Who are the winners and losers in yesterday's California voting?

It's a question those who care about California workers' comp should be asking. After all, workers' comp exists in a political petri dish. A proverbial political football over the years, workers' comp is reformed...and reformed...and reformed. So it always pays to see who'll be at the helm.

Winners yesterday?

Assembly Speaker Karen Bass and her Assembly Democrats. They won 3 key races.
-Joan Buchanan of Alamo (Contra Costa County) took that until recently was held by a Republican. The Bay Area now has no Republican Assembly
members.
-San Diego Democrat Marty Block captured a seat previously held by a Republican
-in the Palm Springs area, Democrat Manuel Perez took the seat formerly held by Republican Bonnie Garcia

However, in a cliffhanger the Republicans may have captured the Central Valley seat formerly held by Nicole Parra, in which case the net Democratic pickup will be 2 seats.

But don't get too excited. There still are not enough Democrats to override a veto by the Governor.

On the State Senate side, there is a squeaker in progress in the Santa Barbara area. Democrat Hannah-Beth Jackson holds a lead of 108 votes out of around 300,000 cast. A recount is likely.

A former Assemblywoman, Jackson would probably be a great friend to the cause of disabled workers.

So even though their numbers continue to dwindle in the legislature, Republicans wield the power of the veto and the 2/3 majority requirement for budget votes.

As Republicans become more rare in the legislature and among the high profile state officers (the Controller, Treasurer, Secrretary of State and Attorney General are all Democrats), the party is forced to turn to wealthy businesspeople or celebrities for its gubernatorial candidates.

Losers yesterday?

Gavin Newsom. With Dianne Feinstein and Jerry Brown flirting with gubernatorial runs, Newsom 's odds had already started dropping.

The passage of Prop 8 (prohibiting gay marriage) further weakens his chances. Newsom, whose arrogant "whether you like it or not" speech was injected into the Prop 8 campaign ads, is probably unalterably wounded for a winning 2010 campaign.

Another loser? Carly Fiorina, who had been touted by some as a possible coming Republican political face. Fiorina's performance on behalf of the McCain campaign was poor, showcasing the difficulty some business executives face when they try to morph into the political arena. It will be interesting to see how former Ebay CEO Meg Whitman
can do if she launches her campaign for Governor.

Feinstein appears to be a big winner. With Democrats falling short of a veto-proof 60 seats in the U.S. Senate, Feinstein may just feel free to leave the Senate and "come home" to run the California statehouse.

Stay tuned.

Julius Young
www.boxerlaw.com
(you can subscribe to the blog by clicking on the RSS reader button on the right lower corner)

Polls can be wrong.

But even as the popular vote appears likely to be tightening, the electoral college math appears to favor an Obama victory in Tuesday's election. (disclosure: I am an Obama contributor; my son, a paralegal at Cotchett, Pitre and McCarthy in Burlingame, is at the moment in Colorado, volunteering in the campaign's last moments)

If Obama wins, would there be implications for California workers' comp?

The direct consequences would be non-existent. Workers' comp is not governed by federal law.

Here are some thoughts on the implications of an Obama victory.

1. As part of a push for more regulation over the financial industry, federal oversight of insurance companies may be strengthened. Regulation of workers' comp carriers is generally done at the state level. But the recent AIG debacle (and troubles at The Hartford and other insurers) shows that there are gaps in insurance regulation. Some insurers are in dire straits as their parent companies got involved in complicated financial products.

2. Provided his popularity doesn't sink, Obama will be a great help to
California Democrats as they seek to take back the statehouse in 2010.
Obama could provide tremendous fundraising help and generate unbelieveable amounts of publicity for the eventual Democratic candidate (whether that be Dianne Feinstein or Jerry Brown or one of the second tier prospects who may enter the fray). A Democratic governor is the single best shot California workers have for making significant positive changes in the workers' comp system. Obama could help further solidify Democratic legislative dominance in Sacramento.

3. Labor will have a receptive ear in Washington. This will probably include support for the Employee Free Choice Act, which would strengthen union efforts to organize more workers. It's an act strongly opposed by corporations. But Obama will likely support it to stem the loss of union power, as union membership continues to decline.

4. Efforts to promote stronger health and safety regulations would probably succeed. Under the Bush administration, oil and chemical companies have succeeded in blocking many safety proposals. Many of these proposals can be done via federal regulatory action.

5. There will be a focus on putting together a package that addresses job creation. Without jobs, there will be no work and no workers' comp.

6. An Obama administration will attempt to set a general theme of fairness for the middle class. In a country where many feel their interests are dominated by big corporations and wealthy executives, Obama will attempt to set a main street tone. This may make it easier for advocates of disabled workers, who note that in California workers' comp insurance profits have sometimes outstripped medical and indemnity benefits paid to workers. Excess will be out, fairness will be in. But whether this can be translated into real comp reform at the state level is quite dodgy.

After that, the picture gets murkier.

With budget deficits soaring and tax receipts plunging, action on "change" that requires money will be difficult. The cupboard is bare, and the demands on government are great.

Obama is actually something of an enigma. Would he lead cautiously, proposing incremental change as suggested by "Blue Dog" Democrats?
In doing so, perhaps reaching out to skeptical conservatives to forge a national unity government? That's the Obama who ran the Harvard Law Review.

Or would he risk his political capital on grand changes (healthcare comes to mind) pushed by progressive think tanks, the folks who read Daily Kos and Huffington Post or those who sat with him in the pews in Rev. Wright's church? Frustrated Democrats have a huge wish list of change and could get crankly very quickly.

Or chart a middle course, perhaps focusing on consensus- building items such as children's healthcare and a job stimulus package emphasizing infrastructure projects and energy independence projects to create "jobs, jobs, jobs"?

And with a messy Iraq disengagement, the situation in Afghanistan spinning out of control and with concern mounting that the Al Qaeda frontline could be a takeover of Pakistan's nuclear arsenal, Obama will have his hands full.

This will have to be a domestic presidency. This will have to be an international presidency. The order is tall.

Stay tuned.

Julius Young
www.boxerlaw.com
(you can subscribe to the blog by clicking the RSS button on the lower right corner under "Most Recent Entries")

King Kong. Jack the Ripper. Atilla the Hun. The Mummy.

Those were not AIG and The Hartford stockholders, looking for extra morsels of food. No, it was just some kids, dressed as pretty scary ghouls at my door tonight, in quest of a candy fix.

Next year perhaps we'll see some different masks. Alan Greenspan would be a natural. And perhaps there will be a Henry Paulson mask. Franklin Raines, Richard Fuld, or Joseph Cassano? Too arcane. But perhaps masks will emerge for other "Masters of the Universe" who led us into the swamp of de-leveraging and to the precipice of deflation.

But tonight, dear comp community reader, before you reread that copy of Bonfire of the Vanities, let's turn our attention to a nugget of good news amidst all the doom and gloom.

There was some good news in the California workers' comp world.

Temporary total disability maximum rates will rise next year, due to the SAWW (state average weekly wage) increase. For injuries in 2009, TTD maximums will rise to $958.01 as of 1/1/09. TTD minimums will rise to $143.70. Workers eligible for TTD can draw 2/3 of their average weekly wage, subject to the maximums and minimums.

Workers who are still temporarily disabled more than 2 years after the date of injury (but who have not reached 104 weeks of TTD) may qualify for the increased rates. That's called the Hofmeister bump.

The increase in the SAWW will also affect workers injured after 2003 who are eligible for life pension or permanent total disability benefits
(due to the operation of the COLA under Labor Code 4659(c)).

Disclosure:an upcoming issue of the State Bar Workers Comp Section
magazine, the Workers Compensation Quarterly, will feature an article on SAWW increases and COLAS written by yours truly along with Richard Jacobsmeyer of oakland and Jeff Greenberg of San Francisco.

The way the economy is going, SAWW increases for 2010 may be small or nonexistent. But it's good to see that some workers on TD will be able to keep up with inflation based on the 2008 wage figures.

Stay tuned.

Julius Young
www.boxerlaw.com
(you can subscribe to the blog by clicking on the RSS reader button on the lower right corner under "Most Recent Entries")

It's good to have a sugar daddy. Someone to pay the bills.

Sarah Palin had the Republican National Commmitee, treating her to shopping binges at Barney's and Nieman Marcus.

CNA insurance, hemorraging millions in the 2008 economic crisis, turned to its corporate parent, Loews Corp., controlled by the Tisch family. CNA has been a major player in the California workers' comp market over the years.

Hoping to head off at the pass any credit ratings issues, Loews gave CNA an infusion of $1.25 billion.

That's some sugar.

Still nesting at the U.S. taxpayer's teat is AIG. The U.S taxpayer is is committed to the tune of over $123 billion. $90 billion of that has already been drawn down.

Put this in perspective. This sum-for AIG, one company-is way more than currently guaranteed to the failing U.S. auto industry.

This sum-for AIG, one company-is about one-sixth of the total rescue package for the banking industry.

It appears that AIG is leaking like a sieve. Treasury officials and Congressional investigators are now trying to determine how AIG has lost so much of its cash so quickly.

Analyst are sifting through AIG documents to determine to what extent AIG executives issued misleading statements about the company's condition.

Talk about lack of transparency. What went on at Lehman Brothers may have been child's play compared to AIG.

There is concern that AIG may soon require a lot more money. But how much more money is Treasury prepared to extend to save the Titanic?

Here's a link to an article by Mary Williams Walsh that just appeared tonight in the New York Times, with many details about the unraveling of AIG:
http://www.nytimes.com/2008/10/30/busin ... nted=print

We're all going to pay for this.

Stay tuned.

I'll be posting soon about Insurance Commissioner Poizner's 5% solution: his rejection of the WCIRB rate increase recommendation.

Julius Young
www.boxerlaw.com
(you can subscribe to the blog by clicking on the RSS reader buttons on the lower right corner of the column under "Most Recent Entries")

At the bottom of this post there is a link to a DWC newsline issued today.

The DWC advises that the right to vocational rehabilitation sunsets at the end of 2008 for those workers injured before 2004 who might otherwise be eligible.

A benefit that had no dollar limits before 1994 and a $16,000 cap after 1994 may be expiring forever.

There is some controversy over this. I've heard some applicant attorneys advance the argument that voc rehab may still be pursued after January 1, particularly if rehab was started (or demanded) before January 1.

We are coming up on Halloween, so it's a fitting time to note that some attorneys believe that the courts could enforce voc rehab by recognizing
"ghost statutes" even though the Voc Rehab "bureau" or "unit" as it has been called will no longer exist.

Perhaps. But that's an untested and risky strategy.

So those workers seeking VR now have a window of time to use it or lose it. Workers injured after 1/1/04 will remain eligible for a job retraining voucher.

The DWC newsline can be seen here:
http://www.dir.ca.gov/dwc/dwc_newslines ... 62-08.html

Stay tuned.

Julius Young
www.boxerlaw.com
(you can subscribe to the blog by clicking on the RSS reader button on the lower right column under "Most Recent Entries")