Clark Durant: Loser, not Career Politician

Clark Durant is running for Debbie Stabenow’s U.S. Senate seat, representing Michigan. Durant, who ran unsuccessfully for the Senate in 1990 and has held lesser appointive and elective political offices beginning in 1984, says voters should choose him instead of a “career politician.”

If he had gained a Senate seat in 1991, what would that make him? A career politician! So, his message really is, “Vote for me, I’m a loser, not a career politician.”

Incidentally, Stabenow was in the House of Representatives from 1997 to 2001, when she became a senator, for a total of 15 years in Congress. Durant would have been in the Senate for 21 years by now, if he had won. I guess that makes him a career loser.

John Payne, Attorney
1800 Grindley Park Street 6
Dearborn, Michigan 48124
Come visit me at: http://www.law-business.com
313.563.4900/fax 313.583.3100

Pittsburgh Office:
9853 Old Perry Highway
Wexford, Pennsylvania 15090
800.220.7200/fax 412.548.0022

The Weight of the Nation

“The Weight of the Nation” is a four-part documentary on the national obesity epidemic that starts May 14, 2012 on HBO. In a May 10, 2012 video editorial, “The Tax Code Diet: The Institute for Medicine gets political on obesity,” Dan Henninger and Joe Rago, of the The Wall Street Journal, mock the documentary and the Institute of Medicine report on which it is based. http://online.wsj.com/article/SB10001424052702304070304577394051312808264.html
Their neo-Con “all government is evil” attitude should be seen as an unqualified endorsement of companies that push unhealthy eating habits to maximize profits with no regard for the health of their consumers.

Henninger and Rago, neither of whom are obese, do not deny that the nation has a problem. However, they ridicule the idea that the government might have a role in encouraging healthy eating. They claim that what one eats is a matter of individual choice and that the government should not attempt to regulate food packaging and advertising. They further argue that unhealthy products like carbonated soft drinks loaded with high-fructose corn syrup and caffeine should not be taxed to subsidize anti-obesity and healthy diet programs and other health costs attributable to those products.

Do the neo-Cons oppose food-safety inspections and regulation to protect us from pathogens like salmonella or mad-cow disease? Some social Darwinists would place all responsibility for food safety on processors and vendors. They would say, “Let the market sort out which manufacturers poison us and should go out of business, but even most neo-Cons would agree that we rely on the government to enforce food safety rules. When we buy beef or carrots at Piggly Wiggly we have confidence that the products are not drenched in E. coli because of government oversight.

Our food supply may be free of disease-causing pathogens, but what about high-fructose corn syrup, salt, and aspartame? What about the absurd mounds of fat, sugar, cheap meat, carbohydrates, and salt that Applebees, Burger King, Cheesecake Factory and other restaurants call “meals.” People tend to be gullible and when the restaurant calls something a “meal,” many customers will assume that what they will be served is a reasonable portion for one person to eat at one sitting. The restaurant is playing on customer’s credulity when it serves an “appetizer” with 1,500 calories or delivers a mass of food that exceeds 2,300 calories and calls it a meal. At the very least, calorie counts should be displayed on the menu or bill of fare.

In the supermarket, trusting consumers are fooled by advertising and packaging into thinking that candy is a healthy breakfast and cookies are nutritious snacks. The frozen-food aisle is crammed with pre-prepared entrees labeled “heart-healthy” or “lean” that barely qualify as “food.” Judging by the ingredient lists, which are often barely legible, a product might be lasagna or animal shampoo. Few shoppers have the time or the ability to really decipher what they are buying. They do not realize that “organic” and “natural” and “fresh” and “heart-healthy” are just advertising gimmicks that have no meaning. Shoppers assume that the government keeps food processors, distributors and retailers honest. That is far from the case, with some reasonable reforms shoppers could have the protection they deserve.

Watch “The Weight of the Nation” with an open mind. There is a crisis of obesity in the United States and we must curb our eating – particularly with regard to children. By allowing our children to overeat we are condemning them to a lifetime of obesity and all of the health problems caused by excess weight. We as a nation must address the problem and the government has an important role to play.

John Payne, Attorney
1800 Grindley Park Street 6
Dearborn, Michigan 48124
Come visit me at: http://www.law-business.com
313.563.4900/fax 313.583.3100

Pittsburgh Office:
9853 Old Perry Highway
Wexford, Pennsylvania 15090
800.220.7200/fax 412.548.0022

Leave My PIP Alone!

Michigan’s automobile insurance companies would like to crimp motorist personal injury protection (PIP) benefits. The Republican majority claims that the expense of providing this coverage is crippling the Michigan economy, driving employers out the state, poisoning the air and water, increasing obesity, cancer and heart disease, allowing children to drop out of school earlier and earlier, causing telemarketers to call right at dinner time, and raising the television volume during commercials. In short, all of Michigan’s problems are caused by requiring unlimited PIP benefits.

Although Michigan voters have endorsed unlimited PIP benefits by referendum, the Michigan Chamber of Commerce and the insurance lobby have bought enough legislators to endanger the law. Michigan Rep. Harvey Santana offers a concise explanation of why such a change would be wrongheaded in “Rep. Santana on HB4936 and SB649.”

Gov. Rick Snyder and the legislature want to avoid the embarrassment of citizen review. The legislature attached an “appropriations” measure so that the law will not be subject to challenge by the people. This loophole allows the legislature and governor to pass laws that are not subject to referendum. The PIP-elimination bill includes an appropriation of chump change to print some brochures — a cheap trick to stymie the democratic process. If you read to the bottom of the bill, you find that $50,000 is appropriated to the Office of Insurance and Financial Servises “to implement this section.” That is like putting a thumb bell on the steering wheel of a 450 hp. Peterbilt flat-top sleeper and calling it a tricycle.

Proponents of this measure claim that it will reduce auto insurance premiums. Have you ever seen insurance companies reduce rates in response to favorable changes in the law? That is about as likely as the AFLAC goose showing up in your leaky rowboat. Consumers will not see any benefit from this bill, but it will drastically reduce the coverage for those who are seriously injured in auto accidents.

As a case in point, a Pennsylvania colleague was contacted by the wife of a seriously injured 50-year-old man. The accident was caused by an impaired driver. The husband received very severe head injuries and will be permanently disabled. The driver who caused the accident had minimal insurance and only $15,000 can be obtained. The husband owned three vehicles at the time of the accident, but his uninsured-motorist coverage was limited to $100,000 per vehicle. The cost of treatment for injuries has greatly exceeded the $315,000 available, so there is nothing for long-term care. This family, which includes two middle-school aged children will be financially ruined.

If this case were in Michigan, the husband would have unlimited PIP benefits to cover his lost wages and care needs of about $10,000 per month. Our legislature wants to eliminate this protection. The insurance lobby claims that the new law would still cover 99% of injured motorists, but 1% of motor-vehicle injury claims make up a lot of seriously-injured Michigan citizens. Tell your governor and legislators to leave our no-fault auto insurance coverage intact.

John Payne, Attorney
1800 Grindley Park Street 6
Dearborn, Michigan 48124
Come visit me at: http://www.law-business.com
313.563.4900/fax 313.583.3100

Pittsburgh Office:
9853 Old Perry Highway
Wexford, Pennsylvania 15090
800.220.7200/fax 412.548.0022

“Get Your Boot off My Neck” is Class Warfare?

Over the last half century, those who are wealthy by most definitions have doubled their income and net worth over and over, while the rest of us – we ninety-nine percenters – have seen our income and net worth decline. As the fiscal gap between rich and poor has increased, the difference in tax brackets has shrunk. Any talk about increasing the tax rate on the wealthy has been met with porcine squeals about “class warfare.” If there is any class warfare in the United States, it has been going on for 50 years and the poor are losing it. There is a tipping point at which wealth begets greater wealth and poverty begets greater poverty. Conservative talk about “equality of opportunity” is code for the Darwinian model of government – the spoils system. Those with power get what ever they can grab and money is power.

There are many self-made wealthy people in the United States, but stacked against the millions who live and die in poverty, they are very lucky or talented exceptions. The wealthy have an almost insurmountable advantage over the rest of us. When you compare two equally talented children – one from Brentwood and one from Watts – it is easy to see why legal equality of opportunity has little meaning for most of us. Chip, from Brentwood, was raised on the healthiest food, received a superlative education from Montessori at age three through graduate school at an Ivy League university, lacked no dental or medical service that could improve his appearance or health, and left college with a contact list of Fortune 500 CEOs and board members. Jamal, from Watts, lacked no challenge to his very existence. His minimum-wage single parent had a difficult time providing sufficient calories for the family and providing shelter. His education in inner-city schools prepared him for neither an occupation nor college. Barring an exceptional opportunity Jamal has no prospects beyond minimum-wage employment.

This oppression by the wealthy and powerful plays out every day in the corporate sector. Rank-and-file employees, who build the wealth of the company by their work, are either down-sized into the ranks of the unemployed or grossly overworked, performing the tasks of those who are no in the ranks of the unemployed in addition to their own. Meanwhile, those in the upper echelons of management never miss a compensation increase or a bonus.

According to Fortune, the CEOs of the top 500 corporations average $9 million in compensation, bonuses and stock gains. http://www.forbes.com/lists/2011/12/ceo-pay-20-year-historical-chart.html While this is a big drop from the $16 million the CEOs made in 2007, it is much more than they earned. As was explained in “Not All Pirates Are in Somalia,” http://topomyhead.wordpress.com/2011/04/15/not-all-pirates-are-in-somalia/, these CEOs reap such ridiculous compensation through rampant cronyism, but that is not the worst aspect of corporate executive overpayment. It is all deductible to the corporation, so 35% of the $9 million is tax savings. It comes out of the pockets of the very workers who are being so roughly treated.

Federal minimum wage in the United States is approximately $15,000 per year for a full-time worker. If deductible CEO compensation were limited to 100 times minimum wage, or $1.5 million, the Fortune 500 corporations would each pay approximately $2.6 million more in taxes just on their CEO’s compensation. That would be $1.3 billion more in taxes for schools, Veteran programs, road and bridge repair, national parks, student subsidies, and all the other important government functions that are being cut back due to the Bush-era tax cuts. That is $1.3 billion in tax revenues for cutting back the deductibility of the compensation of the CEOs, only. In every corporation there is a whole rat pack of over-compensated vice presidents and directors who contribute nothing to profitability or production. A tax increase would not be necessary; all that would be required is cutting back deductions to what is reasonable.

The compensation deduction for corporate income taxes should be limited to reasonable compensation. It is absurd to suggest that these corporations could not find a competent – even a brilliant – CEO for $1.5 million a year. Corporate boards pretend that they need to give their CEOs and other executives huge compensation packages because they are so valuable, but that is not the case. Corporate CEOs pack their boards with fellow CEOs, who pay them whatever they ask. The fact is that CEO pay is often not in proportion to talent or success.

The Corporate Library’s 2006 report, “Pay for Failure: The Compensation Committees Responsible,” described 11 public corporations that paid their CEOs more than $15 million per year despite five-year track records of shareholder losses. For example, Ivan G. Seidenberg, chief executive of Verizon Communications, received $19.4 million in salary, bonus, restricted stock and other compensation in 2005, half again as much as in 2004. As his compensation increased, the stock fell 26%, bondholders lost value as the company’s debt was downgraded by credit agencies, and 50,000 managers saw their pensions frozen.

Instead of paying additional tax due to the loss of the deductibility of CEO compensation over $1.5 million, the corporations could raise the pay of the employees who actually do the work, or hire more employees. Instead of cutting the workforce to the bone and eliminating fringe benefits, these corporations could reintroduce the type of corporate culture that made it worthwhile to get out of bed and got to work.

A culture of greed and megalomania has taken root among the wealthy and powerful in the United States. Conservative activists and politicians are catering to those who have it all. Anyone who says the “haves” should help the “have-nots” by paying a little more in taxes is accused of class warfare.

This country is being run for the benefit of the plutocrats who comprise the 1%. It is not class warfare for the rest of us to want them to take their boots off our necks. It is time for the 99% to stand up for our rights.

John Payne, Attorney
1800 Grindley Park Street 6
Dearborn, Michigan 48124
Come visit me at: http://www.law-business.com
313.563.4900/fax 313.583.3100

Pittsburgh Office:
9853 Old Perry Highway
Wexford, Pennsylvania 15090
800.220.7200/fax 412.548.0022

The Peter Principle: A Lesson for Today

As the stock market picks itself up, staggers to a lamppost where it holds on for a couple of sessions, then collapses again into the gutter, there is no shortage of experts to explain why the DJIA is stuck around 11,000. Hedge fund managers, analysts, market strategists, portfolio managers, economists, and college professors have all kinds of theories about why the market goes up, down, around, or retrograde oblique. Their inane, contradictory or downright nonsensical analyses and recommendations raise the question of how much they really know. Furthermore, the incompetence of hedge fund and portfolio managers who have made news lately by losing millions or billions for their employers call into question the ability of the firms themselves to hire and supervise able staff. The Peter Principle can help explain the chaos in our financial and equities markets.

According to the Peter Principle, “in a hierarchy every employee tends to rise to his level of incompetence.” The 1969 book, “The Peter Principle,” by Dr. Laurence J. Peter and Raymond Hull, explains how employees get promoted until they are in job they cannot perform competently. For a civil servant or a cog in a bureaucratic machine of any type, the Peter Principle is a transcendent revelation. It provides a rationale for all the frustrations of working in an organization that seems like a mental hospital where the patients are in control. It also explains many of the systemic breakdowns we see every day – the Kitchen Aid coffee maker that has to be replaced due to defective warmer pad coating, the $80,000 Lexus recalled for steering problems, the FEMA post-Katrina modular housing debacle, the regional blackout caused by overloaded electrical transmission equipment, or the house fire caused by failure to ground a broad-band cable coming into the attic.

The Principle holds that in a hierarchy, workers get promotions as long as they work competently. When they reach a position that is above their competence, they remain there, being unable to earn further promotions. Peter’s Corollary states that “in time, every post tends to be occupied by an employee who is incompetent to carry out their duties” and adds that “work is accomplished by those employees who have not yet reached their level of incompetence.”

The book is an eye-opener for employees who find themselves stuck in a position where they are surrounded by incompetents. It is also a wake-up call for those who are frustrated in their positions and do not know why. They may have reached their level of incompetence. Knowing this, they can relax and stop striving for a promotion that will never come, or look for an opportunity to move to a different occupation.

Hedge fund managers are assumed to be financial geniuses, when they may be as error-prone and unsophisticated as anyone else hired on the spur of the moment to fill a position. Dana Dealdo may be in charge of a hedge fund as a result of favoritism, nepotism, sexism, cronyism, racism, anti-racism, or blackmailism. Stock brokerages, hedge funds, arbitrage firms, and other market movers and shakers are just as susceptible to the Peter Principle as car companies, fast-food outlets, public utilities, and municipalities. The awe and reverence accorded them by the media may be misplaced.

This is not just a plug for a book, although “The Peter Principle” was one of the most insightful books I have read. It is to urge a recognition that we cannot expect that things will always go right and we cannot rely on the recognized “experts” talking heads on television turn to for commentary. It is necessary to think analytically about every aspect of our lives. Without becoming survivalists, it is important to recognize and prepare for the possibility of a widespread failure of our power grid, communications network, or water supply. The Fukushima nuclear accident shows that there are incompetent executives at the highest levels of government and industry. Without turning our backs on nuclear power, it is necessary to develop idiot-proof policies for the siting of reactors and development of safety protocols. Above all, we need to be realistic about the level of competency we expect, whether it is a cashier in a dollar store or a legislator in Congress.

John Payne, Attorney
1800 Grindley Park Street 6
Dearborn, Michigan 48124
Come visit me at: http://www.law-business.com
313.563.4900/fax 313.583.3100

Pittsburgh Office:
9853 Old Perry Highway
Wexford, Pennsylvania 15090
800.220.7200/fax 412.548.0022

Not Taxed Enough

Standard & Poor’s downgrade of the United State’s credit rating, if not the economy in general, should clue in TEA Partiers and disciples of Grover Norquist that the deficit cannot be brought down through spending cuts alone. The government needs more revenue and more economic stimulus through government spending. However, it is time to stop whining about all the taxes we pay and start bragging about our investment in our country.

Congress has to forget about extending the Bush-Era tax cuts for the wealthy and consider the additional revenue an infrastructure investment. Those funds can be directed at improving the nation’s roads, railroads and airports, energy and communication systems, water and resource conservation programs, and border security.

How often do you hear the wealthy mewl about high taxes, anyway? Never! It’s the TEA Partiers and conservative elected officials doing the kvetching. They are generally lower-middle- to middle-class schmucks like the rest of us. They just think that they will get more butter on their toast from the rich if they oppose taxing them. The Fox News Gang are just reading out of Rupert Murdoch’s right-wing script.

Smart homeowners know that they cannot keep putting off repairs. It is common for homeowners to keep putting off upgrades and improvement. A couple who raised their family in a home they bought in the ’60s may have 30-year old avocado appliances, gold-colored shag carpet and an analog-digital converter so they would not have to replace their 13-inch Zenith TV. That’s fine if they feel more comfortable surrounded by outdated furnishings. However, they need to take action if the roof is leaking or termites are making lunch out of their studs and joists. We are beyond fashion considerations in our infrastructure.

We have bridges that are on the verge of collapse and civic buildings that are unsafe due to asbestos and formaldehyde. Our power grid is outdated and dangerous and lack of inspection of cargo and cargo vessels leaves us vulnerable to terrorist attacks, inadvertent importation of invasive species and food-born illnesses.

We have dire needs that could be addressed by a Congress that is not afraid to ask us to pay for what we need. They do not even have to call it a tax increase. Call it an investment in our nation’s future.

John Payne, Attorney
Garrison LawHouse, PC
1800 Grindley Park Street, Suite 6
Dearborn, Michigan 48124
Come visit me at: http://www.law-business.com
313.563.4900/fax 313.583.3100

Pennsylvania Office:
9853 Old Perry Highway.
Wexford, Pennsylvania 15090
800.220.7200/fax 412.548.0022

Minnesota: Government by Truculent Four-Year-Olds

Traveling on I-94 near Ann Arbor, Michigan, I pulled into a rest area today. This is a privilege denied to motorists on I-94 in Minnesota, since Gov. Mark Dayton and the Minnesota legislature are acting like truculent four-year-olds. They shut the state down over a budget disagreement. From border to border, I-94 runs 260 miles through Minnesota. That is four hours of driving without a rest area, which is dangerous–not merely unpleasant and uncomfortable.

A political conflict is understandable, but shutting down state parks, highway rest areas, and other state amenities, not to mention really vital services, is unforgivable. Each side is betting that the public will blame its opponents. To a large degree, this is what will happen.

Right-wingers listen to right-wing radio and Fox News. They hear and believe accusations against the left. Liberals do not have left-wing radio or a left-wing network, but they listen to Rachel Maddow and John Stewart and dismiss right-wing radio and Fox News as a pile of bovine manure. They hear and believe blame levied on right-wingers. Those on the right are likely to blame liberals for the shutdown, but liberals are equally likely to blame the right for the shutdown.

That engineering a state shutdown is a sound political strategy does not make it either right or pardonable. Furthermore, these spoiled, immature jerks intentionally made the shutdown as unpleasant for the public as possible. For example, closing facilities like state parks and highway rest areas was unnecessary. Various nonprofits, such as service clubs, churches, and support groups, could have been recruited to maintain services at such state facilities.

We already have an Adopt-A-Highway program, which relies on service clubs and other organizations to keep parts of the freeway system clean. There is no reason that nongovermental groups could not operate highway rest areas, campgrounds, beaches, libraries, and such facilities. This would require a more extensive operation than Adopt-A-Highway, but it would also provide more chances for charities to solicit donations or make money providing services. However, it would require elected government officials to be more concerned with the welfare of the citizens than they are about political advantage. That is why it does not happen.
John Payne, Attorney
Garrison LawHouse, PC
1800 Grindley Park Street, Suite 6
Dearborn, Michigan 48124
Come visit me at: http://www.law-business.com
313.563.4900/fax 313.583.3100

Pennsylvania Office:
9853 Old Perry Highway.
Wexford, Pennsylvania 15090
800.220.7200/fax 412.548.0022

It’s Summer: Where are the Summer Jobs?

Here we are, a week away from the solstice. Most of the high schools are out for the summer and where are our young people to find jobs? The parents and grandparents have grabbed the jobs that usually keep high school juniors and seniors off the streets in the summer. The jobs are not there for our teenagers. We have been trying to jumpstart the economy since Bush XLIII, but every time we start to really pump some job juice into the economy, we back off. What we need to do is raise the debt limit, stop worrying about the deficit, and put people to work on infrastructure.

If people started buying new cars and refrigerators and hot tubs and houses, we could turn this recession around. Unfortunately, consumer confidence is not that strong. I would wager that the average age of the cars in people’s garages and the refrigerators in their kitchens is two or three years higher than it was in 1999. When the marketplace falls flat, the government needs to step in. The problem here is that consumers are not consuming so the government must do so.

This solution is intensely disagreeable to fiscal Conservatives. They will decry a “tax-and-spend” mentality and oppose government handouts (unless they are to corporations). However, expanding the welfare system or hiring more regulators or paying unemployment compensation over an extended period is not what I have in mind.

Our roads and bridges are in deplorable shape. Public transportation is unreliable and unsafe. Many of our municipal buildings are rundown and ugly. Spending money on infrastruction is not wasted. When the government fixes a road or builds a levee, the country goes up in value.

When your roof is leaking, you do not ask whether you can afford to fix it. You take out a loan and put a new roof on the house. This protects and improves the value of your house. It is the same with a country. You don’t wait until a Minnsota freeway bridge falls down, you inspect all the essential bridges and fix them as necessary. If a new bridge over the Detroit River is needed, build it now, when the unemployment rate in Detroit is terrible. However, be absolutely certain that the projects are need. Tossing pork around is the last thing you want to do when deficit spending is necessary.

A bi-partisan committee could apportion new stimulus funds where they are most needed and where the investment value would be highest. The only problem is finding senators and representatives who would be willing to put the country’s interests ahead of their party’s.

John Payne, Attorney
Garrison LawHouse, PC
1800 Grindley Park Street, Suite 6
Dearborn, Michigan 48124
Come visit me at: http://www.law-business.com
313.563.4900/fax 313.583.3100

Pennsylvania Office:
9853 Old Perry Highway.
Wexford, Pennsylvania 15090
800.220.7200/fax 412.548.0022

Can the Kahn Plan

Medicaid is again being staked out, like the goat in “Jurassic Park,” for the Michigan legislature to prey on. However, unlike the T-rex that spurned easy meat, our legislators will chow down on anything that is not protected by special interests. This time it is estate recovery. Families of limited means and communities where they live have no mighty lobbyists, so they lack defenses against the slavering maws of senate budget raptors. Contact your representative and senator to let them know you oppose Senate Bills 404, 405, and 406.

Medicaid pays nearly half of Michigan’s nursing home costs of approximately $2.5 billion. The federal government covers approximately 60% of the $2.5 billion, so the cost to the state is around $1 billion. This is a tempting target for budget hawks, TEA Partiers, and other conservatives who want to cut back social programs. Estate recovery is a well-loved weapon to aim at the Medicaid long-term care program.

The federal Medicaid program requires states to pursue reimbursement from the estates of persons who die receiving Medicaid for long-term care. However, estate recovery only applies to the estates of single persons; and countable assets are limited to $2,000 in the absence of a spouse who is not in a nursing home. This generally limits the reach of estate recovery to the person’s exempt homestead, so what we are talking about is a program to grab the houses of deceased single Medicaid recipients from their families. A 2004 national survey by the ABA Commission on Law and Aging found that the average recovery per estate was only $8,116 and the median $5,081, so a program that concentrates on seizing the homes of nursing home patients when they die will not produce a huge windfall for Medicaid.

Tara Velting, writing for the right-wing Mackinac Center, asserted that the state could recover 5% of $1.7 billion in Medicaid long-term care costs, or $85 million. TaraLynn T. Velting, “Michigan Dithers on Medicaid Estate Recovery,” August 7, 2006, accessed June 12, 2011 at http://www.mackinac.org/7856. This assumes that Michigan will approach Oregon’s 5.8% effectiveness in estate recovery. There are several fallacies in Tara’s calculation.

First of all, Oregon is an anomaly. The estate recovery programs in the other 44 states and four commonwealths recover less than 2%, on average.

Secondly, she is not factoring in program costs. State Medicaid programs are very tightlipped about program costs and every state or commonwealth operates differently, so these costs are hard guage. Some estate recovery programs are entirely operated by state employees, while other programs rely on private collectors who receive a portion of what they bring in, but based on typical bureaucratic inefficiency and the likelihood that private collectors will get to keep at least 20% of what they recoup it is likely that one third of the gross amounts recovered will be consumed by program and collection costs.

Finally, the state would not get to keep all of the funds collected. A pro rata portion of the recouped Medicaid costs would go to the federal government.

A more realistic assessment of the Michigan’s annual net estate recovery receipts would be 1% of $1 billion, or $10 million, beginning in 2014. In the meanwhile, the state would spend upwards of $5 million to put the program in place. Despite this dismal prognosis, the Snyder Administration decided to pursue estate recovery.

Michigan Department of Community Health is in the process of implementing estate recovery, although the program will exempt homes “of modest value” and the policy provisions include several exemptions for “undue hardship.” Republican Senator Roger Kahn, of Saginaw is not satisfied with DCH’s plan. He has introduced a set of bills that would eliminate all exemptions and exceptions and expand estate recovery to go after the decedent’s dentures and spare nightie. The Kahn plan would certainly not exempt homes of modest value, or real estate owned jointly with other family members.

If the upside of estate recovery is $10 million a year against a $2.5 billion program, what is the downside? What is wrong with estate recovery, and if the DCH plan is misguided, why is the Kahn plan a catastrophe?

1) First and foremost, it will be a disaster in older neighborhoods. Most Medicaid estates will be limited to a modest home in an older neighborhood. If the state will be seizing the home on the Medicaid recipient’s death, families will decide not to maintain it. By the time the nursing-home resident dies, the home will already have deteriorated. Once the state gets the property it will probably be sold at auction to a purchaser who is, or aspires to be, a slum landlord.

2) It may deter some older persons from seeking needed long term care. The realization that the state will take their home after their death may deter some older persons from seeking necessary care, which could aggravate their health problems. It is an estate tax on modest estates while multimillion dollar estates are passed on tax-free under federal Estate Tax. Estate recovery will take 100% of a Medicaid recipient’s estate.

3) It will result in the loss of family homes and farms. Unless the heirs are able to reimburse the state for the recipient’s Medicaid costs, the home or farm would have to be sold. This is not too disturbing when the decedent had been living alone and the home or farm was only that person’s property, but that is not always the case.

Families of modest means frequently own property together and family members may have been living with, and caring for, the nursing home resident before long-term care became inevitable. A disabled son or daughter may have nowhere to go if the home is sold. A farm may have been inherited by several sons and daughters, who have all been working the farm and investing in it. There is no exception in the Kahn plan to accommodate such common situations.

4) Estate recovery complicates Medicaid and makes it more arbitrary. Good estate planning advice will allow people to maximize what they can protect, while those with the least to protect will have their estates cleaned out.

5) Estate recovery is used to scare seniors and their families into nefarious estate-planning and investment schemes. Trust mills and unscrupulous insurance agents use seminars to sell overpriced and unnecessary annuities, trust kits, and life insurance. Estate recovery gives them added ammunition to bag their unsuspecting prey.

Senator Kahn’s plan is grossly unfair to seniors and their families. Furthermore, it is unnecessary and premature. DCH already has a plan in place. The legislature should wait to see how effective it is. Please contact your legislator to oppose the Kahn plan, today.

John Payne, Attorney
Garrison LawHouse, PC
1800 Grindley Park Street, Suite 6
Dearborn, Michigan 48124
Come visit me at: http://www.law-business.com
313.563.4900/fax 313.583.3100

Pennsylvania Office:
9853 Old Perry Highway.
Wexford, Pennsylvania 15090
800.220.7200/fax 412.548.0022

Weiner’s Real Offense

Rep. Anthony Weiner has been dominating the news with purported offenses in the sexual realm. He is accused of sexting a half-dozen or so women over the last several years. So, what? Saying stupid things to–and acting “inappropriately” with–women is a male trait.

I once was on a date and the woman I was with described a prior experience. Her date had parked in a secluded spot and asked her to “relieve the tension” for him. On another occasion, I went over to a girlfriend’s house with a casual acquaintance. She had asked if I know someone to bring along to meet her housemate. As soon as he met the housemate the guy I had brought along started pawing at her. In short order my girlfriend and her housemate asked me to take the lunkhead and beat it.

I do not recall being that stupid, but I had a number of first-and-only dates in my single years. I am sure I made an ass of my self more than a few times.

Yes, Anthony Weiner acted the part of a horse’s ass, but no more than a lot of men I have known. At least 90% of the men calling for his resignation have acted with equal or greater witlessness on occasion. Their message is really, “Weiner should resign (but I do not need to because I never got caught).” Give him a break on the stupid lewdness. Apparently no laws were broken and he should not be forced to resign.

However, Weiner is committing a greater transgression against society. He mispronounces his name. His name is Weiner, to rhyme with diner, not Wiener, to rhyme with beaner. Wiener, the sausage, comes from Wien, the local name for the city we refer to as Vienna.

To remember the pronunciation, I think of “Wien, Wien, nur du allein,” which is pronounced “veen, veen nur du align,” and is a paean to the city. It means, “Vienna, Vienna, only you alone.” Wein, but the way, is the German word for wine, so Weiner’s name indicates a heritage in the trade of winemaking.
Whenever the newsies talk about “Anthony Weener,” I cringe. It bothers me when words are mutilated like “nukular” for nuclear, “reelator” for realtor, or “Febyuary” for February. I would be able to forgive Anthony Weiner for his sexual indiscretions if he didn’t mangle his name.

John Payne, Attorney
Garrison LawHouse, PC
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