An Open Letter to President Obama - # 5
Good Morning Mr. President,
In one of your campaign speeches about a year ago you said:
"Just words? - Don't Tell Me Words Don't Matter!"
With that in mind can we discuss the meanings of a few words or phrases?
A contract is "a written (or spoken) agreement, especially one concerning employment, sales, or tenancy, that is intended to be enforceable by law."
A Bill of Attainder is a legislative act that singles out an individual or group for punishment without a trial. (Confession time... I had to look it up.)
The Constitution of the United States (you remember that from your days teaching constitutional law at the University of Chicago), Article I, Section 9, paragraph 3 provides that: "No Bill of Attainder or ex post facto Law will be passed."
Per U.S. v. Brown, 381 U.S. 437, 440 (1965), "The Bill of Attainder Clause was intended not as a narrow, technical (and therefore soon to be outmoded) prohibition, but rather as an implementation of the separation of powers, a general safeguard against legislative exercise of the judicial function or more simply - trial by legislature." (I had to look this up too because I am not a constitutional scholar, but you are.)
Mr. President, if contracts are subject to change, after the fact, then they in fact, have NO meaning in the present. As Charles Krauthammer said, "there is such a thing as law. The way to break a contract legally is Chapter 11. Short of that, a contract is a contract. The AIG bonuses were agreed to before the government takeover and are perfectly legal. Is the rule now that when public anger is kindled, Congress summarily cancels contracts? Even worse are the clever schemes now being cooked up in Congress to retrieve the money by means of some retroactive confiscatory tax."
I find it hard to believe congress (your congress) this week has passed a bill to RETROACTIVELY tax the bonuses of certain A.I.G. employees. I will not and perhaps cannot, defend the appropriateness of these bonuses but if they were legal contracts, no-one, including you and/or congress has a right to tax, modify or void those contracts. To do so will destroy our legal system. Not just in this situation but for all future contracts. Who would want to work for or do business with any company or organization whose contracts and agreements were subject to retroactive taxation or negotiation? Please don't tell me words don't matter.
In early March the "Helping Families Save Their Homes Act of 2009", was approved in the House (your house). This too is a contract modification program. If Congress wants to deal with the rising number of foreclosures, it should not create a new problem by converting the mortgage crisis into a bankruptcy crisis. Doing so will open the door to a host of unintended consequences that will further freeze credit markets, raise interest rates for new home buyers, and spread the mortgage contagion to other types of consumer credit. Congress needs to reject this plan and look for better solutions. Are we beginning to go down an irreversible slippery slope?
You do not need any help from me. But I have a few suggestions, if you insist on this course of taxing, changing or voiding contracts after the fact.
If Chrysler and General Motors take billions of bailout cash, should not congress (your congress) pass a law to cut the salaries and benefits of union workers retroactively because their leadership had negotiated sweetheart deals earlier?After all, the plan calls for limiting executive compensation as a condition of taking the bailout money. It seems to me if you want to have government oversight on executive pay you will soon want oversight on the pay for the rest of working America. After all, there are many more of us. Or at least there were before your congress and your administration started to fix things.
Would it not make sense to renegotiate the labor contracts that caused at least part of the automotive companies current financial woes? Or perhaps we could just impose a tax on the excess portion of their compensation over and above, say, the national average. More reasonable and competitive labor prices would surely help these companies pay us back. I am sure the U.A.W. (United Auto Workers) would find that fair and reasonable. These line workers make very little compared with the A.I.G. executives, but the principle does not change. Does it?
Fair warning to retired America... the speaker of the house, Nancy Pelosi, has seriously discussed legislation to place an additional tax on retirement (401k and pension) income. Obviously, working hard and saving for your future is a bad thing and as such it must be taxed.
Your new budget and stimulus package nearly doubles our spending on education. Throwing more money at our education system will solve nothing without clear goals and objectives. How about renegotiating the N.E.A. (National Education Association) teacher contracts? We could institute a bonus plan for, say, 50% of their total compensation based on student achievement levels. That is, unless we do not wish to hold teachers accountable for results. We already spend more on education than almost any country in the world but consistently turn out substandard students particularly in math and science. The teachers clearly have not lived up to their contractual obligations. At least with this proposal the baby sitters will earn less than the teachers.
Since nearly every state is going to take billions from your stimulus package they too should renegotiate their government employee union contracts downward to be more competitive with the non-union workforce. Or, at least, we should retroactively tax their health care and pension benefits that all of us will now be subsidizing. Isn't that exactly what we are going to do to the AIG executives?
Do you see where I am going with this logic? Voiding or rewriting legal contracts has many unintended consequences, none of which can turn out well for the country. We are still and must remain a nation of laws. If you or your congress feel a wrong has been done, craft a law to correct it for the future.
I am sure you have noticed that I keep saying you or your congress or your administration. The actions or proposed actions discussed above have all been advanced without input or compromise from the loyal opposition. All have been purely partisan efforts. I know "you won," and I know this is how politics works. I also know you must, as of January 20, 2009, take full and total responsibility for the havoc you and your congress are wreaking on the American people both now and in the future.
Your congress wrote the legislation unilaterally and rushed it through to passage without reading or reviewing it per your previous promise. Please don't tell me words don't matter. Then, without reading and reviewing it, you signed it into law. You must have agreed to all the provisions in the bill or you would not or should not have signed it. Now it comes to light that your administration actually did know about the A.I.G. bonuses IN ADVANCE and now feign outrage that these greedy executives dare take the bonuses you, in fact, authorized in the legislation. Mr. President, it is your own stimulus package which included a measure to protect "any bonus payment required to be paid pursuant to a written employment contract executed on or before February 11, 2009." It would be nice if you and your congress would cool down the rhetoric and take responsibility for this blunder.
Mr. President, on the subject of the your just proposed budget. The budget deficit will hit nearly two trillion dollars this year. It is projected to produce over nine trillion dollars in deficits in the next ten years. That is more than four times those of the previous administration. Remember how you railed about those deficits during the presidential campaign? Please don't tell me words don't matter. That is four times more WITHOUT a war to fund. Two trillion, ten trillion... it just takes my breath away.
Sir, if deficit spending stimulated an economy, the last seven years should have done the trick. If regulation fixed things, the 80,000 or so pages of regulations already on the books (30 times more than the middle of the New Deal) should have worked. If increased government spending, especially on education and health care helped, we should be in great shape by now. Spending trillions is not the answer... cutting spending across the board is the answer. We do it at home when things are tight and we should expect no less from our government.
I don't say this lightly, but, if you continue down this road, which I am sure you will, I too hope you fail. Please don't tell me words don't matter.
Respectfully,
Steve Mishket
03/23/09
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