College loan debt has become a red-flag issue rivaling that of home mortgage debt a half-decade ago. Ironically, the White House, like Congress, in the haste to avert disaster, might create it. President Obama's Fiscal Year 2014 budget includes a plan to expand participation in the Income-Based Repayment program, which is designed to assist eligible persons going through a partial financial hardship to stay current on federal student loans. At present, the program forgives outstanding debt for borrowers who make 20 years of timely payments - 10 years if they work in the public or nonprofit sector. But eligibility is limited to borrowers approved since October 2007. The Obama plan would extend forgiveness to those who took out loans before that. And it would render debt tax-exempt. It's a sweet deal - except to taxpayers.
Nobody doubts for an instant that rebuilding the New Jersey coastline in the wake of Hurricane Sandy will be costly. But a little over two weeks ago Republican Governor Chris Christie took a step that should make it a good deal less so. On April 15, Christie vetoed a union-backed bill passed this winter by the legislature to expand the range of state-contracted construction requiring Project Labor Agreement (PLAs). Such agreements, drawn up between state/local governments and unions, require contractors to pay union-scale wages and benefits on large-scale public works projects. Unions love them because they effectively remove nonunion companies from competitive bidding. The general public doesn't make out as well.
Thomas Perez embodies ethnic identity radicalism. Whether the U.S. Senate has the courage to challenge him is yet unknown. President Obama today nominated Perez for Secretary of Labor. As the Department of Justice's assistant attorney general for civil rights since October 2009, Perez has promoted a hard-charging egalitarianism that goes even beyond that of first-term Obama Labor Secretary Hilda Solis, who resigned in January. His "Third World First, America Last" worldview comes with hefty baggage. He's persuaded the Justice Department to dismiss its case against Black Panther members accused of menacing white voters and poll watchers in Philadelphia on Election Day 2008.
Hurricane Sandy did about $30 billion of property damage to New Jersey communities late last October. And construction unions and their political supporters aren't about to let a good crisis go to waste. In mid-January the New Jersey Senate approved, by a 23-13 vote, fast-track legislation (S.2425/A.3679) to expand the range of projects eligible for inclusion under Project Labor Agreements (PLAs). Such agreements are pre-hire contracts that all but force building contractors to hire union labor on large-scale projects. Increasingly common for some two decades, the main achievement of PLAs has been to raise labor costs.
That the cost of higher education is escalating is hardly news, least of all to families who borrow to pay for it. Less understood is that the relative ease of availability of college loans is a major reason for those rising costs - and resulting defaults. Late in January, FICO Labs, a San Jose, Calif.-based credit research company, released a report detailing a number of disturbing trends in the student lending industry. During 2005-12, the average outstanding loan balance rose by nearly 60 percent to over $27,000. And default rates were highest for recent originations. "This situation is simply unsustainable and we're already suffering the consequences," said FICO Labs analytics chief Andrew Jennings. Yet the Obama administration, in seeking to make college universal, may be fueling the problem to the point of inviting a bailout potentially rivaling that of home mortgages.
The elder Jesse Jackson has grown wealthy these past couple decades mainly by shaking down corporations. One of his sons, former Rep. Jesse Jackson Jr., D-Ill. (see photo), has preferred a different path to wealth: his campaign till. That path is now leading to federal prison. On Wednesday, February 20, the younger Jackson, who served nine terms in Congress before resigning last November 21, pleaded guilty in District of Columbia federal court to diverting about $750,000 in re-election funds to personal use. Jackson, who since last June has been hospitalized twice at the Mayo Clinic for bipolar disorder and other problems, told U.S. District Judge Robert L. Wilkins that in pleading guilty to wire and mail fraud, he had "no interest in wasting the taxpayers' time or money." His wife, Sandi, until recently a Chicago city alderwoman, hours later pled guilty to a related tax fraud charge.
The National Labor Relations Board may be inoperative at present. Yet one of its rulings last month, unless undone, will curtail a longstanding right of employers and individual workers. On December 12, in WKYC-TV Inc., the NLRB ruled 3-1 that an employer must continue to collect dues from union members via automatic "checkoff" even after the collective bargaining agreement expires. The ruling effectively overturns the board's Bethlehem Steel decision of 1962, which ruled against forced dues check-offs following contract expiration. It's another case of President Obama's appointees to the normally five-member body favoring forced unionism.
When is a presidential recess appointment less than an appointment? It would seem when Congress isn't in recess. This Friday morning, January 25, a three-judge panel of the U.S. Circuit Court of Appeals for the District of Columbia unanimously invalidated President Obama's three appointments - Sharon Block, Richard Griffin and Terence Flynn - to the National Labor Relations Board (NLRB) of January 4, 2012. The Obama administration is expected to appeal the case, known as Noel Canning v. NRLB, to the U.S. Supreme Court. As Flynn stepped down last summer and another member left in December, the normally five-member NLRB now has only one legitimate member, Mark Pearce.
The increasing overlap of labor and political activism is an insidious form of public corruption in this country. It enables union officials to deemphasize their role of representing workers at the bargaining table in favor of advocating policies to socialize the economy, building incestuous relationships with politicians, and fattening their bank accounts. This tendency was heavily felt in 2012, a presidential election year. Union leaders recognized the need to re-elect their ally and benefactor, President Barack Obama, over someone a wealthy Republican with a strong business background; i.e., someone they truly could despise. They got what they wanted. In the process, they further built a political infrastructure. Yet union leaders also experienced reversals of fortune at the state level - most of all, in Michigan - where they had been used to getting their way.
A presidential re-election typically triggers a cabinet reshuffling. The U.S. Department of Labor is now part of the process. On Wednesday afternoon, January 9, Labor Secretary Hilda Solis announced her resignation. Solis, previously a four-term Democratic congresswoman from California, had won the job on the strength of her aggressive championing of union interests. In a statement issued shortly thereafter, President Obama lauded Solis as "a tireless champion for working families," adding that "her efforts have helped train workers for the jobs of the future, protect workers' health and safety and put millions of Americans back to work."