap, Property rights, Public safety & health, Race and race relations, Regulation, Science & Technology, Social services, Taxes, The Economy, Transportation

Tagged

The Remarkable Renaissance of Virginia Rail

Posted on April 3, 2013 by Peter Galuszka| 2 Comments

By Peter Galuszka

Many decades ago, Richmond was a major, and colorful, train hub. Crack passenger lines of all liveries, the purple and silver of the Atlantic Coast Line, the citrus colors of Seaboard, and the blue and yellow of the Chesapeake & Ohio, all went through town.

Cars and aircraft reduced rail to dirty old cars that were on time about 50 percent of the time. But that is changing.

In the past several years, Amtrak, partly funded with public money, is coming back with the addition of early morning trains from Richmond to Washington, new lines from Norfolk and Lynchburg and on-time rates approaching 90 percent. Many are clean and have Internet service.

For the first time in years, rail is being seen as a real alternative to struggling with congested Interstate 95 or messing with airport delays, the nasty TSA and snarly airlines that charge you for checked bags and everything else.

In fact, transportation expert George Hoffer at the University of Richmond, says the Amtrak turnaround is so significant that it is cutting in half the ratios of those who fly out of Richmond versus take the train. It used to be 12 passengers for every rail rider and now it is six to one, he says.

Brookings says that rail passengers out of four Richmond area rail stations has increased nearly 60 percent from 1997. So we’re seeing a slow and steady chugging along which has positive implications for the state’s economy and the environment.

For more, see my Style Weekly article.

→ 2 Comments

Posted in Economic development, Economy, Energy, Environment, Federal, Infrastructure, Land use & development, Transportation

Tagged

A Light Rail Public-Private Partnership in Virginia Beach?

Posted on April 3, 2013 by James A. Bacon| 4 Comments

The Tide heads to rail station at Norfolk State University. Photo credit: Virginian-Pilot.

by James A. Bacon

Philip Shucet, savior of the runaway train project that was Norfolk Light Rail, has submitted a proposal to to extend the rail line into Virginia Beach. Under the proposal, the Tide rail service would become operational in the Virginia Beach Town Center, nearly halfway to the Oceanfront, by November 2016 — at least four years earlier than under current projections. Moreover, the project would require no federal funding.

Shucet took over as CEO of the Tide after gross mismanagement during its construction phase, staunching losses and launching the project to great acclaim. He resigned a year ago to pursue private business interests. In his latest incarnation, he heads a group that includes Skanska, Truland Transportation, Jacobs engineering and AECOM, all of which were involved with the original Tide project.

City staff will review the proposal and report back to City Council, reports the Virginian-Pilot. Neither Shucet nor city officials revealed details of how the group planned to carry out the plan. However, Shucet has built up an impressive track record for bringing in projects on time and on budget, beginning with his tenure under Governor Mark Warner as chief of the Virginia Department of Transportation, again as a key player in the Jordan Bridge project in Chesapeake, and again as CEO of the Tide.

A consultant has produced a preliminary estimate of $807 million to extend light rail to the Oceanfront, or $254 million to stop the line at Town Center. The cost for the 12.1-mile route includes the construction of five bridges, the Pilot reports. The route would follow an existing rail bed.

Bacon’s bottom line: I am eager to see the project details. To date, Virginia Beach officials have assumed that it would be impossible to finance the project without federal participation. The Federal Transit Administration pays up to 80% of the capital costs of light rail projects. However, the regulations, red tape and a lengthy approval process can add years to the time-line and millions of dollars to the cost. By foregoing federal funding, the private group could accelerate the schedule and slash costs dramatically.

Who, then, would pay? Private investors could try issuing bonds but it’s hard to see how they would generate enough revenue from rail operations to pay back the interest and principal — light rail typically operates at a loss and requires ongoing subsidies from state and local government.

It’s possible that Shucet is banking upon state participation in the project, which is feasible given the likelihood that transportation tax restructuring will be enacted this year. The tax package devotes considerably more money to mass transit, and the McDonnell administration is very comfortable negotiating public-private partnerships.

There is one other theoretical possibility, although I have seen no indication that Shucet intends to pursue it. The ideal way to finance rail projects is through “value capture” — capturing a portion of the increased real estate values created by the transportation improvement. For example, Virginia Beach Town Center has been reinventing itself as the city’s center for walkable urbanism — compact, higher-density development, mixed uses, and pedestrian-friendly street design. Building a rail stop there on an line anchored by downtown Norfolk at one end and the Virginia Beach Oceanfront on the other would create a windfall for property owners.

A value-capture approach would create a special tax district around the rail stop, generating revenue to support, say, $50 million to $100 million in bonds. In theory, the higher taxes would be more than offset by higher leases and rents collected by property owners. Virginia Beach could sweeten the pot, as needed, by granting higher density rights to property owners in the tax district. Constructed properly, such an approach could be a win-win situation for property owners, taxpayers and commuters.

Bacon’s fantasy scenario: By eliminating federal red tape, I fantasize, Shucet has figured out a way to bring down the cost of the $800 million project to $600 million or less. The rail line, which has 10 stops in Norfolk, adds 10 more in Virginia Beach. Virginia Beach City Council establishes appropriate zoning around the 10 stops, transforming whatever is there now into transit-oriented development. The city establishes special tax districts at each stop, generating dedicated tax revenues to support bond payments equivalent to $60 million per stop. (The stops at Town Center and the Oceanfront could support more while the other, less-developed stops would support less.) Voila, 100% of the capital cost is covered by the public-private partnership!

How likely is such a scenario? Not very. Even if the numbers worked out, there is zero chance that the financing and zoning, not to mention the politics, behind such a strategy could be put into place in time for Shucet’s group to then complete design and construction by 2016.

But, hey, it doesn’t hurt to dream.

→ 4 Comments

Posted in 2013, Federal, Infrastructure, Land use & development, Regulation, Taxes, Transportation

Tagged

State-Wrecked

Posted on April 1, 2013 by James A. Bacon| 13 Comments

Some chilling words from David A. Stockman in Saturday’s New York Times:

With only brief interruptions, we’ve had eight decades of increasingly frenetic fiscal and monetary policy activism intended to counter the cyclical bumps and grinds of the free market and its purported tendency to underproduce jobs and economic output. The toll has been heavy.

As the federal government and its central-bank sidekick, the Fed, have groped for one goal after another — smoothing out the business cycle, minimizing inflation and unemployment at the same time, rolling out a giant social insurance blanket, promoting homeownership, subsidizing medical care, propping up old industries (agriculture, automobiles) and fostering new ones (“clean” energy, biotechnology) and, above all, bailing out Wall Street — they have now succumbed to overload, overreach and outside capture by powerful interests. The modern Keynesian state is broke, paralyzed and mired in empty ritual incantations about stimulating “demand,” even as it fosters a mutant crony capitalism that periodically lavishes the top 1 percent with speculative windfalls. …

Without any changes, over the next decade or so, the gross federal debt, now nearly $17 trillion, will hurtle toward $30 trillion and soar to 150 percent of gross domestic product from around 105 percent today. Since our constitutional stasis rules out any prospect of a “grand bargain,” the nation’s fiscal collapse will play out incrementally, like a Greek/Cypriot tragedy, in carefully choreographed crises over debt ceilings, continuing resolutions and temporary budgetary patches.

These policies have brought America to an end-stage metastasis. The way out would be so radical it can’t happen. …

When it bursts, there will be no new round of bailouts like the ones the banks got in 2008. Instead, America will descend into an era of zero-sum austerity and virulent political conflict, extinguishing even today’s feeble remnants of economic growth.

Boomergeddon, anyone? We’ve shot all our ammo. Interest rates are near zero. Five years into the business cycles, deficits still are close to $1 trillion a year. There are no arrows left in the public-policy quiver but economy-wrecking a slow-motion repudiation of the debt through inflation, and that will have hideous consequences of its own. You thought the Great Depression was bad? At least half the population lived on farms back then and could raise subsistence crops. Today many urban Americans, rendered supplicants to the government, have no ability to survive on their own.

The federal government is beyond salvation. Virginia is not yet there. We still have a few years to build “antifragile” state and local government institutions. Alas, Virginia’s governing class, though less reckless than their federal counterparts, are blind to the danger.

– JAB

→ 13 Comments

Posted in 2013, Economy, Federal

Tagged

McAuliffe Pitches Jobs vs. Ideology

Posted on March 16, 2013 by Peter Galuszka| 17 Comments

 By Peter Galuszka

“Fantastic,” says Terry McAuliffe as he listens to officials at the Culpeper, Va., campus of Germanna Community College talk about projects ranging from designing machine controls to a weight-loss competition. The tall, curly-haired McLean businessman — a Democrat who wants to be Virginia’s next governor — walks through a campus building while tossing out a barrage of questions and furiously taking notes. “I’m going to help with you with that, Ben,” he says to one teacher. “These community colleges are just jewels,” he remarks to another.

The visit to the Germanna campus, on which I tagged along in February, is part of McAuliffe’s effort to cast himself as a moderate jobs creator in a head-to-head campaign against firebrand Republican Attorney General Ken Cuccinelli II. The off-year race is already attracting national attention as Republicans seek to turn the page from their drubbing in the 2012 elections. The media are watching closely to see how Cuccinelli will play his hand — how much will he tone down the rhetoric that’s made him a star on the right? — and a flood of out-of-state money is expected to flow to both candidates.

“My focus is all on economic development,” McAuliffe says flatly. “It’s job-creation, and that’s why I am touring every community college in Virginia. That is my focus — to bring mainstream, pro-business ideas. My opponent’s more into a social, ideological agenda.”

This bread-and-butter strategy is as obvious as it is essential. Early polls show the two candidates running neck and neck, but Cuccinelli has assets that could give him an edge: experience in state government and a better-known name. News this week that Republican Lt. Gov. Bill Bolling doesn’t have the cash to mount an independent bid only puts more pressure on McAuliffe to reach beyond the safely anti-Cuccinelli, Democratic base. University of Virginia analyst Larry Sabato and his colleagues noted that Bolling’s decision leaves the state with “two deeply flawed candidates” who “have limited positive appeal.”

McAuliffe indeed has baggage to overcome. In decisively losing the Democratic primary for governor in 2009 to underwhelming state Sen. Creigh Deeds, he was unable to shake off an image as a hard-charging Democratic Party operative and former fundraiser for Bill Clinton. More recently, the Connecticut-born banker-turned-entrepreneur has been criticized for locating a hybrid-car factory in Mississippi instead of Virginia — a story line that offers an obvious counterattack to his Virginia-jobs-first appeal.

McAuliffe clearly will have to contend again with accusations that he is a carpetbagger out of touch with Virginia’s problems. The Cuccinelli campaign played that card this month when it ridiculed McAuliffe for urging in a tweet from Florida that Virginia residents take care as snow approached. McAuliffe’s answer is to stress his Old Dominion ties: “My wife and I have lived in the same home in Northern Virginia for 21 years,” he says. “We have five children. I want our children to stay here and have jobs.”

This outsider problem may actually be less than meets the eye. Plenty of successful Virginia politicians did not grow up in the Old Dominion. One is none other than hugely popular Democrat Mark Warner, an Indiana-born entrepreneur who ran Douglas Wilder’s 1989 campaign for governor before becoming a successful governor himself and then a U.S. senator.

Warner’s brand of tech-savvy centrism clearly has not been lost on McAuliffe. As he steps through classrooms at Germanna, he regularly brings up Warner’s name. He also praises fellow Democrat Tim Kaine, another former governor who became a U.S. senator, and even Republican Gov. Robert F. McDonnell, as pro-business leaders. In contrast with Cuccinelli, McAuliffe backs McDonnell’s breakthrough with the General Assembly that produced the first real money for roads since 1986. “I’ve got to give Gov. McDonnell credit for keeping the discussion going,” he says.

The big question is whether identifying with practical politicians such as McDonnell will be enough to distance independents and moderate Republican voters — who might be turned off by McAuliffe’s deep history with the Democratic Party — from Cuccinelli and the tea party movement that stands with him.

Cuccinelli may be wondering the same thing. Lately, he seems to be avoiding inflammatory rhetoric (there was hardly a reference to gays, abortion or any other social flashpoint to be found in his recent book about constitutional federalism). He might be wise to stick to that approach. McAuliffe is clearly planning to pounce if Cuccinelli goes rogue.

“I always say the most important family value you can have is a job,” McAuliffe says at the end of his community college tour. “There’s a real difference between us, and we can’t be sending out signals with a social-ideological agenda that says that people aren’t wanted. We can’t divide people. We’ve got to unite them.”

(Note: This is article appears in the Local Opinions section of The Washington Post)

http://www.washingtonpost.com/opinions/the-frame-mcauliffe-wants-jobs-vs-ideology/2013/03/15/caf57a3e-8c11-11e2-9f54-f3fdd70acad2_story.html

→ 17 Comments

Posted in Demographics, Economic development, Economy, Education (higher ed), Education (K-12), Electoral process, Federal, Finance, Governance reform, Government workers and pensions, Health care, Labor & workforce, Money in politics, Politics, Science & Technology, Social services, Taxes, The Economy, Transportation

Tagged

Sequestration and Resilience in Washington Region

Posted on March 13, 2013 by James A. Bacon| 36 Comments

Ballston corridor in Arlington

Of the 3.1 million people employed in the Washington metropolitan area, 450,00 work for the federal government or military. No question, Washington stands to get hammered by sequestration and other budget cuts. But Mark Muro and Jessica Lee with the Brookings Institution argue in “Sequestration Shock: Smart D.C. Metro Will Figure It Out,” that the high education levels of the workforce make the region economically resilient.

Admittedly, government culture is antithetical to the entrepreneurial culture of the private sector. But, they write:

The region has changed a lot in the last decade, with the emergence of a new urban character comprising a huge part of that change. … Washington has gradually become a cool place for smart, well-educated young people to live. As it happens, that turns out to be a vital ingredient for spawning successful new companies, particularly in tech-heavy fields such as “big data,” social media, cloud technology, and app design. That’s why it’s a big deal that new energy and people are beginning to flow through the nascent innovation districts that are emerging on U Street NW, H Street NE, and along the Rosslyn-Ballston corridor. These relatively affordable yet hip neighborhoods are where the future is being figured out.

Big data? Big data? Do we know anyone involved with big data? Perhaps Don Rippert can add his perspective here.

Afterthought: Notice the areas not included in the authors’ appraisal of hip, nascent innovation districts: Tysons, Reston-Herndon, Dulles. Then ask yourself, where is Virginia investing its infrastructure dollars? Just asking…

– JAB

→ 36 Comments

Posted in 2013, Budget, Economy, Federal, Labor & workforce, Science & Technology

Tagged

Dissecting Obama’s “War on Coal”

Posted on March 10, 2013 by Peter Galuszka| 13 Comments

By Peter Galuszka

During elections a few months ago, headlines, blog sites and televisions screens were crowded with news about the “War on Coal” being waged by President Barack Obama and his EPA chief.

Coal firms were laying off thousands of miners as their bottom lines took big hits. Virginia politicians including Kenneth Cuccinelli and Bob McDonnell were in the Southwest Virginia coalfields piling on.

The mood was equally dark at a Platts coal conference in Ft. Lauderdale Thursday and Friday, but the true despair is coming from the Central Appalachian fields of Eastern Kentucky, West Virginia and Virginia, which are especially distressed.

Does this mean coal is toast? Not at all, speaker after speaker said. Fields in the Powder River Basin in Wyoming and Montana – representing about half of U.S. production — are doing just fine. The Illinois Basin east and south of St. Louis is enjoying a revival, as is Pennsylvania anthracite (hard coal) which went into a steep decline about a century ago.

As for Central Appalachia, the bell is tolling. The killers are natural gas and high costs. Barack Obama is partly to blame, but some of his allegedly overwrought policies haven’t taken effect or haven’t really been formulated yet, despite how much coal executives love to talk about the administration’s “Train Wreck” of tougher rules on mercury and toxics, polluted coal-field air moving to cleaner places and tighter carbon dioxide emissions plans for new coal-fired electrical plants.

While one can whine all he wants about the Sierra Club and Michael Bloomberg’s stand against coal, the biggest culprit is natural gas. Hydro-fracking drilling methods and technology innovation in finding new fields have unleashed a flood of cheap methane. True, gas prices are edging upwards of about $3.50 per million BTUs, but they are low enough to cause havoc with coal.

According to Nick Carter, a West Virginia-based coal executive who is regarded as the Godfather of the Appalachian industry, says that when gas prices drop to $3 at that rate, they impact Powder River coal which is cheap and inexpensive to mine. At fifty cents more, it impacts Illinois Basin coal. But gas prices would have to rise beyond a level between $4.50 to $6 to make Central Appalachian, including Virginian, coal, worth mining. “We will be in a period of transition and there will be a new normal,” he says.

The impact of cheap gas cannot be underestimated. It is the reason one doesn’t hear much talk about utilities putting in advanced carbon capture technology to continue using coal. It is too expensive to do so. If gas goes to the $7 or $8 levels, says Seth Schwartz of Energy Venture Analysis, “companies would be investing in new controls. But if gas stays at near $3, “the utilities would just idle (coal-fired) plants,” he says.

Gas is also going to push a rash of coal company consolidation because it is much harder for smaller coal firms — and there are plenty in Virginia’s small coal fields — to continue to operate because they lack the capital to stay in business. Today in the U.S., the top 10 percent of the mines in terms of production produce 70 percent of the coal. Most are in the Powder River Basin.

Virginia’s two prominent coal firms are taking big hits. Bristol–based Alpha Natural Resources, which took over troubled Massey Energy in 2011, has seen its credit cut from B+ to BB. Its stock is down 88 percent. Richmond-based James River Coal saw its credit cut from B to CCC and its equities are down 91 percent.

True, there’s a bright spot in the metallurgical coal market to make steel. China, a big buyer, is starting to come back with bigger buys after an economic slowdown that should benefit met-heavy Alpha.

But the writing is on the wall. It’s brutal what is happening to Central Appalachian coal. It’s not coming back,” Schwartz says.

Sounds right and all the complaining about Obama and the EPA can’t turn it around. Indeed, if anything is killing Virginia coal industry, it is the free market.

→ 13 Comments

Posted in Disaster planning, Economic development, Economy, Energy, Environment, Federal, Governance reform, Infrastructure, Labor & workforce, Money in politics, Politics, Regulation, Science & Technology

Tagged