Capital Watch January 2013

CA P I TA LWAT C H PA . c o m

CAPITALWATCH VOL. 6 NO. 1

INSIDE Sen. Corman sues NCAA seeking to keep PSU sanction money in state PAGE 3 Lottery privatization bid extended until Jan. 10 PAGE 4 Legislators hail delay on rules for small games of chance PAGE 6 Activist files complaint re Go. Corbett’s gifts, ethic activities PAGE 7 Rendell, company says he has no personal financial stake in Lottery deal PAGE 10 EDITORIALS: Year of the Snake may be a mixed bag for the Commonwealth PAGE 12 Got a tip? Got a lead?

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JANUARY 2013

Gov. Corbett says state will file lawsuit against NCAA Pennsylvania Gov. Tom Corbett has announced that the state will file a federal antitrust lawsuit against the NCAA for placing heavy sanctions against Penn State football over its handling of the Jerry Sandusky scandal.

Penn State itself is not party to the lawsuit and Corbett isn’t using the state’s attorney general’s office to file the claim. Instead, he’ll use his office’s outside counsel and an additional law firm.

Pennsylvania Attorney Generalelect Kathleen Kane says she’ll reserve comment on Gov. Corbett’s lawsuit until she reads the filing and receives a full briefing about it, adding that she was not briefed or consulted on the lawsuit.

Kane, a former Lackawanna County prosecutor and a Democrat, is scheduled to be sworn in as Pennsylvania’s chief legal officer on Jan. 15.

Corbett is seeking no monetary judgment, just an injunction against sanctions that call for, among other things, scholarship reductions and a four-year postseason ban. He cites the economic impact of a weakened Nittany Lion program’s effect on businesses in the State College area.

“The citizens and the businesses of Pennsylvania have been harmed,” Corbett said during the Jan. 2 media conference held in State College.

Penn State went 8-4 last season but attendance fell to a reported average of 96,730 fans at 107,000seat Beaver Stadium. It represented a drop of 4,697 from 2010 and the lowest since 2001. However, it was a continuation of a five-year trend of dropping attendance.

The NCAA responded with a statement expressing disappointment in Corbett for extending a scan-

Gov. Tom Corbett announces that the state will file a federal antitrust lawsuit against the NCAA for placing heavy sanctions against Penn State football over its handling of the Jerry Sandusky scandal.

dal that Penn State itself expressed interest in putting behind it.

“We are disappointed by the Governor’s action today. Not only does this forthcoming lawsuit appear to be without merit, it is an affront to all of the victims in this tragedy – lives that were destroyed by the criminal actions of Jerry Sandusky. While the innocence that was stolen can never be restored, Penn State has accepted the consequences for its role and the role of its employees and is moving forward. Today’s announcement by the Governor is a setback to the University’s efforts.”

At issue is whether the NCAA overstepped its authority and circumvented its long-held ruleenforcement guidelines to hit Penn State up for promoting what the NCAA called a “football-first” culture that allowed

Sandusky to operate.

Sandusky, the school’s former defensive coordinator, was convicted in June on 45 counts of child sexual assault of 10 victims, with many of the acts occurring on campus where he used his access to Joe Paterno’s legendary program as bait.

In punishing Penn State, the NCAA cited the failure of university officials in 2001 to turn over to proper authorities a claim by a then assistant coach that he witnessed Sandusky showering inappropriately with a young boy in a locker room. Sandusky went on to abuse additional victims until 2009. He is currently serving 30 to 60 years in a southwest Pennsylvania prison.

NCAA president Mark Emmert, in a move the NCAA itself touted as “unprecedented,” asked the organization’s board of

trustees to grant him sweeping power to rule on the case, sidestepping the often lengthy and exhaustive NCAA infractions process.

Emmert cited the school’s acceptance of a self-commissioned internal report by former FBI director Louis Freeh in July as the basis for that decision. He handed down significant penalties, including a four-year postseason ban, four years of scholarship reductions, the vacating of some of Paterno’s victories and a $60 million fine, among other items.

“We cannot look to NCAA history to determine how to handle circumstances so disturbing, shocking and disappointing,” Emmert said in July of claiming a new power.

Corbett says the school’s acceptance won’t play a part in the lawcontinued on page 4

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JANUARY 2013 CAPITAL WATCH

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Sen. Corman sues NCAA seeking to keep PSU sanction money in state

BY KEVIN ZWICK, CAPITOLWIRE

A high-ranking Senate Republican sued the NCAA in state court Jan. 4, in an effort to prevent the organization from spending portions of a $60 million fine against Penn State University outside of Pennsylvania.

Sen. Jake Corman, R-Centre, filed the lawsuit against the National Collegiate Athletic Association and one of its officials in Commonwealth Court, arguing the organization is using “unlawful means” and lacks the legal authority to spend commonwealth-appropriated funds for child abuse programs outside of Pennsylvania.

The lawsuit blasted the NCAA for not committing to spend more than a quarter of the fine on “a host of underfunded and unfunded child abuse prevention causes” in Pennsylvania.

The lawsuit comes after pleas from Corman and the state’s congressional delegation to spend the entire $60 million on Pennsylvania-based child abuse programs.

Corman, a Penn State alumnus who represents State College, also argued that NCAA having sole authority over spending the fine,

Sen. Jake Corman’s lawsuit argues the NCAA is using “unlawful means” and lacks the legal authority to spend commonwealth-appropriated funds for child abuse programs outside of Pennsylvania.

which will be “unavoidably commonwealthsourced,” will undermine his constitutional authority as Senate Appropriations Chairman.

“Without any legislative consultation, or, indeed, any legal authority whatsoever, the NCAA unilaterally mandated that an overwhelming portion of the $60 million fine would be spent on projects outside of Pennsylvania’s borders according to standards developed by the so-called Child Sexual Abuse Endowment Task Force,” the lawsuit says. “…The task force will act as super-legislature, answerable to no Pennsylvania authority, with the sole discretion as to how $60 million in Pennsylvania monies will be spent.”

A university spokesman had no comment to Corman’s lawsuit. The NCAA could not be immediately reached for comment.

The NCAA charged the fine and athletic penalties against Penn State this summer following what they called “an unprecedented failure of institutional integrity,” which allowed former assistant football coach Jerry Sandusky to prey on children.

He was convicted on 45 counts stemming from a child sexual abuse investigation and sentenced to 30-60 years in prison.

The NCAA has indicated it would keep a quarter of the fine in Pennsylvania, while distributing the rest through grants for national child abuse programs. The commonwealth has already paid the first of five installments of $12 million, which sits in escrow until an endowment fund is developed.

The filing comes days after Gov. Tom Corbett announced a federal lawsuit against the NCAA, in an effort to overturn the sanctions against the university.

Corman said last week he plans to introduce legislation to require state-funded higher education institutions that are fined more than $10 million dollars by a governing body to set up an endowment fund to appropriate the fine dollars in Pennsylvania. CW

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NEWS

JANUARY 2013 CAPITAL WATCH

Lottery privatization bid extended until Jan. 10

BY KEVIN ZWICK, CAPITOLWIRE

A deadline for the bid from a British firm to run daily operations of the Pennsylvania Lottery was extended Dec. 31, giving Gov. Tom Corbett and officials an extra 10 days to consider the proposal.

The bid to generate $34 billion over 20 years from Camelot Global Services, the operator of the British National Lottery, won’t expire until Jan. 10, according to the Revenue Department.

The extension also means administration officials could evaluate a counteroffer to Camelot’s bid from the American Federation of State, County and Municipal Employees union, which represents over half the Lottery’s 230-person workforce.

Their proposal is due by Jan. 8.

Officials say the extension also gives risk mitigation firm Kroll Advisory Solutions more time to complete a background report on Camelot. If the administration chooses to accept Camelot’s bid, a second extension could be granted, according to the Revenue Department.

Some lawmakers from both parties and the AFSCME have criticized the administration for rushing the confidential procurement process to manage the $3.5 billion Lottery without oversight from the public or Legislature.

The new bid deadline is four days prior to a scheduled Senate Finance Committee

hearing on the proposal – the first legislative hearing on the bid from Camelot. Lottery and Revenue Department officials testified at a hearing earlier this year on the state’s Lottery privatization efforts, which was days after the state issued a Request for Proposals.

Finance Chairman Sen. Mike Brubaker, R-Lancaster, said the committee will hold the hearing as planned on Jan. 14, due to the possibility of a second bid extension if the state follows through with the privatization deal.

“With a potential $34 billion commitment to a lottery expansion, we – as elected officials – have a duty to all Pennsylvanians to ensure such discussions and questions surrounding this issue are open, transparent and above reproach,” Brubaker said in a statement. “Our testifiers will provide on the record statements regarding the financial implications of such a decision, the ramifications to the nearly 200 lottery employees, as well as the legality of the overall bidding process.”

Through the private management agreement, the state is looking to expand the base of players through new marketing strategies, increased retailers and a variety of new games. The plan includes an expansion of keno in bars and restaurants throughout the state – a move criticized

by some lawmakers from both parties and most likely a topic of discussion at the legislative hearing in mid-January.

Some lawmakers are opposed to allowing keno and other terminal-based games, who see those games as an expansion of gambling that would inevitably lead to more gambling addiction.

Corbett officials disagree, saying the state will regulate any expansion of Lottery gaming, which would be carried out gradually, with the state controlling hours of operation, limiting the number of play slips to players, and partnering with the Council on Compulsive Gambling of Pennsylvania.

The Pennsylvania Lottery generated $1.06 billion in profit last year, its highest earning of its 41-year history, which was 8.7 percent higher than its previous profit record year of 2005-06.

Revenue Secretary Dan Meuser agrees with critics of the privatization deal who say the Lottery isn’t broke, but he said that won’t be the case 10 years from now, when the number of older adults who need services funded by the Lottery will surge.

This looming prospect is the main driver behind the move to privatize, Corbett officials say. Private management means new, innovative ways to generate more revenue

for Lottery-funded programs for senior citizens, proponents say.

The Pennsylvania Lottery funds threequarters of the Department of Aging budget and a number of programs, including property tax relief and rent rebates; free and reduced fare transit; long-term living services; low-cost prescription drug programs PACE and PACENET; and funding for more than 50 county Area Agencies on Aging. CW EDITOR’S NOTE: Not long after the deadline extension announcement, state Sen. Mike Brubaker, R-Lancaster, who chairs the Senate Finance Committee, said in an interview with the Patriot-News on Dec. 31, he has been told by the governor’s office that a second extension is anticipated.

“It would be my hope and desire that the second extension will go beyond the hearing date,” Brubaker said, referencing a Jan. 14 hearing about the privatization contract scheduled by his committee.

Gov. Corbett says state will file lawsuit against NCAA continued from page 1

suit, even though Corbett himself is a sitting member of Penn State’s board of trustees.

“I think Penn State had no choice given the ultimatums that the NCAA, improperly in my opinion, gave to the administration,” he said.

Corbett argues that the acts of Sandusky were criminal in nature and fall outside of the NCAA’s realm, which as a trade organization is empowered to assure fair play among members. That generally is limited to cases involving academic scandals or prohibited extra benefits provided to athletes.

“The NCAA should not have sanctioned Penn State,” Corbett said. “This was a criminal matter, not a violation of NCAA rules.”

Corbett himself has been criticized for not pursuing Sandusky more diligently when he was the state’s attorney general. Attorney General-elect Kane has promised to investigate how Corbett handled the case.

Corbett said this suit isn’t to absolve Penn State’s role in the Sandusky scandal.

It’s just not an athletics matter.

“Penn State does have a moral responsibility to the victims and the community,” he said. “And it has accepted that responsibility and working with the victims and the civil courts.” CW

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6 NEWS

JANUARY 2013 CAPITAL WATCH

State lawmakers take oath in New Year’s Day session

Recently elected Democratic senators are sworn in on New Year’s Day. Photo: Senate Democratic Caucus.

Newly elected members of the Pennsylvania Legislature took their oath of office in a rare New Year’s Day gathering as the 2013-14 session opened.

It was the first time in 22 years that the ceremony was held on the holiday. The state constitution specifies that it take place on the first Tuesday in January following the biennial legislative elections.

Judges administered the oath to 226 legislators, the 25 senators who were up for election last year and 201 representa-

tives. One House member, Rep. Frank Farry, was out sick, and Rep. Matt Smith was sworn into the Senate, leaving a vacancy in the House to be filled in a special election.

Newly elected legislators included 33 freshmen, 22 Democrats and 11 Republicans in a legislature where the GOP controls both houses.

Lawmakers elected Senate President Pro Tempore Joseph Scarnati to a fourth twoyear term and handed House Speaker Sam

Smith a second term. Both are Republicans from Jefferson County.

Legislators also certified election returns confirming four-year terms for the state row officers. Attorney General-elect Kathleen Kane, Auditor General-elect Eugene DePasquale and state Treasurer Rob McCord, who was re-elected, are scheduled to be sworn in on Jan. 15.

DePasquale, a Democratic representative from York who also was re-elected to his House seat in the Nov. 6 election, took

his legislative oath with the group but plans to resign before he is sworn in as auditor general.

If Democrats retain the seats being vacated by DePasquale and freshman Sen. Matt Smith, D-Allegheny, the balance of power in the House will remain unchanged at 111 Republicans and 92 Democrats.

In the Senate, the GOP majority lost three seats in the election, shrinking the balance of power to 27 Republicans and 23 Democrats. CW

Legislators hail delay on rules for small games of chance Led by Rep. Peter J. Daley II, D-Fayette/ Washington, a bipartisan group of southwestern Pennsylvania lawmakers are applauding the one-year reprieve for clubs and fraternal organizations to file burdensome reports on the small games of chance they operate. Organizations now have until Feb. 1, 2014 to file reports.

“The delay is a relief for the thousands of organizations that rely on small games of chance to raise money for community services and programs,” said Daley who was joined in the effort by Representatives Brandon Neuman, D-Washington; Rick Saccone, R-Allegheny/Washington; Jesse White, D-Allegheny/Beaver/Washington; Deberah L. Kula, D-Fayette/Westmoreland; Tim Mahoney, D-Fayette; and Pam Snyder, D-Fayette/Greene/Washington.

“I thank the Corbett administration for the freeze,” Daley said. “However, I am most grateful for the tens of thousands of people who spoke out against these tedious mandates.”

Daley said he received hundreds of letters and emails from organizations and over 10,000 signatures on his petition, urging repeal of parts of Act 2 of 2012.

“Thank you to all the social clubs, veterans organizations and volunteer fire departments who signed my petition and wrote letters about the burdensome problems with parts of Act 2. Your voice has been heard,” said Daley.

Rep. Neuman echoed Rep. Daley’s sentiments.

“Local fire departments, veterans’ organizations and other volunteer organizations across the state have voiced concern about the complex annual reports required by the new law,” Neuman said. “Their voices have been heard.”

“I think it is wise of the governor to step back and give relief for a year so the legislature can sort this out and make it right,” Saccone said.

“This is good news for small clubs, veterans’ organizations and VFDs all across Pennsylvania,” White said. “The moratorium gives us time to work with local groups to make realistic and beneficial changes to the law that help keep their doors open, not hurt them.”

“We shouldn’t be making it harder for these groups to do the good that they do,” Kula said. “The onerous rules need

Legislators gather at a news conference concerning problems with Act 2.

to be fixed, and this delay opens the door for remedies.”

“This delay gives everyone time to go back to the drawing board, to craft revisions that make sense and are livable for all concerned parties,” Mahoney said. “It provides some much-needed breathing room

to get this important legislation done right.”

“I heard from many of the organizations about the problems with the law,” Snyder said. “I look forward to working in a bipartisan manner to fix it so these wonderful groups can continue to help our communities.” CW

NEWS 7

JANUARY 2013 CAPITAL WATCH

Activist files complaint re Gov. Corbett’s gifts, ethic activities

Gene Stilp’s complaint centers on the contents of Gov. Tom Corbett’s late filing which describes his acceptance of travel gifts.

Activist Gene Stilp has filed complaints with the Pennsylvania Attorney General’s Office of Official Corruption, the U.S. Attorney’s Office, the Ethics Commission and the District Attorney’s Office concerning Governor Tom Corbett’s filing of information concerning his acceptance of gifts.

Stilp has asked the various agencies to investigate the actions of the Governor for violations of the Code of Conduct that governs the activities of employees, appointees and officials in the Executive Branch of the Commonwealth.

Section 7.153, codified at 4 Pennsylvania Code Section 7-159 prohibits the Governor’s acceptance of gifts from parties that have or are seeking to have business interests with the Commonwealth.

The complaints center on the contents of Governor Corbett’s late filing which describes his acceptance of travel gifts as described in an Associated Press article.

The Governor accepted a $1,400 vacation trip from a supporter that also does business with the Commonwealth.

While it is a standard practice to ask the Pennsylvania Attorney General’s Office to investigate the activities of Pennsylvania politicians that are involved in violations of the Pennsylvania Code, Stilp is also asking the federal and county authorities to investigate.

Stilp said, “In the Senator Jane Orie case, the county prosecutor brought the case to a successful verdict after then Attorney General Tom Corbett refused to prosecute the senator. The federal prosecutions of then senators Fumo and Mellow were also missed by then Attorney General Corbett. My hope is one of the agencies at the federal, state or county level will investigate and prosecute but you never know who will follow through on information.”

To read the full complaint go to: www. capitalwatchpa.com CW

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JANUARY 2013 CAPITAL WATCH

House, Senate committee chairs named House Speaker Sam Smith and Senate President pro tempore Joe Scarnati have announced the chairs for each committee in the state House and Senate for the 2013-14 Legislative Session.

House chairs include: AGING AND OLDER ADULT SERVICES: Republican: Rep. Tim Hennessey, 26th legislative district, Chester County.

Democrat: Rep. Steve Samuelson, 135th legislative district, Lehigh and Northampton counties.

FINANCE:

LIQUOR CONTROL:

SENATE CHAIRS INCLUDE:

Republican: Rep. Kerry Benninghoff, 171st legislative district, Centre and Mifflin counties.

Republican: Rep. John Taylor, 177th legislative district, Philadelphia County.

Aging & Youth – Senator Bob Mensch (R-24).

Democrat: Rep. Paul Costa, 34th legislative district, Allegheny County.

Agriculture & Rural Affairs – Senator Elder A. Vogel, Jr. (R-47).

LOCAL GOVERNMENT:

Appropriations – Senator Jake Corman (R-34).

Democrat: Rep. Phyllis Mundy, 120th legislative district, Luzerne County.

GAME AND FISHERIES: Republican: Rep. Martin Causer, 67th legislative district, Cameron, Potter and McKean counties.

Republican: Rep. Kate Harper, 61st legislative district, Montgomery County.

Democrat: Rep. Bob Freeman, 136th legislative district, Northampton County.

Democrat: Rep. Gary Haluska, 73rd legislative district, Cambria County.

PROFESSIONAL LICENSURE:

AGRICULTURE AND RURAL AFFAIRS: Republican: Rep. John Maher, 40th legislative district, Allegheny and Washington counties.

Democrat: Rep. Joseph Petrarca, 55th legislative district, Armstrong and Westmoreland counties.

CHILDREN AND YOUTH: Republican: Rep. Kathy Watson, 144th legislative district, Bucks County.

Democrat: Rep. Louise Bishop, 192nd legislative district, Philadelphia County.

COMMERCE: Republican: Rep. Chris Ross, 158th legislative district, Chester County.

Democrat: Rep. W. Curtis Thomas, 181st legislative district, Philadelphia County.

CONSUMER AFFAIRS: Republican: Rep. Robert Godshall, 53rd legislative district, Montgomery County.

GAMING OVERSIGHT: Republican: Rep. Tina Pickett, 110th legislative district, Bradford, Sullivan and Susquehanna counties.

Democrat: Rep. Rosita Youngblood, 198th legislative district, Philadelphia County.

HEALTH: Republican: Rep. Matt Baker, 68th legislative district, Bradford and Tioga counties.

Democrat: Rep. Flo Fabrizio, 2nd legislative district, Erie County.

HUMAN SERVICES: Republican: Rep. Gene DiGirolamo, 18th legislative district, Bucks County.

Republican: Rep. Julie Harhart, 183rd legislative district, Lehigh and Northampton counties.

Republican: Rep. Nick Micozzie, 163rd legislative district, Delaware County.

STATE GOVERNMENT:

Education – Senator Mike Folmer (R-48).

Republican: Rep. Daryl Metcalfe, 12th legislative district, Butler County.

Environmental Resources & Energy – Senator Gene Yaw (R-23).

Democrat: Rep. Mark Cohen, 202nd legislative district, Philadelphia County.

TOURISM AND RECREATIONAL DEVELOPMENT: Republican: Rep. Jerry Stern, 80th legislative district, Bedford and Blair counties.

Democrat: Rep. Thaddeus Kirkland, 159th legislative district, Delaware County.

Republican: Rep. Ron Marsico, 105th legislative district, Dauphin County.

Republican: Rep. Keith Gillespie, 47th legislative district, York County.

Republican: Rep. Paul Clymer, 145th legislative district, Bucks County.

Democrat: Rep. Thomas Caltagirone, 127th legislative district, Berks County.

Democrat: Rep. Ted Harhai, 58th legislative district, Fayette and Westmoreland counties.

LABOR AND INDUSTRY:

Democrat: Rep. Bill Keller, 184th legislative district, Philadelphia County.

Democrat: Rep. Greg Vitali, 166th legislative district, Delaware County.

Judiciary – Senator Stewart J. Greenleaf (R-12).

Law & Justice – Senator Charles T. McIlhinney, Jr. (R-10).

EDUCATION:

Republican: Rep. Ron Miller, 93rd legislative district, York County.

Intergovernmental Operations – Senator-elect Scott E. Hutchinson (R-21).

Republican: Rep. Dick Hess, 78th legislative district, Bedford, Fulton and Huntingdon counties.

URBAN AFFAIRS:

ENVIRONMENTAL RESOURCES AND ENERGY:

Game & Fisheries – Senator Richard Alloway (R-33)

Labor & Industry – Senator John R. Gordner (R-27).

JUDICIARY:

Republican: Rep. Mario Scavello, 176th legislative district, Monroe County.

Finance – Senator Mike Brubaker (R-36).

TRANSPORTATION:

Democrat: Rep. Michael P. McGeehan, 173rd legislative district, Philadelphia County.

Democrat: Rep. James Roebuck, 188th legislative district, Philadelphia County.

Community, Economic & Recreational Development – Senator Kim L. Ward (R-39).

Democrat: Rep. Harry Readshaw, 36th legislative district, Allegheny County.

Democrat: Rep. Tony DeLuca, 32nd legislative district, Allegheny County.

Democrat: Rep. Peter J. Daley, 49th legislative district, Fayette and Washington counties.

Communications & Technology – Senator Randy Vulakovich (R-40).

Consumer Protection & Professional Licensure – Senator Robert M. Tomlinson (R-6).

Democrat: Rep. Angel Cruz, 180th legislative district, Philadelphia County.

INSURANCE:

Banking & Insurance – Senator Don White (R-41).

VETERANS AFFAIRS AND EMERGENCY PREPAREDNESS: Republican: Rep. Stephen E. Barrar, 160th legislative district, Chester and Delaware counties.

Democrat: Rep. Chris Sainato, 9th legislative district, Beaver and Lawrence counties.

Local Government – Senator John H. Eichelberger, Jr. (R-30).

Public Health & Welfare – Senator Patricia H. Vance (R-31).

Rules & Executive Nominations – Senator Dominic Pileggi (R-9).

State Government – Senator Lloyd K. Smucker (R-13).

Transportation – Senator John C. Rafferty, Jr. (R-44).

Urban Affairs & Housing – Senator David G. Argall (R-29).

Veterans Affairs & Emergency Preparedness – Senator Lisa Baker (R-20).

NEWS 9

JANUARY 2013 CAPITAL WATCH

Gov. Corbett addresses ethics filing, commits to greater transparency with PennWATCH

BY KEVIN ZWICK, CAPITOLWIRE

At a recent press conference to announce a new website aimed at making state government more transparent, Gov. Tom Corbett took questions regarding a businessman with ties to the Marcellus Shale industry and campaign donor who financed a fiveday vacation for the governor to Rhode Island in July 2011.

The trip was omitted from a State Ethics Commission filing in March, but was added last month.

The filing shows central Pennsylvania businessman John Moran Jr. had paid $1,422 for air transportation and lodging for a July 2011 trip to Rhode Island for the governor and First Lady Susan Corbett.

Corbett said he is friends with Moran, who was appointed to the governor’s Privatization Council months after the trip and is a board member of the non-profit Team Pennsylvania Foundation, which financed recent trade missions to Europe and South America. Corbett said he stayed on Moran’s boat in Newport, Rhode Island, during the trip.

The administration said the information was omitted from a filing in March due to a clerical error.

The addition of the trip to the filing was first reported by StateImpact Pennsylvania.

The governor took questions on the topic after committing to greater transparency in state government through the PennWATCH website, www.pennwatch. pa.gov.

The site will include information on the state budget, spending, revenues and employees.

Corbett said since some information requested through the state’s Right-ToKnow law could be found on the website, it could be an alternative to filing requests for some information.

“Since taking office, my administration has received over 14,000 Right-ToKnow requests,” he said. “…Many of the Right-To-Know requests we receive for information from citizens should be, we believe, something they could find and simply log onto, rather than require a Right-To-Know request.”

Through the new website, the public could access spending to agencies and payments made by agencies, and review the state budget. The number of employees, their annual salaries in each agency, as well as legislative and executive staff, is also included. Full employee compensation information will be added in January, said Secretary of Administration Kelly Powell Logan.

The employee information could sometimes be incomplete, in instances of law enforcement and corrections officers, and employees seeking protection from abusers, Corbett said. Information on vendor employees or volunteers also won’t be available on the site.

“What we’ve done with the website is, if you have a specific question, you’re clicking into that agency and going right to the Right-To-Know officer. The Right-ToKnow officer may be able to immediately say ‘click here on the site, it is available right now,’” said Logan.

hired to do to gather the information being requested by the reporter,” she said.

“This new tool, in conjunction with the Right to Know Law, gives citizens greater access to their government’s records. That’s exactly what the General Assembly intended: greater accountability and transparency,” said

to develop the website. “I think one of the positive features is that it may serve as an umbrella search engine.”

The website also has links to state websites including, the Right-To-Know law, procurement, lobbyist registration, campaign finance and federal Recovery Act spending.

Through the new website, the public could access spending to agencies and payments made by agencies, and review the state budget. The number of employees, their annual salaries in each agency, as well as legislative and executive staff, is also included.

“Ideally, as we update the site, we’ll be capturing the information that the citizens really care about, and the next phases will help to reduce the number of Right-ToKnow requests, because, as the governor said, we have tens of thousands of RightTo-Know requests, and it takes a lot of state employee time, where they have to be diverted from their work that they were

Office of Open Records Executive Director Terry Mutchler in a press release.

“We promoted and supported the ability for people to access more data. I think it’s a good start. It’s a work in progress,” said Eric Epstein, founder of the Rock The Capital watchdog group. He praised Rep. Jim Christiana, R-Beaver, for pushing passage of the law passed in June 2011

Epstein said one critique would be the lack of historical perspective, since the data only goes back as far as July 1 of this year, leaving the public without a way to compare or develop trends among spending.

The data is uploaded to the site on a monthly basis, and will remain available for eight years after being posted, the administration said. CW

10 NEWS

JANUARY 2013 CAPITAL WATCH

Rendell, company say he has no personal financial stake in Lottery deal

BY KEVIN ZWICK, CAPITOLWIRE

Hearing Loss Can Lead to Dementia and an Increased Risk of Falling

Former Gov. Ed Rendell, a senior advisor at a financial firm advising the Corbett administration’s Lottery privatization effort, has been criticized for potentially benefitting financially from the deal.

But Rendell has no personal financial interest and makes no money from the privatization effort, according to Rendell and a source helping Camelot with the deal.

The conservative blog Breitbart.com claimed Rendell stood to gain financially

capped at $30 million. Greenhill, law firm DLA Piper and risk management consultant Kroll Advisory Solutions would be paid through $50 million in up-front money from Camelot, which the state would keep if it plans to follow through with the private management deal, the department says.

Greenhill, which is contracted as the financial advisor to the administration on privatization efforts, is guaranteed at least $3 million from the Lottery deal,

Seniors with hearing loss are significantly more likely to develop dementia over time than those who retain their hearing, according to a recent study by Johns Hopkins and the National Institute on Aging.

The findings convinced the researchers to say that this could lead to new ways to combat dementia, a condition that affects millions of people worldwide and carries heavy societal burdens.

The study leader, Frank Lin M.D., PhD, suggests that hearing loss can lead to dementia by making individuals more socially isolated. The constant strain of decoding sounds over time may overwhelm the brains of people with hearing loss, leaving them more vulnerable to dementia. He states that you are five times more likely to develop dementia if you suffer from untreated hearing loss.

Untreated hearing loss also contributes to an increased risk of falling by as much as three-fold. Dr. Lin adds, “Gait and balance are things most people take for granted, but they are actually very cognitively demanding. Hearing loss is a cognitive load in which the brain is overwhelmed with demands on its limited resources.”

Dr. Lin’s findings offer a starting point for interventions. Even something as simple as hearings aids could delay or prevent dementia by improving a patient’s hearing.

“A lot of people ignore hearing loss because it’s such a slow and insidious process as we age.” Dr. Lin says. “Even if people feel as if they are not affected, we’re showing that it may well be a more serious problem.”

Former Governor Ed Rendell denies rumors that he would personally benefit from the lottery privatization effort.

from the deal through his employment with Greenhill & Co., a New York-based investment firm consulting Corbett officials on the process.

The post claims Rendell is pushing for the privatization because he might “be loading his own pockets” off the deal.

Earlier this month, Rendell distanced himself from effort to privatize management of the Pennsylvania Lottery.

“I said keep me out of it because one, it might be some form of conflict; and two, I’m obviously not the favored person in the Corbett administration,” Rendell told the Patriot-News earlier this month.

Rendell was hired with the firm to focus on “public-private partnerships, infrastructure projects and advising governments on a wide range of financial matters,” according to a Greenhill press release announcing his hiring.

The Revenue Department says the total compensation for Greenhill and other consultants on the private management deal is

the Patriot-News reported. Auditor Generalelect Eugene DePasquale has speculated the number could be ten times as high as that.

Camelot’s bid guarantees $34 billion over 20 years, which the administration is currently reviewing. The union representing more than half the Lottery employees has until Jan. 8 to propose a counter-offer to Camelot’s bid.

Gov. Tom Corbett’s Council on Privatization and Innovation supported the move to privatize management of the Pennsylvania Lottery.

The Corbett administration says privatizing Lottery management could lead to greater profits to fund programs that go toward programs benefitting senior citizens. Although the Lottery reported $3.5 billion Lottery in profits, a record, last year, the administration says an increasing senior population will strain the Lottery’s ability to provide funds for essential services for seniors, including property tax relief, low-cost prescription drugs and transportation. CW

NEWS 11

JANUARY 2013 CAPITAL WATCH

Judge ‘leaning’ toward July for start of Voter ID merits trial

BY KEVIN ZWICK, CAPITOLWIRE

A state judge said the constitutional arguments over the state’s Voter ID law are likely to start in July, with a separate hearing possible this spring on whether to extend an injunction to May primary election.

Commonwealth Court Judge Robert Simpson says he’s “leaning” toward a midJuly hearing on constitutional arguments, but won’t announce the schedule officially for at least 10 days.

Simpson prevented the law from taking effect in the past November election, much to the chagrin of his fellow Republicans. He said a separate hearing would likely be needed to decide whether the injunction would extend to the upcoming May primary.

Whichever way Simpson rules, both parties say the case will be appealed to the state Supreme Court.

The Voter ID law, one of the nation’s strictest, generated controversy in the runup to the 2012 general election, as many claimed it would impose a hardship on poor and minority voters. Each time someone votes, they would be required to show eligible photo identification under the law.

The plaintiffs, who include about a dozen voters and civil rights groups, successfully challenged the law to obtain a temporary injunction, but the court’s ruling didn’t address the constitutional merits of the law.

“Given the explanations from the challengers on how much discovery they intend to do, it does present a problem for us finishing that before May. So I think the court is probably right to suggest that we deal with the issue of the May election separately,” said senior deputy attorney general Patrick Cawley, who is representing the commonwealth.

Cawley wouldn’t say whether the state could agree on an extended injunction or would fight to prevent one.

“We’re going to have to take a look at it, because it may be unavoidable, given the logistics of what this litigation looks like, that we have to do something to alleviate the voter ID requirements for May,” he said. “I don’t know if that’s going to be the case, but it’s something we have to seriously consider.”

Whether the state attorneys have the authority to agree to extend the injunction without a hearing is also questionable, Cawley said.

“We are generally required to defend any statute that is challenged in court to the end, until we get a final resolution, and it’s not something like a fact-driven case where

we might be able to settle,” he said. “It presents an interesting situation about how we deal about concessions and how the law is being implemented.”

Michael Rubin, a lawyer representing the plaintiffs, argued for the July hearing date, saying further discovery is needed to address changes in the state’s database since the last hearing and the lack of millions in federal aid to inform the public about the requirements to vote.

The state used $5 million in federal funding through the Help American Vote Act toward a public education campaign for the new law. Through the multimillion dollar “Show It” outreach campaign, the state sent more than six million mailings to homes of Pennsylvania voters to inform them of the law, and the commonwealth also contracted with media relations and advertising firms to produce Internet, radio, television and billboard advertisements.

The state tweaked the ad campaign after the court temporarily suspended the law for the Nov. 6 election, but the challengers of the law said it confused voters.

They asked the court to order the state to cease its ad campaign, but the court rejected the request.

The challengers also plan to provide evidence that some voters were wrongfully turned away from the polls in November 2012.

Cawley argued there is little additional discovery needed, based on prior testimony from the previous hearings. He said through prior testimony, the court heard about the public education effort and how to obtain the Department of State voting ID. Simpson told attorneys he was interested in quantifying how many voters can vote in their residence, but have trouble traveling to PennDOT drivers license centers to obtain photo ID. “I want to hear more about the commonwealth’s thinking on that,” Simpson said.

Another looming scenario, which was not discussed in court, is how the state will proceed under the command of incoming Attorney General Kathleen Kane, a Democrat who was critical of the Corbett administration for “playing politics” regarding a probe by the federal Department of Justice.

“I would have no indication until the new attorney general arrives, but we have a statutory duty to defend statutes, regardless of who is in the office of attorney general,” Cawley said. CW

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12 OPINION

JANUARY 2013 CAPITAL WATCH

Editorial

Year of the Snake may be a mixed bag for the Commonwealth The New Year is a time for taking stock and making predictions. Pennsylvania politicians might well want to look at their state’s horoscope for the new, Chinese year beginning in February 2013 – the Year of the Snake – as they set the agenda for the coming 12 months.

If a state government could indeed have a horoscope, it might read like this one found on the web: “The Snake … has the ability to read complicated situations quickly in a controlled manner which is good for business. But 2013 Snake needs to watch for fanatical commitments since Snake’s inclination is to spend money quickly than earn …”

Keep that in mind as we run through Capital Watch’s own set of predictions for issues and challenges looming in the coming year.

First, there’s Governor Tom Corbett’s own agenda, sketched out in a Pennsylvania Press Club talk as 2012 drew to a close. The next year, he said, would see action on: • Transportation funding • Privatization of the state liquor store system • State pension stabilization Surely, all three questions will be addressed; although it’s not at all clear whether the outcome will be positive in the eyes of all concerned.

Most agree that the transportation funding “gap” is about $3.5 billion if you consider all of the deferred maintenance needs that should be addressed involving substandard and aging bridges and highways as well as state funding for mass transit. Legislators have been getting a proverbial “free ride” for the past two years by telling transportation advocates that they were simply waiting for a clear sign from Governor Corbett that he was supporting increasing funds (read that as a polite way of saying “raising taxes and/or user fees”). If recent history repeats itself, the General Assembly is likely to approve a package that falls short of fully addressing the issue, ensuring that it will be the blame from conservatives for voting for anything that sounds like a tax while failing to get kudos for moving Pennsylvania into the 21st Century in transportation terms.

Then there’s liquor privatization. Little has changed since the Governor first proposed selling off the state stores – except that legislators can look at privatization efforts in Virginia and Washington State where rave reviews for privatization actions there have not been forthcoming. In fact, consumers in some parts of Washington have been complaining that privatization has brought increased prices.

Some attempt will be made to link possible new income from liquor privatization to shoring up the state’s public employee pension funds. Right now that idea is seen as a typical management negotiating ploy to drive a wedge in public employee opposition to state store divestiture – something sure to cost union jobs. The presumption from management is that labor leaders will think selfishly about what is best for their own members – a more soundly funded pension system – rather than the interests of workers in sister unions. So far, there’s been no sign that this is likely to happen.

Besides, the unions have bigger fish to fry – fighting off efforts to create a two-tiered pension system with all new state employees and teachers being enrolled in a 401(k) kind of pension scheme while current employees continue with their defined benefit program. On the face of it, this approach is doomed because it’s not actuarially sound.

Of course, that didn’t stop a previous General Assembly from approving a pension scheme early in this century that increased their pensions by 50 percent at a time when the Commonwealth was making only small contributions to the state pension fund – all on the premise that the staterun pension systems were rolling in dough.

So, in a nutshell, this Year of the Snake promises to be a real donnybrook with no real light at the end of the tunnel.

Into this mix you can add a couple of additional issues: Questions about the Shell ethane cracker project.

We’ll probably find out for sure this year whether Shell Oil will actually build its ethane cracker in Beaver County and take advantage of generous state tax credits. If it doesn’t, people will ask why. If it does, people will ask “Where are the spinoff jobs?”

Revisiting the state’s Voter ID law. The law was a “rush job.” Even if it is partially upheld by the state Supreme Court, it will likely need repairs or retooling.

Proposals to revise the state’s Electoral College approach. Basically, there are three competing concepts: (1) Award PA electoral votes on the basis of who wins each of our state’s gerrymandered Congressional Districts; (2) apportions the electors on the basis of the percentage of the Pennsylvania total vote earned by each candidate and (3) award all of PA’s electoral votes to the

candidate who wins the popular vote nationwide – but only if enough states adopt this “National Popular Vote” approach to ensure that the candidate with the most popular votes nationally wins. (Option 2 could be predicated on that same language.)

Pressure to revise the state’s prevailing wage law.

Some conservatives may be willing to vote for increased taxes or revenues for highways if they can “take something home,” like a weakening of the state’s law requiring fair wages to be paid for state highway contracts.

Efforts to pass Michigan-style Right to Work legislation in Pennsylvania. See “prevailing wage” above.

Gun legislation. It’s hard to say what will be proposed and what might be adopted but pressure will be great to “do something” in the wake of the Connecticut school shootings.

Wow. And those predictions only take us up to June and we haven’t really mentioned the state’s General Fund budget – also a “must.” CW

OPINION 13

JANUARY 2013 CAPITAL WATCH

Averting the “Lottery Cliff” for seniors and taxpayers

BY ELIZABETH STELLE

From the greatest generation to the latest generation, Pennsylvania’s seniors have worked a lifetime to build this great commonwealth through hard work and sacrifice, but are now being told the only way to depend on well-earned and needed care is if the right numbers come up in the Pennsylvania Lottery. Sadly, that’s a gamble our grandparents and children can’t afford to make.

Ultimately, our booming senior population could result in a “Lottery Cliff” – dramatic cuts to programs that benefit senior citizens and/or significant tax increases on working Pennsylvanians. Our Pennsylvania seniors depend on Lottery revenues to fund critical programs, including prescription drug programs, property tax rebates and senior centers. Unfortunately for them, a recent Legislative Budget and Finance Committee report found that future demand for these programs will outpace Lottery revenues. Bringing in private experts to run the state Lottery offers an alternative solution to higher taxes or cutting seniors’ programs.

To Governor Corbett’s credit, the commonwealth recently completed a competitive bidding process for a private company – Camelot Global Services – to operate the state Lottery with future financial guarantees of a minimum of $34 billion in Lottery

profits over the next 20 years. Compared to the Lottery’s historic performance, this bid would generate an additional $2.3 billion for senior services over the first decade.

Through a private management agreement (PMA) between the Department of Revenue and Camelot, the commonwealth would continue to own and oversee the Lottery, but would contract out day-today operations to an experienced private company with a record of increasing revenues. Camelot currently runs the lottery for the United Kingdom, and California and Massachusetts have engaged Camelot to consult on their lotteries.

Furthermore, this deal will be good for job seekers and taxpayers. Camelot will incorporate in Pennsylvania and pay the same state taxes as other businesses.

The contract requires that 80 percent of Lottery workers and hours worked be located in Pennsylvania. And Camelot has already indicated plans to expand the current Lottery workforce.

Under the proposed contract, the commonwealth would retain 70 of the 230 current Lottery employees. The contract guarantees the remaining 160 state Lottery workers one year of employment. During the transition time, Camelot will offer new positions to state employees and the commonwealth will find replacement positions

for anyone who does not receive an offer.

This means more private sector job opportunities for Pennsylvania workers, reduced strain on our public pension system and more tax revenue for the commonwealth.

In contrast to coordinated claims the process has been rushed, the Department of Revenue issued the invitation for bids nine months ago. Over that time, there was a legislative hearing, a series of news releases, an investigation into the qualifications of each of the prospective bidders, and posting of the full contract on the Department of Revenue’s Web site.

While Camelot was the only company to put money on the table ($200 million up front), the bidding process was competitive, with two other interested bidders. This represents more bidders than any state Lottery management procurement to date, pulling from the handful of companies worldwide qualified to operate Pennsylvania’s multi-billion dollar enterprise. In addition to Camelot’s proposal demonstrating the benefits of a competitive bidding process, the union representing Lottery employees (AFSCME) has the opportunity to put forward an even better deal.

Yet after a lengthy, open bidding process resulting in an agreement that guarantees more money for senior programs, critics

– in particular, AFSCME union leaders – are attacking Gov. Corbett. What are they really concerned about?

The number government union bosses really care about is not $34 billion, it’s $100,000. That is how much union dues money AFSCME could lose if 160 Lottery employees transition to jobs with a private company.

Those dues, which the state government deducts from workers’ paychecks and sends directly to the union, cover about half of AFSCME Executive Director David Fillman’s $204,000 compensation package. Those dues also support AFSCME’s lobbying and political activity – nearly $1 million in 2011-12, not including Political Action Committee spending.

Certainly, the Corbett administration should be applauded for putting the needs of seniors and taxpayers ahead of the demands of special interests who get rich off big government. The guaranteed $34 billion in Lottery profits is no gamble, and will ensure we don’t push seniors and working Pennsylvanians over the impending “Lottery Cliff.” CW Elizabeth Stelle is a policy analyst with the Commonwealth Foundation (www.CommonwealthFoundation.org), Pennsylvania’s free-market think tank.

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14 OPINION

JANUARY 2013 CAPITAL WATCH

2013 will be the second act for 2012 stories of the year

BY PETER L. DECOURSEY

If you look at the 2012 stories of the year, many of them are sort of holding patterns, prequels that will be defined by the events of the coming year.

For example, one of the least-recognized stories of this year was the way the Pennsylvania Legislature blatantly gerrymandered the congressional map so a delegation that was 12-7 Democrat in November 2010 is now 13-5 Republican.

A neutral map would have made the 12-7 GOP map that started 2012 into probably 11-8 for the GOP or better for the Democrats. If Democrats had been in control and 6-7 seats shot out of Philadelphia (their version of all the GOP eastern seats cruising out towards Lebanon or Lancaster) it could easily be 12-6 Democrats.

So every time the remaining U.S. House GOP majority is said to be full of Tea Partiers or loyal to not raising taxes because of its majority, remember that between 2 and 5 seats of its majority are there because of gerrymandering, because the Republican legislative leaders rode a partisan herd as far as they could.

The congressional redistricting by the Pennsylvania GOP is one of the most unrecognized major stories of the year. And it will continue to play out, every time U.S. Rep. Keith Rothfus, R-Allegheny, makes

a vote or a statement. Every time you read some Tea Party faction in the House did this or that, remember to read: one Tea Party guy did that, with the help of two fairly conventional GOP members, like the ones from Pennsylvania.

Another big story that will play out in 2013 in a big way is what Attorney General-elect Kathleen Kane will do about what most Democrats and many independents believe is her commitment to at least embarrass and likely do worse to Gov. Tom Corbett on his Jerry Sandusky prosecution.

I don’t ever remember a prosecutor essentially pre-announcing the result of a probe before: it is hard to talk to a potential Democratic candidate for governor without having them sound like the Kane report release day will their Christmas Day in 2013.

The problem being that right now, Kane has the public’s benefit of the doubt as to her fairness and ability, as she should have after a remarkable campaign. But since about half of the folks mad at Corbett over the Sandusky investigation are furious he did too much, and the rest incensed he did too little, how will Kane’s report ultimately help her?

She basically has to argue he and his successors prosecuted Sandusky and his Penn State colleagues too slowly, and make that slowness, even though key evidence

surfaced late in 2010, into an indictment most people will believe.

Don’t be surprised if the scorecard on the Sandusky Affair gets a little less lopsided between Kane and Corbett this year, especially since she is up about 50-0 in the public mind at the moment. Unless she finds smoking guns and more than delays, she is going to look awfully partisan awfully fast.

Another big story this year that got too little attention was Corbett’s big budget and policy wins in June. He is going to run for re-election largely on those victories in policy: teacher accountability, school choice scholarships through EITC 2.0, corrections reform, eliminating welfare cash assistance, creating the county welfare block grants, more workers comp reform, more tax breaks for businesses, the Shell cracker tax break and another year where spending was less than it was when Corbett took over state government.

But all of those accomplishments will get assaulted in 2014 re-election ads by his Democratic opponent if Corbett cannot deliver a state transportation funding bill in the next six months, after essentially two years of delay on that issue.

And if Corbett really pushes hard to reduce the future pension benefits of existing employees, and makes lawmakers not

only vote to reduce their own pensions, but amend his bill to include themselves, but not the courts in it, the potential blowback factor is huge.

This is not a guy the establishment of either party or the permanent bureaucracy likes right now. As he continues to assault their temples of perks and pensions and pushes for more spending reductions, an Empire Strikes Back scenario increases in likelihood. Of course, the permanent establishment of this town sees themselves as Luke and Han in “A New Hope.”

And after a huge year when the Supreme Court smacked the governor and GOP legislative leaders around like rag dolls - keeping the 2001 state Legislature maps in place for the 2012 elections, putting Voter ID on hold for perhaps the 2012 and 2013 elections - given the summer 2013 plan for the next legal proceedings - and pondering the shale zoning case, the big question is: what will the political community do in response?

State Supreme Court Chief Justice Ron Castille and Justice Max Baer, the key architects of the redistricting and Voter ID decisions, both run for retention this year.

Retention elections are up-or-down votes.

Baer at least has the comfort of knowing his party’s establishment wanted the results he reached, so they ought to be motivated to raise funds for him, and this time around their retention elections could each cost as much as $2 million to $5 million. But Tea Party officials have already marked them both for losses in retention, and in this case, regular GOP activists may not be far behind them.

In Baer’s case, if he votes to uphold the lower courts that rejected zoning language in the Marcellus Shale law for which drilling companies fought, he may get targeted by those companies’ deep pockets even if Castille does not.

But Castille has angered legislative leaders by nuking their map and, in their view, given two Senate seats to the Democrats, those won by Sens.-elect Matt Smith, D-Allegheny, and Rob Teplitz, D-Dauphin.

He infuriated rank-and-file Republican activists with his Voter ID vote.

So after an unprecedented year of judicial reversal of major legislative action, Castille and Baer are in the forefront: they will either show that justices really can smack lawmakers around when they want or that there are limits to what justices can do when the stakes are high enough.

And remember, both the GOP political establishment and the deep-pocketed, notvery-shy shale industry both could end up with their oxen gored by the time Castille and Baer run for re-election.

So yes, all of these were big stories this past year. And they will become bigger stories this year.

If you only see the first act of most plays, you would not see the ending coming, and you would miss most of the fun of the drama.

So stay tuned for 2012, Act II, running from Jan. 1 to June 30, 2013. CW Peter L. DeCoursey serves as Bureau Chief of Capitolwire.

OPINION 15

JANUARY 2013 CAPITAL WATCH

The nation must pay its bills, but not by running up its credit card

BY CHRIS COMISAC

The nation must pay its bills.

That’s the argument President Barack Obama appears to be using to hammer away that he won’t enter into another round of negotiations regarding the federal debt limit.

Speaking at a press conference this week about Congress passing a bill to avoid the “fiscal cliff,” Obama said: “Now, one last point I want to make - while I will negotiate over many things, I will not have another debate with this Congress over whether or not they should pay the bills that they’ve already racked up through the laws that they passed. Let me repeat: We can’t not pay bills that we’ve already incurred. If Congress refuses to give the United States government the ability to pay these bills on time, the consequences for the entire global economy would be catastrophic - far worse than the impact of a fiscal cliff.”

But the President is proposing to pay those bills by charging them to the nation’s credit card, not by using money we bring in through taxes or by cutting the nation’s spending. The interest on the nation’s more than $16 trillion debt, alone, is about $266 billion annually – far more than the revenue and savings to be generated annually by the fiscal cliff-resolving bill praised by Obama.

The bill which he said he would sign into law raises approximately $620 billion in tax revenue during the next 10 years while cutting current spending by a paltry $15 billion.

Obama says there’s more deficit reduction work to be done – the law he will sign only postpones $109 billion in automatic spending cuts for two months - but only if he gets more tax increases, which he calls “reforms”: “… we can’t simply cut our way to prosperity. Cutting spending has to go hand-in-hand with further reforms to our tax code so that the wealthiest corporations and individuals can’t take advantage of loopholes and deductions that aren’t available to most Americans.”

So he’s managed to increase federal revenue while avoiding, at least temporarily, having to make any significant spending cuts, and he declares he won’t negotiate about how much money the nation can borrow, even though federal revenue doesn’t come close to matching federal expenditures: the Federal budget deficit in 2011 was $1.089 trillion.

Wouldn’t it be nice if we could all operate that way? Could you imagine this discussion with your bank: “Yes, Mr. Banker, I know my family household income is only $50,000, but I’m going to get a $1,500 raise for the coming year, so why can’t I afford to spend $25,000 more than I have?

“Can’t I just get a loan to cover that additional spending; and even if I don’t pay that loan off by the end of next year, would it be possible to get a similar loan – probably for more money, though – next year, since I’m pretty sure I’m going to keep spending more than I have in my bank account, although I

might get another raise sometime during the year, if things go well?”

You’d get laughed out of the building.

And while credit card companies are more lenient in their lending policies, they still like to get paid back, eventually.

Common sense would seem to indicate a spending problem in the aforementioned contrivance. Sure, you could try to get a better job that pays more money, but what are the odds of increasing your household salary by 50 percent by next year.

Considering that, what do you think the odds are that the federal government will increase revenues – even if there are more tax hikes upon which lawmakers can agree and voters will support - by more than a trillion dollars in just one year, or over several, when it was such a Herculean task to get $62 billion?

With all due respect to the President, even if a few more tax hikes are in order – and I’m sure there are a few loopholes that could be closed - the nation still has a spending problem to address. The only way to get back to some fiscal sanity – which will yield prosperity – will require some pretty significant cutting and an avoidance of new spending, no matter how noble it might sound or be.

Obama gives lip service to cutting spending by saying he believes “that there’s further unnecessary spending in government that we can eliminate,” but doesn’t specify anything, pulls certain items (like entitlements) off the table and then touts a legislative package that raises $41 in taxes for every $1 dollar it cuts in spending.

Anyone who has had to put together a household budget understands this point: there are a few necessary items, and there are items that can be trimmed or cut completely.

The President still seems to believe that if the nation just spends enough, everything will be better.

If that were the case, spending $16 trillion more than we have should have created a veritable utopia in this country by now. The debt alone equates to about $51,000 for every man, woman and child in this country.

The trillion dollars that we spent last year in excess of what we had works out to more than $3,200 for every man, woman and child.

I’m sure a family of four could be made much happier by an extra $12,000 a year regardless of their current financial situation.

Plus, our national debt is just about equal to the combined gross domestic products of

China, Japan and Germany, which have the 2nd, 3rd and 4th largest GDPs in the world behind the U.S. Our debt even eclipses our own GDP by more than $1 trillion.

And yet there are more people (nearly one-third of the nation’s population, not including those who receive only Social Security or Medicare) now receiving public assistance than when Obama took office in 2009 and only about 20,000 more people holding nonfarm employment in this country since then, and about 4 million less than there were in January 2008.

Heck, even with all the criticism he gets for his budget cutting, Gov. Tom Corbett – who did cut spending when compared to the last Pennsylvania budget signed by his predecessor - has seen as much, if not more, positive job creation and economic results as Obama.

Yes, Mr. President, the nation must pay its bills … it just needs to figure out some way to avoid incurring so many of them and cutting those it doesn’t need to incur.

Like it or not, we can’t just tax, borrow and spend our way to prosperity – we’d be there by now if we could. CW Chris Comisac serves as Deputy Bureau Chief of Capitolwire.

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