Meg Whitman's gubernatorial campaign appears to have jumped the shark.

Whitman campaign advisor Mike Murphy has sent an e-mail to California Insurance Commissioner Steve Poizner (Whitman's rival for the Republican gubernatorial nomination), threatening Poizner if he does not reconsider his gubernatorial run.

It follows a threat to put Poizner "through the wood chopper".

That's a thinly veiled reference to the movie Fargo, where actor Steve Buscemi was thrown into a wood chopper.

Murphy's e-mail is telling in its display of arrogance. Murphy says ..."we can spend $40M tearing up Steve if we must..." It's just one more example of the emerging Whitman strategy: buy the governorship, no matter what it costs.

I'm not a Poizner supporter, but I must admit that he has shown a great deal of backbone in resisting pressure from California comp insurers to raise rates. Today he showed backbone in defying the Whitman campaign's threats.

Whitman appears to be ready to spend whatever it takes to achieve her goal: to buy the California statehouse.

But Poizner, using jiujitsu tactics, won this round. Whitman's campaign is on the mat on this one.

A central narrative of Whitman's campaign is competence and managerial talent. But if you have trouble managing the consultants and political advisers who staff your campaign, it sends a poor message.

Poizner wrote to AG Jerry Brown (that's a strange twist), the FBI, and various U.S. Attorneys, asking for an investigation on the following grounds:
-California Election Code Sec. 18205 (prohibits inducing by way of money or other valuable consideration) a person to withdraw as, or not become, a candidate for public office
-18. U.S.C. Sec 875(d) (Federal anti extortion statute)
-18 U.S.C. Sec. 1952 (another Federal anti-extortion statute)
-18 U.S.C. 1343 (Federal law prohibiting fraud to deprive people of rights)

Little may come of Poizner's call for an investigation. But Whitman's campaign stepped in some public relations manure on this one.

This race will be interesting.

I'll be commenting from time to time on the Governor's race. The outcome of that election will probably have profound consequences for the California workers' comp system.

Stay tuned.

Julius Young
www.boxerlaw.com

This week a report from the Legislative Analyst Office (LAO) questions salary reductions of state personnel who are funded through targeted and user-funded mechanisms:
http://www.lao.ca.gov/reports/2010/stad ... 012710.pdf

The Workers' Comp Appeals Board is "user funded" by assessments on employers. Those assessments also fund Cal-OSHA and labor standards enforcement activities.

But WCAB staff have been subject to furloughs. The Governor plans salary cuts from which the WCAB staff would not be exempted. This is causing great consternation among WCAB staff and staff at other user funded agencies.

The LAO report by Legislative Analyst Mac Taylor notes that:
"It is unclear, however, why the administration chooses to implement the 5 percent unallocated cuts to parts of personnel budgets not funded by the General Fund. The administration's rationale communicated to our office-that the overall size of state government is too large-is arbitrary and not based on any reviews of specific program workloads or personnel effectiveness."

The LAO recommends to the legislature:
"The administration has not put forth a credible rationale why unallocated reductions should be extended to personnel expenses funded by special funds, federal funds, or other nongovernmental funds.
If the Legislature chooses to implement unallocated personnel reductions, we believe that it should do so only for General Fund personnel budgets in departments."

Will the administration back off its plan? Or will they trot out another lame spokesperson to defend this policy?

We shall see.

Julius Young
www.boxerlaw.com

A "collapsed souffle in an unused kitchen in the back of an empty house"....

That sounds like a line from a writing of French surrealist Antonin Artaud, who wrote that "life is a costume grafted to a dead tree".

But the souffle line is from Peggy Noonan. Noonan, former Ronald Reagan speechwriter, and current Republican pundit, uses the line in an op-ed piece in the Wall Street Journal to claim that healthcare reform is dead.
Noonan posits that, despite Obama's insistence that Congress not give up now....now when we are so close..., that "The bill will now get lost in the mists and disappear".

If Congressional Democrats were looking for a road map on healthcare reform, the State of the Union address offered few clues. We're almost into February without a clue as to how the White House proposes to rescue this sinking healthcare reform enterprise.

I've argued in the space recently for salvaging the effort with a scaled back bill to focus on politically popular elements such as eliminating preexisting conditions coverage refusals, allowing purchase of healthcare plans across state lines, eliminating other insurance carrier abuses such as recissions, creating incentives for doctors to practice primary care , and promoting clinics in underserved areas.

Healthcare economists will tell you that the trick is trying to keep costs down if preexisting condition coverage limits are banned. Will healthy people decide to avoid buying insurance coverage until they are sick? If millions of people game the system in that way then costs are shifted and premiums would rise .

There are ways to structure a ban on exclusions due to preexisting conditions, although they are not pretty and perhaps unworkable for many. To gain coverage individuals could be required to pay premiums retroactive to when they were diagnosed with the particular condition.But would this work? Such a solution would be unaffordable in all likelihood. A diabetic who either could not pay for coverage or chose not to pay for coverage could go for years without coverage before developing expensive complications. Do we allow insurers to then refuse coverage for this person (as happens now) or do we allow them to purchase coverage? And if we allow them to purchase coverage do we exclude coverage for the diabetes itself or only for its complications? Or do we provide full coverage for that person even though they did not pay into the system for years?

Perhaps we could force insurers to write coverage for people who have underlying chronic diseases provided that they purchase the insurance while the disease is relatively quiescent. Under that scenario a diabetic may have had episodes related to ketoacidosis, for example, but if the diabetes was under control then he would be guaranteed the right to buy insurance. Setting up bright lines as to when individuals could and could no longer purchase insurance would be tricky.

But tricky is not an excuse to do nothing. Why should a 20 year old diabetic be doomed to a lifetime of no insurance coverage? And do the anti-tax tea party folks want to pay (through their taxes) for that diabetic's treatment in county-run emergency rooms? Or would they just refuse him ER treatment there?

Dealing with such difficult issues is the reason we have such lengthy, perhaps convoluted, Senate and House healthcare bills. The goal was to force most people to have insurance and create mechanisms to help people who couldn't otherwise afford it.

But the majority of voters are unhappy about such an expanded scheme.

Hopefully the Congressional leadership has some creative health economists who can put together a credible but scaled back plan.

I agree. This souffle is collapsing.

Julius Young
www.boxerlaw.com

A top national priority of labor, the Employee Free Choice Act, appears to be a casualty of the the Massachusetts Senate election.

With Democrats no longer in control of a filibuster-busting 60 seats, the EFCA is unlikely to move out of the Senate. And in any event, opposition from some Democrats already meant that any bill would be watered down.

Labor union membership has been shrinking for years, particularly in non-public worker unions. The Employee Free Choice Act was touted as a way for labor to regain strength by facilitating organizing. This is a dreadful blow to unions who hoped for a resurgence.

As a piece in today's Politico by Jeanne Cummings notes, labor union voters in Massachusetts broke for the the Republican, Scott Brown. In that way labor's own members torpedoed remaining hopes for the EFCA:
http://www.politico.com/news/stories/0110/32041.html

It's one more example of how expansive hopes for progressive change have come asunder under the Obama administration.

Today it appears that there's discord in Democratic leadership ranks:
http://www.politico.com/news/stories/0110/32053.html

And progressive pundits such as Bob Herbert are raising uncomfortable questions about the Obama vision ("Obama's credibility gap"):
http://www.nytimes.com/2010/01/26/opini ... rt.html?em

Stay tuned.

Julius Young
www.boxerlaw.com

Governor Schwarzenegger's popularity is at an all-time low, but the Guv still has the urge to stick it to working people.

A new Field poll found that 59% believes that California is in worse shape than before Schwarzenegger took office:
http://www.field.com/fieldpollonline/su ... ls2324.pdf

Only 7% of Californians believe California will be in better shape when Schwarzenegger leaves office than it was when he took over from Gray Davis.

One theme emerges from the Schwarzenegger years: the Governor's war on working people.

That's further confirmed in a piece by Shane Goldmacher in today's Los Angeles Times, titled "Schwarzenegger's budget plan puts unions in the cross-hairs":
http://www.latimes.com/news/local/la-me ... gle+Reader

Targeted in the Governor's budget appear to be the following:
-home care workers for the elderly and disabled (whose numbers would be reduced)
-state prison guards (the Gov. proposes to privatize prisons)
-teachers (whose seniority provisions would be reduced)

This is in addition to the furloughs which have impacted thousands of state workers.

Schwarzenegger claims that the public sector needs to take a haircut.
Steve Maviglio, a Sacramento Democratic strategist, calls it a "jihad against organized labor."

There's little evidence that the Governor-or his party-are willing to look at revenue sources from the corporate sector.

It's yet another signal that this Governor is not likely to be a negotiating partner for anything positive for injured workers or the unions to whom they belong.

Julius Young
www.boxerlaw.com