Google+

Tags: Illinois

Obama to Campaign in States Where His Job Approval Is In the Mid-40s



Text  



President Obama’s autumn campaign schedule feels a lot like President Bush’s safe-state only itinerary in 2006: “The White House is putting the finishing touches on a post-Labor Day schedule that will send the president to states where he’s still popular, such as: Michigan, Wisconsin, Pennsylvania, Illinois and California, Obama officials and Democratic operatives said this week.”

Michigan is the only state with a competitive Senate race on that list. Republican Terri Lynn Land is keeping it close with Democrat Rep. Gary Peters. In the governor’s race, incumbent Republican Rick Snyder has held a small lead over Democrat Mark Schauer. Note that PPP found Obama’s approval rating in Michigan at 43 percent in early July.

Democrats are feeling cheerier about their odds in Wisconsin’s governor’s race, where Mary Burke is neck-and-neck with incumbent Republican Scott Walker. (Obama held a Labor Day rally in Wisconsin Monday.) But recent polling puts President Obama’s approval rating in Wisconsin at 44 percent

In Pennsylvania, Democrat Tom Wolf appears set to easily beat incumbent Republican Tom Corbett. (NRO’s John Fund dissects the Corbett implosion here.) Wolf may not particularly want the presidential help; the most recent Franklin & Marshall poll put President Obama’s approval at 34 percent

Illinois, President Obama’s home state, offers a Senate race that is not expected to be competitive, with incumbent Dick Durbin heavily favored over Jim Oberweis. But Republicans appear likely to win the governor’s race, with Bruce Rauner enjoying a solid lead over beleaguered incumbent Gov. Pat Quinn.  An early August poll put President Obama’s job approval at 45 percent among Illinois registered voters.

In California, Jerry Brown is expected to win reelection over Neel Kashkari. The Field Poll released today found Obama’s job approval at 45 percent — which doesn’t sound so bad, but it’s the lowest ever recorded in that poll.  

​Back in 2006, the Washington Post looked at then-President Bush’s schedule in deep red states and concluded, “The politician who has done more than anyone else over the past decade to build and expand the Republican Party has become a liability to Republicans in many parts of the country.”

Eight years later, the politician who as done more than anyone else over the past decade to build and expand the Democratic Party has become a liability to Democrats in many parts of the country — perhaps even in some states he won twice.

Tags: Barack Obama , Michigan , Wisconsin , Pennsylvania , Illinois , California

The Coming Republican Takeover of . . . Illinois?



Text  



How will President Obama feel when a Republican wins the governor’s race in his home state of Illinois?

Gov. Pat Quinn is facing an increasingly uphill battle against Republican gubernatorial candidate Bruce Rauner, a new We Ask America poll shows.

Rauner is now sitting on a 14-point lead in the poll that was conducted July 28, which is up from his 10-point lead he had in a June poll. Rauner’s boost can be attributed to his economic plan, which includes a state income tax reduction. A poll showed while people don’t believe Illinois can afford this plan, a majority say it makes them more likely to vote for him.

Reboot Illinois, which was founded by hedge fund manager Anne Dias Griffin, commissioned the poll by We Ask America, an independent polling subsidiary of the Illinois Manufacturers’ Association.

Overall, if the election were held today, Rauner would pull in 47 percent of the vote, compared to Quinn’s 33 percent. Of those polled, 20 percent said they’re still undecided.

All 118 seats in the Illinois house of representatives and about one-third of the state-senate seats will also be on the ballot this year. Democrats have a 40-to-19 margin in the senate and a 71-to-47 margin in the house. But a big win by Rauner could create coattails, and it appears he and his campaign are investing money in an effort to make that happen:

Crain’s Chicago Business columnist Greg Hinz:

Thanks to heavy spending by wealthy gubernatorial nominee Bruce Rauner — and disgust within the GOP that it let the governor’s mansion slip away four years ago despite the Rod Blagojevich scandal — Illinois Republicans appear to be disciplined, organized and moving to win in a way they haven’t been in decades. And the Democrats know it.

One insider tells me that a combination of the state and national parties and the Rauner campaign is prepared to spend as much as $2 million just on an absentee ballot operation — perhaps seven or eight times as much as in 2010, when Republican state Sen. Bill Brady of Bloomington lost to Gov. Pat Quinn.

Another source reports that the party has opened 20 field offices just in the collar counties. In comparison, Mr. Brady had three offices in the entire state.

Notice the momentum and bandwagon effect:

New Jersey Gov. Chris Christie came to Chicago Friday and gave Republican Bruce Rauner $2.5 million.

With that the Republican Governors Association more than doubled its financial support of Rauner’s campaign for governor.

Tags: Illinois , Pat Quinn , Bruce Rauner

In Illinois, 67% Oppose Spending $100 Million on Obama Presidential Library



Text  



The people of Illinois may still feel fond of their former resident, President Barack Obama. They’re just not eager to spend $100 million to host his presidential library:

A new poll from Capitol Fax’s Rich Miller reveals that a whopping 67 percent of prospective voters here in Illinois oppose the Michael Madigan-sponsored plan to earmark $100 million for Barack Obama’s presidential library and museum.

Results showed that just 29 percent of likely voters approve of the state-financing proposal, which Illinois House Speaker Madigan successfully pushed last month amid vocal opposition from Republicans and just about everyone who thinks that offering nine figures as bait to attract the library here is perhaps not such a great idea given how strapped for cash we are. Also: Obama, a fundraising machine with an arsenal of super-rich Democratic donors, is likely going to sign off on Chicago as the location, with or without the $100 million in taxpayer money. (Take that, Honolulu.)

Federal tax dollars partially foot the bill for all presidential libraries: “These libraries — now 13 in all — cost taxpayers $75 million to operate in the last fiscal year.” That’s for maintenance and operating it once its open; private donors cover the construction costs.

 

Tags: Barack Obama , Illinois

Illinois Governor’s Anti-Crime Program May Have Committed Crimes



Text  



Elsewhere in today’s Jolt, an update on the organized-crime organization commonly referred to as the Illinois state government:

Illinois Governor’s Anti-Crime Program May Have Committed Crimes

Indictments of Illinois governors: it’s not a question of “if,” but “when” and “for what”!

In this case, there are allegations of Pat Quinn using state funds to run a slush fund to award his allies. Even by Illinois standards, this looks pretty brazen:

Cook County State’s Attorney Anita Alvarez issued a sweeping grand jury subpoena seeking records tied to Gov. Pat Quinn’s troubled Neighborhood Initiative Program – including those for a grant involving the husband of Cook County Circuit Court Clerk Dorothy Brown.

The Sun-Times previously reported that almost seven percent of the $2.1 million in funds given to the Chicago Area Project meant to combat crime in West Garfield Park went to Brown’s husband, Benton Cook III . . . 

The state’s Auditor General, William Holland, slammed the program in a February audit, saying Quinn’s administration didn’t “adequately monitor” how state grant dollars were spent or on whom; community organizations that hired people with those funds weren’t maintaining time sheets; and city aldermen dictated where funding was to be steered.

Political opponents likened the program to a “political slush fund.” The Quinn administration has said the program was set up in response to a violent summer over 2010 and later, in 2012, the governor supported legislation that moved oversight of the program from the Illinois Violence Prevention Authority to the Illinois Criminal Justice Information Authority.

This is the detail that a previous Illinois governor might have called golden: “In his review, Holland further found that the state did not allow for a competitive, open application for the money and instead sought recommendations from Chicago aldermen as to what community organizations should get money in the Neighborhood Recovery Initiative program.”

Gee. The governor takes a pile of money and claims it’s for crime prevention, and then asks a bunch of Chicago alderman where to spend it? Who could have foreseen something going wrong with that plan?

There is a better option, Illinois voters. His name is Bruce Rauner, and he’s the GOP nominee. Today he’s announcing his campaign has collected “590,000 signatures in support of a ballot measure that would ask voters whether term limits should be introduced.”

Think about it, you might see some Illinois governors leaving their offices not wearing handcuffs.

Only one poll has been conducted this month; it put Rauner up by 3.

Tags: Bruce Rauner , Pat Quinn , Illinois

The Stage Is Set for Illinois Republicans. Really.



Text  



Also in today’s Jolt:

Could Illinois Get a Republican Governor in 2014?

Illinois Republicans, you have a golden opportunity this year. Don’t screw it up:

Gov. Pat Quinn may be the ‘luckiest politician alive,’ a moniker given to him by Hillary Clinton after all of Quinn’s primary opponents for Governor dropped out of the race, but a recent visit to Rockford and a new statewide poll shows he has a great deal of work to do if he is to win reelection.

The ‘Capitol Fax/We Ask America’ poll republished in the political website ‘Reboot Illinois’ found the Governor trails whoever may be the prospective Republican nominee.

’Reboot Illinois’ reports that, “According to the poll of 1,354 likely general election voters, all four of Quinn’s potential Republican primary opponents have pulled ahead of the long-unpopular Democratic governor. The poll, taken January 30th, found that Sen. Bill Brady leads Gov. Quinn 48-39. Sen. Kirk Dillard and Treasurer Dan Rutherford are ahead of Quinn 46-37. And Rauner leads the governor 47-39. The self-described party affiliation in the poll was 22 percent Republican and 38 percent Democratic, while 40 percent said they were independents.

When one Democrat after another decided to not run for governor against the perpetually unpopular Quinn — most notably Bill Daley and state attorney general Lisa Madigan — I wondered if the current crop of ambitious Democratic pols knew something the rest of us didn’t. Daley’s explanation seemed particularly ominous and cryptic:

“One of the things I always thought in my career that I wanted to do, I thought I would be able to have that opportunity, I hoped, would be to run for office. And even though you’re around it for a long time, you really don’t get a sense of the enormity of it until you get into it,” Daley told the Tribune.

“But the last six weeks or so have been really tough on me, struggling with this. Is this really me? Is this really what I want to spend my next five to nine years doing? And is this the best thing for me to do at this stage of my life?” he said. “I’ve come to the conclusion that this isn’t the best thing for me.”

“A sense of the enormity,” huh? One theory: The state’s finances are such an epic mess that whoever is governor starting next year is going to have four years of misery, and if they’re really unlucky, another four after that.

How bad is Illinois’s long-term debt problem? Bad enough to get Democratic state lawmakers to do things the public-sector unions don’t want them to do. That’s baaaaaaaad!

Quinn and the state legislature just passed a major pension-reform bill, at least temporarily slowing down the clock on one ticking financial time bomb. But that bill may get undone, depending on what the judges say:

Illinois’ largest government employee unions sued Tuesday to overturn Illinois’ new pension law, ripping the long sought, landmark money-saving changes as outright “theft” from workers that won’t pass a legal smell test.

The suit, filed in Sangamon County Circuit Court, had been expected following last month’s passage of a bill that seeks to curb annual cost-of-living increases for retirees and to increase the retirement age for many current workers. The goal is to close the state’s worst-in-the-nation $100 billion unfunded public pension liability within 30 years.

Yes, you read that correctly. A $100 billion debt in the state’s pensions. And that’s the optimistic calculation. As our friends at IllinoisWatchdog.org calculated,

The Land of Lincoln is in the top five when it comes to debt per capita ($25,959), debt in relation to state spending (727 percent) and unfunded pension liability ($254 billion).

Even if the pension-reform law sticks around, the state’s fiscal mess is . . . colossal:

Our analysis of the state’s fiscal situation before the recent pension changes projected a $4 billion deficit in Fiscal Year 2015, which would get larger each year and reach nearly $13 billion in 2025. That is a serious budget gap, and one that is impossible for the state to maintain for long. It’s like a family spending $5,000 each month when they only have $4,700 in income — and that $300 monthly gap growing to $800 each month in 10 years. Just as for this family, this situation is unsustainable for the state.

While the pension changes were at least implicitly touted as helping deal with this large and growing budget gap, they actually affect it very little in the long term. The new pension law does substantially reduce the fiscal burden to the state of paying for future pension obligations. The savings to the state come mostly from reductions in cost of living adjustments for current and future recipients of state pensions.

But for the next 10 years, the state will use most of the savings from the law to address the unfunded liability. The state will only allocate about $1 billion each year to reduce the annual scheduled payments to the pension funds. So with the new pension law in place, the projected deficit goes from $3 billion in FY 2015 to $13 billion in 2025 — still a huge shortfall and hardly different than the situation prior to the pension changes.

The state spent nearly $1.5 billion on interest payments for their debt in 2013.

Hey, where are all of you Republican gubernatorial candidates going? Come back!

If the state of Illinois’ budget deficit were a robot, it would look something like this.

Tags: Illinois , Pat Quinn , Bill Brady , Kirk Dillard , Dan Rutherford , Bill Daley

Bloomberg’s Big Spending in an Illinois House Primary



Text  



Former Democratic representative Debbie Halvorson, who is running in the extremely crowded primary in the special election in Illinois’s second congressional district, tells Breitbart.com:

There’s a commercial that everybody knows about, that runs, I think every seven minutes. The mayor of New York (Michael Bloomberg), Mr. Nanny State himself, is trying to come into Illinois and buy himself a seat, and I feel it’s backfired on him. Because, everywhere I go now, I’m swarmed by many many people who are saying “you’ve got my vote.”

Halvorson is A-rated by the NRA and opposes an assault-weapons ban. The Independence USA political action committee, which is controlled by New York mayor Michael Bloomberg, is running the ad, which doesn’t endorse anyone; it just tells people to vote against Halvorson.

This is a Democratic primary with 16 candidates, and most of the highest-profile contenders are liberal, inner-city, black cogs of the Chicago political machine — in a district that stretches out to the southern suburbs. With about 15 of the Democrats competing for the same group of voters, Halvorson could well end up with the largest share of the vote on Primary Day.

Tags: Debbie Halvorson , Illinois , Mike Bloomberg , Special Elections

If Voters in Illinois Sour on You, Mr. President . . .



Text  



The death of Qaddafi, and some pop-culture silliness about television shows fearing to echo or managing to predict actual events, feature in the final Morning Jolt of the week. And then there’s this intriguing polling result:

Illinois? Really?

The headline is a predictable “Poll: Obama tops GOP Rivals in Illinois,” but look beyond that and the implications are pretty stunning:

Obama did best against Perry, with 50.8 percent of respondents reelecting the president and 32.8 percent choosing the Texas governor.

Obama did the worst again Romney, with 46.1 percent to 38.5. Against Cain, the former chief executive officer of Godfather’s Pizza, the percentage was 46.3 percent for Obama against 34 percent for Cain.

Finally against Ron Paul, Obama had a showing of 49.3 percent against 30.3 percent.

The poll is the fourth annual state survey taken by the institute. It surveyed by phone 1,000 registered Illinois voters from Oct. 11 through Oct. 16 and has a margin of error of plus or minus 3 percentage points.

“You could look at this as being uncomfortably close for the president in his home state,” institute director David Yepsen said. “On the other hand you could say Obama is holding up fairly well in Illinois, given the difficult year he has had politically and the continued poor performance of the economy.”

Get beyond the “meh” numbers for the Republicans. Note that other than his quasi-home state of Hawaii and perhaps some intensely Democratic state, like Vermont or Maryland, this should be one of Obama’s strongest states. He won it with 61.8 percent in 2008.

Also note, of course, this is registered voters, not likely voters, so if it holds to traditional patterns, it’s probably giving Democrats a slight edge they wouldn’t have among actual votes. (Insert joke about Illinois’s dead casting votes here.) Then we get to this: “The poll shows 51.8 percent of respondents think Obama is doing a good job, while 46.4 percent disapprove.”

In other words, even in the state most inclined to give Obama every benefit of the doubt, they’re souring on him.

“When an incumbent can’t get to 50% against challengers in the other party’s primary, that’s a big red flag in any state,” writes Ed Morrissey at Hot Air. “Undecideds usually break hard against the incumbent, and being below 50% means that the possibility of a loss becomes much greater, especially if turnout shifts in favor of the opponents. When that occurs in an incumbent President’s home state — especially one so solidly Democratic as Illinois — it’s practically a cue for a dirge. Pat Quinn’s 35% job approval rating as Governor isn’t exactly helpful either, as it will depress enthusiasm and grassroots efforts to turn out the vote. Obama may have to avoid Quinn in order to campaign effectively, and that won’t be easy to do. . . . Does this mean Republicans could end up winning Illinois in a general election? I wouldn’t bet money on that outcome, but that’s not the real issue here. What this means is that Obama will have to bet money on Illinois, and a lot of it, to keep the GOP from taking his home state in November 2012. That’s money that Obama won’t be spending elsewhere, like Virginia, Ohio, Florida, and North Carolina, and other states that he needs to keep in order to win re-election.”

To be honest, I’m not even sure Obama will need to spend much money to keep Illinois, and judging by the fundraising so far, Obama isn’t likely to lose in 2012 because of a lack of funds. What I do find significant about this is that if Obama’s numbers look mediocre here, they’re much worse in much less friendly territory, and thus, barring some dramatic change in the next 13 months, he’s doomed. Fairly early in the evening in 2004, appearing on NRANews.com and calling in to ABC News.com, I was confidently projecting a George W. Bush win, based on how John Kerry was dramatically underperforming Gore in non-swing states like Connecticut and New Jersey. If Kerry was under-performing Gore in heavily Democratic states, it was hard to believe he would somehow outperform Gore’s threshold in tougher places like Florida.

But . . . still a lot of race to run.

Tags: Al Gore , Barack Obama , Illinois , John Kerry

Illinois Treasurer: Don’t Loan Any More Money to My State!



Text  



Ah, the political culture that our president marinated in:

Illinois chief fiscal officer [Republican Treasurer Dan Rutherford] said Monday he is willing to dial up the bond houses and finance companies to alert them that lending the state more money, as Gov. Pat Quinn  has proposed, would be a ‘major risk.’ . . . The backlog of unpaid bills will reach $8 billion by July, Comptroller Judy Baar Topinka recently estimated. Rutherford says the debt from past borrowing has soared to $45 billion in recent years, which amounts to $10,000 for every household in the state. As a result, Illinois has the second-worst credit rating in the nation, above only California, he added.

We need to borrow more money so we can pay down our debt!

Tags: Illinois

Of All the Democrats to Hang on . . . Pat Quinn? Blago’s Successor?



Text  



The GOP keeps Mark Kirk’s seat. Congratulations, Congressman-elect Robert Dold; I underestimated his chances all cycle long.

And yet, this Illinois Campaign Spot reader warns the new Republicans to not get too comfortable:

Greetings from still occupied Illinois. Kirk and the House candidates won, Brady BOTCHES the gov race. Of all the Dems to survive last night………Pat Quinn ?

As you said a feel bad landslide. All those new House Republicans from Illinois better not get too comfy because they will get redistricted to the far side of the moon now. House Speaker Mike Madigan will give Quinn the keys to the red train at Santa’s Village and continue to be the real Governor of Illinois (as he has been since Jim Edgar, the last real Governor Illinois had). So I get a state income tax increase and a whopper of a property tax increase. Yay for me.

Take a look at the vote %s from the Gov and Senate races, might explain why the House results were so better than the Senate. House races are in their little districts, Senate…………everybody in the state gets a shot at you. The % of the vote out of Cook County…………..most of that is African American from Chicago, plus heavy city union vote. Quinn came out of Chicago alone up 4 to 1, lot of ground to make up around the state. Statewide, not just in Illinois, monolithic African American vote is HARD to beat, even in a wave. GOP needs a message or candidate to strip some of that off. Any state with large African American vote is going to be a tough go in 2012 for whoever the GOP candidate vs Dear Leader.

I would throw in one point about redistricting: People move, demographics change, and after a while, even safe seats don’t seem so safe anymore. Phil Hare’s awkwardly drawn district lines were meant to create a safe Democratic seat, and Congressman-elect Bobby Schilling laid that notion to rest.

Tags: Bobby Schilling , Illinois , Pat Quinn , Robert Dold

You Could Call This the ‘Blagojevich Base’



Text  



At least one Illinois ballot-distribution operation is at peak efficiency:

Meanwhile, the Chicago Board of Elections hand-delivers ballots to inmates in Cook County Jail. The board doesn’t even wait for the inmates to apply — it brings the applications with the ballots! More than 2,600 inmates have cast ballots — strikingly similar to the 2,600 soldiers who will likely not receive a ballot for Tuesday’s election.

They’re second only to the cemeteries.

Tags: Illinois

Another Stimulus, Another Bailout



Text  



Pres. Barack Obama’s plan for yet another round (!) of stimulus spending, this time focused on highway infrastructure work, is, like so many products of this administration, something other than what it seems. What Obama is proposing is another backdoor bailout for spendthrift states, such as his political home state of Illinois, giving them large injections of federal money so that they can redirect spending that would be dedicated to highway projects to other areas—e.g., to the government-employees’ unions that are Obama’s most loyal constituency. Call it “No Blue-State Appropriator or Union Goon Left Behind, Part Whatever.”

The highway system in particular (and the transportation racket more generally) is a source of endless financial shenanigans and a rich seam of political patronage to be mined by Obama’s allies at the state and local levels. The federal highway system is maintained by a combination of federal and state spending (in a few cases, local spending as well) with the bulk of the states’ money coming from gasoline taxes and fees levied on car owners. Illinois, for example, levies a 39-cents-a-gallon tax on gas (the sixth highest in the nation, according to the Tax Foundation), and it also applies its general sales tax (another 6.25 percent) to gas. Once you figure in the total tax burden, government levies are probably a bigger contributor to the price of a gallon of gas in Illinois than is the crude oil from which it is distilled. So, what does Illinois get for its money?

Part of what it gets is the Illinois Department of Transportation (IDOT), one of those wonderfully, comically inept state agencies that does things that make political analysts laugh and taxpayers weep: things like deciding to suddenly stop doing roadwork because they are out of gas money (irony!) or threaten to start leaving roadkill on the highways unless the state gives them another $20 million.

Highway maintenance is important, of course. But that’s not all that IDOT does with its money. For instance, IDOT helps to maintain a vast network of full-employment programs for petty bureaucrats, called “regional planning agencies.” Every region in the state has one, and they are not small: The Chicago version lists 94 staffers on its website. Its budget of $16.7 million comes mostly from IDOT ($3.8 million) and the Federal Highway Administration ($11.5 million), with money reshuffled from other government agencies, local levies, and our friends over at the Environmental Protection Agency (no, really!) kicking in another $1 million or so. Nearly a hundred bureaucrats spending state transportation money, FHA money, and EPA schmundo, doing . . . what? Overseeing roadwork? Not exactly.

Because our entire government is turning into a bank, IDOT is in the business of making low-interest loans and grants for business-related projects that it likes under its Economic Development Program (EDP). These are supposed to be transportation-oriented projects, but “economic development” is a famously elastic definition under which to operate.

May I give you a little flavor for how carefully this economic-development business is managed? Here’s an excerpt from the minutes of a recent meeting of the Chicago Metropolitan Agency for Planning, or CMAP. Mr. Blankenhorn is CMAP’s executive director, Ms. Powell its chairman:

Mr. Blankenhorn said IDOT’s FY2010-11 budget includes $5 million to fund Metropolitan Planning Organizations statewide, with CMAP due to receive $3.5 million of that. He said the drawback is that all the money is supposed to be used for transportation planning, and while some of CMAP’s programs, such as community and economic development, can be tied in, most cannot. He said IDOT has promised to be flexible in what spending it will allow, but it’s really up to the General Assembly to provide funding for an agency it created to do more than transportation planning. He urged CAC members to mention the need for funding other areas if they meet with their legislators or people in leadership roles at other state agencies. Mr. Mellis asked if this means CMAP is fully funded for next year. Mr. Blankenhorn said the funding is buried in IDOT’s budget, but it’s in there. Ms. Powell said CMAP is technically not fully funded if it has programs it can’t pay for. Mr. Blankenhorn agreed and said he will no longer use the term‚ fully funded.

Buried in its budget, but they’ll be flexible! Sweet.

So, what does CMAP spend money on? Personnel, mostly — more than half of its budget goes to salaries and compensation: Just over $9.3 million is budgeted for FY2011, or about $100,000 for each of the 94 staffers listed. (I’m looking to see how lavishly compensated the top staffers are and will update you when I get the information.) If you start pumping billions of dollars into bridges and highway resurfacing, you free up a lot of money for the CMAPs and such of the world. But given the sorry record of previous “shovel ready” stimulus programs, don’t be surprised if the bridge-and-blacktop stuff is skipped altogether and the money goes straight into “community development” projects.

This is the sort of horsepucky upon which President Obama proposes to lavish another $50 billion. Stop him.

Kevin D. Williamson is deputy managing editor of National Review.

Tags: Bailouts , Debt , Deficits , Democrats , Despair , Doom , Fiscal Armageddon , Illinois , Obama , Stimulus

Public-Pension Criminals



Text  



So now that the state of New Jersey has been charged by the SEC with lying to bond investors about the (desiccated, horrific, probably insolvent) state of its pension funds, the guessing game begins: Who is next? Exchequer readers will not be surprised to learn that Illinois, the place where Barack Obama developed his famous financial acumen, is on the list of potential targets.

When Illinois passed its pension “reform” law a few months ago, it decided it could skip an additional $300 million in pension contributions this year, and many millions more in the future. This, for a pension system that already is less than half funded. The New York Times asked a few actuaries about that decision, and the bean-counters are crying foul:

Paradoxically, even though the state will make smaller contributions, the report forecasts that Illinois will get its pension funds back on track to a respectable 90 percent funding level by 2045. It projects that costs will increase slowly and an economic recovery will make cash available for the state to make the contributions it has failed to do in the past.

Whether that is even possible is contested by some actuaries who note that its family of pension funds is now only 39 percent funded. (If a company let its pension fund dwindle to that level, the federal government would probably step in, but federal officials have no authority to seize state pension funds.)

Some actuaries who have reviewed the state’s plans said that shrinking contributions would make the pension funds shakier, not stronger.

Indeed, one of them, Jeremy Gold, called Illinois’s plan “irresponsible” and said it could drive the pension funds to the brink.

Further, Mr. Gold pointed out that Illinois’s official disclosures said that its pension calculations used an actuarial method known as “projected unit credit,” but that the pension reform report used another method, which had not been approved for disclosure.

“According to Illinois statute, the prescribed contributions are determined under a method that may not be in compliance with the pertinent actuarial standards of practice,” Mr. Gold said.

The Wall Street Journal has more on state pension shenanigans here.

Hey, taxpayer: How’s your retirement fund looking these days? Anything left to put in it after the state-workers’ unions are done with you? Heck, you’re probably the kind of sucker who pays his mortgage with his own money.

Tags: Angst , Debt , Deficits , Despair , Fiscal Armageddon , General Shenanigans , Illinois , New Jersey , Pensions

Illinois Fiscal Meltdown: A Continuing Series



Text  



The Land of Lincoln (or, if you prefer, the Origin of Obama) is going broke, in a big, big way, as I have noted earlier. The main reason is it going broke is because its public-sector caste is robbing the rest of the state blind.

Have the taxpayers finally had enough? Is nearly a half-million dollars a year for a suburban Chicago parks director too much?

Dozens of Highland Park residents confronted their Park District commissioners Thursday night, demanding that they resign for approving a series of exorbitant bonuses, salary increases and pension boosting payouts to top district executives between 2005 and 2008.

. . . former executive director Ralph Volpe, finance director Kenneth Swan and facilities director David Harris were awarded bonuses that totaled $700,000 during a four-year span.

Additional salary increases during that time have or will provide the three executives with pensions that rival or surpass their total salaries to run the district in 2005. By 2008, Volpe’s total compensation topped $435,000.

Swan’s salary, which was $124,908 in 2005, spiked to $218,372 in 2008. Harris’ pay jumped from $135,403 to $339,302 during that time.

Even though Harris resigned in 2008, Park District officials confirmed that he was paid the remaining $185,120 left on his three-year contract. The district also gave him a sport utility vehicle while his compensation without the SUV in 2008 still totaled $339,302 for eight months on the job, officials said.

As Derb says: We’re in the wrong business. Get a government job.

Highland Park has 34,000 residents. Its park system is not exactly monumental. Get this: By way of comparison, the head of the Central Park Conservancy in New York City earns only  (only!) $364,000 — and the conservancy itself raises most of the park’s $25 million annual budget. New York is not exactly famous for the austerity of its public institutions. That Central Park boss must feel like he’s getting the short end compared to that Highland Park parks tycoon.

Tags: Angst , Despair , Fiscal Armageddon , General Shenanigans , Illinois , Obama , Rip-Offs

An Obama Endorsement Hurts Candidates . . . in Illinois.



Text  



I doubt you’ll read anything more surprising today:

Illinois voters say they would be negatively influenced if a candidate was endorsed by Barack Obama. And if his support isn’t an asset in his home state it’s hard to imagine where it is.

40% of voters in the state say they’d be less likely to support an Obama endorsed candidate to only 26% who say it would be an asset. The reality at this point is that Obama turns Republican voters off to a much greater extent than he excites Democrats. That’s reflected in the fact that 83% of Republicans say an Obama endorsement would be a negative with them while only 49% of Democrats say it would be a positive. Independents also respond negatively by a 38/19 margin.

The numbers on an Obama endorsement are perhaps more relevant with undecided voters. Among those who have not yet made up their minds in the Senate race 21% say an Obama endorsement would resonate positively with them while 33% say it would be a turnoff.

We’re hearing a lot of talk about Obama being a one-term president, his presidency is over, etcetera, etcetera. Most of this is premature. But if Obama has become a political liability in Illinois . . . well, he’s really in the depths, and it’s quite possible he’ll never recover.

Tags: Barack Obama , Illinois

The Next Bubble: Municipal Bonds?



Text  



An interesting thing happened on the way to the bond market: As I mentioned earlier, the state of Illinois went to market with $900 million in “Build America Bonds,” which are federally subsidized debt instruments intended to be used for infrastructure projects — building bridges, blacktopping roads, and the like. Which is to say, right in the middle of a fiscal meltdown, Illinois is launching a major construction campaign — basically, it’s a make-work jobs project, a chance to get a piece of all the money that the stimulus bill has left on the table and put it in the hands of politically connected union bosses. Thanks to Barack Obama, Nancy Pelosi, and Harry Reid, you and I will be covering a 35 percent federal tax credit for investors in those bonds. (Most of the investors, that is, but not all — more on that development in a second.)

Illinois, already sitting on top of $5 billion in unpaid bills and an imploding pension system, is borrowing money everywhere it can, having already tapped into the bond markets three times in recent years just to cover its unfunded retirement obligations for state employees. (Illinois state-government pension? You should have a retirement so fat.) So the chance to go even deeper into debt, with a federal subsidy to sweeten the deal, was irresistible.

Strangely, the market went crazy for those Build Americas. Illinois is already paying a premium in the debt markets; its credit was downgraded in June and its finances are just abject. But the yield demanded on those Build Americas came in 15 basis points lower than expected, meaning Illinois will pay a little less interest on that $900 million bond obligation. Why did the markets cut Illinois a break? Did they forget the Land of Lincoln is the land of Obama, Blago, and George Ryan? That it has the worst credit rating of any state in the Union? That it’s currently considered a greater default risk than Iceland and that it’s only one spot behind Iraq in the default-risk ratings? (And only three behind Pakistan!) What gives?

The most obvious explanation is that the yield on the Build Americas is nearly 7 percent, and there’s not much out there paying 7 percent right now. Investors also get a 35 percent federal tax credit on those returns, so the real rate is even higher. [See correction below.] But what about the risk? My own suspicion is that, even though the law explicitly says otherwise, there is some suspicion on the part of investors that the Obama administration would, in a crunch, stand behind those Build Americas — especially from a big state like California or from a politically sensitive state like the president’s home turf of Illinois.

Addison Wiggin has an interesting observation: 29 percent of the bids for those Build Americas came in from overseas, where investors don’t even enjoy the tax subsidy. They’re just looking for a yield and not paying much attention to the risk. Investors are liking governments: Capital inflows into municipal bonds are way up — $2.7 billion this week vs. $676 million last week, with similarly strong increases in the four-week rolling average — and junk-rated municipal bonds are popular, too. Wiggin sees a bubble and reports:

Allstate (perhaps not ironically headquartered in Illinois) has trimmed its muni holdings by 13% over the last three quarters. An insurance giant holding $20 billion in munis is seeing the same subprime-style risks we outlined in the last issue of Apogee Advisory:

  • Widespread investor acceptance
  • Complicated derivatives
  • Intense incentive for banks to make deals
  • Boneheaded assumptions of endless return on investment
  • Loads of underqualified borrowers
  • Stunning amounts of leverage and debt
  • Social and political pressure to grow at all costs

The multi-trillion-dollar muni market remains loosely regulated, and despite high-profile mishaps in the subprime market, municipal bonds still carry overstated credit ratings from Wall Street’s finest firms.

The latest stimulus under consideration, Stimulus V, is a state-and-local bailout in disguise. If Illinois, California, and the others keep borrowing like this, they won’t even be able to disguise the coming bailout when the municipal-bond bubble bursts.

I wonder, Where will the money come from?

STIMULUS SPENDING UPDATE: $50,000 in stimulus dollars spent to put on a stage version of Gertrude Stein’s novella Brewsie and Willie. Taking the stimulus to the theater? And nothing for the critics?

UPDATED: Reader Prayin’ for Reagan (nice name)  sends in a correction, which I’m still trying to confirm. In short: There are two kinds of Build America bonds: one in which the 35 percent interest subsidy is paid directly to the bond issuers, and another in which the subsidy is passed on to the bond investors in the form of a tax credit. Either way, the investors receive a higher real yield and the issuers get the benefit of a federal subsidy to offset their risk. I thought Illinois was issuing tax-credit bonds, PfR says I’m wrong. Am checking out now, will update.

UPDATED AGAIN: Prayin’ for Reagan is indeed correct, and I am wrong.

– Kevin D. Williamson is deputy managing editor of National Review.

Tags: Barack Obama , Debt , Deficits , financial Armageddon , Illinois , Municipal Bonds , sovereign credit

I’m Not Saying Running Against Phil Hare Is Like Playing the Rams at Home



Text  



In yesterday’s rankings, the one that has generated the most skepticism is putting Rep. Phil Hare of Illinois in the “Blue/As Difficult as Beating the St. Louis Rams” category. As one media guy who watches Congress closely put it:

You have Phil Hare in the easiest to beat bunch. He seems more like Leans Democrat to me — equivalent to your Orange/Eagles group. This is a district that was carried not just by Obama, but by Kerry and Gore. In 2008, Republicans couldn’t even be bothered to contest Hare, and he got 57 percent the last time they did. He’s done a couple stupid things lately — ‘I don’t care about the constitution’ and not releasing an internal poll — but this one seems to be a much harder take-away than some others.

All true, but I figure the “I don’t care about the Constitution” makes for one wicked attack ad, and that internal poll must have shown something pretty ominous, or else he would have released it. (Think about it, even a 55-45 split in his favor would be acceptable to release.)

Here’s Hare to the Wall Street Journal at the end of last month, right before President Obama visited the district:

In Illinois, Rep. Phil Hare, the Democrat who represents Quincy, said he needed the president to make the case that the economy was improving, and that his programs, especially the economic stimulus, have worked. “I’ve had a death threat. I had a rock thrown through the window of a leased vehicle. It’s tough out there,” Mr. Hare said.

I’m also wondering about coattails in Illinois; it looks like the Democrats have two awful top-of-the-ticket names in Illinois. Neither Alexi Giannoulias nor Pat Quinn are leading the Daily Kos/Research 2000 poll, and neither Democrat has led a poll since March. The last five percentage totals for Quinn, the incumbent: 36, 38, 38, 33, 37. Those are Corzine-esque numbers.

Tags: Alexi Giannoulis , Bill Brady , Bobby Schilling , Illinois , Mark Kirk , Pat Quinn , Phil Hare

Subscribe to National Review