LegalNewsLine.com

Business leader praises Brown opinion on gov't salaries

Chris Rizo (chrisrizo@legalnewsline.com) — Sat, 21 Nov 2009 00:01:00 CST

SACRAMENTO, Calif. (Legal Newsline)�California Attorney General Jerry Brown's legal opinion that state lawmakers' salaries can be reduced mid-term won praise Friday from a statewide business leader.

Brown, a Democrat, was asked by legislative administrators whether the seven-member panel that sets lawmakers' wages and benefits -- the California Citizens Compensation Commission -- may reduce the salaries of legislators and other elected officials in the middle of their terms amid the state's fiscal woes.

The president of the Small Business Action Committee, Joel Fox, said on his blog "Fox & Hounds" that Brown made the right decision.

"I'm no legal scholar, but Attorney General Jerry Brown's decision yesterday to allow for an 18 percent salary cut for the state's lawmakers and constitutional officers was a political no-brainer," Fox said. "The budget is in woeful deficit, unemployment is at record levels, public employees are on furlough � of course, the state lawmakers must share the pain."

The citizen commission voted in May to reduce the salaries of elected officials, including state legislators, by 18 percent. The salary reduction would cut legislative pay from $116,208 to $95,291.

The salary cut applies also to the attorney general, state superintendent of public instruction, controller, insurance commissioner, treasurer, lieutenant governor, secretary of state and members of the Board of Equalization.

The commission also in June cut lawmakers' per-diem payments, car allowances and medical insurance and other benefits by 18 percent effective next month.

"The fact that legislators tried to avoid the pay cut during these difficult times separates them even further from average citizens," wrote Fox, who runs Joel Fox Consulting, a public affairs and political consulting firm. He is a former longtime president of the Howard Jarvis Taxpayers Association.

In his formal legal opinion Thursday, Brown noted California voters' 1990 approval of Proposition 112, which requires the commission to "adjust the annual salaries of state officers" each year. Brown said Proposition 112 contradicts and supersedes a ballot measure adopted in 1972 that prohibited mid-term salary reductions.

"The rules of constitutional interpretation require harmonization of conflicting provisions if possible. If provisions cannot be reconciled, however, the later-adopted provision prevails," Brown wrote. "Because I believe that the two conflicting provisions cannot be reconciled, the later-adopted provision calling for adjustments up or down must prevail."

Last year, the California Citizens Compensation Commission, whose members are governor's appointees, approved a 5 percent raise for the attorney general and state superintendent of schools and a 2.75 percent raise for state legislators and other state elected officials.

On Wednesday, it was announced that the Golden State will face a nearly $21 billion budget shortfall over the next year and a half.

The report released by the nonpartisan Legislative Analyst's Office said there is a $6.3 billion shortfall in the current fiscal year budget, which Gov. Arnold Schwarzenegger signed in July.

The state's budget gap will expand to $14.4 billion for fiscal year 2010-2011, Taylor said.

From Legal Newsline: Reach staff reporter Chris Rizo at chrisrizo@legalnewsline.com.

Health care bill rests in moderate Democrats' hands

Chris Rizo (chrisrizo@legalnewsline.com) — Fri, 20 Nov 2009 21:00:00 CST

WASHINGTON (Legal Newsline)�Months ago, the chief lobbyist for U.S. trial lawyers predicted that moderate Senate Democrats could be an obstacle to President Barack Obama's push for a national health care overhaul.

She was right.

The American Association for Justice's Washington lobbyist, Linda Lipsen, correctly said at her organization's national convention in July that Arkansas Sen. Blanche Lincoln could stymie the upper chamber's health care bill.

As of today, Lincoln is not expected to be one of the 60 votes -- equivalent to the entire Democratic caucus -- needed to begin formal debate on the proposed $848 billion health care overhaul offered by Senate Majority Leader Harry Reid, D-Nev.

Barbara O'Connor, director of the Institute for the Study and Politics and Media at California State University at Sacramento, told Legal Newsline that Lincoln "probably won't" support the plan.

"They are leaning all over her," O'Connor said Friday night of Lincoln, who is seeking a third term in November 2010.

Additionally, there have been questions as to whether Democrat Mary Landrieu of Louisiana will support the procedural vote to begin debate needed to prevent a Republican filibuster.

Sen. Ben Nelson, D-Neb., who had threatened to filibuster the bill, said on Friday he will vote allow the health care debate to begin. He said he is reserving final judgment on the bill until after floor debate.

"If you don't like a bill why block your own opportunity to amend it?" Nelson said, explaining his change of heart.

While Lincoln, Landrieu and Nelson each face conservative electorates back home, Lincoln faces a particularly tough reelection, political observers say.

"Arkansas is a state with a lot of older voters, and they are not going to be very happy if she supports a plan that a majority of voters have not embraced," Jennifer Duffy, who analyzes Senate races for the Cook Political Report, told The Christian Science Monitor. "It could become a brick in a larger message that she's gone Washington, voting with the Democratic Party and not Arkansas."

In her presentation before medical malpractice litigators in San Francisco, trial lawyers' Lipsen said other Democratic barriers could be Senate Finance Committee Chairman Max Baucus of Montana and Sen. Tom Carper of Delaware. But so far, they have not posed any danger to the sweeping 2,074-page health care bill.

Lipsen predicted also that once a Senate bill reaches the floor for debate there would likely be a range of amendments proposed, including legal reforms that her group vehemently opposes.

"Democracy is a great thing except on the Senate floor," she quipped.

On whether Obama would sign a health care bill that limits medical malpractice litigation, Lipsen said at the time that she expected the president to sign the bill, even amid trial lawyers' objections.

"If it looks moderate or modest even though you know it not to be, this president will sign it," Lipsen said. "It's health care reform."

Lipsen has a solid record of reading the tea leaves correctly. Also on that July day, she made a second correct prediction. She foretold that federal legislation to give a special $1.6 billion tax break to trial lawyers faced an uphill battle.

The proposal would have allowed plaintiffs attorneys to deduct fees and expenses up-front on their taxes for filing contingency-fee lawsuits. Legal expenses are currently considered loans to clients that are to be repaid from ultimate awards if they win or deducted on their income filings in the event of a loss.

Amid a loud outcry from critics who said the proposal would be an incentive for trial lawyers to file more lawsuits, the measure foundered.

Tort reforms absent

Surely to the delight of Lipsen and much to the chagrin of Republicans, tort reforms are absent from the Senate health care plan, which critics have called an unfair bundle of tax increases Democrats want to foist upon Americans.

The plan would expand insurance coverage to some-31 million uninsured Americans and bar insurance companies from denying coverage on the basis of pre-existing medical conditions, among other things.

It would also require most individuals to purchase health coverage either through their employer, on their own or through a public plan.
Business groups have criticized the Democratic leadership for not including in the legislation legal reforms.

"To truly reform the health care system, Congress must explore every means available to help reduce costs on the American public, including medical malpractice tort reform," Associated Builders and Contractors President and CEO Kirk Pickerel said Thursday.

An Associated Press poll released Thursday indicates that 54 percent of Americans say they would like to see it more difficult for aggrieved patients to sue hospitals and doctors over alleged medical malpractice.

The director of the nonpartisan Congressional Budget Office, Douglas Elmendorf, has said as much as $54 billion could be saved over the next 10 years if Congress enacts legal reforms including a $250,000 cap on damages for pain and suffering and a $500,000 cap on punitive damages and restricting the statute of limitations on malpractice claims.

Reid plan relies on tax increases

Reid's Patient Protection and Affordable Care Act would be bankrolled with a tax on employer-sponsored group health plans with premiums over $8,500 for individual and $23,000 for family coverage. His plan also calls for a 5.4 percent surtax on adjusted gross personal income exceeding $1 million for couples and $500,000 for individuals.

Reid also wants to collect a new 5 percent tax on elective cosmetic medical procedures as well as charge annual fees to insurance companies and manufacturers of medical devices and brand-name prescription drugs.

The pending draft Senate plan -- opposed by the chamber's 40 Republicans -- would increase Medicare payroll taxes by one-half percent -- to 1.95 percent -- for individuals earning more than $200,000 or couples earning more than $250,000.

House, Senate Plans to merge

The expansive House-approved plan championed by House Speaker Nancy Pelosi, D-Calif., and the health care bill that is expected to be passed in the Senate will be merged in conference committee before a final bill goes to the president, who has made health care reform the cornerstone of his domestic policy agenda.

The $1 trillion House-approved plan would extend coverage to about 36 million uninsured Americans, and also bar insurers from denying coverage and prohibit the insurance industry from charging higher premiums to consumers with a preexisting condition.

Both the Senate and House bills also contain a public insurance option, which proponents say is aimed at injecting more competition into the marketplace. Under the Senate plan, states would have the ability to opt out of the public option.

To pay for the coverage expansion under the House bill, that chamber's legislation calls for, among other things, a 5.4 percent surtax on individuals making more than $500,000 a year or families earning more than $1 million and a 2.5 percent excise tax on medical services or devices. The taxes would raise an estimated $460 billion over 10 years.

From Legal Newsline: Reach staff reporter Chris Rizo at chrisrizo@legalnewsline.com.

OppenheimerFunds settles with Oregon; Families to receive refunds

Chris Rizo (chrisrizo@legalnewsline.com) — Fri, 20 Nov 2009 18:50:00 CST

SALEM, Ore. (Legal Newsline)- OppenheimerFunds Inc., manager of Oregon's college savings plan, has reached at $20 million agreement in principle with the Beaver State over losses program participants suffered after the company invested funds in risky securities.

Attorney General John Kroger had sued in Marion County on behalf of families whose savings were devalued.

The lawsuit filed in April against New York-based OppenheimerFunds and two of its affiliates had sought $36 million of lost assets in the Oregon College Savings Plan plus interest along with attorneys' fees.

OppenheimerFunds is the investment manager of the Oregon 529 College Savings Network, and is marketed directly to the public. The Oregon 529 College Savings Network allows families receive a state tax deduction of as much as $4,000 a year.

The material terms of the settlement was approved Thursday by the Oregon 529 College Savings Board. A final settlement agreement has not yet been signed.

OppenheimerFunds is a unit of MassMutual Financial Group, based in Springfield, Mass.

In a brief statement, OppenheimerFunds denied any wrongdoing, saying it settled the Oregon lawsuit to avoid "lengthy and expensive legal process and to apply resources to more constructive ends."

The settlement will divide $20 million among about 45,000 account holders. Settlement payments will be based on how heavily individual accounts were invested in the Core Bond Fund, which lost 35.5 percent in value in 2008, while similar funds in the same investment class lost an average of about 5 percent last year.

The average settlement payment will be about $440, state officials estimated. The funds will be distributed by February.

"When big financial institutions behave irresponsibly, they must be held accountable," Kroger said in a statement. "I am happy that our aggressive investigation resulted in a prompt resolution of this case."

Officials said investors in the college savings program lost at least $36.2 million because of Oppenheimer's alleged actions. Last year, Oregon's college savings program saw its aggregate value decline by nearly 25 percent, to about $770 million.

In the lawsuit, Kroger and fellow Democrat state Treasurer Ben Westlund II alleged that the company broke securities law and other committed other legal violations, including breach of contract, breach of fiduciary duty, negligence and negligent misrepresentation, because the fund did not alert the state that program investments were placed in risky securities.

"We are vigilantly watching out for Oregon families who are investing for a better future," Westlund said. "It was important for the Board to get this matter resolved in a timely way so that money could get back into the accounts of families that need it now, not several years from now."

The Oregon 529 College Savings Board voted in January to remove the Oppenheimer Core Bond Fund from the state 529 portfolio. The Board also voted to terminate the Oppenheimer Limited Term Government Bond Fund.

Oregon's contract with OppenheimerFunds runs through the end of the year. The firm will be replaced by New York-based TIAA-CREF, formally known as the Teachers Insurance and Annuity Association - College Retirement Equities Fund, as the manager of Oregon's college savings plan.

From Legal Newsline: Reach staff reporter Chris Rizo at chrisrizo@legalnewsline.com.

W.Va. Chamber: Coal regulations will increase health care costs

John O'Brien (john@legalnewsline.com) — Fri, 20 Nov 2009 14:39:00 CST

CHARLESTON, W.Va. (Legal Newsline) - The West Virginia Chamber of Commerce says the state's two long-standing senators should refuse to vote on health care reform until it is assured regulations on the coal industry will be eased.

Chamber President Steve Roberts said Friday there's a war on coal/energy that has been growing since President Barack Obama took office and urged Democratic Sens. Robert Byrd and Jay Rockefeller to delay their votes on health care.

"This war against coal and domestic energy threatens our state and its citizens with increased poverty, lost tax revenues and economic disruption," Roberts said.

"This needs to end before irreparable damage sets in."

Job losses and poverty contribute to poor health, Roberts said.

"It seems counterintuitive to ask taxpayers in this country to pour money and take on a trillion dollars in future debt to expand health care coverage and benefits while at the same time the Obama administration and Congress are working to destroy jobs, eliminate good health care benefits and hurt people's well-being," he said.

Elements of the war on coal/energy, Roberts said, are:

-Climate change legislation that will raise energy prices for coal-fired power plants;

-Regulating carbon dioxide as a pollutant;

-Reviews of federal mining permits;

-New requirements for greenhouse gas emission permits;

-Classifying coal combustion byproducts as hazardous waste; and

-More oversight of state surface coal mining programs.

"Votes to advance national health care reform are at razor-thin margins in both houses of Congress, and West Virginia's congressional delegation needs to use this time � and their clout and seniority -- to get this anti-coal situation stopped," Roberts said.

From Legal Newsline: Reach John O'Brien by e-mail at jobrienwv@gmail.com.

Agreement brings new player into Conn. road deicing market‏

Nick Rees — Fri, 20 Nov 2009 14:17:00 CST

HARTFORD, Conn. (Legal Newsline) - Competition in the road salt industry will be increased following an agreement announced by Attorney General Richard Blumenthal that enables a new vendor to enter the market.

"This agreement averts a monopolistic road salt market that would reduce competition and choice, and threaten to increase road deicing costs for taxpayers," Blumenthal said. "Road salt is a hot commodity in a cold winter - a necessary expense even in the best of times.

The agreement comes as part of an anti-trust investigation by Blumenthal into the consolidation of two giant deicing road salt companies. The merger of the companies jeopardizes competition in the Connecticut market, where the state's deicing road salt contract for the upcoming season are worth more than $15 million, and increases costs for the state and municipalities.

Competition would be substantially reduced by the acquisition of Morton International, Inc., by the International Salt Company's parent company, K+S, which would reduce competition and bulk deicing road salt provider choices in Connecticut.

The German K+S is one of the world's leading suppliers of salt products while the Chicago-based Morton is a leading salt vendor in North America.

The newly merged K+S and Morton have agreed to divest certain assets in Connecticut. The company will divest several Connecticut road salt contracts as well as portions of their rented stockpile space, trucking contracts and on-hand salt to allow a new state-approved road salt vendor - Granite State - to enter and compete in the Connecticut market.

"When budgets are frozen - along with roads - Connecticut taxpayers cannot afford the risks of reduced competition," Blumenthal said. "This agreement adds a new viable competitor to the market - avoiding a salt supply stranglehold and enhancing competition. This new company, approved by the state, will receive the contracts and assets necessary to serve Connecticut. Towns and cities can piggyback on these competitive state contracts, and benefit from preserved price competition."

Granite State, which has operated in other New England states for many years, has never bid on Connecticut contracts. Granite State, under the new agreement, must now perform under several International Salt Company contracts as International Salt Company had performed the previous year.

International Salt Company will also pay $40,000 to the state under terms of the agreement for the cost of its investigation and legal action.

Scruggs book coming Dec. 2

John O'Brien (john@legalnewsline.com) — Fri, 20 Nov 2009 13:39:00 CST

JACKSON, Miss. (Legal Newsline) - Throughout the downfall of famed plaintiffs attorney Richard "Dickie" Scruggs, visitors to Mississippi political Web site Y'All Politics noted that the saga would make a good book.

Site operator Alan Lange must have been paying attention, because he and former federal prosecutor Tom Dawson are gearing up for the release of their book "Kings of Tort," which will be available nationwide Dec. 2.

Lange's site gathered news reports and published original posts while the story of Scruggs began in Nov. 2007. Dawson was an Assistant U.S. Attorney assigned to the case and retired this year.

The two meet at a University of Mississippi football game in 2008 and decided to write the book together months later.

"We were both convinced that there would likely not be a narrative that would put the scandal in the correct historical context," said Lange, who also runs a legal staffing company.

"Small businesspeople like myself have long suspected that Scruggs was, in fact, telling the truth when he bragged about 'magic jurisdictions' that fundamentally lacked fairness for civil defendants.

"I thought it was critical to get the facts out there in context so that everyone could recognize the signs of this corruption and be on guard so it will never happen again."

Lange and Dawson compiled more than 100 sources like news reports and court documents, and used Dawson's experience on the case to provide insight into the behind-the-scenes elements of the investigation.

Two state judges, several high-profile attorneys, two state attorneys general and a former U.S. Senator make up the key players in the story.

Scruggs has pleaded guilty in two separate cases to bribing state judges for favorable rulings in civil lawsuits that were filed by former business partners who argued with Scruggs over their shares of attorneys fees. He received a total of 7 1/2 years in prison.

Scruggs gained notoriety when his work helped lead to the 1998 Tobacco Master Settlement Agreement, which has an estimated worth of $246 billion for the 52 participating territories and states. Mississippi is not one of them, but has its own separate agreement.

He was a successful asbestos attorney before that, and most recently became involved in Hurricane Katrina litigation. The story of fellow incarcerated asbestos lawyer Paul Minor is also explored in the book.

Lange said he asked counsel for Scruggs and his son and former law partner Zach for an interview but was denied. Former Mississippi Attorney General Mike Moore, who hired Scruggs for the tobacco case and represented Zach during criminal proceedings, also denied an interview request, as did current state Attorney General Jim Hood.

Curtis Wilkie, a friend of Scruggs' and journalism professor at Ole Miss, is also writing a book on the subject, Lange said.

From Legal Newsline: Reach John O'Brien by e-mail at jobrienwv@gmail.com.

Ohio AG sues Wall Street rating firms

Chris Rizo (chrisrizo@legalnewsline.com) — Fri, 20 Nov 2009 12:44:00 CST

COLUMBUS, Ohio (Legal Newsline)� The Ohio's attorney general sued the nation's three major Wall Street credit-ratings agencies Friday, alleging that they provided inflated ratings to mortgage-backed securities.

Attorney General Richard Cordray said as a result of inflated ratings by Standard & Poor's, Moody's Investors Service and Fitch Ratings, five Ohio public pension funds lost at least $457 million.

"The rating agencies were central players in causing the worst economic crisis in Ohio since the Great Depression. The rating agencies assured our employee pension funds that many of these mortgage-backed securities had the highest credit ratings and the lowest risk," Cordray said. "But they sold their professional objectivity and integrity to the highest bidder."

In his 77-page lawsuit -- filed in U.S. District Court for the Southern District of Ohio -- Cordray said the credit-rating firms marketed mortgage-backed securities, saying they had the highest ratings and lowest risk.

Cordray, the former Democratic state treasurer, said the rating firms put high rating on the on toxic mortgage debt in return for high fees paid by those they were rating.

"The rating agencies' total disregard for the life's work of ordinary Ohioans caused the collapse of our housing and credit markets and is at the heart of what's wrong with Wall Street today," Cordray said.

The attorney general's lawsuit was filed on behalf of the Ohio Public Employees Retirement System, the State Teachers Retirement System of Ohio, the Ohio Police & Fire Pension Fund, the School Employees Retirement System of Ohio and the Ohio Public Employees Deferred Compensation Program.

The McGraw-Hill Companies, parent to Standard & Poor's, says it plans to fight Cordray's claims.

"We believe the claim has no legal or factual merit and we intend to defend ourselves vigorously against it," said corporate spokesman Steven Weiss.

The lawsuit is just the latest action by a state attorney general filed against Standard & Poor's, Moody's and Fitch.

In September California Attorney General Jerry Brown, a Democrat, began an investigation to determine how much and when the companies knew about the creditworthiness of high risk mortgage-backed securities.

"Standard & Poor's, Moody's and Fitch put their seal of approval on high risk mortgage-backed securities, recklessly giving stellar ratings to shaky assets that proved toxic to the entire financial system," Brown said at the time.

In July, the California Public Employees' Retirement System filed a lawsuit in state court over $1 billion in losses because of what the pension fund called inaccurate risk assessments on the part of the three credit rating agencies.

Last year, Connecticut Attorney General Richard Blumenthal, a Democrat, sued the credit-rating agencies over "deceptive and unfair practices" that he said have cost taxpayers millions of dollars in interest and bond insurance costs.

From Legal Newsline: Reach staff reporter Chris Rizo at chrisrizo@legalnewsline.com.

Rogue Conn. waste hauler fined ore than $270,000‏

Nick Rees — Fri, 20 Nov 2009 10:19:00 CST

HARTFORD, Conn. (Legal Newsline) - Fines and penalties of more than $276,000 have been imposed on a rogue waste hauler for operating two illegal transfer stations in Stamford, Conn., by a Superior Court judge who also ordered that the facilities be permanently closed.

Joseph Cammarota was ordered by Superior Court Judge Robert Satter to pay a $200,000 penalty and $76,814 in outstanding penalties and interest relating to previous violations of state environmental and solid waste hauling laws.

Attorney General Richard Blumenthal obtained both the penalties and the closures while working in cooperation with Department of Environmental Protection Commissioner Amey Marrella.

"This decision sends a powerful message to the solid waste industry," Marrella said. "The message is that if someone operates without permits, fails to abide by administrative orders and skirts the law, we will take actions necessary to bring them into compliance, require they clean-up their sites and seek large penalties against them."

Cammarota and his companies, Camm of Stamford, Inc., and Target Disposal Service, were also prohibited by Judge Satter from dumping solid waste at Cammarota's properties located at 14 Larkin Street and 29 Popular Street in Stamford.

"This decision is a huge victory for the environment and public health, imposing strong punishment - nearly $280,000 - against an unrepentant polluter," Attorney General Richard Blumenthal said. "This powerful penalty sends a potent message: carters who operate illegal transfer stations will pay a price. But it also shows that we must strongly enforce and enhance laws that stop transfer station polluters and illicit waste haulers. We have zero tolerance for transfer station operators who operate illegally without licenses, flouting state law and endangering public health. We will fight to enforce state laws protecting the environment and requiring licensing of transfer stations."

The penalties and closure order follow a lawsuit filed by Blumenthal in 2006 against Cammarota and his companies.

Poll: Republican Whitman tied with Brown in Calif. governor's race

Chris Rizo (chrisrizo@legalnewsline.com) — Fri, 20 Nov 2009 00:07:00 CST

SACRAMENTO, Calif. (Legal Newsline)�If California Attorney General Jerry Brown decides to run for governor next year, he could have some real competition on his hands �- from a Republican, a poll indicates.

A Rasmussen Reports poll released Thursday indicates that Brown, a major longtime figure in California politics, has the same level of support as Republican gubernatorial hopeful Meg Whitman, a former Silicon Valley executive, in a state where Democrats far outnumber Republicans on voter registration rolls.

In a hypothetical general election matchup, the Rasmussen Reports poll shows that Brown, who has not formally entered the race, is in a dead heat with Whitman, the former eBay chief executive, both with 41 percent support.

The poll found that 14 percent of California voters are undecided.

In a September poll by Rasmussen, Brown led Whitman by nearly 10 percentage points, 44 percent to 35 percent.

Although Brown has not formally entered the gubernatorial race, he has formed an exploratory committee, allowing him to raise money for a potential bid.

In addition to Whitman, former U.S. Rep. Tom Campbell and state Insurance Commissioner Steve Poizner, a former state finance director, are vying to succeed fellow Republican Gov. Arnold Schwarzenegger, who is barred by term-limits from seeking reelection.

Brown, who was California governor from 1975 to 1983, may seek another two terms as the state's chief executive because he led California before term limits were enacted.

In potential matchups with the other two GOP candidates, Brown would handily win if the general election were held today, the poll indicates.

Brown leads Campbell by nine points, 42 percent to 33 percent, and leads Poizner by 11 points, 43 percent to 32 percent.

On the Republican gubernatorial hopefuls, Brown told Legal Newsline last week that they are all "smart" but cautioned them that leading the Golden State is "different than running a business," taking a jab at Whitman and Poizner, who before entering politics were business leaders.

For her part, Whitman has said Brown is an entrenched career politician.

"I'm not a career politician. I spent 30 years in business," Whitman said in a recent ABC News interview. "I can tell you that people in California have had it with career politicians: they are done."

Although Brown, 71, is far better known than any of the Republican candidates, he is a more controversial political figure, with 41 percent of California voters viewing him unfavorably and 30 percent very unfavorably.

Brown was the mayor of Oakland, Calif., from 1998 to 2006, before being elected as the state's chief legal officer in 2007. He unsuccessfully sought the Democratic nominations for U.S. president in 1976, 1980, and 1992.

He is the only Democrat preparing for a run for his party's gubernatorial nomination. San Francisco Mayor Gavin Newsom abandoned his campaign late last month amid lackluster poll numbers and poor fundraising.

U.S. Sen. Dianne Feinstein, D-Calif., and U.S. Rep. Jane Harman, D-Calif., are two names frequently mentioned as other possible Democrats interested in jumping into the governor race.

From Legal Newsline: Reach staff reporter Chris Rizo at chrisrizo@legalnewsline.com.

Critics decry Senate health care plan

Chris Rizo (chrisrizo@legalnewsline.com) — Fri, 20 Nov 2009 00:03:00 CST

WASHINGTON (Legal Newsline)�Senate Majority Leader Harry Reid's plan to overhaul the nation's health care system received a chilly reception from Republicans who decried the proposal as a bundle of tax increases and new responsibilities for cash-strapped states without enacting legal reforms.

The Senate Democratic leadership is aiming for a vote Saturday on whether to take up the legislation, which would expand insurance coverage to some-31 million uninsured Americans and bar insurance companies from denying coverage on the basis of pre-existing medical conditions, among other things.

"This is about the woman with high cholesterol, or the man with heart disease, or the child with hay fever who can't get help," said Reid, D-Nev. "That's why we're stopping insurance companies from deciding they'd simply rather not give health care to the sick."

To move his plan forward, 60 senators must vote to begin debate on the 2,074-page bill that would require most individuals to purchase health coverage either through their employer, on their own or through a public plan.

All but three Senate Democrats � moderates Blanche Lincoln of Arkansas, Ben Nelson of Nebraska and Mary Landrieu of Louisiana - are expected to support the procedural vote.

Utah Republican Sen. Orrin Hatch told the Los Angeles Times on Wednesday that the Senate health care floor debate is "going to be a holy war."

"This is a lousy bill that is going to cost American taxpayers like mad for the rest of our lives," Hatch said Thursday in an appearance on the Fox News Channel.

Associated Builders and Contractors President and CEO Kirk Pickerel said Thursday that the Senate plan falls woefully short.

"To truly reform the health care system, Congress must explore every means available to help reduce costs on the American public, including medical malpractice tort reform," Pickerel said in a statement.

An Associated Press poll released Thursday indicates that 54 percent of Americans say they would like to see it more difficult to sue hospitals and doctors over alleged medical malpractice.

Reid's plan would be bankrolled with a tax on employer-sponsored group health plans with premiums over $8,500 for individual and $23,000 for family coverage.

The Patient Protection and Affordable Care Act also calls for a 5.4 percent surtax on adjusted gross personal income exceeding $1 million for couples and $500,000 for individuals.

Reid also wants to collect a new 5 percent tax on elective cosmetic medical procedures -- the so-called botox tax -- as well as charge new annual fees to insurance companies and manufacturers of medical devices and brand-name prescription drugs.

The Reid plan would increase Medicare payroll taxes by one-half percent -- to 1.95 percent -- for individuals earning more than $200,000 or couples earning more than $250,000.

The $1 trillion House plan, meanwhile, would extend coverage to about 36 million uninsured Americans, bar insurers from denying coverage and prohibit the insurance industry from charging higher premiums to consumers with a preexisting condition.

Both the Senate and House bills contain a public insurance option, which proponents say is aimed at injecting more competition into the marketplace. Under the Senate plan, states would have the ability to opt out of the public option.

The Congressional Budget Office has said the Reid plan would reduce federal deficits by $130 billion over the next decade.

To help cut federal health care spending, the legislation calls for the creation of an Independent Medicare Advisory Board that would recommend steps to curtail growth of the program that provides health care benefits to millions of older- and disabled Americans.

To pay for the coverage expansion under the House bill, that chamber's legislation calls for, among other things, a 5.4 percent surtax on individuals making more than $500,000 a year or families earning more than $1 million and a 2.5 percent excise tax on medical services or devices.

The taxes would raise an estimated $460 billion over 10 years.

"Higher premiums, tax increases and Medicare cuts to pay for more government. The American people know that is not reform," said Senate Minority Leader Mitch McConnell, R-Ky.

A key difference between the Senate and House plans is when important provisions will take effect such as when people would have to have insurance coverage or employers would be required to pay for policies.

Most of the House bill would take effect in 2013, while the Senate bill calls for provisions to take effect a year later.

The expansive House-approved plan championed by House Speaker Nancy Pelosi, D-Calif., and the bill that is expected to be passed in the Senate will be merged in conference committee before a final bill goes to President Barack Obama, who has made health care reform the cornerstone of his domestic policy agenda.

A group of Republican state governors said this week that they are concerned congressional efforts to change the way the nation's health insurers do business will mean cost shifts to the states, negatively impacting their already-stretched budgets.

The Senate bill, critics say, would significantly expand the Medicaid program for the poor, and foist some of the additional costs on the states after three years.

"We're concerned about the federal government overreaching and trampling the prerogative of states across this great country," Minnesota Gov. Tim Pawlenty said Thursday. "At a time when state budgets that are tighter than ever, that's not only going to be burdensome. But also from a policy direction, it heads our country in the wrong direction."

From Legal Newsline: Reach staff reporter Chris Rizo at chrisrizo@legalnewsline.com.