Schwarzenegger declares California fiscal emergency

California just doesn't get it. All decades of liberal spending, state sponsored welfare and an open invitation to illegal immigration, the State is broke,...and not just broke but in debt up to their ears....or Arnold's Pectorals anyway. Hey State workers and Union members going on un-paid furloughs,...how does that make you feel?

SAN FRANCISCO (Reuters) – California Governor Arnold Schwarzenegger declared a state of emergency over the state's finances on Wednesday, raising pressure on lawmakers to negotiate a state budget that is more than a month overdue and will need to close a $19 billion shortfall.

The deficit is 22 percent of the $85 billion general fund budget the governor signed last July for the fiscal year that ended in June, highlighting how the steep drop in California's revenue due to recession, the housing slump, financial market turmoil and high unemployment have slashed its all-important personal income tax collection.

In the declaration, Schwarzenegger ordered three days off without pay per month beginning in August for tens of thousands of state employees to preserve the state's cash to pay its debt, and for essential services.

California 's budget is five weeks overdue, joining New York among big states with spending plans yet to be approved, and Schwarzenegger and top lawmakers are at an impasse over how to balance the state's books.

Analysts say it could be several more weeks before the Republican governor and leaders of the Democrat-led legislature reach an agreement, a delay that threatens to lower the state's already weak credit rating, now hovering just a few notches above "junk" status.

"Without a budget in place that addresses our $19 billion budget deficit, every day of delay brings California closer to a fiscal meltdown," Schwarzenegger said in a statement.

"Our cash situation leaves me no choice but to once again furlough state workers until the legislature produces a budget I can sign," he wrote.

Schwarzenegger's declaration noted the state's government is projected to run out of cash no later than October should its budget stalemate persist, as expected.

California has a long history of nasty and lengthy budget battles.

Last year, the fight over a spending plan dragged on so long the state controller had to issue IOUs instead of payments to vendors to conserve money for priority payments, including payments for education programs and for investors holding the state's bonds.

IOUs AS EARLY AS NEXT MONTH

Schwarzenegger's declaration noted State Controller John Chiang has said he could be forced to issue IOUs as early as next month because of the budget impasse.

Schwarzenegger has proposed slashing spending to balance the state's books, an approach rejected by Democratic lawmakers. Their leaders in the state Senate and Assembly are trying to draft a joint plan likely to include proposals for tax increases to rival the governor's budget plan.

By ordering furloughs, which he also did last year, Schwarzenegger is bringing pressure on state employee unions allied with Democratic lawmakers on the heels of losing a courtroom battle to cut state employees' pay to the federal minimum wage to bolster the state's finances.

Schwarzenegger's new furlough order was instantly condemned by labor officials as a political ploy.

"To once again force state employees to take unpaid furloughs is just another punitive measure by Governor Schwarzenegger because he couldn't impose minimum wage," said Patty Velez, president of the California Association of Professional Scientists.

The declaration exempted state employee bargaining units that recently agreed with Schwarzenegger's administration to new contracts that include reduced pension benefits.

Schwarzenegger has said he will only sign a budget agreement if it includes an overhaul of the state's public pension system, which includes the California Public Employees' Retirement System, the biggest U.S. public pension fund, which he says poses one of California 's greatest financial challenges going forward.

Schwarzenegger clearly has no qualms in the final months of his final term about pressuring lawmakers through the wallets of one their top constituencies, said Pete Peterson, executive director at the Davenport Institute at Pepperdine University 's School of Public Policy .

"It's an indirect play," he said. " ... these past few months there has been a much more confrontational relationship between the governor and the unions."

Fallen Soldiers' Families Denied Cash as Insurers Profit

Taken from Bloomberg.com news from an article written by Article by By David Evans July 28, 2010

Makes me sick to my stomach. Greed that is one of the original sins that will be this Country's downfall unless we change course and change course now!

Thanks Royal,...you know who are you brother!


Like $28 billion in 1 million death-benefit accounts managed by insurers -- wasn’t actually sitting in a bank.

It was being held in Prudential’s general corporate account, earning investment income for the insurer. Prudential paid survivors like Lohman 1 percent interest in 2008 on their Alliance Accounts, while it earned a 4.8 percent return on its corporate funds, according to regulatory filings.

“I’m shocked,” says Lohman, breaking into tears as she learns how the Alliance Account works. “It’s a betrayal. It saddens me as an American that a company would stoop so low as to make a profit on the death of a soldier. Is there anything lower than that?”

Millions of bereaved Americans have unwittingly been placed in the same position by their insurance companies. The practice of issuing what they call “checkbooks” to survivors, instead of paying them lump sums, extends well beyond the military.

In the past decade, these so-called retained-asset accounts have become standard operating procedure in an industry that touches virtually every American: There are more than 300 million active life insurance policies in the U.S. , and the industry holds $4.6 trillion in assets, according to the American Council of Life Insurers.

Insurance companies tell survivors that their money is put in a secure account. Neither Prudential nor MetLife Inc., the largest life insurer in the U.S. , segregates death benefits into a separate fund.

Newark, New Jersey-based Prudential, the second-largest life insurer, holds payouts in its own general account, according to regulatory filings.

New York-based MetLife has told survivors in a standard letter: “To help you through what can be a very difficult, emotional and confusing time, we created a settlement option, the Total Control Account Money Market Option. It is guaranteed by MetLife.”

But No FDIC Insurance

The company’s letter omits that the money is in MetLife’s corporate investment account, isn’t in a bank and has no FDIC insurance.

“All guarantees are subject to the financial strength and claims-paying ability of MetLife,” it says.

Both MetLife, which handles insurance for nonmilitary federal employees, and Prudential paid 0.5 percent interest in July to survivors of government workers and soldiers. That’s less than half of the rate available at some banks with accounts insured by the FDIC up to $250,000.

Bank of New York Mellon Corp. handles the paperwork and monthly statements for customers with MetLife “checking accounts.” The insurance company, not the bank, most recently reported holding about $10 billion in death benefits, in 2008.

The “checkbook” system cheats the families of those who die, says Jeffrey Stempel, an insurance law professor at the William S. Boyd School of Law at the University of Nevada , Las Vegas , who wrote ‘Stempel on Insurance Contracts’ (Aspen Publishers, 2009).

Until public officials wake up, the bereaved will remain a secret profit center for the life insurance industry.

To read this exceptionally depressing and upsetting article, please click here

Fallen Soldiers' Families Denied Cash Payout as Insurers Profit

http://www.bloomberg.com/news/2010-07-28/fallen-soldiers-families-denied-cash-payout-as-life-insurers-boost-profit.html

Nevada Tea Party Pictures

Although long past over and done with, the big Nevada Tea Party rally in Searchlight, Nevada raised its head again, recently when Liberals being pushed to back up tjheir claims of racism in the Tea Party with some evidence mentioned the rally in Nevada andn the rally in Washington D.C. as examples,...however they forgot to provide any evidence, video tape or othrwise, although there is a standing $100,000 offer for any evidence showing racists in the Tea Party. It appears that the Tea Party pretty much polices it's own.

Contrast that with President Obama and his administration suing Arizona over it's version of the Federal Immigration enforcment laws, let allowing municipalities to be "sanctuary" cities, not prosecuting Black Panthers for obvious voter intimidating outside Phildephiea polling places, and other breaches of faith and his oath of office.

The following are my three favorite pictures of the Tea Party Rally in Nevada. Could not decide on one for the signs of the month, so I chose all three.