Federal Reserve Board: D.C. Circuit Affirmed Dismissal of Employment Discrimination Case, Artis v. (Greenspan) (Bernanke) Yellen

On April 1, 2016, the District of Columbia Circuit Court of Appeals issued a mandate of its December 21, 2015, order, which summarily affirmed the dismissal of the appellants’ appeal. The court determined that the record was replete with examples of appellants’ misconduct at the district court level.

The circuit judges on the panel were Brett Kavanaugh, Cornelia Pillard, and Robert Wilkins.

(Docket number 15-5260, available at www.pacer.gov).

Thus ends this shamefully long case to fight against the complainants in the initial stages of a so-called Equal Employment Opportunity counseling session.

One thing is certain, Board employees should read this case and, in case of any issue, consult legal counsel first, and be wary of the Board’s complaint mechanisms (unless there are sufficient reforms).

Eighteen years for this case to arrive at a messy and incomplete end. The whole affair scars the Board’s credibility; the Board is worthy of further Congressional oversight. In addition, the Board should never again have the latitude to put forward such lengthy, expensive litigation without approval.

Federal Reserve Board: Appeal Filed in Long-Lived Employment Discrimination Case, Artis v. (Greenspan) (Bernanke) Yellen

Following a dismissal with prejudice in the United States District Court for the District of Columbia, the plaintiffs in Artis v. Greenspan Bernanke Yellen filed an appeal with the U.S. Court of Appeals for the District of Columbia Circuit in September 2015 (docket number 15-5260, available at http://www.pacer.gov).

U.S. Civil Service: Partnership for Public Service and Booz Allen Hamilton Propose Unfair, Inequitable Dick Grote Style “Rank and Yank” System for the Civil Service, despite Its Many Flaws

The second merit system principle (5 U.S.C. sec. 2301(b)) reads as follows and must guide any successful civil service reform proposal:

All employees and applicants for employment should receive fair and equitable treatment in all aspects of personnel management without regard to political affiliation, race, color, religion, national origin, sex, marital status, age, or handicapping condition, and with proper regard for their privacy and constitutional rights.

The website, Government Executive, published an article about a proposal from the Partnership for Public Service (PPS) and the federal contractor Booz Allen Hamilton (BAH) to reform the federal civil service in the United States. (See report at http://cdn.govexec.com/media/gbc/docs/pdfs_edit/040114e1.pdf.) In short, PPS and BAH propose an inhumane and cruel solution, rank and yank, (contrary to the second merit system principle)– wrapped up in a colorful PDF document and poor, vague writing–that must be rejected totally.

I continue to be amazed that a system that caused organizational failure (Enron) or organizational disarray and destruction of innovation in a high-tech company (Microsoft) continues to be seen as a positive cure-all solution. Any proposal that seeks to enrich few people at the cost of the many is an insult to the democratic form of government that governs the country; how ironic that such an undemocratic proposal is fashioned for the United States government’s civil service.

Among the various proposals was a stunning one–a rank and yank system. (Emphasis, below, mine.)

Problem seen by PPS & BAH: Rigid policies that were designed to encourage long-term tenure and internal equity, for example, are now a burden on a government that needs to encourage flexibility and innovation to meet rapidly changing and difficult challenges. (Page 8, second column, second full paragraph of PPS & BAH report.)

Their solution–a rank-and-yank style system: With a credible performance management system in place, our proposed system would eliminate tenure-based pay increases for managers and employees, and instead make pay progression within a particular salary band based strictly on performance—up to an occupation’s market rate for performance that meets expectations, and above that rate only for performance that exceeds expectations. Employees who fail to meet their performance expectations would not be eligible for a base pay increase until their performance improves to satisfactory levels. (Page 25, second column, second full paragraph of the PPS & BAH report.)

PPS and BAH rank-and-yank style system slightly differs from the full system proposed by Dick Grote in that it recommends no salary increase rather than direct firing. But curiously, with all of the vague and convoluted verbiage of the report, PPS and BAH do not say how this proposal will be paid for.

Given the reality of fixed salary budgets in government and a comment by Robert Tobias, consulted on the report, stating that the proposal will likely be budget neutral, I infer that the small amount of so-called top performers will be enriched at the impoverishment of the large remainder of the workforce (some of them suffering everlasting stagnant pay). This blatant inequity and unfairness, itself in violation of the merit principles the PPS & BAH report notes that it values (page 9), is likely the reason for the confusing writing in this part of the report. Given a flat salary pool, those designated as so-called poor performers would likely never get another increase while witnessing their paycheck’s economic power withering away as a result of inflation and an increasing cost of living.

Rank and yank, pay for performance, up or out, whatever it is called really works one way: Giving the managers the absolute power to sort the workforce (in secret), giving the employee little to no ability to participate or appeal the management decision. Twenty percent will be designated as the richly rewarded “top performers,” 70% will be designated as “vital” and yet receive little salary increase, and then 10% will be designated as poor performers, with no salary increase at all until they decide to quit or suffer with working hard for a salary that cannot keep up with their cost of living.

This cruel proposal must be subject to discussion of all consequences, with complete involvement of the public, in clear language and then rejected.

Third Way: Evaluating Group’s Document “Saving Social Security”; Proposal for Work Rewards for Seniors Provides for an Unacceptable FICA Exemption

Continuing with the evaluation of the Third Way proposal for Social Security (with the awareness that the Joint Commission on Deficit Reduction is set to begin work soon), this post evaluates the Work Rewards for Seniors plan. Third Way proposes that senior citizens who work beyond a certain age should stop paying Federal Insurance Contributions Act (FICA) taxes. Third Way acknowledges a reduction of FICA revenue but assert that the proposal would produce savings sufficient to make up for the revenue loss.

• I think that there should not be a cutoff for FICA. As long as you earn income, you pay into the Social Security system. That expectation began at the person’s first wage-earning job and continues that way until a person stops working for wages.
• In addition, Third Way’s proposal causes problems when Social Security beneficiaries are not contributing to the Social Security system (from which the beneficiary is receiving funds).

Debt Limit Debate: Cut, Cap, and Balance Bill Did Not Have 2/3 Vote in the House to Begin Const. Amdt Process

I viewed House Speaker John Boehner’s response to President Barack Obama’s speech tonight (7/25/11). Again, Speaker Boehner mentioned the balanced budget amendment. Unfortunately, the House did not satisfy the Constitutional requirement of a 2/3 vote in approval in the House. A “bipartisan” vote (or bare majority) is not enough.

Overall, this stalemate over this debt-limit issue is quite unbecoming and reckless, considering the unknown risks of playing with default fire.

Constitutional Amendment, Article V

Constitutional requirement: 2/3 of 435 (House)	(2/3) x 435 = 290
House roll call #606 (on the Cut, Cap, and Balance Act, H.R. 2560)	Yeas-234; Nays-190; Abstain-8

14th Amendment and Debt Ceiling: Amendment’s Applicability to the Current Debt Situation Unclear; Congress Has the Power to Enforce the Provisions of the 14th Amendment

The once routine lifting of the debt ceiling has become a quite a battle of wills. Considering that the United States will continue to issue debt (for federal pensions and Social Security and other purposes), I am unsure whether this is a good place to make a high-stakes stand.

Now, to break the impasse, some commentators are suggesting that the 14th Amendment , section 4 can be used by the President to exceed the debt ceiling.As frustrating and upsetting as the debate has been, the political branches (especially Congress) will finally have to set down and do the work they were elected to do, keeping in mind the real power of a Presidential veto.

Section 4.
The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

It’s compelling, but I don’t think it applies to the current debt debacle. It has more applicability to the Civil War era when it was written. In addition, the Congress has the right to enforce the provsions of the 14th Amendment, section 5.

Section 5.
The Congress shall have the power to enforce, by appropriate legislation, the provisions of this article.

Also, Congress has the power of the purse, Article I, section 8, and allowing the President to set the debt limit on his own may create a separation-of-powers issue.

Barack Obama and Third Way: Nature of Deficit and Debt is Complicated; GOP Stance for No New Taxes Untenable, Unfair

With the collapse of the debt and deficit talks between President Barack Obama and House Speaker John Boehner, the focus again is getting the debt limit raised. Although there is a strong attempt to equate debt with deficit, the terms have quite different meanings. Boehner and the GOP are trying to develop a package of cuts without any revenues; chart 22 shows the futility of that move. The middle and lower classes must not be made to lose services to maintain the extravagant lifestyles of the wealthy. On another note, given the makeup of the group called “Third Way,” I am not surprised that their Ivy League educated analysts do not clearly explain the true reality of debt and deficit.

MPR711_F22

On the chart numbered 22 (charts 22 and 24 are from the Federal Reserve’s Monetary Policy Report , the revenues (receipts) and spending (expenditures) are reflected by line graphs. The deficit is the gap between the two lines on the far right. In terms of revenues, the contributions to federal pensions by employees and agency employers are counted as current revenue (and debt) (see CSRDF, 5 U.S.C. section 8348(b)); the same is true for Social Security. The difference between the lines also directly contributes to the debt.

The use of federal pensions and Social Security FICA funds as current income questions the legitimacy of any tax cut pledges by the GOP because monies from other groups are used to give money back to the rich while leaving the government without sufficient revenues to satisfy is obligations to repay its debt (chart 24). Also, because of the composition of the revenues, it is unacceptable for the nonwealthy classes to be hit with the numerous service cuts so that the status of the rich (subsidized by the lower classes) can remain unchanged.

MPR711_F24

Balanced Budget Amendment: Text Available for Review at OpenCongress

These days the saying that “the devil is in the details,” is more true than ever.

The text of the balanced budget amendment (H.R. 2560, Cut, Cap, and Balance Act of 2011) is available at the OpenCongress website. Unfortunately, the complex language obscures what the legislation will actually do (except for the balanced budget amendment–an uphill climb).

I’m waiting for the text of the McConnell-Reid legislation.

Barack Obama and Third Way: Press Conference Comment Seems to Have Been Influenced by Third Way; Group Favors Keeping Image Only of Concern and Care for the Nonwealthy

If I needed confirmation that President Barack Obama is tied to the Wall Street-connected think tank Third Way, I would have that confirmation today. Interestingly, in the Third Way publication “The Case for Taking Up Entitlement Reform“, the following are considered “entitlements”–FICA- funded Social Security and Medicare, Medicaid, and federal employee pensions. I found the President’s statement bracing, yet I was not surprised; he is governing as a liberal Republican anyhow.

I do not believe for a second that cutting these programs will allow time to focus on the items that he mentioned. How can you move to cut spending from the lower income classes, and then have the audacity to use that you will be able to add spending with insufficient revenues?  This idea is unwise and fantastical.

A quote at his July 15 press conference appears to have been strongly influenced by a Third Way publication (emphasis for comparision purposes).

And so that’s where I’d have a selling job, Chuck, is trying to sell some of our party that if you are a progressive, you should be concerned about debt and deficit just as much as if you’re a conservative.   And the reason is because if the only thing we’re talking about over the next year, two years, five years, is debt and deficits, then it’s very hard to start talking about how do we make investments in community colleges so that our kids are trained, how do we actually rebuild $2 trillion worth of crumbling infrastructure.

If you care about making investments in our kids and making investments in our infrastructure and making investments in basic research, then you should want our fiscal house in order, so that every time we propose a new initiative somebody doesn’t just throw up their hands and say, “Ah, more big spending, more government.”

It would be very helpful for us to be able to say to the American people, our fiscal house is in order.  And so now the question is what should we be doing to win the future and make ourselves more competitive and create more jobs, and what aspects of what government is doing are a waste and we should eliminate.  And that’s the kind of debate that I’d like to have.

Here’s a quote from a Third Way publication “The Case for Taking Up Entitlement Reform” (compare with bolded words above).

Winning the economic future depends on progressive public investments—in innovation, children’s health, education, pure research, teen pregnancy prevention, space exploration, medical research, infrastructure, school lunches, and the arts and humanities. But left on autopilot, the nation’s budget will be swamped by entitlement and debt obligations that will crowd out everything. Scraps will be left for defense and domestic discretionary spending to fight over, and we know who wins that battle.

Barack Obama and Third Way: Hatred of Federal Civil Service Totally Out of Line; Wall Street that Placed United States in the Financial Crisis Exempt from Scrutiny

A common thread in Third Way publications is that somehow employees of the federal government (also U.S. citizens and taxpayers) should be called to make dramatic sacrifices for symbolic purposes. Yet, the functionaries of Third Way are scions of Wall Street. As the financial sector threw the United States into a recession because of its shady, conflict-of-interest, and casino-like business practices, Third Way does not call for any sacrifices from Wall Street millionaires. Sacrifices are only called for from one group—federal civil service employees (their military service colleagues are exempted from the inane vitriol), a group effectively unable to speak a word in opposition.

Because of this discrepancy, I find Third Way a dishonest and untrustworthy source of advice. Clearly, these opinions sprout from bitter Wall Street types wanting to cast blame for its manifest failures onto innocent people. That President Obama takes advice from this fork-tongued group is galling.

Third Way Publication	Statement Against Federal Employees
“The Case for Entitlement Reform”	“Democrats must couple entitlement reform with a credible set of proposals to demonstrate that government is taking the first and the deeper cut. A place to start is the financing of federal pensions, which is completely out-of-kilter with the way private sector retirement works. Voters need to see Washington give its share.” (Page 7)Comment: My question is what “private sector” is being talked about as the sector is not monolithic (it is made of many separate entities). As a result, the federal pension system cannot be compared to the so-called private sector. Why is it that “Washington’s sacrifice” only consists of federal civil service employees (who are also citizen-taxpayers, a point often forgotten (even by so-called Third Way democrats)).
“Frequently Asked Questions about Federal Retirement Reform”	“Doesn’t this amount [5.2% additional FERS contribution] to a pay cut for federal employees?Yes, it does. Federal employees will have to contribute more to a very generous retirement plan. When fully phased in, it would reduce take home pay by 5.2%. The truth is that for the last 25 years, federal employees have gotten a very good deal. In today’s environment, in which everyone is going to have to give something up, it’s a deal the taxpayer can no longer afford.” Comments:  This point (and the others in the memo) reflect a pervasive use of the author’s self-interested calculations as fact (see, e.g., memo’s footnote 11). The Third Way point also is not in line with the history of FERS (federal employees contribute 7%, not just 0.8% for their pensions (6.2% to Social Security and 0.8% to the pension (both components of FERS). “This landmark legislation resulted in large part from the need to shore up Social Security system by broadening its base (by mandating coverage of the federal civilian work force), along with pressure from then-President Ronald Reagan to reduce federal spending.” (See Jamie Cowen, “Twenty-Five Years after Federal Pension Reform,” page 3). Also, there is a special case made to single out the federal civil service for particular and sole scorn, a practice that is underhanded and unbecoming. “ Does the proposal affect veterans and military employees? No, this proposal covers only those in FERS—federal employees, congressional employees, members of Congress, and judicial branch employees. Military retirees are covered under a separate program administered by the Department of Defense.”