Sunday, December 27, 2009

Out of Balance Constitution

In my last post, I discussed that the health care reform would probably require States to raise State taxes, hence an “unintended consequence” (or in my opinion, intended) of the health care bill and an out for congress to say it is “deficit” neutral. However, the senate passage of health care reform, on Christmas Eve, probably would not have been possible without the 17th Amendment, which changed the way Senators were elected. The health care bill is a prime example of how the 17th amendment has cause the Constitution to be out balanced. The States need to have a voice in the federal government, especially one so intent on spending and “bailing out”. It also, occurred to me that if the Senators were elected by the State legislators we would not have to worry about the “D” or the “R” in their name, because the Senators would be accountable to the legislative body of their state, not the “party”. It was pretty obvious that there was some party arm twisting, among other things to get the votes to pass the bill.

So what recourse do “We the People” have to get the Constitution back in balance. After doing some research into the 17th amendment, I found out that the way you repeal an amendment to the Constitution is by another amendment. It was done once before when the 21st amendment repealed the 18th amendment, which abolished liquor. It just so happens, someone has already written a proposed amendment to repeal the 17th amendment. This proposed amendment puts the States back into the federal government; in addition the amendment has a provision that would allow the state legislator to remove a senator by a majority vote. Well, I am not a lawyer, so I am not sure that this particular proposed amendment is the exact one, but it is a huge step in the right direction. Ratifying a proposed amendment is not an easy task, but it can be done.

Related Article

Can We Recall Senator Webb and Senator Warner?

Lt. Gov Bill Bolling Letter to Senator Webb and Warner

Sunday, December 20, 2009

Health Care Bill will raise your State Taxes

On Saturday, December 19th, 2009, the one vote that Majority Leader Sen. Reid needed to stop the filibuster was “brokered”. I use the term brokered because that seems to be the best fit. Sen. Reid was told by President Obama to deal with Sen. Ben Nelson (D – Nebraska) who was holding out because of tax payer funded abortions that were allowed in the bill. At least, that is what he was saying. However, here is the deal that Sen. Nelson was able to finagle for Nebraska.


Currently, Medicaid expenses in all 50 states are being paid partly by the State Government using State Tax, and partly funded by Federal Government. But if this bill passes, the “Senator Ben Nelson vote purchase” would make the tax payers of all other 49 states (excluding Nebraska) pay 100% for all of Nebraska’s new Medicaid recipients. The federal Government will pay 100% for all of Nebraska’s new Medicaid recipients.

… If this bill goes through, Nebraska will be the only state that gets this sweet deal of all other State’s citizens paying 100% for Nebraska’s new Medicaid recipients. The Citizens of other 49 states will not only be paying for their own Medicaid program, but will also be forced to pay for 100% of Nebraska’s new Medicaid recipients.

Here in VA, a lot of attention is being given to Senator Webb, who had, also, been one of the missing votes on cloture, due to the Medicare cuts in the bill, among other things. On Dec 15, 2009, Sen. Webb published an op-ed in The Winchester Star, here is a portion:

I voted five times against proposed cuts to Medicare due to my concerns about taking half a trillion dollars out of that system at a time when the pool for Medicare is about to expand with the retirement of those in the Baby Boom generation. I am a long-time supporter of Medicare Advantage programs which have, in my view, greatly improved services in rural areas of Virginia, and I did not want to see cuts to benefits or services. On the issue of abortion, I studied the bill closely to ensure that no taxpayer dollars will be used to fund abortions. I am convinced that this legislation strictly adheres to the requirements of the Hyde Amendment. It also includes clear conscience provisions for providers and consumers who elect to reject a plan that offers such coverage.

Let's not forget the the Louisianna "purchase"....

Democrats are ready to cut virtually any deal to get their bill passed, and some, like Louisiana's Sen. Mary Landrieu, appear willing to sell out one-sixth of the U.S. economy for a few hundred million dollars in Medicaid money.

With these Senators, you can see that Medicare and Mediaid is the common thread. Sen. Nelson’s and Sen. Landrieu, hold out and subsequent “deals” has exposed, in my opinion, the dirty little secret that no one seems to be talking about. The Health Care bill *WILL* raise your state taxes.

This is why the Speaker of the Virginia House of Delegate, Bill Howell and Lacey Putney, Chairman of the House Appropriations Committee sent a letter to Senator Webb and Senator Warner urging them to oppose the Obama-Reid health care overhaul. Here is a portion:

In order to reduce the ranks of the uninsured, the Obama-Reid plan expands Medicaid to cover an additional 15 million Americans, effectively the largest expansion of the Medicaid program since it was established. As you well know, Medicaid is funded partly by states and partly by the federal government. Despite the enhanced federal matching funds to expand Medicaid, states will still be saddled with significant cost increases to meet these new obligations beyond the next five years. While Senator Reid may tout his bill as deficit-neutral in the near term, the fine print shows that it will be the states that will be left holding the bag down the road.

A conservative estimate of the cost to expand Virginia’s Medicaid eligibility to 133 percent of the federal poverty level indicates that Virginia will need to provide $920 million more from 2017 to 2019 cumulatively. In 2019 alone, our increased costs of expanding Medicaid could be almost $470 million annually.

This is how President Obama is able buy votes for the health care bill, through Senator Reid, the administration has agreed to pick up the entire Medicare tab for Nebraska. So, why aren’t the other Senators crying foul? This is a huge concession by the administration using taxpayer money. Well, the “general public”, who vote for the Senators, doesn’t realized this fact because congress does not want you to know and it is not being reported in main stream media. However, the state law makers understand this completely and they are the ones who are going to have to take the blame for raising taxes.

Now, all of this leads me to the point I really want everyone to understand. This is an excellent example of an unintended consequence of the 17th Amendment. The reason that, originally the constitution, Article I, Section 3, had the senate elected by state legislature was to give the state government a voice in the federal government. After all, the federal government is a agent to the state, right? Do you think that if our senators were still accountable to the state legislature they would be so willing to vote for this health care bill that will saddle the state with addition financial burden?? Heck NO!!! The 17th amendment, in my humble opinion, is one of the main reasons our checks and balances have become so unbalanced.

The next question we need answer is, what deal did Senator Webb and Senator Warner work out for their vote? We'll get working on that... stay tuned.

Update: Related Article

According to The Weekly Standard: Nelson: Indian Country Abortion-Funding "Wasn't Addressed"

Related Articles:

Harry Reid’s “Senator Ben Nelson 60th Healthcare vote purchase“– The 49 state tax payer funded bribe

Senator Webb's Op-Ed in The Winchester Star

Friday, December 18, 2009

New and Improved: Credit Card with 79.9% APR

Remember in early summer the legislators cheered as a credit card reform bill was passed by congress and signed into law by President Obama. This was going to be so great for consumers legislators claimed.

“This is a victory for every American consumer who has ever suffered a
the hands of a credit card company,” said Sen. Christopher Dodd, D-Conn., chairman of the Banking Committee. The bill passed the Senate 90-5.

"Consumers will have more money to invest in the economy instead of paying off debt," Rep. Carolyn Maloney, the New York Democrat who sponsored the House credit card bill, said just before the vote. "Americans want this bill."

So I wonder if this is what they had in mind when the legislation was passed:

From the Washington Times:

It's no mistake. This credit card's interest rate is 79.9 percent.

The bloated APR is how First Premier Bank, a subprime credit card issuer, is skirting new regulations intended to curb abusive practices in the industry. It's a strategy other subprime card issuers could start adopting to get around the new rules.

Typically, the First Premier card comes with a minimum of $256 in fees in the first year for a credit line of $250. Starting in February, however, a new law will cap such fees at 25 percent of a card's credit line.

In a recent mailing for a preapproved card, First Premier lowers fees to just that limit -- $75 in the first year for a credit line of $300. But the new law doesn't set a cap on interest rates. Hence the 79.9 APR, up from the previous 9.9 percent.

"It's the highest on the market. It's the highest we've ever seen," said Anuj Shahani, an analyst with Synovate, a research firm that tracks credit card mailings.

The terms are eyebrow raising, but First Premier targets people with bad credit who likely can't get approved for cards elsewhere. It's a group that tends to lean heavily on credit too, meaning they'll likely incur the steep financing charges.

Read the entire article here

Don't get me wrong, if this interest is going to make someone, who probably should not be getting a credit card anyway, think twice it is a good thing. However, knowing congress as I do. This has the potential for a future "crisis" to bailout the people who don't make the best choices. Isn't that how we got into this fix?

Friday, December 11, 2009

Hanover County Sets Stage for 2010 Real Estate Assessments

On Dec 10th an article appeared in the Richmond Times Dispatch with the headline Hanover real estate loses nearly $200 million in value.

Here is a excerpt from the Article:

Hanover County real estate has lost nearly $200 million in value since last year, supervisors learned yesterday from the county's chief assessor, John W. Nelms Jr.

The overall decrease of 1.5 percent in value represents a nearly $195 million decline in residential real estate and a $2.8 million decline in commercial real estate, Nelms said. Assessments were calculated based on sales through the end of October, he said. Values changed on about 10,500 parcels, most of them in the central to eastern part of the county between Ashland and Mechanicsville.

sold in the county also is down, from $347,400 in 2008 to $271,200 in the most recent report, he said. That figure doesn't necessarily indicate a decline in the value of any specific property, however.

The following letter was submitted to The Mechanicsville Local by long time Hanover resident BJ Ostergren. Mrs. Ostergren is also the owner of The Virginia Watchdog website


According to an article in the Richmond Times-Dispatch on 12/10/09 about house sales in Hanover it was reported that "the average price of homes sold is down from $347,400 in 2008 to $271,200" in 2009. That equals a 22% drop in value.

Also in that article the County Assessor, John Nelms, Jr. stated that it was the "less expensive" property that was selling.

While the "less expensive" property may be selling, it has also taken a hit in this distressed market.

For example, in my subdivision, a house sold this past June for $170,000 which was almost 18% less than its 2009 assessed value of $206,800.

But get this....In 2008 that same property's assessed value was $178,200 which was still higher than what it sold for this year; however, in January 2009, the County Assessor (who lives in Richmond) raised the value on that property to $206,800 even while knowing that we were in a depressed market. The house was not worth the 2008 assessed value much less the assessment increase put on it this year by the county. The owner got a bum deal because he had to pay higher taxes this year based on an inflated assessed value.

Remember this example (I could give you more) and ask yourself if you could sell your house in this day and time for what the County Assessor thinks it's worth. Obviously my neighbors couldn't, but I'm also sure there are exceptions.

Around the first of January we are all going to get notices telling us what the County Assessor thinks our property is worth. Even if your property assessment stays the same - or goes up - in that notice, you should seriously think about "appealing" your reassessment. You have that right and it's free.

Also, look online on the "Assessor's" page on the County's web site at the parcels that he is going to lower for 2010. Compare your house's assessed value to others of like value and see if you think you're getting the shaft from the county. What your house is assessed for has a direct bearing on how deep you will have to reach down into your pockets to pay real estate taxes next year.

There are over 44,000 parcels in Hanover and only 10,500 (about 23%) are even changing. Some will be going up in value and some will be going down, but 34,000 values will be staying the same.

How can this be?

BJ Ostergren

Tuesday, December 8, 2009

Budget Busting Bailout

This past weekend at the RPV Advance, I had the opportunity to speak, albeit briefly, with Rep. Eric Cantor (VA 7th) the House Minority Whip. I asked him what current legislation, besides Health Care, in the House needs our attention. Without hesitation he told me “Barney Frank’s Budget Busting Bailout, it would make Bank Bailouts permanent.” The really name for this is the Wall Street Reform and Consumer Protection Act of 2009 (HR 4173) and the House of Representatives will begin considering it as early as tomorrow. This bill is a bundle various legislative acts from Compensation Fairness Act, aka “Say on Pay”, to Financial Stability and Enhancing Prudential Regulation, permanent bailouts for failing banks.

This legislation claims to end the “too big to fail” bailout, however what really happens is the federal government is creating an oversight council to monitor the market place to identify stability threats. The Federal Reserve will act as an agent to the council and will have extended powers, but as a trade off the General Accountability Office enhanced authority to examine the Board of Governors of the Federal Reserve and the Federal Reserve Banks to provide greater transparency.

O.k. that sound all well and good, but for those of us who have been paying attention one of the things we have been asking for is to Audit the Federal Reserve, HR 1207. Audit the Fed would be a great first step in providing economic stability. As far as the permanent bailout, if the Council determines that a “big bank” is failing it will have the authority to step in to provide for an “orderly dissolution” of the failing firm. That shareholder and unsecured creditors will bear the losses. If I could interject with the facts, for a minute, isn’t that what happens now?? The market will bear the risk, not the taxpayers. This does not make sense, until you get to the last bullet point on the summary of the bill.

There is no bailouts for failing institutions. If the financial assistance is necessary for orderly dissolution, industry will pay for it.
o A Systemic Dissolution Fund can be used to help wind down failing financial institutions, but not to preserve them. The fund will be pre-funded by assessments on financial companies with more the $50 billion in assets and by hedge funds with more than $10 billion in assets.

TAH DAH… there’s the tax. It will be penalizing large “too big to fail” companies in the event that they might fail. This is like being given a speeding ticket because you might speed.

We must pay attention to this, Please Please Please contact your Representative and tell them to oppose this legislation.

You can read more about this HR 4173 at

Monday, December 7, 2009

RPV: Not much advancing.

This past weekend in Williamsburg, VA the Republican Party of VA held their Advance conference. The title of the conference “Advance” implied to me that there would be planning and strategizing about the congressional mid-term elections. Unless I missed something that was going on behind close doors there was very little planning. I found this very odd considering there is no lack of candidates.

In the 5th congressional district alone there are 8 candidates that I know of and more keep are popping up daily. There are 3 potential candidates for the 2nd district and at least one in the 9th district. Several of the candidates were there some with tables and information, some had hospitality rooms and some did both. Why weren’t these candidates given more of an opportunity to speak? If the RPV is *really* ready to “take back” the government, that means actually getting principled candidates. It would have been nice to see them in front of a crowd and hear them speak about what they believe. That is just as important as the one on one and you can’t get passion from a flier.

Instead what we got was a lot of back patting and “we worked so hard” this past election. And yes, they probably did work “so hard”. They joked about all the mis-steps of the Deeds campaign, but come on there really was no comparison. McDonnell was the better of the two candidates, but …. dare I say it.. he probably was not the best candidate, he was the chosen candidate for whatever reason. I am sure I’ll never know.

If the RPV is to get qualified candidates elected they need to do more to make the party stronger. They can do this by listening to the community, giving all potential candidates an opportunity to show their passion and qualification, and stop with the “anointed” candidate process.

The last observation I would like to make about the weekend is several people asked me the question, how long have you been working with the Republican Party? Uh, never. To see the blank look on their face when I said Richmond Patriots are a 9-12 group was a wake up call to me. O.k. ladies and gentleman, we have a lot of work to do. There are people in the so-called “conservative” party that are not aware of the 9-12 movement. The Republican Party is still in the mode of politics as usually, but what they fail to see is that we are AWAKE and more people are waking everyday. We are educating people on the issues and we will be holding them accountable no matter who has the majority in the government. And Bob McDonnell, we are expecting you to protect Virginia and we will be holding you accountable.

You can watch the Saturday Night Festivities:

Republican Party of VA 2009 Advance Banquet

Michael Steel speaks around 25:00 mark
Eric Cantors Key Note is around 1:25:00 mark