Olympia Business Watch

Why Democrats won't cross the trial lawyers on Health Care Reform

From the August 31 editorial page of the Washington Examiner (Washington, D.C.):  “The reason tort reform is not in the (health care reform) bill is because the people who wrote it did not want to take on the trial lawyers in addition to everybody else they were taking on. And that’s the plain and simple truth,” said Howard Dean, former Vermont governor, presidential candidate and now chair of the National Democrat Party.

Put otherwise, trial lawyers have effectively bought themselves veto power, the Washington Examiner surmised.

In the ranking by OpenSecrets.org of campaign contributions by the top 100 special interests during the past 20 years, the American Association for Justice (AAJ) – formerly the Association of Trial Lawyers of America – ranks sixth overall.

 

The AAJ is the trial lawyers’ Washington lobbying group, and 90 percent of its $30.7 million in contributions since 1989 went to Democrats. At the other end of this pay-to-play process in the nation’s capitol, AAJ has spent nearly $14 million lobbying Congress just since Democrats won control of both chambers, including $2.3 million thus far this year.

 

As governors like Texas’ Rick Perry and Mississippi’s Haley Barbour have demonstrated in recent years, capping medical malpractice suits can save billions of dollars by lowering the cost of insurance for providers and increasing access to quality care for patients. Without such caps, trial lawyers stand to continue raking in millions of dollars in fees by bringing suspect suits. And, as the above campaign contribution data show, it’s easy to see where many of those dollars end up. With such a lucrative quid pro quo, Democrats in the White House and Congress aren’t ever likely to do anything to cross this special interest.

Reforest forests, not farmland

Part of the climate change legislation Congress will consider when it reconvenes next month includes a plan to reforest 18 million acres of farmland, AWB President Don Brunell writes in his weekly column.

The idea, developed by the U.S. Environmental Protection Agency, is aimed at producing more oxygen and absorbing carbon dioxide - a greenhouse gas.

It's a reasonable enough sounding plan, until you consider the consequences of taking 18 million acres of farmland out of production, Brunell writes.

Instead of reforesting farmland, a move that will lead to higher food prices, Congress should replant public forests denuded by wildfire, he says.

Why isn't tort reform in the health care proposals?

According to former Vermont governor and DNC Chairman Howard Dean, it's because of trial lawyers.

On Tuesday, Dean appeared at a town hall meeting on health care reform in Reston, Va., with Virginia Rep. James Moran (D). A constituent asked why tort reform was not included in the current health care proposals in Congress. Here's what Dean said in response:

"This is the answer from a doctor and a politician. Here's why tort reform is not in the bill. When you go to pass a really enormous bill like that, the more stuff you put in it, the more enemies you make, right? And the reason that tort reform is not in the bill is because the people who wrote it did not want to take on the trial lawyers in addition to everyone else they were taking on. And that is the plain and simple truth."

Watch the CSPAN video here. Comment thread begins at approx. 1:32:30. 

Call it what you want: AWB's holiday tree helps families in need

Monday's announcement by the Department of Administration regarding public displays in the state Capitol obscures a crucial point in the ongoing debate over trees, flying spaghetti monsters and Festivus poles -- in particular, the hundreds of needy families that benefit from AWB's Capitol Holiday Kids' Tree. While the tree in the rotunda is the most visible symbol of this effort, the real story lies in the children and families who benefit from this unique program.

Each year since 1989, AWB has coordinated thousands of gifts and more than $300,000 in cash donations from members and member organizations. The donations are then distributed to families in need by firefighters in Grays Harbor and Thurston counties. Last year's project alone generated $20,000 for the families; toys were provided to children in the two counties through the Toy Industry Foundation. Barnes & Noble booksellers also donated books for distribution to patients at Seattle Children's Hospital.

Despite the rule-making ruckus over the tree, AWB will host the program again this year, and hopes the frenzy over the symbol of the event will not obscure the good will of the program.

Climate Change Legislation Costly to Washington State

When Congress reconvenes following its August recess, it will resume work on climate change legislation.  Just before the recess, the House was considering legislation by Congressmen Henry Waxman (D-Calif) and Ed Markey (D-Mass) which includes language to establish a cap and trade system.  Under that approach emissions would be capped at certain levels and those exceeding those levels would have to purchase (trade) emission credits from those with a surplus.

The National Association of Manufacturers(NAM) and the American Council for Capital Formation (ACCF) updated its analysis of the impacts of the legislation on our economy, families and jobs. NAM and ACCF found under a high-cost scenario the House global warming bill could reduce economic growth by 2.4 percent and cost 2 million jobs by 2030. One "key finding is that the climate bill will hurt the manufacturing sector particularly hard. As much as 66 percent of the total job loss from the climate bill could come from manufacturers.

The Waxman-Market legislation requires that 2005 carbon dioxide limits be reduced by 17% reduction by 2020 and 83% by 2050.  The price of carbon permits (what companies must pay to emit greenhouse gases could be between $48 and $61 per metric ton by 2020 and could increase to $123 and $159 by 2030.

As for Washington State, NAM-ACCF estimates the impacts by 2030 include:

1.    loss of 41,456 - 56,459 jobs

2.    decrease in disposable income of $696 – 1,213

3.    in gasoline prices of 21 – 27%

4.    electricity price increase of 19%

5.    natural gas up 77%

6.    a decrease in Washington’s GSP by $11.8 billion

This will have lasting impact on Washington families, businesses, hospitals, schools and the economy.  The state budget will not escape either because so goes the economy, so goes state and local governments.

For a copy of the Washington Analysis, contact Don Brunell (DonB@awb.org).

Don C. Brunell, President

Why California is in trouble and how to avoid a similar fate

Much of California's economic troubles can be linked to the loss of manufacturing jobs, AWB President Don Brunell writes in his weekly column.

In the 1950s and '60s, when the Golden State truly was a land of sunshine and opportunity, "it offered middle-class people, not just techy high-fliers, a shot at the American dream - complete with superb schools and universities, and an enviable physical infrastructure," according to an Economist article Brunell cites.

High taxes and intrusive government regulations have since strangled the state's economy, according to the article.

As Washington lawmakers prepare to address the state's revenue shortfall, they should learn from California's mistakes and get to work protecting Washington's manufacturing base.

Could Washington's Nation-Leading Minimum Wage Go Down Next Year?

Probably not.  But as news yesterday came out that the adjustable minimum wage rate in Colorado will likely go down with inflation next year (ably dilated in this blog post by the Washington Policy Center's Carl Gipson), one may wonder why our state's inflation-adjusted minimum wage rate wouldn't also go down if (and as) inflation indices trend downward.

Colorado's minimum wage law was adopted in 2006 as an amendment to the state constitution.  It states, in pertinent part, that Colorado's annual minimum wage "shall be adjusted annually for inflation, as measured by the Consumer Price Index used for Colorado." Note that an "adjustment" can go either up or down.

Washington's minimum wage law, by contrast, appears to be a one-way ratchet.  Our statute, adopted by initiative in 1998, says the Department of Labor & Industries shall "calculate an adjusted minimum wage rate to maintain employee purchasing power by increasing the current year's minimum wage rate by the rate of inflation."  Note the third verb: "increasing". 

I suppose an argument could be made that if the rate of inflation is negative, the adjusted rate should go down despite the word "increasing" -- after all, keeping the rate the same the following year because of negative inflation isn't "increasing" it either.  Courts in Washington have done stranger things with statutes. 

But I wouldn't hold my breath.

WashACE's Richard Davis looks at Workers' Comp Costs

In a column printed in this week's Puget Sound Business Journal, WashACE coordinator Richard Davis comments on the ongoing debate over the cost of workers' compensation in Washington.  Take a look.

What businesses must do now to prepare for fall swine flu

Tell employees to go home if they're sick.

Cross-train workers so business can continue if a large number of employees fall ill.

And don't require a doctor's note from sick workers. Doctors will be busy treating patients.

Those are a few of the suggestions that U.S. Commerce Secretary and former Washington Gov. Gary Locke has for business leaders as officials prepare for a possible return of the swine flu.

Locke and Kathleen Sebelius, the U.S. Health and Human Services secretary, took to the air Wednesday to bring attention to the issue. Officials are preparing for a second wave of H1N1 infections this fall, and warning that it could sicken millions of people.

A vaccine for the swine flu is being tested in eight cities, including Seattle. It will be given in addition to the standard seasonal flu vaccine.

AWB is the business liaison to the state's emergency management system, and will work to keep businesses informed about swine flu issues.

A copy of the press release from the Department of Commerce is available here.

A list of resources from the federal government is available at www.flu.gov, including a workplace planning toolkit.

The Columbian Looks at Possible Workers' Comp Increase

The buzz about a possible major hike in workers' comp taxes is causing employers trepidation, notes The Vancouver Columbian this morning.  Bob Malooly, L&I's assistant director for insurance services, is quoted extensively on the matter:

A big rate hike of between 15 percent and 20 percent would cover projected rising claims and withering returns on Washington's $11 billion insurance account, said Robert Malooly, assistant director for insurance services for the state's Department of Labor & Industries.

Its public insurance account pays medical bills and lost wages to workers injured on the job in Washington.

In many cases, it pays for long-term and lifelong injuries, Malooly said.

"We don't know what medical inflation will be. The contingency reserve provides for some of that uncertainty," Malooly said. [snip]

In 2008, Washington's public workers' compensation account paid a total of $1.72 billion in benefits. L&I expects the total to increase to $1.89 billion this year.

Malooly said he expects costs will continue to rise, due to higher medical costs and wage inflation.

"You would think in an economic downturn nobody would get a raise, but what happens is the least senior people get laid off and they tend to be at the bottom of the pay scale," he said.

Workers' comp pays approximately 66 percent of the wage of an injured employee.

Malooly said his department has also been dealing with more complex claims in today's large population of older workers who are putting off retirement to a later age.

"For example, we're seeing more people with diabetes, and treating a leg injury for someone with diabetes is very expensive versus someone who doesn't have (diabetes)," he said.

At the same time:

Local employers say an increase can only cause more damage to their recession-battered businesses, especially those that provide work in high-risk injury jobs, such as construction.

"It's something that's going to hurt the ability to hire more employees" at a time when the county's jobless rates are already high, said Sam Vilhauer, a local custom home builder and former president of the 936-member Building Industry Association of Clark County.

The Department was originally supposed to update the preliminary figures driving this discussion at a meeting of the state Workers' Compensation Advisory Committee on August 26th.  That meeting has now been postponed until September 15th while the Department conducts additional analysis on the financial and actuarial data.