Posts tagged as “Red Line TV & Radio”

Lee Elci: Yeah. Exactly. Yeah. The one, the big red button. Alright. Listen. Good morning. Great column, by the way, one that we have talked about at length in the past. But if folks haven't read Red's column, go to the Wall Street Journal or go to the-red-line.com and take a look at it there. It's fantastic. But today you wanted to talk about the Big Beautiful Bill.

Red Jahncke: Yes, sir.

Lee Elci: Alright. Yeah. Talk to me. Give me the 30,000 foot view and then I'll ask questions.

Red Jahncke: I did, and that's exactly where I think we should start. Because, right from 30,000ft, the Democrats are distorting and misinforming. By the time you get to anything that's actually in the bill, you're beyond this point of major distortion.

Gary Byron: So, Senator Ron Johnson and some others gave the, the One Big Beautiful Bill kind of a cold reception when it arrived in the Senate. A warning that the Bill will balloon deficits and debt, which, by the way, are already ginormous. Jamie Diamond, JPMorgan Chase CEO predicted that a crisis -- not if, but as soon as six months from now, will occur.

So, look, there's no greater contributor to the recent rapid growth in deficits and debt than Medicaid, particularly under the Democrats, and thus no more appropriate GOP target financially and politically.

But let's be honest with each other Red. When we look at, when we look at Medicaid and the cuts that it's taking, it's it's not really for people who are justifiably and legitimately are on Medicaid. It's cutting waste, fraud, fraud and abuse. It's cutting back on illegal immigrants who have been on Medicaid for quite some time. It's cutting back on fraud. That sometimes doctors are guilty of. And, it's it's cutting back on people who claim to be disabled who really are not; they're actually able bodied individuals. And it's also requiring for those who need some Medicare (speaker meant Medicaid) and can work it, keeping them honest and putting them to work, I think they can work up to a certain amount of hours. Well, I didn't think this was a political issue. I thought this was common sense. I thought both parties were in agreement on eliminating waste, fraud and abuse. What's the story here Red?

Red Jahncke: Well, first of all, let's frame the issue in terms of the aggregates. Medicaid is exploding. It went from $600 billion in 2017 to $870 billion in 2023. That's almost a 50% increase in just six years. That kind of defines the term “unsustainable.” You ran through some of the issues involved.  Two of them stand out in terms of what the One Big Beautiful Bill has in it: single, able bodied, childless adults will no longer be eligible, unless they work, because under Joe Biden, they were able to enroll without any work requirement; that clocks in, I think, at a pretty substantial savings number. The various other things you mentioned, you hope are done on a regular basis year in, year out. That's be on the lookout for waste, fraud and abuse.

Lee Elci: We talked last week. Your latest column that came out, I think, is a bombshell, if you will. Pension spiking in Connecticut with state employees retiring on pensions 38% higher than their salaries. How did this practice become so entrenched?

Red Jahncke: It's been a practice [since] the 1980s, but most states have begun to rein it in. It's been the most dramatically abused in the blue states with heavy public sector unionization. California, Illinois, New York, New Jersey, Connecticut, all the usual suspects. But, what's going on in our state is jaw dropping, even to people who know this game. The idea that people are retiring with beginning pensions far in excess of their last salary is just an eye popping and astounding condition.

Lee Elci: Why do you think Connecticut, this little state, is the second most unionized state?

Lee Elci: So, I wanted to ask you, if you put in a hiring or wage freeze, how are you going to recruit new employees for the state of Connecticut?

Red Jahncke: Well, offer a signing bonus. It's paid to maybe 1% of the employees who you hire there, 1% of the entire workforce. You don't need to pay 50,000 state employees 4.5% more for an entire year.

Lee Elci: All right. I just wanted to get that out there. So, Red, let's talk about this column. We had talked about this probably about a month or so ago, and it was jaw-dropping, to say the least. So, just give me the 30,000 foot view before we dive into your latest, “States Are Using Medicaid as a Slush Fund.”

Red Jahncke: Well, let's hit the news headline today, which is the Big Beautiful Bill, working its way through Congress as a very modest reform of these provider taxes. Namely, there's a moratorium on increases and the installation of a new tax. Say you're not yet taxing your nursing homes. Under the bill, if it passes into law, you will not be able to create a new tax in your state’s on nursing homes. You also cannot increase those taxes that you already have in place.

Lee Elci: So, what did you want to talk about today?

Red Jahncke: We've done a study here at the Townsend Group. I think we gave a preview last week, and, the study's out. It's posted on the website. Website upper right-hand corner. It's overtime spiking by Connecticut state employees. Looking first at the Department of Correction.

We looked at the ten employees in each of the last five fiscal years who clocked the highest overtime pay. You would think that is 50 individuals. It’s actually runs 28 employees because some repeat year to year.

And we looked at their overtime in relation to their previous years of working overtime. We looked at it in relation to their current or last salary. And if they have retired, in comparison to their pension benefit.

11 of the 28 have retired. They have retired with a pension benefit higher than their last salary. They are going to make more money in retirement than they ever made on the job.

Lee Elci: All right, here we go. Red Jahncke is joining us. National columnist, our Wednesday guest. Good morning sir. How are you today?

Red Jahncke: Hey. I'm good. Well, let's kind of jump into it, okay? You know, the juxtaposition is just jarring. The talk in Hartford, as we know, has been all about surpluses, surpluses, surpluses and why can't we, the Democrats saying why can't we spend the surpluses? And, of course, the surpluses are not surpluses. They are necessary payments into the state pension fund because without the surpluses the pension fund would go backward.

So, the public hears all about these surpluses, surpluses, surpluses. Then what does Ned Lamont do on Monday morning? He declares a financial emergency.

Lee Elci: All right, so let me ask you a couple of Trump related questions. He's basically, touring the Mideast, as you had said, the Trump of Arabia tour. What are your thoughts on some of this stuff?

Red Jahncke: Yeah, modern day Lawrence of Arabia. He's in Riyadh with MBS, and, celebrating to beat the band. He has defacto recognized the new regime in Syria, and he's threatening Iran. I just read that they've had a fourth round of talks that have gone nowhere. Right. So, I have no extra insight on what that means. He's got the deal with the Houthis: If you don't target our ships, we won't blast you to kingdom come. And of course, Israel is upset because there's no mention of the Houthis having to withhold fire on on Israel. He's gone all in, in Arabia.              

Lee Elci: Right. Well, you mentioned Syria. What's your thoughts? Is that a good thing or a bad thing? Have they paid enough of a penance for the things that they've done in the past?

Lee Elci: You’ve written a column “12 ways Lamont Fails to Grasp the Impact of Giving State Employees a 33% Raise.” And I know we've been talking about this a lot. But here's what I wanted to do today. I have a set of dice, Red,. I'm going to roll the dice and whatever number comes up, we'll talk about that particular issue in your column. How's that sound?

Red Jahncke: That's that's great. All right.

Lee Elci: Here we go. The dice are out and the number is six. I would like you to talk to me about number six, Lamont saying, “Remember, we've had a pretty good inflation in the last six years.” Well, inflation over that period was 2.5%. Take it away, Red,

Red Jahncke: First, just a little bit of context. Labor cost, is the largest single expense that the state has.

But, I'll go to number six. Yes, 33% for state employees under Ned Lamont. Six years inflation over the period, 25%. The average private sector worker in the nation 23%. State employees are 10% ahead of their compatriots in the private sector. Just not fair, just not sustainable. I mean, the private sector is what generates the economic activity that supports the government expenditures we make. If the private sector is lagging, we can't sustain a 10% premium for public sector workers.

Lee Elci: That's right, I forgot your regular reminder that Connecticut state employees have received a 33% wage increase under Governor Lamont compared to a 23% increase for private sector workers. So how about a little more details for those of the listeners that are joining us for the first time?

Red Jahncke: I think the key here is the the misunderstanding and the dysfunction at Hartford, that surrounds this whole issue. So Governor Lamont, in his budget proposal issued in February, laid out all the evidence any would one would need to appreciate the calamitous impact of these wage increases and benefit increases for state employees.

So let me roll out a couple of a numbers from the Office of Fiscal Analysis. The governor put $500 million in what's called the Reserve for Salary Adjustments. That is an account where money is put for future wage increases for state employees. And the fringe benefit increase under the governor's budget. That is $740 million. Together, that's $1.2 billion going to state employees.

Also the required calculation of the constitutional spending cap: only $2.2 billion of an increase in allowable spending. So you have $1.2 billion going to state employees [out] of the $2.2 billion. Very little left over to spend on services for citizens.