Wednesday, April 11, 2012

Arkansas judge fines J&J $1.1 billion in Risperdal case

Arkansas judge fines J&J $1.1 billion in Risperdal case

Associated Press
LITTLE ROCK, Ark. — An Arkansas judge on Wednesday fined Johnson & Johnson and a subsidiary more than $1.1 billion after a jury found that the companies downplayed and hid risks associated with taking the antipsychotic drug Risperdal.
Circuit Judge Tim Fox determined that Johnson & Johnson and its subsidiary, Janssen Pharmaceuticals Inc., committed nearly 240,000 violations of the state's Medicaid fraud law — or one for each Risperdal prescription issued to state Medicaid patients over a 3 1 / 2-year period. Each violation carried a $5,000 fine, the state's mandatory minimum amount, bringing the total to more than $1.1 billion.
Fox issued an additional $11 million fine for more than 4,500 violations under the state's deceptive practices act, but he rejected the state's request to levy fines in excess of the $5,000 minimum for the Medicaid violations.
Attorney General Dustin McDaniel said in an emailed statement that the ruling "sends a clear signal that big drug companies like Johnson & Johnson and Janssen Pharmaceuticals cannot lie to the (U.S. Food and Drug Administration), patients and doctors in order to defraud Arkansas taxpayers of our Medicaid dollars."
Janssen issued a statement in which it said, "We are disappointed with the judge's decision on penalties. If our motion for a new trial is denied, we will appeal."
The Arkansas Supreme Court would hear the appeal.
Janssen attorney Ed Posner argued during Wednesday's penalty hearing that there was no evidence that harm had been done to people who were prescribed Risperdal or to the state's Medicaid program, and that the state's mandatory penalties were therefore inappropriate. At the beginning of the hearing, the companies unsuccessfully lobbied the judge to declare the penalty portions of the Medicaid fraud and deceptive practices laws ruled unconstitutional.
Arkansas was one of several states to sue over Risperdal. A South Caroline judge upheld a $327 million civil penalty against the J&J and Janssen in December. Meanwhile, Texas reached a $158 million settlement with the companies in January in which the company didn't admit fault.
Hours after the ruling, shares of New Brunswick, New Jersey-based Johnson & Johnson were down 24 cents, to $64.00.
Jurors in Arkansas were not told about the financial stakes during 10 days of testimony, beyond that Janssen could have seen a $200 million swing in its revenues if it issued alarming warnings that the drug could cause weight gain, diabetes and other health effects. If upheld, the award would go toward the state's Medicaid fund, which is facing a projected $400 million deficit next year.
Risperdal, introduced in 1994, is a "second-generation" antipsychotic drug that earned Johnson & Johnson billions of dollars in sales before generic versions became available several years ago. It is used to treat schizophreniabipolar disorder and irritability in autism patients. Risperdal and similar antipsychotic drugs have been linked to increased risk of strokes and death in elderly dementiapatients, seizures, weight gain and diabetes.
The 12-person jury deliberated for three hours Tuesday before deciding in favor of the state.
Janssen continued to maintain after the verdict that it did not break the law, pointing out that the package insert included with the medication was approved by the U.S. Food and Drug Administration.
At the start of Wednesday's hour-long hearing, Fox said the Arkansas Supreme Court had ruled in a 1969 case that fines could not be found excessive, and thus unconstitutional, based simply on a large number of violations.
The ruling represents a political victory for McDaniel, who is expected to run for governor in 2014.
The state is facing a shortfall of an estimated $400 million in its Medicaid program next year.
Matt DeCample, a spokesman for Gov. Mike Beebe, said it's too early to say how the money will be distributed if the fines are upheld.
"While it's a very impressive award, we recognize that the appeals process can be a lengthy one, so it is too early to speculate about the use of that money," DeCample said in an email.

“Free” Wifi in Hotels | It Ain’t So Free

“Free” Wifi in Hotels | It Ain’t So Free

1

Free Wifi in Hotels | It Aint So Free
Over the last 2 weeks, while visiting Europe, the only major complaint that I really had was in regards to connectivity. As an international traveler, I’d rather die than turn on roaming on my iPhone. But this isn’t the issue. I can understand why roaming costs are so high. My issue is with something which I would have thought by now, would be a non-issue. WiFi in hotels.

WIFI IN HOTELS | IT AIN’T SO “FREE”

Hotels are known for sucking every last penny out of their guests, whether it’s through $8 colas in the mini fridges, ridiculously priced breakfasts, or hidden Internet costs. What bothers me more, isn’t so much the cost, which I’ll touch on shortly, but the deceiving nature in which they advertise that they offer “High Speed Internet” at their hotels. I understand that hotels are companies, and that companies need to make money, but I believe there are better ways of going about it.
I stayed at three hotels over the last 2 weeks. Two in London, and one in Paris. All three hotels stated in their “Complimentary Services” section, they they offer “High Speed Internet” at their hotels. And it’s only after you go on a treasure hunt do you discover that it’s “complimentary” only to those who have “Gold” membership status with the hotel in question. If you’re part of the “99%” who don’t have your wallets stuck up these hotel’s behinds, you better get ready to either suffer without Internet, or fork over your left arm, and a second mortgage. While I agree that it’s sometimes nice to disconnect from the world for a few days, if you’re like me, who runs a one-man business, it’s not very practical.
All three hotels I stayed at offered daily or multi-day passes. The daily passes would have cost me about $20/day, while the 5 day pass ran about $80 after the currency conversion. Of course, there’s always a kicker. Another important fact that these hotels don’t tell you, is that the connection passes only allow you to use Internet on one or two devices. If you’re visiting the hotel with 3 people in a room, you are required to purchase an additional pass in order for all three guests to go online.

“IT COSTS TOO MUCH”

Of course, hotels claim that offering Internet in their hotels is a pricy endeavor. I have news for you. It’s really not. After researching hotels that do offer free wifi in their hotels, the service itself costs around $300/month, plus the installation of the routers (which should already be installed in most hotels).Assuming a hotels only has 300 rooms, which we all know isn’t the case, it would cost $1 per room, per night, for the additional service. Hotels that contain thousands of occupied rooms should have no excuse to not offer free wifi.

“WE GOTTA MAKE MONEY”

Sure, hotels need to make money. They advertise ‘dirt cheap’ rooms to their guests, hoping to stab them in the back with extra fees, like $5/minute local calls, but they’re doing it all wrong. If you’ve logged into a public hotspot recently, you’ve likely had to accept some terms, enter some basic information, or fork over your first child. Finding out that that connecting to the network will charge your card will steer away a large number of potential customers. If I had to guess, up to 80% of hotel guests would rather walk to a Starbucks than pay $20/day for wifi in their hotel. (I spent hours in a Paris McDonalds to avoid the hotel’s costs)
So what’s the solution? To me, it’s simple. With the booming mobile advertising market, it surely wouldn’t be very difficult to strike a deal with Visa, Amex, or even a local company to run a 2 minute video ad before connecting to the network. Watch the ad, you get your wifi, the hotel gets paid. If you factor in the 80% of people who would now be connecting to the network, I bet hotels would make as much, if not more by offering free wifi. And I’m sure hotels would be able to easily strike a strong deal with advertisers looking to get their message out, especially in high tourist areas.

I COULD BE WRONG

I’m not a marketing guru, nor a financial adviser, so there’s a good chance that this idea makes no sense at all, but for a service that is offered at McDonalds and Starbucks at no additional cost, hotels can certainly follow suit. If they really want to make a extra buck, hire a good negotiator, and pop on a video ad before connecting to the network. I’d much rather sit through a 2 minute ad than pay $80 to stay connected, and I’m sure others would agree.

Romney Campaign Enlists GOP Women Who Opposed Equal Pay Bills To Attack Obama

Romney Campaign Enlists GOP Women Who Opposed Equal Pay Bills To Attack Obama


As part of its bizarre strategy of blaming President Obama for the GOP’s “war on women,” the Romney campaign released statements today from two Republican Congresswomen, Reps. Mary Bono Mack (R-CA) and Cathy McMorris Rodgers (R-WA). The statements correctly note that women have been hit particularly hard by job losses in recent years, butmisleadingly lay the blame for those losses on Obama, just as Romney himself has been doing recently.
“Mitt Romney supports pay equity for women and, as president, will do what President Obama has not — implement pro-growth economic policies that will allow women and all Americans to finally get back to work,” wrote McMorris Rodgers. “Women in the Obama economy are facing hardships of historical proportions,” added Bono Mack. “Simply put, women cannot afford four more years of Barack Obama.”
But their concern for pay equity and women in the workplace must be a recent development. Both congresswomen voted against the landmark Lilly Ledbetter Fair Pay Act of 2009 — which empowers women to seek restitution for pay discrimination — and both voted against the proposed Paycheck Fairness Act, which would have made it easier for women to fight pay inequality.
This morning, the Romney campaign refused to say during a conference call whether Romney supports the Lily Ledbetter Fair Pay Act, the first law that President Obama signed. The campaign later scrambled to assert that Romney “supports pay equity” and “is not looking to change current law.”

Newt Gingrich Campaign Vendors Wonder If They'll Ever Get Paid

Newt Gingrich Campaign Vendors Wonder If They'll Ever Get Paid
Posted: 04/11/2012 8:09 am Updated: 04/11/2012 1:22 pm

WASHINGTON -- For a long time, Larry Scheffler maintained a hard policy at his Nevada printing company: no credit for politicians. But when a friend called on behalf of GOP presidential hopeful Newt Gingrich In January, saying the candidate needed signs for the upcoming Nevada caucus, Scheffler made an exception.
"They said they were going to pay right away," Scheffler, 61, said in an interview.
Scheffler's company, Las Vegas Color Graphics, produced a trove of campaign materials for Gingrich: 5,000 rally signs, 5,000 bumper stickers, 5,000 lapel stickers, 5,000 cards targeting Hispanic voters, and nearly 100 yard signs. The tab came to $7,439.62.
But more than two months after the caucus, Scheffler is still waiting for the check. "We got burned," he said.
Like all the GOP presidential hopefuls, Gingrich has cast himself as a champion of small businesses, promising tax relief to American entrepreneurs and a deregulation plan that will spur job growth. But some small businesses are less than pleased with the former House speaker's presidential campaign -- in particular, some of the vendors who have performed work for it. Last month HuffPost reported how Gingrich was ramping up an expensive campaign even as he was running out of money and flagging in the polls. The loose spending should come as little surprise: Gingrich was trailed by 30 years' worth of debts, lawsuits and bankruptcies leading into the campaign.
In interviews with HuffPost, many vendors listed in Gingrich's Federal Election Commission debt disclosures said they're still waiting to be paid, weeks or months after finishing work. Several said they've been given the runaround by campaign officials as they've tried to collect. Gingrich has vowed to slog on with his debt-ridden campaign, despite having won a mere 136 delegates, leaving some vendors to wonder when they can expect their checks.
Gingrich campaign spokesman R.C. Hammond told HuffPost that Newt 2012 is doing its best to pay people. "Vendors have been contacted and we are paying bills as swiftly as we are able," Hammond said.
Gingrich said Sunday that his campaign is "slightly less" than $4.5 million in debt, adding that he dipped into "personal funds" to help keep Newt 2012 moving "on a shoestring."
"We owe much more than we wanted to," Gingrich said on Fox News Sunday. "Florida got to be a real brawl. And I think, unfortunately, our guys tried to match Romney and it turned out we didn't have anything like his capacity to raise money."
Though Gingrich has long held himself up as a paragon of fiscal responsibility, vendors that include Noiseworks Media have found that the former speaker's campaign is apparently spending money it doesn't have. Based in Coral Gables, Fla., Noiseworks produced a handful of television and radio spots for the campaign, in English as well as Spanish, that aired in Florida and Arizona leading up to those primaries. Disclosure forms peg Gingrich's debt to Noiseworks at $10,500, but the firm's director, Tere Gutierrez, said the tab is closer to $24,000. The firm fronted nearly half of that money to actors, makeup artists and other contractors that the firm needed for the production, Gutierrez said.
"It's unusual that we don't get paid -- politicians are usually very good at that, they pay immediately," said Gutierrez. But with the Gingrich campaign, "It's getting from bad to worse. ... It's a lot of running around, 'We're going to get to you, we're going to do a payment plan.' We're calling and emailing, calling and emailing, every day. And nothing."
According to Gutierrez, Noiseworks had the choice to work for either Gingrich or frontrunner Mitt Romney. But like Larry Scheffler's printing company, Noiseworks decided to do business with Gingrich because of a personal connection.
Nobody had to pull strings to get Gregory Fournier doing work for the Gingrich campaign. The president of Florida-based political consulting firm Insite Political, Fournier also happened to be a Gingrich campaign chairman for Volusia County, home to Daytona Beach. Fournier happily performed roughly $5,000 of work for Newt 2012, having signs made for a Florida event and obtaining voter data for the Sunshine State's primary. But getting paid was like "going to war," Fournier said.
"At first it was, 'Well, they sent out the check, it went out in today's mail.' Then, 'The check was pulled. You have to contact the campaign manager.' He never returned any emails," said Fournier. "Luckily, I saved every single document of the state committee people asking me for stuff."
Fournier was eventually paid in full about a month ago, but the experience left him with a bad taste. Adding further insult, he'd made a $2,500 donation to the campaign. He figured all of his support would maybe warrant a handshake, an autographed book or a thank-you, but he said he never got to meet the former speaker. Even so, he still supports Gingrich.
"It's not the speaker -- I believe in the speaker," Fournier said. "I think logistically his campaign was a mess."
Not all the vendors reached by HuffPost had bad experiences with Newt 2012. Daniel Coats, the president of Red Cyclone, a Georgia-based company that produces campaign materials for conservative candidates, said the campaign paid him promptly. "They made good on everything," Coats said, though he also noted, "Our policy is we don't ship until we receive payment."
Angel de la Portilla, an Orlando-based political consultant, didn't have such a policy. He said the Gingrich campaign owes him $6,000 for setting up events with Hispanic voters ahead of the Florida primary. (The campaign reported to the government that it owes de la Portilla $3,840.)
"I have not yet been paid," de la Portilla said. "I have been told numerous times by different people at the senior level of the campaign that I would be paid. I got an email telling me the check was in the mail."
It turned out the check wasn't in the mail. "It's just disappointing they way it's being handled," de la Portilla said.
Gingrich's campaign bounced a $500 check last month for the fee to qualify for the Utah ballot, reports the Salt Lake Tribune. The campaign has not responded to the state's calls and a certified letter, according to the report. The campaign has until April 20 to pay the fee or Gingrich won't be on Utah's June 26 ballot.
Some vendors may never get paid. Given that the campaign has little in the way of assets, Gingrich would likely need to either pay out of his own pocket or raise enough money from donors to settle the campaign's debts. Raising money becomes less likely as Gingrich's presidential hopes diminish. Vendors can wait years for a campaign to settle up. Former presidential candidate John Glenn famously took 23 years to pay off the roughly $3 million he ran up in campaign debt in 1984.
Gingrich on Tuesday vowed to continue his campaign in the wake of Rick Santorum's departure. "I am committed to staying in this race all the way to Tampa so that the conservative movement has a real choice," Gingrich said in a statement.
Scheffler, head of the Las Vegas printing company, said his firm has 150 employees and about $30 million in annual sales from printing and mailing political signs.
"It’s not gonna shove us down," he said of the Gingrich campaign debt. "It just really makes me mad they got the better of me when I knew better."
Scheffler said he'd been calling three different Gingrich campaign officials about the debt, but none have gotten back to him in weeks. On Tuesday morning he saw a clip of Gingrich on Fox News, insisting his campaign wasn't going to end. "I am not conceding to Gov. Romney," Gingrich said in the clip, taped the previous evening.
Scheffler was not impressed. "I can't believe he's talking like this with all the money he owes and he couldn't care less about the small businesses he's ripping off."
Tuesday afternoon, Scheffler said he reached Gingrich on the candidate's mobile phone and said he wanted to be paid. "He said, 'We really ran behind when we were in Florida. I'll try to scrape up some money to get you paid.'"
Scheffler said Gingrich hung up without taking down details of the debt.

Sunday, April 8, 2012

Federal Funds to Train the Jobless Are Drying Up

April 8, 2012

Federal Funds to Train the Jobless Are Drying Up

With the economy slowly reviving, an executive from Atlas Van Lines recently visited Louisville, Ky., with good news: the company wanted to hire more than 100 truck drivers ahead of the summer moving season.
But a usually reliable source of workers, the local government-financed job center, could offer little help, because the federal money that local officials had designated to help train drivers was already exhausted. Without the government assistance, many of the people who would be interested in applying for the driving jobs could not afford the $4,000 classes to obtain commercial driver’s licenses. Now Atlas is struggling to find eligible drivers.
Across the country, work force centers that assist the unemployed are being asked to do more with less as federal funds dwindle for job training and related services.
In Seattle, for example, the region’s seven centers provided training for less than 5 percent of the 120,000 people who came in last year seeking to burnish their skills. And in Dallas, officials say they have annual funds left to support only 43 people in training programs, nowhere near enough to help the 23,500 people who have lost their jobs in the last 10 weeks alone.
The Labor Department announced on Friday that employers had added only 120,000 new jobs in March, a disappointing gain after three previous months of nearly twice that level. But with 12.7 million people still searching for jobs, the country is actually spending less on work force training than it did in good times.
Federal money for the primary training program for dislocated workers is 18 percent lower in today’s dollars than it was in 2006, even though there are six million more people looking for work now. Funds used to provide basic job search services, like guidance on résumés and coaching for interviews, have fallen by 13 percent.
Political fights have focused primarily on extensions of unemployment insurance, while the cuts in funds for training have passed with little debate and little notice.
At the peak in 2000, the federal government was spending more than $2.1 billion a year in today’s dollars for training programs aimed at dislocated workers under the Workforce Investment Act. Stimulus funds added close to $1.5 billion over two years, but now annual spending has receded to about $1.2 billion.
The cuts “make it harder to meet the employers’ needs,” said Michael Gritton, executive director of KentuckianaWorks, which oversees four government-financed job centers in Louisville. “And obviously you have these individual customers who are asking for help to climb back into the middle class and you can’t help them either.”
Employers who want to hire often complain that the jobless do not have the necessary skills. In such an environment, advocates for workers say that cutting funds for training and other services makes little sense.
“We should be spending significantly more than we were spending five years ago,” said Andy Van Kleunen, executive director of the National Skills Coalition, a nonprofit group that promotes investment in training. “And even then we would not be catching up to the demand.”
Jack Griffin, president and chief operating officer of the Atlas World Group, said that finding drivers should be easy given the national unemployment rate of over 8 percent. “You would think they would be lined up at our door,” he said.
Atlas recently lowered the number of driving hours required and is offering a signing bonus of $3,000. Mr. Griffin said the company would consider training applicants itself if they would “sign a piece of paper saying that when they graduate they will come to work for us for two years.”
To bolster training and other services for jobless workers, the Obama administration recently proposed consolidating two programs. The general dislocated worker program paid for under the Workforce Investment Act would be combined with the Trade Adjustment Assistance program, which provides training and other benefits to workers who lose their jobs because of foreign competition.
The trade program, which has an annual budget of $575 million, is typically more generous, but narrow in eligibility. The combined program would make all funds available to anyone who had lost a job, regardless of the reason.
In his latest budget proposal, President Obama also requested an additional $2.8 billion a year for job training over the next decade. “Even in this very tight budget,” said Gene Sperling, national economic adviser, “the president felt that there was an imperative to call right now for a more simplified and effective training system” that also had an increase in funds.
Whether Congress is willing to consider more aid is uncertain. The federal budget endorsed by House Republicans calls for reductions in a broad category that includes job training.
The constraints are dispiriting for people like Jacqueline Francis, who was laid off from a job in human resources about a year and a half ago. Since then, she has followed the all-too-familiar drill of sending out résumés and cover letters that are never answered.
With her savings depleted, she wants to return to school and switch careers. Ms. Francis, a divorced mother in Louisville with a daughter in high school and a son in college, has pinpointed nursing, a field she considers most likely to provide employment.
Last month, she visited a job center run by KentuckianaWorks only to learn that the $240,000 allocated for health care training had been spent.
“I could have cried,” Ms. Francis said. She said she would apply for financial aid at the local community college and sell items in her wardrobe to pay for a nursing degree. “I want to better my situation,” she said.
Local employers say they also feel the pinch. “We depend on those dollars to help us with training for more entry-level positions,” said Tony Bohn, chief human resources officer at Norton Healthcare, which operates more than 100 doctor’s offices in the area.
It is not always easy to measure whether job training helps, or to what degree.
“Traditionally, we have found that job training has not been very effective for people who have lost their job recently,” said Kenneth R. Troske, an economist at the University of Kentucky in Lexington. Research suggests it delivers better returns for people with checkered job histories, or for people from extremely low-income backgrounds.
The Labor Department is paying for a study of training programs by the Workforce Investment Act at 28 locations across the country, but the research will not be complete until 2015.
Training advocates say that paying for education yields a better return than simply continuing to pay unemployment benefits. Marlena Sessions, chief executive of the Workforce Development Council of Seattle-King County, said that every dollar spent on training dislocated workers in 2009 returned about $8.70 to the local economy as people found new jobs and increased their spending.
Some economists say that previous studies of the cost-effectiveness of training have focused too closely on a worker’s starting income after completing a certificate or degree program as a measure of success.
Ken Harris, a 39-year-old former assembly line worker at a General Motors plant in Dayton, Ohio, financed part of his nursing degree with federal funds. He started a job this year at an emergency room in Cincinnati. At his hourly wage, he says that he will earn an annual salary of about $55,000, with the potential for more, compared with the $74,000 he earned after 15 years with G.M.
But he has peace of mind that he is not likely to lose his job. And he is having more fun. “At G.M. you did the same thing every 48 seconds,” Mr. Harris said. “In the nursing job, you don’t know what’s going to walk in the door.”

Welfare Limits Left Poor Adrift as Recession Hit

April 7, 2012

Welfare Limits Left Poor Adrift as Recession Hit

PHOENIX — Perhaps no law in the past generation has drawn more praise than the drive to “end welfare as we know it,” which joined the late-’90s economic boom to send caseloads plunging, employment rates rising and officials of both parties hailing the virtues of tough love.
But the distress of the last four years has added a cautionary postscript: much as overlooked critics of the restrictions once warned, a program that built its reputation when times were good offered little help when jobs disappeared. Despite the worst economy in decades, the cash welfare rolls have barely budged.
Faced with flat federal financing and rising need, Arizona is one of 16 states that have cut their welfare caseloads further since the start of the recession — in its case, by half. Even as it turned away the needy, Arizona spent most of its federal welfare dollars on other programs, using permissive rules to plug state budget gaps.
The poor people who were dropped from cash assistance here, mostly single mothers, talk with surprising openness about the desperate, and sometimes illegal, ways they make ends meet. They have sold food stamps, sold blood, skipped meals, shoplifted, doubled up with friends, scavenged trash bins for bottles and cans and returned to relationships with violent partners — all with children in tow.
Esmeralda Murillo, a 21-year-old mother of two, lost her welfare check, landed in a shelter and then returned to a boyfriend whose violent temper had driven her away. “You don’t know who to turn to,” she said.
Maria Thomas, 29, with four daughters, helps friends sell piles of brand-name clothes, taking pains not to ask if they are stolen. “I don’t know where they come from,” she said. “I’m just helping get rid of them.”
To keep her lights on, Rosa Pena, 24, sold the groceries she bought with food stamps and then kept her children fed with school lunches and help from neighbors. Her post-welfare credo is widely shared: “I’ll do what I have to do.”
Critics of the stringent system say stories like these vindicate warnings they made in 1996 when President Bill Clinton fulfilled his pledge to “end welfare as we know it”: the revamped law encourages states to withhold aid, especially when the economy turns bad.
The old program, Aid to Families with Dependent Children, dates from the New Deal; it gave states unlimited matching funds and offered poor families extensive rights, with few requirements and no time limits. The new program, Temporary Assistance for Needy Families, created time limits and work rules, capped federal spending and allowed states to turn poor families away.
“My take on it was the states would push people off and not let them back on, and that’s just what they did,” said Peter B. Edelman, a law professor at Georgetown University who resigned from the Clinton administration to protest the law. “It’s been even worse than I thought it would be.”
But supporters of the current system often say lower caseloads are evidence of decreased dependency. Many leading Republicans are pushing for similar changes to much larger programs, like Medicaid and food stamps.
Representative Paul D. Ryan of Wisconsin, the top House Republican on budget issues, calls the current welfare program “an unprecedented success.” Mitt Romney, who leads the race for the Republican presidential nomination, has said he would place similar restrictions on “all these federal programs.” One of his rivals, Rick Santorum, calls the welfare law a source of spiritual rejuvenation.
“It didn’t just cut the rolls, but it saved lives,” Mr. Santorum said, giving the poor “something dependency doesn’t give: hope.”
President Obama spoke favorably of the program in his 2008 campaign — promoting his role as a state legislator in cutting the Illinois welfare rolls. But he has said little about it as president.
Even in the 1996 program’s early days, when jobs were plentiful, a subset of families appeared disconnected — left with neither welfare nor work. Their numbers were growing before the recession and seem to have surged since then.
No Money, No Job
While data on the very poor is limited and subject to challenge, recent studies have found that as many as one in every four low-income single mothers is jobless and without cash aid — roughly four million women and children. Many of the mothers have problems like addiction or depression, which can make assisting them politically unpopular, and they have received little attention in a downturn that has produced an outpouring of concern for the middle class.
Poor families can turn to other programs, like food stamps or Medicaid, or rely on family and charity. But the absence of a steady source of cash, however modest, can bring new instability to troubled lives.
One prominent supporter of the tough welfare law is worried that it may have increased destitution among the most disadvantaged families. “This is the biggest problem with welfare reform, and we ought to be paying attention to it,” said Ron Haskins of the Brookings Institution, who helped draft the 1996 law as an aide to House Republicans and argues that it has worked well for most recipients.
“The issue here is, can you create a strong work program, as we did, without creating a big problem at the bottom?” Mr. Haskins said. “And we have what appears to be a big problem at the bottom.”
He added, “This is what really bothers me: the people who supported welfare reform, they’re ignoring the problem.”
The welfare program was born amid apocalyptic warnings and was instantly proclaimed a success, at times with a measure of “I told you so” glee from its supporters. Liberal critics had warned that its mix of time limits and work rules would create mass destitution — “children sleeping on the grates,” in the words of Senator Daniel Patrick Moynihan, a New York Democrat who died in 2003.
But the economy boomed, employment soared, poverty fell and caseloads plunged. Thirty-two states reduced their caseloads by two-thirds or more, as officials issued press releases and jostled for bragging rights. The tough law played a large role, but so did expansions of child care and tax credits that raised take-home pay.
In a twist on poverty politics, poor single mothers, previously chided as “welfare queens,” were celebrated as working-class heroes, with their stories of leaving the welfare rolls cast as uplifting tales of pluck. Flush with federal money, states experimented with programs that offered counseling, clothes and used cars.
But if the rise in employment was larger than predicted, it was also less transformative than it may have seemed. Researchers found that most families that escaped poverty remained “near poor.”
And despite widespread hopes that working mothers might serve as role models, studies found few social or educational benefits for their children. (They measured things like children’s aspirations, self-esteem, grades, drug use and arrests.) Nonmarital births continued to rise.
But the image of success formed early and stayed frozen in time.
“The debate is over,” President Clinton said a year after signing the law, which he often cites in casting himself as a centrist. “Welfare reform works.”
The recession that began in 2007 posed a new test to that claim. Even with $5 billion in new federal funds, caseloads rose just 15 percent from the lowest level in two generations. Compared with the 1990s peak, the national welfare rolls are still down by 68 percent. Just one in five poor children now receives cash aid, the lowest level in nearly 50 years.
As the downturn wreaked havoc on budgets, some states took new steps to keep the needy away. They shortened time limits, tightened eligibility rules and reduced benefits (to an average of about $350 a month for a family of three).
Since 2007, 11 states have cut the rolls by 10 percent or more. They include centers of unemployment like Georgia, Indiana and Rhode Island, as well as Michigan, where the welfare director justified cuts by telling legislators, “We have a fair number of people gaming the system.” Arizona cut benefits by 20 percent and shortened time limits twice — to two years, from five.
Many people already found the underlying system more hassle than help, a gantlet of job-search classes where absences can be punished by a complete loss of aid. Some states explicitly pursue a policy of deterrence to make sure people use the program only as a last resort.
Since the states get fixed federal grants, any caseload growth comes at their own expense. By contrast, the federal government pays the entire food stamp bill no matter how many people enroll; states encourage applications, and the rolls have reached record highs.
Among the Arizonans who lost their checks was Tamika Shelby, who first sought cash aid at 29 after fast-food jobs and a stint as a waitress in a Phoenix strip club. The state gave her $176 a month and sent her to work part time at a food bank. Though she was effectively working for $2 an hour, she scarcely missed a day in more than a year.
“I loved it,” she said.
Her supervisor, Michael Cox, said Ms. Shelby “was just wonderful” and “would even come up here on her days off.”
Then the reduced time limit left Ms. Shelby with neither welfare nor work. She still gets about $250 a month in food stamps for herself and her 3-year-old son, Dejon. She counts herself fortunate, she said, because a male friend lets her stay in a spare room, with no expectations of sex. Still, after feeding her roommate and her child, she said, “there are plenty of days I don’t eat.”
“I know there are some people who abuse the system,” Ms. Shelby said. “But I was willing to do anything they asked me to. If I could, I’d still be working for those two dollars an hour.”
Diverting Federal Funds
Clarence H. Carter, Arizona’s director of economic security, says finances forced officials to cut the rolls. But the state gets the same base funding from the federal government, $200 million, that it received in the mid-1990s when caseloads were five times as high. (The law also requires it to spend $86 million in state funds.)
Arizona spends most of the federal money on other human services programs, especially foster care and adoption services, while using just one-third for cash benefits and work programs — the core purposes of Temporary Assistance for Needy Families. If it did not use the federal welfare money, the state would have to finance more of those programs itself.
“Yes, we divert — divert’s a bad word,” said State Representative John Kavanagh, a Republican and chairman of the Arizona House Appropriations Committee. “It helps the state.”
While federal law allows such flexibility, critics say states neglect poor families to patch their own finances. Nationally, only 30 percent of the welfare money is spent on cash benefits.
“It’s not that the other stuff isn’t important, but it’s not what T.A.N.F.” — the Temporary Assistance program — “was intended for,” said LaDonna Pavetti of the Center on Budget and Policy Priorities, a Washington research and advocacy group. “The states use the money to fill budget holes.”
Even in an economy as bad as Arizona’s, some recipients find work. Estefana Armas, a 30-year-old mother of three, spent nine years on the rolls, fighting depression so severe that it left her hospitalized. Once exempt from time limits because of her mental health, Ms. Armas joined support groups, earned a high school equivalency degree and enrolled in community college.
Just as her time expired last summer, Ms. Armas found work as a teacher’s aide at a church preschool.
“It kind of pushed me to get a job,” she said.
Supporters of Temporary Assistance cite stories like that to argue that it promotes a work ethic. Despite high unemployment, low-skilled single mothers work as much now, on average, as they did under the old welfare law — and by some measures, a bit more. As a group, their poverty rates are still lower. And those without cash aid, they say, can turn to other programs.
“We have reduced our caseload, and we don’t have people dying in the street,” Mr. Kavanagh said. “There were an awful lot of people who didn’t need it.”
But the number of very poor families appears to be growing. Pamela Loprest and Austin Nichols, researchers at the Urban Institute, found that one in four low-income single mothers nationwide — about 1.5 million — are jobless and without cash aid. That is twice the rate the researchers found under the old welfare law. More than 40 percent remain that way for more than a year, and many have mental or physical disabilities, sick children or problems with domestic violence.
Using a different definition of distress, Luke Shaefer of the University of Michigan and Kathryn Edin of Harvard examined the share of households with children in a given month living on less than $2 per person per day. It has nearly doubled since 1996, to almost 4 percent. Even when counting food stamps as cash, they found one of every 50 children live in such a household.
The Census Bureau uses a third measure, “deep poverty,” which it defines as living on less than half of the amount needed to escape poverty (for a family of three, that means living on less than $9,000 a year). About 10 percent of households headed by women report incomes that low, a bit less than the peak under the old law but still the highest level in 18 years.
Some researchers say the studies exaggerate poverty by inadequately accounting for undisclosed income, like help from boyfriends or under-the-table jobs. They note that asking poor people about their consumption, rather than their income, suggests that even the poorest single mothers have improved their standard of living since 1996.
Mr. Haskins, the Temporary Assistance program’s architect, agrees that poverty at the bottom “is not as bad as it seems,” but adds, “It’s still pretty darn bad.”
Trying to Make Do
Asked how they survived without cash aid, virtually all of the women interviewed here said they had sold food stamps, getting 50 cents for every dollar of groceries they let others buy with their benefit cards. Many turned to food banks and churches. Nationally, roughly a quarter have subsidized housing, with rents as low as $50 a month.
Several women said the loss of aid had left them more dependent on troubled boyfriends. One woman said she sold her child’s Social Security number so a relative could collect a tax credit worth $3,000.
“I tried to sell blood, but they told me I was anemic,” she said.
Several women acknowledged that they had resorted to shoplifting, including one who took orders for brand-name clothes and sold them for half-price. Asked how she got cash, one woman said flatly, “We rob wetbacks” — illegal immigrants, who tend to carry cash and avoid the police. At least nine times, she said, she has flirted with men and led them toward her home, where accomplices robbed them.
“I felt bad afterwards,” she said. But she added, “There were times when we didn’t have nothing to eat.”
One family ruled out crime and rummaged through trash cans instead. The mother, an illegal immigrant from Mexico, could not get aid for herself but received $164 a month for her four American-born children until their time limit expired. Distraught at losing her only steady source of cash, she asked the children if they would be ashamed to help her collect discarded cans.
“I told her I would be embarrassed to steal from someone — not to pick up cans,” her teenage daughter said.
Weekly park patrols ensued, and recycling money replaced about half of the welfare check.
Despite having a father in prison and a mother who could be deported, the children exude earnest cheer. A daughter in the fifth grade won a contest at school for reading the most books. A son in the eighth grade is a student leader praised by his principal for tutoring younger students, using supplies he pays for himself.
“That’s just the kind of character he has,” the principal said.
After losing cash aid, the mother found a cleaning job but lost it when her boss discovered that she was in the United States illegally. The family still gets subsidized housing and $650 a month in food stamps.
The boy worries about homelessness, but his younger sisters, 9 and 10, see an upside in scavenging.
“It’s kind of fun because you get to look through the trash,” one of the girls said.
“And you get to play in the park a little while before you go home,” her sister agreed.

Saturday, April 7, 2012

Malawi State Radio Announces Death of President Mutharika

April 7, 2012

Malawi State Radio Announces Death of President Mutharika

LILONGWE (Reuters) - Malawi's state radio announced on Saturday that President Bingu wa Mutharika had died, and Vice-president Joyce Banda prepared to take over as southern Africa's first female head of state.
The radio announcement confirmed reports by medical and government sources on Friday that the 78-year-old Mutharika had died shortly after a heart attack the previous day.
The delay in the official announcement, as well as the airflifting of Mutharika's body to South Africa on Thursday, had aroused suspicions about the succession process in the impoverished southern African nation.
The United States, which has been an important aid donor for Malawi, expressed alarm at the official silence and said it did not want to see any delay in the swearing of Banda, a women's rights activist.
Malawi's constitution is clear that Banda should take over, although a smooth transition has not been completely assured since she was booted out of Mutharika's ruling DPP party in 2010 after an argument about succession.
Mutharika appeared to have been grooming his brother Peter, the foreign minister, as his de facto successor.
"Malawi's constitution lays out a clear path for succession and we expect it to be observed. We are concerned about the delay in the transfer of power," the U.S. State Department said in a statement.
"We trust that the vice president who is next in line will be sworn in shortly."
Banda is due to hold a news conference on Saturday, officials said, as well as meet the Attorney General and head of the armed forces, suggesting any divisions over the transfer of power have been ironed out.
Few of Malawi's 13 million people mourned Mutharika, whom they regarded as an autocrat personally responsible for an economic crisis that stemmed ultimately from a diplomatic spat with former colonial power Britain a year ago.
"We know he is dead and unfortunately he died at a local, poor hospital which he never cared about - no drugs, no power," said Chimwemwe Phiri, a Lilongwe businessman waiting in a line of cars for fuel at a petrol station.
As reports of the death of the self-styled "Economist in chief" swept the capital, there were pockets of drunken jubilation among those who accused Mutharika of turning back the clock on 18 years of democracy in the "Warm Heart of Africa".
"I am yet to see anyone shedding a tear for Bingu," said Martin Mlenga, another businessman. "We all wished him dead, sorry to say that."
Medical sources said Mutharika's body was flown to South Africa because Malawi's energy crisis was so severe the Lilongwe state hospital would have been unable to conduct a proper autopsy or even keep his body refrigerated.
There has been no comment from the South African authorities.
(Reporting by Mabvuto Banda; Editing by Ed Cropley and Pascal Fletcher)