Friday, September 28, 2012

Greek electricity workers call 48-hour strikes


Greek electricity workers call 48-hour strikes

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ATHENS | Fri Sep 28, 2012 8:01am EDT
(Reuters) - Greece's electricity workers said on Friday they will start rolling 48-hour strikes as early as next week to protest austerity measures demanded by the country's international lenders.
Strikes at state-controlled utility PPC (DEHr.AT) have in the past led to rotating power cuts across the country, as the grid operator reduces the load to prevent wider blackouts. PPC is the country's single power retailer and produces about 70 percent of all electricity generated in the country.
The strike will begin as early as October 1 if the government submits new austerity measures to parliament next week, said PPC's labor union GENOP-DEH, one of the most militant unions. If the vote takes place later in the month, the strikes will be postponed accordingly.
The walkout poses yet another challenge to the wage and pension cuts that Athens is negotiating with the European Union and the International Monetary Fund to obtain fresh bailout funds.
"These measures ... must not be allowed to go through. GENOP-DEH wants to reverse this policy," the union said.
GENOP also urged labor union confederation GSEE, the country's biggest, to step up its anti-austerity action after a nationwide 24-hour strike on Wednesday. If GSEE agrees to new labor action, GENOP will call off its strike, it said.

LOLGOP quips of the hour


LOLGOP ‏@LOLGOP
Give Fox News credit. They’ve made it easier for Mitt to run on gutting Medicare than it is for the president to run on insuring 30 million.
LOLGOP ‏@LOLGOP
George W. Bush invaded the wrong country & bungled the worst financial crisis in 50 years. But at least he didn’t insult 47% of us directly?
LOLGOP ‏@LOLGOP
What the GOP learned from ObamaCare and Occupy Wall Street: Nominate the plutocrat who created ObamaCare!

Spain must leave the euro


Spain must leave the euro

Mario Draghi's promise to do “whatever it takes” to save the euro never did look like inducing any more than a temporary lull in the storm; still less did the German Constitutional Court’s thumbs up to the European bail-out fund and the trouncing that eurosceptic parties received in the Dutch election.

Actors stand on giant replicas of  Spanish pesetas which are lifted by an unseen crane over the Royal Mint in Madrid, Spain Thursday Feb. 28, 2002 on the last day of the existence of the peseta as legal tender after 133 years
Actors stand on giant replicas of Spanish pesetas over the Royal Mint in Madrid Photo: AP
Yet the eurozone crisis has sparked back into life more swiftly than even I would have anticipated, with the epicentre returning to a fast-shrinking Spanish economy. Political and economic developments are once more threatening to combine into an uncontrollable firestorm.
To understand why, it is first necessary to explode some myths about the nature of the eurozone debt crisis. This is not at root either an isolated banking crisis or indeed a fiscal one, though that’s how public policy in Europe attempts to define it.
As many of us have long argued, both these phenomena are but symptoms of what in essence is just a good old fashioned balance-of-payments crisis. This has been greatly exaggerated by monetary union, which is also preventing the application of time-honoured solutions. Utopian pursuit of the single currency is damning Europe to economic oblivion. Political hubris has eclipsed economic common sense.
After monetary union, capital flowed in ever-increasing quantities from Europe’s surplus to its deficit nations; Germany and others were in essence lending the periphery the money to buy German goods and services. Monetary union precluded the sort of interest and exchange rate discipline that would normally serve to keep things in check.
Cheap money fuelled unsustainable construction and credit booms in the periphery and encouraged governments to spend more than they should. Relative to the core, wages and prices rose, rendering these countries progressively less competitive and deepening the problem of trade imbalances. The deficit countries borrowed to spend, rather than earning it.
Since the onset of the financial crisis, the process has gone violently into reverse. Money has fled the periphery, starving it of credit and exacerbating the economic downturn. Tax revenues have collapsed, causing budget deficits to soar and fiscal crisis to take root.
With a shrinking economy has come a mounting bad debt problem, which Spain and others have yet fully to recognise. Confidence in the banking system is at rock bottom, leaving Spanish banks progressively more dependent on the European Central Bank printing presses to fund their lending.
Spain is looking for some €60bn to recapitalise its banks but this is widely thought a gross underestimate of the true size of the problem. City analysis puts the amount needed to restore credibility at nearer €150bn, or 15pc of GDP. Touchingly, the Spanish government still seems to think that much of this new capital can be raised in markets. In truth, the only two banks thought remotely capable of tapping the capital markets, Santander and BBVA, are also the only two likely to be judged in forthcoming stress tests not to need it. If even British banks are thought “uninvestable”, what hope Spanish banks?
Worries about whether Spain can last the course has caused further capital flight, depriving Spain of the very low borrowing costs normally associated with countries facing rapidly weakening inflation and depression. Much of this money has flowed into Germany, further depressing its own already low cost of borrowing.
A politically explosive polarisation has established itself, whereby some countries face ruinously high borrowing costs, depressing the economy and increasing the challenge of fiscal consolidation, while others have very low costs and therefore a significant competitive advantage.
There are three elements to renewed crisis in Spain. First, Spain as a nation state is manifestly coming apart at the seams under the pressure of rising unemployment and crippling austerity, with Catalonia now openly threatening to secede. Spain’s age-old battle between the forces of regionalism and centralism is back with a vengeance.
Second, an unholy alliance of Northern states – Germany, Holland and Finland – has reneged on promises of direct support from European bail-out funds for the beleaguered Spanish banking industry.
This makes the political and fiscal situation in Madrid even more precarious. Spain had hoped that if banks could be recapitalised directly from the bail-out funds, it might avoid the humiliation of a full-scale sovereign bail-out and acceptance of a reform programme imposed by the EU and the IMF. The original summit agreement also seemed to recognise that the banking crisis was separate from the sovereign fiscal crises, and in some sense the responsibility of Europe as a whole.
In this way Spain might have avoided piling on further sovereign debt to rescue its banks. Spanish banks would be a collective, rather than a sovereign, responsibility.
But it now appears that any money for bailing out Spanish banks must be part of a wider sovereign package with corresponding guarantees and conditions.
This reversal in position by the surplus nations of the North is being taken as an act of extreme bad faith, not just in Spain but in the troubled eurozone periphery as a whole. Trust in European solidarity is being shattered.
Finally, Mariano Rajoy, the Spanish prime minister, has been digging his heels in over requesting any form of bail-out, despite the evident need for one as the Spanish economy slips ever deeper into recession and the budget deficit widens back into double digits. There is now no chance whatsoever of Spain meeting its fiscal targets.
Less than a year after sweeping to power in a landslide victory, Mr Rajoy is already fatally wounded. He promised never to apply taxpayers’ money to bailing out the banks. He already has. He promised not to follow Greece, Ireland and Portugal into a sovereign bail-out. Now, other than leaving the euro, he’s got no choice. Even on gay marriage, Mr Rajoy has failed to deliver as promised.
A further €40bn package of austerity measures has been announced in a desperate bid to get ahead of what Brussels wants of Spain and, we must suppose, thereby obtain a somehow unconditional bail-out, allowing national pride to be salvaged. These measures are almost bound to be self-defeating, for they threaten further to shrink the economy, thereby making deficit reduction tougher still. Spain is chasing its tail into austerity-induced fiscal and economic meltdown. Mr Rajoy is a dead man walking.
Other than leaving monetary union and defaulting on its euro debts, which for the moment even the rebellious Catalans don’t seem to want, is there any way out for Spain? The answer looks ever more likely to be no.
Membership of monetary union is preventing the application of appropriate monetary policy to the periphery sovereigns. The single currency has also denied Europe the natural market mechanism of free floating exchange rates to correct deficiencies in competitiveness and reduce external indebtedness.
There is only one conclusion to be drawn from all this; though the short-term costs would be profound, Spain must leave the single currency.
Spain is damned if it leaves, but damned for eternity if it stays. Eurozone policy as it stands offers no plausible way back to prosperity.

Spain's rising debt costs eat up austerity gains


Spain's rising debt costs eat up austerity gains

Spain has pushed through €40bn of fresh austerity measures in the teeth of recession, despite violent protests across the country and separatist crises in Catalonia and the Basque region that threaten to break the country apart.

Spanish PM Mariano Rajoy said he would would listen only to the 'silent majority' of responsible citizens
Spanish PM Mariano Rajoy said he would would listen only to the 'silent majority' of responsible citizens 
Premier Mariano Rajoy has frozen public pay in 2013 for the third year in a row. The agriculture ministry and culture expenses will be cut by 30pc and the defence bureacracy by 15pc. It comes on top of a €62bn squeeze already in the pipeline.
He brushed aside warnings that fiscal overkill – at a time when unemployment is already 25pc – could push the country into turmoil, saying he would listen only to the “silent majority” of responsible citizens.
Bowing to pressure from Brussels, the government has agreed to an independent budget office and a clampdown on early retirement. Pensions will rise by 1pc, paid for by raiding the social security reserve fund. The closed professional guilds and old-boy networks dating back to the Franco era will, in theory, be shaken up. There will be a lottery tax.
The plan was carefully crafted with the European Commission, which praised the measures as “concrete, ambitious and well-focused”. The hope is that the package will pre-empt any need for extra conditions if and when Spain requests a bail-out from the European Stability Mechanism, which in turn would trigger bond-buying by the European Central Bank. This would allow Mr Rajoy to avoid loss of “sovereign” face.
It is uncertain, however, whether the German and Finnish parliaments would agree to such a formula. In any case, Spain must still meet EU deficit budget targets of 6.3pc this year and 4.5pc next year. This looks impossible. Madrid is chasing its tail in a downward spiral.
Rocketing debt service costs alone will eat up almost half the extra savings, rising by €9bn to €36bn next year. The economic slump is eroding the tax base at an alarming rate. Revenues so far this year have fallen by 4.8pc, despite a rise in tax rates.
Professor Jesus Fernandez-Villaverde, from Philadelphia University, said the strategy is doomed to failure: “There is no hope that this can work. I think we’ll be lucky if the deficit is below 8pc this year.
“This has accelerated into a complete disaster over the past three weeks, with the Catalan secession spiralling out of control. Rajoy’s people are overwhelmed, running around in circles in the middle of the Titanic screaming.”
Madrid has so far shown no willingness to defuse the Catalan crisis. Vice-premier Soraya Sáenz de Santamaría said the government has the means to stop a referendum on self-rule and “is willing to use them”.
It is unclear where such a policy will end in the face of separatist fervour in Barcelona. Catalan leader Artur Mas exhorted Spain’s leaders to act in a “civilised” fashion, citing Canada’s handling of Quebec.
The government has based its budget sums on economic contraction of 0.5pc of GDP next year. Citigroup fears a 3.2pc contraction, followed by a further fall of 0.8pc in 2014, ending in debt restructuring.
“Spanish GDP is beginning to fall off a cliff and this is going to make state debt dymanics even worse,” said David Owen from Jefferies Fixed Income.
Miguel Navascues, a former economist at the Bank of Spain, said the country is caught in a debt spiral with no obvious solution other than exit from the euro. “I think there is no way out other than an exchange rate adjustment,” he said.
The cuts come as Spain’s chief export markets buckle. The European Commission’s September survey of business and consumers fell to a 37-month low, with trouble reaching the core.
“The eurozone economy is sinking into deep recession,” said Jonathan Loynes, from Capital Economics.
The ECB said eurozone lending contracted further in August, with loans falling 7.8pc in Portugal, 6pc in Spain and 2.1pc in Italy.
Julian Callow, from Barclays Capital, said: “There is a credit crunch under way in southern Europe. These countries have not yet had any monetary reward for austerity. The conclusion is obvious. The ECB needs to activate its bond plan.”
The decision by the AAA bloc of Germany, Holland, Finland and now Austria to row back from the EU’s summit deal to shore up the Spanish banks directly makes matters far worse.
Spain will have to raise an extra €60bn or so to plug the hole in its banking system. Alberto Gallo, from RBS, said the final shortfall is likely to be €134bn, once the hidden losses from the housing crash become clearer. JP Morgan said the retreat from the June summit pledge will have grave repercussions. The tough line will be taken as “bad faith” in the eurozone periphery, poisoning North-South relations.
“Investors may need to look again at the commitments they think the region has agreed,” it said.

France budget: Hollande's grim choices


France budget: Hollande's grim choices

France is committed to reducing its deficit next year to 3%. If it backtracks it fears the markets would force up its borrowing costs, in the way they have done with Spain and Italy.
France needs to save around 30bn euros (£24bn; $37bn). Only a third of that will come from spending cuts. Taxes on the rich will raise 10% and a similar amount will come from businesses. There is the expectation that capital gains, interest and dividends will be taxed as regular income.
The 2-3,000 people who earn over 1m euros will see their income tax rise to 75%. Already some of the ambitious and well-off French people have trudged to London and Brussels in pursuit of lower taxes. The government has denounced them as unpatriotic and pretends not to care. This budget, said a government minister, would spare the middle and working class, which is where the votes lie.
This budget is a political test for President Francois Hollande. Can he reduce public spending? Which cuts will he choose to make to save 10bn euros? Mr Hollande is a president with little room to manoeuvre. His supporters in the unions are watching closely.
He came to power criticising the policy of austerity first. Growth would be the priority. His first months in office have born that out. There has been no growth for three quarters. France is stagnating. Although the goverment has increased public spending that has been offset by a decline in household spending. The consumer lacks confidence. Unemployment has risen above three million and the president's approval ratings are falling.
One major test of the government's commitment to growth is the country's labour laws. It is notoriously difficult to take on new workers and replace them. Nothing would, over time, boost growth and employment more than a radical overhaul of France's employment laws. But will the government take on its natural supporters and insist change must come?
The French goverment will move cautiously. It will have noticed that elsewhere in Europe the years of austerity are bringing protesters to the streets. On Sunday in Paris there is a demonstration against the EU fiscal pact that sets strict limits on deficits.
It is frequently said by European officials and some leaders that what the EU needs is "more Europe". What this week of budgets and protests has revealed is that what the people want is a Europe that delivers.
France does not want to be Italy. France does not want to be Spain. That is the motive behind today's French budget, according to the prime minister. The relatively new French government hates the very word "austerity", but it too will have to unveil some spending cuts.

McDonald's fired worker 'because she was too generous with McFlurry'


McDonald's fired worker 'because she was too generous with McFlurry'


It once prided itself on its super-size portions but now McDonald's has been accused of dismissing a member of staff because she sprinkled too much chocolate on a McFlurry. 

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McDonald's, MCFlurry.McFlurrygate: Employee fired (Pic: Philip Ide)
Sarah Finch claimed she was fired for putting ‘excessive amounts’ of chocolate on a workmate’s 99p McFlurry.
Ms Finch was described as an ‘exceptional employee’ before being fired from her £180-a-week job for gross misconduct.
The 19-year-old is taking the fast food restaurant to an employment tribunal after she says bosses unfairly sacked her for ‘stealing’ food.
She called the matter ‘trivial’, adding in a statement: ‘There is no standard for such measures – they are always imprecise and will vary among customers. My colleague had asked me, “Make it a nice one” so the measure I gave erred on the side of more than, rather than less than, the mean.’
The teenager said it was common practice for managers at the McDonald’s in Carmarthen, Wales, to give away food to unhappy customers. 
Miss Finch has submitted her claim against franchise company Lonetree. A full hearing is due in Cardiff at a later date, when she will be represented by her mother, Tessa.
Lonetree managing director Ron Mounsey backed his manager’s  decision to sack Miss Finch and said warnings were posted in staff rooms and in company documents.
In a letter to her mother, he said: ‘This is classed as gross misconduct as per my employee handbook, the consequence is dismissal.
‘You may feel it is trivial but, with 740 employees in my business, if my management team were just to overlook such incidents then quickly it would become a free-for-all.’
Employees are ‘aware of the risk they take should they decide to do this’, he added. 
‘This will continue to be the case,’ he said.


Read more: http://www.metro.co.uk/news/913400-mcdonald-s-fired-worker-because-she-was-too-generous-with-mcflurry#ixzz27lAfZKDm

Veterans Wait for Benefits as Claims Pile Up


September 27, 2012

Veterans Wait for Benefits as Claims Pile Up

For Dennis Selsky, a Vietnam-era veteran with multiple sclerosis, it was lost documents. It seemed that every time he sent records to theDepartment of Veterans Affairs, they disappeared into the ether.
For Mickel Withers, an Iraq war veteran with severe post-traumatic stress disorder, it was a bureaucratic foul-up. The department said he received National Guard pay in 2009, though he had left the Guard the previous year, and cut his disability compensation by $3,000. He filed for bankruptcy to protect himself from creditors.
For Doris Hink, the widow of a World War II veteran, it was the waiting. The department took nearly two years to process her claim for a survivor’s pension, forcing her daughter to take $12,000 from savings to pay nursing home bills.
These are the faces of what has become known as “the backlog”: the crushing inventory of claims for disability, pension and educational benefits that has overwhelmed the Department of Veterans Affairs. For hundreds of thousands of veterans, the result has been long waits for decisions, mishandled documents, confusing communications and infuriating mistakes in their claims.
Numbers tell the story. Last year, veterans filed more than 1.3 million claims, double the number in 2001. Despite having added nearly 4,000 new workers since 2008, the agency did not keep pace, completing less than 80 percent of its inventory.
This year, the agency has already completed more than one million claims for the third consecutive year. Yet it is still taking about eight months to process the average claim, two months longer than a decade ago. As of Monday, 890,000 pension and compensation claims were pending.
Skyrocketing costs have accompanied that flood of claims. By next year, the department’s major benefit programs — compensation for the disabled, pensions for the low-income and educational assistance — are projected to cost about $76 billion, triple the amount in 2001. By 2022, those costs are projected to rise nearly 70 percent to about $130 billion.
These are the compounding wages of war, and they are not just the result of recent conflicts. The department is administering pensions for World War II veterans while handling new claims from Vietnam veterans struggling with the multiplying ailments of age. Indeed, nearly a third of all pending new claims are from Vietnam-era veterans, roughly equal to the number from Iraq and Afghanistan war veterans.
Thanks to superior battlefield medicine and armor, those Iraq and Afghanistan veterans have survived combat at a higher rate. As they return home with more wounds, and perhaps more savvy, the ones who file for disability compensation are claiming on average nearly 10 disorders or injuries each, compared with 6 for Vietnam veterans and fewer than 4 for World War II veterans. Their complex claims are often more time-consuming to process, adding to the backlog.
At the same time, a higher percentage — nearly half — of Iraq and Afghanistan veterans are filing for disability compensation, partly because of the weak economy. That is double the rate for previous wars.
“We’re not gaining any ground here,” Eric K. Shinseki, the secretary of veterans affairs, acknowledged in an interview over the summer. “Am I impatient? Yes, but I’ve got a fix.”
That fix is the department’s “transformation plan,” which calls for a new training regimen that Mr. Shinseki says will improve speed and accuracy in processing claims; creation of special teams to handle complex claims; and new digital technology that will replace the current paper-choked system.
When all those pieces are in place by 2015, Mr. Shinseki says that every claim will be processed in fewer than 125 days, with almost no errors — a pledge that veterans’ advocates view skeptically.
Current and former front-line workers, who spoke out of frustration with the widespread criticism of their agency, offer a different analysis. The dysfunction, they say, stems from inadequate training and weak management, an excessively complicated process, and assembly line-like performance standards that require them to meet production quotas under threat of demotion or firing. The solution, they say, is clear.
“They need more workers,” said Mark Locken, a retired Army artillery officer who worked for the department for three years in Boston before quitting in May because, he said, of the stress.
The history of the backlog, which predates the Sept. 11, 2001, attacks,suggests another source of the problem: a bureaucratic culture with conflicting missions.
On one hand, Department of Veterans Affairs employees are urged to be advocates for veterans. “I tell them: you’re going to take care of these young men and women for life,” Allison A. Hickey, a retired Air Force brigadier general who is under secretary for benefits, said in an interview.
Yet those workers are also required to be stewards of the public dime, called on to distinguish the truly needy from the less needy from the fraudulent.
That means they must evaluate veterans to determine whether their illnesses or injuries are real, and whether they are the result of military service, or something else. If those problems are deemed “service connected,” the workers must then quantify their severity and attach dollar values.
Is that traumatic brain injury from high school football or a roadside bomb in Iraq? Is that back injury a 10 percent disability or 30 percent? Is that post-traumatic stress disorder real?
Medical questions without simple answers must be settled by harried bureaucrats and overworked doctors applying black-and-white rules to very gray ailments. Their decisions mean the difference between monthly checks of a few hundred dollars versus a few thousand.
When veterans are not happy with the results, as is often the case, they can appeal, or reapply, submitting new documents and diagnoses to bolster their claims — and adding years to the process.
About half of the current backlog is due to veterans reapplying for denied claims or seeking to increase existing benefits because of new or worsening conditions. So the backlog grows, and along with it, the pessimism of some advocates.
“They are rearranging the decks chairs on a sinking ship,” said Katrina Eagle, a lawyer who represents veterans before the agency. “You can hire people and buy new software. But nothing will improve.”
Bureaucratic Behemoth
Born from a system that paid pensions to Revolutionary War soldiers, the Department of Veterans Affairs has grown into a behemoth with more than 270,000 employees who maintain 131 cemeteries, operate 152 hospitals and disburse benefits to more than four million veterans. The nation has a total of about 23 million veterans.
Congress, the courts and the executive branch have contributed to the growth by creating new benefits and rights like perennial blooms. Typically, Congress has accomplished that by establishing “presumptive connections” between military service and certain diseases, allowing veterans to seek disability compensation if they received a diagnosis within a certain period.
There are now scores of diseases that are presumed to be the result of, or aggravated by, military service, from anemia to yellow fever. Each time the government adds a new one, thousands of veterans apply for benefits.
In 2010, for example, Mr. Shinseki announced that three diseases — ischemic heart disease, Parkinson’s disease and b-cell leukemia — would be considered the result of Agent Orange exposure for veterans who served in Vietnam. As of this week, the department had processed more than 240,000 claims for those diseases filed in just the last two years.
Since at least the 1960s, multiple sclerosis has been on the presumptive list, and in the decades since, tens of thousands of veterans with the disease have received benefits from the Department of Veterans Affairs. Dennis Selsky, 69, is one.
A Navy reservist from the Philadelphia area who was called to active duty for 10 months in 1968, Mr. Selsky worked as an ordnance specialist on domestic air bases. Two years after leaving the service in 1970, he says, doctors told him he had multiple sclerosis, which Mr. Selsky believes he contracted from working on planes contaminated with the herbicide Agent Orange.
Two years ago, he learned from the National Multiple Sclerosis Society that he was eligible for veterans compensation, applied and was granted the minimum benefit: a 30 percent rating, worth $435 a month. That seemed low to him because, he says, he has tremors, walks with a cane and is losing his vision. So Mr. Selksy, who spent 31 years with Verizon before retiring in 1998, appealed, seeking a 100 percent rating that would pay about $3,000 a month.
Then his problems with the Department of Veterans Affairs began in earnest.
First, the Philadelphia regional office lost part of his file, his wife, Sheila, said. Then it lost authorizations to obtain records from his cardiologist, podiatrist, neurologist and ophthalmologist — more than once. After the office finally obtained those doctors’ reports, it still required him to see department doctors to confirm his diagnoses.
Each appointment and lost document has added weeks to the processing, now in its 15th month. So have skeptical department examiners, who have requested additional information on whether Mr. Selsky’s heart palpitations and vision loss are related to his multiple sclerosis. “This should be a slam dunk,” Ms. Selsky said. “He keeps getting worse, and they keep fighting and fighting and fighting with us. The stress is unbelievable.”
Mr. Selsky may have also been the victim of another problem common to claims processing: the chaotic handling of records. Lost or mishandled documents are perhaps the No. 1 complaint about the processing system. Indeed, a 2009 review by the department’s inspector general found rampant cases of mishandled mail, including documents being improperly put in shred bins at 40 of the department’s 57 regional offices.
Workers who process mail in the Philadelphia regional office, which handled Mr. Selsky’s claim, say that veterans’ records have for years piled up in gray file cabinets or cardboard boxes because they were thought to lack clear identifying information, like Social Securitynumbers.
Ryan Cease, a former mail handler at the regional office, said that earlier this year he saw workers who were cleaning up the mail room in preparation for a visit by a senior official tossing records into boxes marked “for shredding.”
Suspicious, he and a fellow worker later leafed through the boxes and found numerous records that they believed could have easily been identified.
Mr. Cease, through another employee, sent an urgent e-mail to the department’s central office. After an investigation, the department concluded that nothing improper had occurred.
“We have not shredded any documents up there,” Ms. Hickey said.
Mr. Cease is not so sure. “I’m convinced,” he said in an interview, “that mail was shredded and that the mail was identifiable.”
Manpower Shortage Cited
In 2009, Kathryn Kausch learned that her mother, Doris Hink, was eligible for a pension because her husband, who died in 1987, had served honorably during World War II. Ms. Kausch sent in the paperwork, hoping the funds would help pay assisted living costs for her mother, now 89, who has dementia.
The application was rejected because her mother’s assets were above the $80,000 threshold. But in a year, those assets had shrunk and Ms. Kausch reapplied in January 2010. That September, the Philadelphia pension office asked for additional documents, and she sent off a fat packet of bank statements, medical invoices and other financial records.
In November, the office notified her that it had not received the documents and was rejecting her mother’s application again. But Ms. Kausch produced a receipt showing that the documents had been delivered, and the office acknowledged it had received them. Then she hunkered down to wait. Months passed.
Ms. Kausch began dipping into her savings to pay her mother’s bills at an assisted living center. Then in July 2011, Ms. Kausch was laid off from her job at Xerox. Desperate for help, she called her congressman, Representative Michael Fitzpatrick, a Republican from the Philadelphia suburbs. A week after his office made inquiries, her mother’s pension was approved.
But Ms. Kausch’s problems did not end. Her mother is eligible for $22,000 in retroactive pension payments dating to 2009. But because of her mother’s dementia, the department must approve Ms. Kausch as her mother’s fiduciary. Though the department has conducted the required interview, it has not filled out the final paperwork, despite calls from Mr. Fitzpatrick’s office.
“No wonder our government has such problems,” Ms. Kausch, 58, said. “It seems you get lost in this bureaucratic paperwork.”
A routine pension claim, undisputed by the department, took nearly two years to process, and only after a congressman’s intervention. An equally straightforward fiduciary application is still pending after six months. Why?
Employees and veterans advocates repeatedly point to one reason: a lack of manpower. Though the Veterans Benefits Administration, the division that oversees entitlement programs, has grown significantly in the past decade, to 20,600 employees from 12,150, it still often assigns mandatory overtime to meet workload demands. And because the processing is so complicated, it can take two years before new hires are fully productive, the department says.
With its staff stretched to the limit, the Veterans Benefits Administration supervisors set priorities for processing claims, workers say, with seriously wounded recent veterans, the homeless and terminally ill often rising to the top. Veterans or survivors who are already receiving benefits but applying for new ones may, as a consequence, be given lower priority, the workers say.
Another problem, front-line claims workers say, are production quotas that determine whether they will be promoted, given raises, demoted or fired. The pressure to meet those quotas cause some workers to skip complicated, time-consuming files and reach for simpler ones, workers and advocates say.
“Given the choice, they’ll go for the thin folder every time,” said Gerald T. Manar, a former manager for the Veterans Benefits Administration who now works for Veterans of Foreign Wars.
More processors would make a difference, most experts say. But at a time when both parties are talking about slashing the federal deficit, hiring more employees may be impossible. Since 2004, the department’s total budget — which includes health care, administrative costs and entitlements — has doubled, to $127 billion. “New employees hired into a broken system that awards process instead of outcomes will not get us there,” Mr. Fitzpatrick said.
For Mickel Withers, a veteran of the Georgia National Guard, the system was not exactly broken. But it was blundering. After serving on a bomb-detection team in Iraq in 2005 and 2006, he left the Army in 2008 with a diagnosis of post-traumatic stress disorder and started receiving $3,080 a month in disability compensation from the Department of Veterans Affairs.
But this May, a check arrived for only $109. The department told him they were docking his compensation because they had determined he received drill pay from the Guard in 2009. Veterans are not allowed to receive both kinds of pay. In fact, Mr. Withers had left the Guard as a sergeant in 2008, but it took the department weeks to confirm that fact. With two children and a wife to support, he had to seek emergency housing assistance from a veterans group to pay rent and filed for bankruptcy to avoid debt collectors.
It was his second bad experience with the benefits system: In 2009, the department overpaid the art school he was attending, then tried to collect the money from Mr. Withers. It took months to resolve that dispute.
“I think they are so overwhelmed over there, they just glance at things,” he said. “It doesn’t make me feel good about the system.”