NEWS,31.07. AND 01.08.2013

UK bodies act to bolster consumer safety

Four British consumer and business bodies have taken legal steps that could compel the regulator to take swift action to end scams after years of financial product mis-selling.
In a bid to end the litany of mis-selling which stretches back to the 1980s with pensions and home loans, Britain's finance ministry said on Wednesday that four bodies have applied for "super complainant" status.
This means that if they collate enough documented evidence that consumers of financial services are being ripped off, the Financial Conduct Authority (FCA) regulator must say within 90 days what action, if any, it will take.
Banks have paid over £10bn ($15.26bn) in compensation so far for selling unsuitable loan insurance, a mounting bill that forced Barclays on Tuesday to announce plans to replenish its capital buffer.
One of the applicants for super complainant status, the Federation of Small Businesses, is representing companies who believe they were mis-sold interest rate protection by banks.
The FCA replaced the Financial Services Authority in April, which was scrapped partly because of mis-selling scandals. The FCA has a remit to protect consumers with its powers to ban products.
"By giving certain consumer and business groups the ability to make 'super-complaints' to the new regulator, the Financial Conduct Authority, we can all help to tackle bad practice more rapidly and robustly than before," UK financial services minister Greg Clark said in a statement.
The other three bodies are the Citizens Advice Bureau, consumers association and Consumer Council Northern Ireland. Others are expected and a decision on who will be granted super complainant status will be taken later this year.
Britain passed a law in 2012 making it possible for consumer bodies to become super complainants and called in March for applicants.

'Obamacare' delay to hit US workers hard

President Barack Obama's decision to delay implementation of part of his healthcare reform law will cost $12bn and leave a million fewer Americans with employer-sponsored health insurance in 2014, congressional researchers said Tuesday.
The report by the non-partisan Congressional Budget Office is the first authoritative estimate of the human and fiscal cost from the administration's unexpected one-year delay announced on  July 2 of the employer mandate - a requirement for larger businesses to provide health coverage for their workers or pay a penalty.
The analysts said the delay will add to the cost of "Obamacare's" insurance-coverage provisions over the next 10 years. Penalties paid by employers would be lower and more individuals who otherwise might have had employer coverage will need federal insurance subsidies.
"Of those who would otherwise have obtained employment-based coverage, roughly half will be uninsured (in 2014)," CBO said in a July 30 letter to Representative Paul Ryan, Republican chairperson of the House of Representatives Budget Committee.
Under Obama's healthcare reform law, employers with 50 or more full-time workers were supposed to provide healthcare coverage or incur penalties beginning on January 1. But the requirement will now begin in 2015.
The delay intensified doubts about the administration's ability to implement Obama's signature domestic policy achievement, and stirred Republican calls for a similar delay in another Obamacare mandate that requires most individuals to have health insurance in 2014.
The Republican-controlled House followed up the administration's decision by voting on July 17 for its own measures to delay the employer and individual mandates. Neither piece of legislation is expected to succeed in the Democratic-controlled Senate.
State and federal officials are racing to set up new online health insurance exchanges, where lower-to-moderate income families that lack health insurance will be able to sign up for federally subsidised coverage beginning on October 1. The poor will also be able to sign up for Medicaid coverage in 23 states that have opted to expand the programme.
Most large employers already offer health insurance and CBO said few are expected to drop coverage because of the delay.
But the change will still result in a $10bn reduction in penalty payments that some employers would have made in 2015 for failing to provide coverage next year, CBO said.
The change also means another $3bn in added costs for exchange subsidies. That is because about half of the one million workers who would have gained employer-sponsored coverage next year will now obtain insurance through the exchanges or via public programmes including Medicaid, CBO said.
Other changes, including an increase in taxable compensation resulting from fewer people enrolling in employment-based coverage, will offset those factors by about $1bn.
CBO now puts the net cost of Obamacare's insurance coverage provisions at around $1.38trn over the next 10 years, versus its May baseline projection of $1.36trn.

Obama offers 'grand jobs bargain'

President Barack Obama proposed a "grand bargain for middle-class jobs" on Tuesday that would cut the US corporate tax rate and use billions of dollars in revenues generated by a business tax overhaul to fund projects aimed at creating jobs.
The goal, as outlined in his speech to an enthusiastic audience at an Amazon.com Inc facility in southeastern Tennessee, was to break through partisan gridlock in Congress with a formula that satisfies Republicans and Democrats alike.
But there was no sign that congressional Republicans who have fought nearly every facet of Obama's domestic agenda would look favourably upon the president's proposal.
The president's plan combined a proposed corporate tax rate cut desired by Republicans with new spending on infrastructure projects like roads and bridges as well as education investment desired by his fellow Democrats.
"I've come here to offer a framework that might help break through the political logjam in Washington and get some of these proven ideas moving," Obama said.
Despite the olive branch, Obama's proposal immediately drew fire from the top Republicans in Congress. Senate Republican Leader Mitch McConnell said: "It's just a further-left version of a widely panned plan he already proposed two years ago - this time, with extra goodies for tax-and-spend liberals."
Bickering broke out as the White House said it had tried to tell aides to John Boehner, the Republican speaker of the House of Representatives, about the plan on Monday but, according to Obama spokesperson Jay Carney, "never heard back" from them.
The president in his speech also jabbed at Republicans over their support for a proposed oil pipeline from Canada and their continual opposition to his ideas.
The contretemps reflected the hyperpartisan environment that has made negotiations nearly impossible in Washington. Efforts to reach a "grand bargain" between Democrats and Republicans on deficit reduction have been at an impasse for months.
New showdowns over spending are expected in the fall, as Congress confronts an October 1 deadline to pass a bill funding the government and then a White House request to raise the federal borrowing limit, known as the "debt ceiling".
Senior administration officials said Obama is not giving up on a big deficit-cutting package, but since no agreement appears imminent, he is offering a new idea to try to follow through on his 2012 re-election campaign promises to help the middle class.
But his narrow proposal on corporate taxes suggested that Obama had all but abandoned a big deal with Republicans on deficit reduction. He argued the deficit was rapidly declining anyway and no deal seemed near with his political opponents.
'The white flag'
The president cast his latest tax proposal as part of a menu of items he is offering to help the United States pick up its economic game in a competitive world economy.
"If we don't make these investments and reforms, we might as well throw up the white flag while the rest of the world forges ahead in a global economy," he said. "And that does nothing to help the middle class."
Obama wants to cut the corporate tax rate of 35% to 28% and give manufacturers a preferred rate of 25%. He also wants a minimum tax on foreign earnings as a tool against corporate tax evasion and the use of tax havens.
In exchange for his support for a corporate tax reduction, Obama wants the money generated by a tax overhaul to be used to fund such projects as repairing roads and bridges, improving education at community colleges and promoting manufacturing, senior administration officials said.
For his part Obama, who will need Republican backing for any budget deal, had scathing words for Republican proposals on economic growth.
He spoke dismissively of the proposed Keystone XL pipeline from Canada, which Republicans have urged him to approve because of its economic benefits. The president said it would create only 50 permanent jobs, adding: "That's not a jobs plan."
Obama's plan to cut corporate taxes while also curtail some existing tax benefits would result in a one-time source of revenue. The White House did not say how much money would be raised, but Obama called for $50bn for infrastructure spending in his State of the Union speech in February.
Republicans contended that by spending the revenue, it would violate Obama's previous commitment to a "revenue-neutral" overhaul of corporate taxes.
Administration officials said they recognise that the climate is difficult in Congress, with Republicans adamantly refusing anything that is seen as increasing spending and Democrats in no mood to cut taxes and get nothing for it.
The president, who has failed in several tries to reach a comprehensive fiscal accord with Republicans, accused them of holding a personal grudge against him and called for a good-faith exchange of ideas.
"If folks in Washington really want a grand bargain, how about a grand bargain for middle-class jobs?" Obama said.
"I don't want to go through the same old arguments where I propose an idea and the Republicans just say: 'No,' because it's my idea. So I'm going to try offering something that serious people in both parties should be able to support," he added.
Boehner's spokesperson, Michael Steel, criticised the proposal even before Obama's speech, saying: "Republicans want to help families and small businesses, too.
"This proposal allows President Obama to support President Obama's position on taxes and President Obama's position on spending, while leaving small businesses and American families behind."

Iran sanctions bill to slash oil exports

The House of Representatives easily passed a bill on Wednesday to tighten sanctions on Iran, showing a strong message to Tehran over its disputed nuclear program days before President-elect Hassan Rouhani is sworn in.
The vote also highlighted a growing divide between Congress and the Obama administration on Iran policy ahead of international talks on the nuclear program in coming months. Iran insists the nuclear program is purely for civilian purposes.
The bill, which passed 400 to 20, would cut Iran's oil exports by another 1 million barrels per day over a year to near zero, in an attempt to reduce the flow of funds to the nuclear program. It is the first sanctions bill to put a number on exactly how much Iran's oil exports would be cut.
The legislation provides for heavy penalties for buyers who do not find alternative supplies, limits Iran's access to funds in overseas accounts and penalizes countries trading with Iran in other industrial sectors.
Existing US and EU measures have already reduced Iran's oil exports by more than half from pre-sanction levels of about 2.2m barrels per day (bpd), costing Tehran billions of dollars in lost revenue a month.
Most of the OPEC member's exports head to Asia, where the United States has worked with Iran's top four customers China, India, Japan and South Korea to push them towards alternative suppliers. The four have cut purchases from Iran by more than a fifth in the first half of this year, over and above the reductions made last year.
China
The success of any toughening of the sanctions will depend on China, Iran's top customer, which has repeatedly said it opposes unilateral sanctions outside the purview of the United Nations, such as those imposed by the United States.
The country reduced oil purchases from the Middle Eastern nation by 21% last year, but that was partly on account of differences in the first quarter over the renewal terms of annual contracts and shipping delays.
Chinese officials have said refiners are likely to cut shipments 5% to 10% this year from last. They cut imports 2% in the first six months of the year.
"I don't think the Chinese government will give in to this kind of pressure," said an official with a Chinese refinery that processes Iranian crude. "There is no chance that Iranian supplies would come to a halt."
For now, relatively steady oil prices have allowed the efforts to continue, but analysts say further sanctions risk pushing up prices and damaging the economies of US allies.
"This is almost like an embargo on Iranian oil imports. It is like giving Iran an ultimatum," a Seoul-based refining source said, after the vote. "I think we can find alternatives but we prefer Iranian crude as the economics are better. If very little Iranian crude is available, overall oil prices would rise."
The bill still has to be passed in the Senate and signed by President Barack Obama before becoming law. The Senate Banking Committee is expected to introduce a similar measure in September, though it is uncertain whether the language to cut exports by 1 million barrels a day will survive.
Critics of the bill said it shows an aggressive signal to Iran that last month voted in Rouhani, a cleric many see as more moderate. He will be sworn in on Sunday.
No higher priority
Rep. Ed Royce, a California Republican and Chairman of the House Foreign Affairs Committee who introduced the bill with Rep. Eliot Engel, a New York Democrat, said the United States has no higher national security priority than preventing a nuclear-armed Iran.
Royce said the Supreme Leader Ayatollah Ali Khamenei's drive to develop a nuclear arsenal was evident. "New president or not, I am convinced that Iran's Supreme Leader intends to continue on this path," he said.
The vote showed a growing disagreement between the White House and Congress on Iran policy. A senior administration official said on Wednesday the White House is not opposed to new sanctions in principle, but wants to give Rouhani a chance.
The Treasury Department last week partially eased sanctions on Iran by expanding a list of medical devices that can be exported there without special permission.
One of the 20 lawmakers to vote against the bill, Jim McDermott, a Washington-state Democrat, said shortly before the vote that the rush to sanction Iran before Rouhani takes office could hurt efforts to deflate the nuclear issue.
"It's a dangerous sign to send and it limits our ability to find a diplomatic solution to nuclear arms in Iran," McDermott said.
A supporter of harsher sanctions disagreed.
Ayatollah Ali Khamenei "doesn't see our flexibility and good faith efforts as a sign of good intentions, he sees it as a sign of weakness," said Mark Dubowitz, the head of Foundation of Defense of Democracies, an advocate of sanctions.
"If anything, it's only going to be massively intensified sanctions that get him to blink."
But Trita Parsi, the president of the National Iranian American council, said the House action undermines the US strategy which has long been one of good cop - bad cop.
The White House has taken a softer stance toward Iran's nuclear program and Congress has taken a tougher one. But now there are signs that the good cop cannot control the bad cop, he said.
"The impression on the Iranian side is not that it's good cop bad cop, but complete chaos and mayhem," Parsi said.
'Too much'
The bill also further denies Iran's government access to foreign currency reserves, and targets Iranian efforts to circumvent international sanctions against its shipping business.
"I think it's too much. Asian countries don't have much oil resources and they need to import a lot from the Middle East," said a trader with a North Asian buyer of Iranian crude. "If the United States keeps pushing further, it would be a big burden for Asian refineries."
While the bill has more steps to clear before becoming law, other buyers, apart from China, have already begun voicing their inability to reduce dependence on Iranian oil much further.
"Cuts in our imports from Iran have been the maximum as compared to other Asian countries," an Indian industry executive said. "At this moment there is no scope for further reduction."
India cut its Iranian oil imports by 43% over the first half of the year. That's more than the 27% cut by South Korea and 22.5% by Japan.
Turkey would also struggle to cut its crude oil imports from Iran any further, a Turkish official said. 

Snowden leaves Moscow airport

Fugitive former US spy agency contractor Edward Snowden left Moscow's Sheremetyevo airport on Thursday after Russia granted him refugee status, ending more than a month in limbo in the transit area.

A lawyer who has been assisting Snowden said the young American, who is wanted in the United States for leaking details of secret government intelligence programmes, had left the airport for a secure location which would remain secret.

"Edward Snowden has successfully acquired refugee status in Russia," the anti-secrecy organisation WikiLeaks, which is also assisting Snowden, confirmed on Twitter.

His lawyer, Anatoly Kucherena, told state television: "I have just seen him off. He has left for a secure location ... Security is a very serious matter for him."

Snowden, aged 30, arrived in Moscow from Hong Kong on 23 June. He had hoped to fly to Latin America, where three countries have offered to shelter him, but was concerned that the United States would prevent him reaching his destination.

Snowden's case has caused new strains in relations between Russia and the United States which wants him extradited to face espionage charges.

According to reports, Snowden, who has left the airport for an undisclosed location, will be allowed to live in Russia for a year.

US dept 'horrified' by WikiLeaks release

Prosecutors in the case of US soldier Bradley Manning are focusing on the damage done by his release through WikiLeaks of more than 250 000 US diplomatic cables.

The first witness on Thursday at Manning's sentencing hearing was former deputy assistant secretary of state Elizabeth Dibble.
She says agency officials reacted with "horror and disbelief" when WikiLeaks began publishing the leaked cables in the autumn of 2010.
The former army intelligence analyst faces up to 136 years in prison for sending the cables and more than 470 000 Iraq and Afghanistan battlefield reports to the anti-secrecy website.
The government opened its sentencing case on Wednesday with testimony that WikiLeaks' publication of the leaked battlefield reports fractured US military relationships with foreign governments and silenced some friendly Afghan villagers.

NEWS,01.12.2012

Little apparent progress in US 'fiscal cliff' talks

With barely a month left before the 'fiscal cliff', US Republicans and Democrats have remained far apart in talks to avoid the across-the-board tax hikes and spending cuts that threaten to throw the country back into recession. While President Barack Obama visited a Pennsylvania toy factory to muster public support for tax hikes on the rich, portraying Republicans as scrooges at Christmas time, his primary adversary in negotiations, Republican House Speaker John Boehner, continued to describe the situation as a stalemate. The argument will resume on Sunday when Boehner, along with Obama's Treasury secretary, Timothy Geithner, and others, take to weekly political talk shows and pick up further steam next week with a possible confrontation in the House of Representatives between Democrats and Republicans over the timing of a vote on tax hikes. Lawmakers are nervously eyeing the markets as the deadline approaches, with gyrations likely to intensify pressure to bring the drama to a close. The markets, in turn watching the politicians, fell as Boehner spoke, but recovered afterward. It was a repeat of the pattern earlier in the week when the speaker offered a similarly gloomy assessment. The latest round of high-stakes gamesmanship focuses on whether to extend the temporary tax cuts that originated under former President George W Bush beyond their December 31 expiration date for all taxpayers, as Republicans want, or just for those with incomes under $US 250,000 , as Obama and his fellow Democrats want. After five days of increasingly confrontational exchanges, the work week drew to a close with an announcement by Democrats of a long-shot effort next week to force an early tax-hike vote in the Republican-controlled US House to break the deadlock. House Minority Leader Nancy Pelosi said she would undertake the rarely successful effort unless Boehner agreed by Tuesday to bring a bill to the floor allowing taxes on the wealthy to rise, something Boehner is highly unlikely to do until he is ready. "The clock is ticking," Pelosi said at a news conference. "The year is ending. It's really important with tax legislation for it to happen now. "We're calling upon the Republican leadership in the House to bring this legislation to the floor next week. "While Boehner offered no immediate response to Pelosi's threat, Cathy McMorris Rodgers of Washington state, recently elected by Republicans to be the fourth-ranking party leader in the House,in an interview not to expect any tax vote next week.Amid the competing statements from the two sides, there were some actual, albeit modest, signs of potential movement. Senate Minority Leader Mitch McConnell threw Republican proposals into the mix for reform of Medicare, the government health insurance program for seniors, which has exploded in cost in recent years and is a major contributor to the country's soaring deficit. McConnell of Kentucky told the Wall Street Journal in an interview that Republicans would agree to more revenue although not higher tax rates if Democrats agreed to such changes as raising the eligibility age for Medicare and slowing cost-of-living increases in the Social Security retirement program.Rodgers, in her Fox News interview, declined to completely rule out a much-discussed potential compromise in which Republicans would accept some increase in tax rates on the rich, but not to the level desired by Obama.More House Republicans although still just a handful expressed flexibility beyond that of their party leaders about considering an increase in tax rates for the wealthy, as long as they are accompanied by significant spending cuts. Most House Republicans refuse to back higher rates, preferring to raise revenue through tax reform. Obama, speaking in Pennsylvania, said he was encouraged by the shifting views of some Republicans, and urged House approval of a bill that has already cleared the Democratic-controlled Senate that would lock in the middle-class tax cuts and raise the rates for the rich. "If we can get a few House Republicans on board, we can pass the bill. I'm ready to sign it," Obama said. But neither he nor the other principals in the debate budged from their basic positions. Instead, Obama turned up the pressure on Friday, hitting the road to drum up support for his drive to raise taxes on the wealthy and warning Americans that Republicans were offering them "a lump of coal" for Christmas. In a visit to the Pennsylvania toy factory, Obama portrayed congressional Republicans as scrooges who risked sending the country over the fiscal cliff rather than strike a deal to avert the tax increases and spending cuts that begin in January unless Congress intervenes. "We already all agree, we say, on making sure middle-class taxes don't go up. So let's get that done. Let's go ahead and take the fear out for the vast majority of American families so they don't have to worry," Obama said at the Rodon Group factory, which makes K'NEX building toy systems as well as Tinkertoys and consumer products.In Washington, Boehner said Obama's plan to raise taxes on the rich was the wrong approach. "There is a stalemate. Let's not kid ourselves," the Ohio Republican said. "Right now we are almost nowhere."

Europe Is Divided AGAIN THIS Time It's Creditors vs. Debtors

The European Union used to be what psychologists call a "fantastic object," a desirable goal that fires people's imagination. I saw it as the embodiment of an open society -an association of nations which gave up part of their sovereignty for the common good and formed a union in which no nation would have a dominant position. The euro crisis is now threatening to turn the European Union into something fundamentally different. The member countries are divided into two classes creditors and debtors with the creditors in charge. Germany, as the largest and most creditworthy country, occupies a dominant position. As a result of current policies, debtor countries pay substantial risk premiums for financing their debt and this is reflected in their cost of financing in general. This has pushed the debtor countries into depression and put them at a substantial competitive disadvantage that threatens to become permanent. This is the result not of a deliberate plan but of a series of policy mistakes. Germany did not seek to occupy a dominant position and is reluctant to accept the obligations and liabilities that it entails. I have called this the tragedy of the European Union. Now, some recent developments give grounds for hope. The authorities are taking steps to correct their mistakes. I have in mind the June summit's decision to form a banking union, and the EU Central Bank's plan for unlimited intervention in government bond markets. Financial markets have been reassured that the euro is here to stay. This could be a turning point if it were reinforced by additional positive steps. Unfortunately, it has merely reinforced German resistance to further concessions. A distinguishing feature of the tragedy I am talking about is that it feeds on hope. Germany is willing to do the minimum but nothing more to hold the euro together. That is how the eurozone becomes permanently divided between creditors and debtors. This is such a dismal prospect that it must not be allowed to become reality. There must be a way to avoid it after all, history is not predetermined. When the European Union was only an idea, a fantastic object, it was conceived as an instrument of solidarity. Today, Europe hangs together out of grim necessity. That is not conducive to a harmonious partnership. The only way to reverse this seemingly inexorable fate is to recapture the spirit of solidarity.Since I am a fervent believer in the European Union as the embodiment of an open society, I have set up an Open Society Initiative for Europe OSIFE for short  and I have been looking for ways to achieve this goal.I realized that the best place to start would be where current policies have created the greatest human suffering. Clearly, that place is Greece. Within Greece, the fate of the many migrants and asylum seekers stuck there particularly resonated with me. Clearly, their plight cannot be separated from that of the Greeks themselves. An initiative confined to migrants would reinforce the hostility they face from some in the majority. The problem seemed intractable, and I couldn't figure out how to approach it. But I was in Stockholm recently to commemorate the centenary of Raoul Wallenberg's birth. This reawakened my memories of the Second World War the calamity that eventually gave birth to the European Union.Wallenberg was a heroic figure who saved the lives of many Jews by establishing Swedish protected houses in Budapest. During the German occupation of Hungary, my father was also a heroic figure. He helped to save his family and friends and others. He taught me to confront harsh reality rather than to passively submit to it. That is what gave me the idea. We could set up solidarity houses in Greece which could serve as community centers for the local population where migrants could also find food and shelter. There are already many efforts under way, and civil society is already heavily engaged, but the scale of the problem is overwhelming. I am talking about reinforcing existing efforts. The asylum policy of the European Union has broken down. Refugees have to apply in the country where they enter the EU, but the Greek government cannot process the cases, and some 60,000 refugees who sought to register have been put into detention camps here conditions are inhumane. Migrants who avoid registering and live in the streets are attacked by the hooligans of the Golden Dawn.Norway has expressed an interest in the fate of refugees in Greece and within the European Union. Sweden has made migration and asylum policy a priority. So Norway and Sweden are the primary candidates for supporting solidarity houses. Hopefully they would be joined by Germany and other member countries.Currently, the Golden Dawn is providing social services to Greeks while attacking the migrants. The initiative I propose would offer a positive alternative. It would be based on solidarity solidarity of Europeans with Greeks and Greeks with migrants. This would be a powerful demonstration of the spirit of solidarity that ought to infuse the European Union.

Walmart's New Health Care Policy Shifts Burden To Medicaid, Obamacare

 

Walmart, the nation’s largest private employer, plans to begin denying health insurance to newly hired employees who work fewer than 30 hours a week, according to a copy of the company’s policy.Under the policy, slated to take effect in January, Walmart also reserves the right to eliminate health care coverage for certain workers if their average workweek dips below 30 hours  something that happens with regularity and at the direction of company managers.Walmart declined to disclose how many of its roughly 1.4 million U.S. workers are vulnerable to losing medical insurance under its new policy. In an emailed statement, company spokesman David Tovar said Walmart had “made a business decision” not to respond to questions from and accused the publication of unfair coverage. Labor and health care experts portrayed Walmart’s decision to exclude workers from its medical plans as an attempt to limit costs while taking advantage of the national health care reform known as Obamacare. Among the key features of Obamacare is an expansion of Medicaid, the taxpayer-financed health insurance program for poor people. Many of the Walmart workers who might be dropped from the company’s health care plans earn so little that they would qualify for the expanded Medicaid program, these experts said.“Walmart is effectively shifting the costs of paying for its employees onto the federal government with this new plan, which is one of the problems with the way the law is structured,” said Ken Jacobs, chairman of the Labor Research Center at the University of California, Berkeley. For Walmart, this latest policy represents a step back in time. Almost seven years ago, as Walmart confronted public criticism that its emplyees coudn't afford its benefits, the company announced with much fanfare that it would expand health coverage for part-time workers. But last year, the company eliminated coverage for some part-time workers those new hires working 24 hours a week or less. Now, Walmart is going further. “Walmart likely thought it didn’t need to offer this part-time coverage anymore with Obamacare,” said Nelson Lichtenstein, director of the Center for the Study of Work, Labor and Democracy at the University of California, Santa Barbara. “This is another example of a tremendous government subsidy to Walmart via its workers.”In pursuing lower health care costs, Walmart is following the same course as many other large employers. But given its unrivaled scale, Walmart’s policies tend to influence American working conditions more broadly. Tom Billet, a senior consultant at Towers Watson, a professional services firm that works with large companies to develop benefit plans, said other companies are also crafting policies that will exclude some part-time workers from medical coverage. Billet portrayed the growing corporate interest in separating out part-time workers as a reaction to another aspect of Obamacare the new rules that require companies with at least 50 full-time workers to offer health coverage to all employees who work 30 or more hours a week or pay penalties.Several employers in recent months, including Darden Restaurants,owner of Olive Garden and Red Lobster, and a New York area Applebee's franchise owner, said they are considering cutting employee hours to push more workers below the 30-hour threshold.“In the past, firms were less careful about monitoring whether someone was full- or part-time,” Billet said, noting that some of his clients were planning to track workers’ hours more carefully. “I expect health plans like Walmart’s won’t be uncommon as firms adjust to this law.” For Walmart employees, the new system raises the risk that they could lose their health coverage in large part because they have little control over their schedules. Walmart uses an advanced scheduling system to constantly alter workers’ shifts according to store traffic and sales figures. The company has said the scheduling system improves flexibility and efficiency. But in recent interviews with The several workers described their oft-changing schedules as a source of fear that they might earn too little to pay their bills. Many said they have begged managers to assign them additional hours only to see their shifts cut further as new workers were hired.The new plan detailed in the 2013 "Associate’s Benefits Book" adds another element to that fear: the risk of losing health coverage. According to the plan, part-time workers hired in or after 2011 are now subject to an “Annual Benefits Eligibility Check” each August, during which managers will review the average number of hours per week that workers have logged over the past year. If part-time workers hired after Feb. 1, 2012, fail to reach the 30-hour threshold, they will lose benefits the following January, according to the book. Part-time workers hired after Jan. 15, 2011, but before Feb. 1, 2012, must work at least 24 hours a week to retain coverage and will also be subject to an eligibility check each year. Those hired before 2011 aren’t subject to the minimum hours requirements or eligibility checks.As for full-time workers under the plan, those who lose hours and slip to part-time at any point during the year will see their spouses’ health coverage dropped immediately. Those workers will also lose their dental and life insurance policies in the following pay period, according to the plan.Some Walmart workers who are excluded from the company’s health care plans are likely to become eligible for Medicaid under the Obamacare expansion, which aims to replace a patchwork of standards now set by individual states with one minimum federal threshold income below 133 percent of the federal poverty line, which for an individual currently comes to $14,856. However, the Supreme Court ruled earlier this year that the decision to expand the program is voluntary for the states. At least eight states, including Texas, have said they will not expand the program, which would leave Walmart workers there with one less option. Part-time workers who lose their Walmart insurance but earn too much to qualify for Medicaid should be able to buy insurance through the health care exchanges to be established under Obamacare  essentially, online marketplaces offering an array of health care plans. For workers who do qualify for health coverage under Walmart's new policy, the latest package represents an upgrade over previous plans. Walmart’s health plans began covering 100 percent of spine and heart surgeries this year at select hospitals and medical centers. They also include a smattering of preventative care services required by Obamacare. But the company’s plans still leave many workers facing significant financial distress in the event of major illness. Under the new policy, one major offering, the so-called Health Reimbursement Account Plan, costs nonsmoking workers $34.80 a month a seemingly affordable sum. Yet it comes with an annual deductible of $2,750, a hefty expense given that half of Walmart’s hourly workforce earns no more than $10 an hour. While a shifting of Walmart employees to Medicaid rolls may increase the burden on American taxpayers, it is likely to be a better deal for the workers themselves. “The packages Walmart is providing for low-income people aren’t offering very much coverage except for catastrophes,” said Linda Blumberg, a senior fellow at the Urban Institute, a left-leaning think tank. “It’s likely they’ll be better off going with a government-sponsored plan.”

NEWS,23.11.2012

US can't afford Obamacare - Boehner

New comments from top Republican lawmaker John Boehner slamming healthcare reforms illustrate how hard it will be for Washington to reach a deficit reduction deal when talks resume next week, analysts say.President Barack Obama and the US Congress will begin negotiating next week on a plan that could avert tax hikes and spending cuts due to begin in January that economists worry could push the US economy over the "fiscal cliff" and into recession.Boehner did not explicitly mention the "fiscal cliff" talks in an opinion piece published in the Cincinnati Enquirer this week. But he argued the nation cannot afford the costs of Obama's 2010 healthcare reform law, given America's sluggish economy and massive $16 trillion (NZ$19.6 trillion) debt."That's why I've been clear that the law has to stay on the table as both parties discuss ways to solve our nation's massive debt challenge," said Boehner, who is a key player in the talks.Boehner's comments show it won't be easy to reach a deal on the thorny tax and spending issues, said Greg Valliere, chief political strategist at Potomac Research Group in Washington."There's an enormous gulf between the two parties on the details," he said, noting it is still possible that Obama and Congress may agree by January to broad spending and tax measures, and then take months afterwards to iron out details."Plunging off the cliff, then passing a tax cut in January that excludes the rich  is still a very live option," Valliere said. Analysts said Boehner's renewed critique of the healthcare law is designed to appeal to Republicans in the House of Representatives who have voted more than 30 times to repeal it.The law aims to extend health coverage to more than 30 million uninsured Americans starting in 2014. It also contains measures designed to contain the costs of America's $2.6 trillion (NZ$3.18 trillion) healthcare system, the most expensive in the world.Republicans promised to repeal the law, which they call "Obamacare", if they won the November presidential elections.But Obama's victory meant the Democrats kept their majority in the Senate. Last June, the US Supreme Court upheld the reforms.Boehner's comments were "not constructive" for the fiscal talks ahead because there is little chance negotiations will lead to changes in the healthcare law, said Jim Kessler, senior vice president for policy at centrist think-tank Third Way."This is a complete non-starter and a clumsy starting point for negotiations," Kessler said.Larry Sabato, political scientist at the University of Virginia, said he thought Boehner's comments seemed like a "bargaining chip" for the talks ahead."Just as President Obama is insisting that taxes must go up for everyone making $250,000 or more, the Republicans are saying that Obamacare is on the table," he said, noting he expects the income trigger for tax increases will end up being much higher and that the healthcare law will stay untouched.After the election, Boehner acknowledged in an ABC News interview that "Obamacare is the law of the land", although he also said the law had to be "on the table" as legislators work toward balancing the nation's budget.Julie Barnes, director of healthcare policy at the Bipartisan Policy Center, said the costs associated with getting the new health reforms in place pale in comparison to the much-larger costs of tax and spending issues before lawmakers."Small businesses and large businesses are not going to view Obamacare as what's really causing the problem for their competitiveness. The problem is healthcare costs," Barnes said.

German business sentiment surprises

German business morale surprised with its first rise in seven months in November as exports outside the euro zone and the prospect of strong Christmas sales offered hope Europe's largest economy can regain some momentum.The Munich-based Ifo think tank said on Friday its business climate index, based on a monthly survey of some 7 000 firms, rose to 101.4 from 100.0 in October, far surpassing even the highest estimate in a Reuters poll.Germany proved largely immune to the first two years of the European debt crisis but recent data has suggested its resilience is wearing thin, with growth slowing to 0.2% in the third quarter.Yet while economists expect the economy to contract in the fourth quarter, they had already expected the first quarter to be better and the IFO numbers added to hopes that it could stave off the recession plaguing euro zone members further south."That was a positive surprise," said Ralph Solveen of Commerzbank. "The brightening climate raises hopes that the economy will stabilise after what will likely be a weak fourth quarter. (One) increase now is nevertheless not a sign of a turnaround."He pointed to reduced fears of a euro-zone break-up as well as positive signals from Asia and the United States, where Germany's strength in high-added value exports like cars, electronics and machinery make it well-placed to take advantage of any economic improvement.The euro rose to a three-week high against the dollar and European stocks trimmed losses after the IFO numbers.Asia-basedFirms were more upbeat about their business outlook, with an IFO sub-index rising to 108.1 from a revised 107.2 in October. They were also less pessimistic about current business, with the current conditions index up to 95.2 from 93.2.That came as a surprise after data this month showed the private sector shrinking, unemployment up, industrial orders and output down and exports falling at their fastest pace since late last year.IFO economist Klaus Wohlrabe said exporters' outlook had improved but firms were still delaying investment due to the uncertainty caused by the unresolved euro zone crisis."Export expectations rose strongly and are back in the positive area now. The orders situation and demand are stabilising. Exports to the United States and Asia seem to be going well,". "The uncertainty (on investment) is still present. ... There has been no turnaround yet. "Seasonally-adjusted GDP data showed gross capital investment made no contribution to growth while investment in plant and equipment fell by 2.0%.Chipmaker Infineon has already said it will cut planned investments. "Businesses are investing less in machines and other equipment. The only explanation for that is a crisis of confidence - which means the German economy will lose more speed," said economist Holger Schmieding of Berenberg Bank.Europe has been unable to contain the euro zone crisis with no agreement yet on how to get Greece's debt down to sustainable levels. France, Germany's single largest trading partner, lost a second AAA credit rating on Monday on concerns over its fiscal outlook and deteriorating economy.

Greece says lenders closer to compromise

 

The International Monetary Fund has relaxed its debt-cutting target for Greece and only a €10bn gap remains to be filled for a vital aid tranche to be paid, Greece's finance minister said on Friday.But other sources involved in the talks cautioned that the funding gap was far bigger than that suggested by Greece and that the two sides were not on the verge of striking a deal to resolve the euro zone's most intractable problem.Greece's finance minister signalled that a compromise was near by saying the International Monetary Fund had agreed to deem the country's debt viable if it falls to 124% of GDP in 2020, giving ground on its earlier target of 120%.The Eurogroup has already agreed on measures to reduce Greek debt to 130% of GDP in 2020, Yannis Stournaras said."That leaves a gap of 5-6 percentage points of GDP to be covered  about €10bn," he told reporters in Brussels.The EU and IMF are considering bringing the debt down through a combination of interest rate cuts and extension of maturities on the country's loans, a debt buyback and having the ECB forego profits on its Greek bond holdings, a Greek finance ministry official told Reuters.Teetering on the verge of bankruptcy, Greece is increasingly frustrated that its lenders are still squabbling over a deal to unlock fresh aid despite the country pushing through unpopular austerity cuts that brought thousands on to the streets.Athens says time is running out and that it needs its next tranches of almost €44bn in aid to recapitalise banks and stabilize its recession-hit economy. Its next big debt repayment falls due in mid-December.It expects the aid to be paid out in one installment, Greece's government spokesman told Greek radio, playing down recent speculation that it could be dribbled out in bits.The euro hit a three-week high against the dollar on growing optimism that Greece's lenders were close to an agreement."Too optimistic"Euro zone finance ministers, the IMF and European Central Bank failed earlier this week to agree how to get the country's debt down to a sustainable level and will have a third go at resolving the issue on Monday.A senior source involved in the negotiations confirmed that the IMF would now accept 124% as a target but was dismissive of the gap amounting to only €10bn."There are still things missing to an agreement," the source said. "The 10 billion is too optimistic."A Greek finance ministry official said the ECB could relinquish €9bn of profits on the Greek bonds it holds, as part of the measures to bring debt in 2020 down from a previous estimate of 144% of GDP.Other options include saving €8bn from cutting the interest rate, extending maturities on Greek debt and spending €10bn to buy back around €30bn of debt.Greece has already begun preparations for the debt buyback, which could be completed by the end of the year if euro zone finance ministers approve the move, the official said.According to current government projections, Greek debt is seen at €340.6bn, or 175.6% of GDP at the end of 2012. It is expected to peak at €357.7bn, almost 191%, in 2015.According to a document circulated at the Eurogroup meeting, Greece's debt cannot be cut to 120% of GDP by 2020 unless euro zone member states write off a portion of their loans to Greece, which Germany has said would be illegal.The document prepared for the meeting of euro zone finance ministers and seen by Reuters spelled out several options now cited by Greek officials - including using about 10 billion euros to buy back bonds at between 30 and 35 cents in the euro.Many Greek retail bondholders are still angry from a debt restructuring earlier this year that imposed heavy losses on private holders of Greek debt.About 40 retail bondholders pushed past security at the co-ruling conservative New Democracy party's offices in Athens on Friday, defaced a portrait of party founder Constantinos Karamanlis and scuffled with guards.

EU budget summit edges towards collapse

EU leaders looked set to throw in the towel Friday as talks on a trillion euro budget for the 27-member bloc faltered over tensions between rich and poor states and Britain's "virulent" demands for austerity.British Prime Minister David Cameron kept up his defiant stance as he arrived for a second day of bitter negotiations on the European Union budget for the seven years from 2014-2020."There really is a problem that there hasn't been the progress in cutting back proposals for additional spending," Cameron, who back home has to pander to the powerful eurosceptic wing of his Conservative party, told reporters.Britain, like many countries across Europe, is responding to economic crisis with major public spending cuts and Cameron argues that at a time of austerity at home the EU must also make deep cuts.His bleak assessment of the state of the budget talks was shared by other EU leaders, who arrived one by one at European Council building in Brussels for bilateral meetings before the summit proper resumed at midday."I believe that also in this round, we won't be where have to get to, which is a unanimous decision," said German Chancellor Angela Merkel, repeating a line she had taken even before arriving in the Belgian capital."If we need a second round, then we will take the time necessary for it," se added, referring to the prospect of a second summit in the coming months to nail down a deal.Nearly a year after he angered his European counterparts by vetoing a pact to resolve the eurozone crisis, Cameron was again at odds with them by demanding cuts to the perks enjoyed by so-called "eurocrats" the well-paid EU civil servants who are frequently targeted by the British press. British officials insisted that other countries including Sweden, the Netherlands and Germany largely backed Cameron's position for a reduction in the planned trillion dollar budget for the seven years from 2014-2020.But an EU diplomat said the main obstacle was Cameron's demand for cuts adding: "The most virulent were the British, the Swedish and the Dutch."Cameron had vowed to bring down the budget from a proposed €1.047 trillion to €886bn.The summit was scheduled to resume at 11:00 on Friday once delegates from the 27 member nations have had time to examine new proposals on the budget submitted by EU President Herman Van Rompuy.The proposals reintroduce his own earlier figure of €972bn in spending, which comes to just over one percent of the EU's total economic output, the usual benchmark used in Brussels budget talks.The latest blueprint which negotiators will work from Friday spreads the funds more generously to sensitive envelopes like the "cohesion" funds for regional development, and the Common Agricultural Policy, the farm subsidy programme cherished by France that is the budget's biggest single item."We will not accept the unacceptable," warned Prime Minister Mario of Italy, which like France defends farm subsidies, but also backs cohesion funds which have vastly aided Italy's less developed south.Italy is among the countries that contribute more to the EU budget than they get back, known as the "net contributors", while once mighty Spain, rocked by the eurozone debt crisis, rejoined the camp of those who get more cash than they put in.Cohesion funds billions of euros outlayed each year to the EU's poorer members so they can catch up with richer neighbours are being defended tooth and nail by the 15 "Friends of Cohesion" nations, led by Poland and Portugal."Cohesion is an issue of competitiveness and growth for the whole European Union, not just for the countries with the greatest needs," argued Prime Minister Antonis Samaras of debt-stricken Greece.

Volkswagen to invest €14bn in China

Volkswagen AG plans to invest €14bn in China over the next four years, its China chief was quoted by the China Daily newspaper as saying, as it speeds up its expansion in the world's largest autos market. Volkswagen, which produces cars in China in partnership with SAIC Motor Corp and FAW Group, is building four plants in the country, the newspaper said, citing the German automaker's China chief Jochem Heizmann. Volkswagen sold 2 million cars in China in January-September, up 18.3% and more than double the overall industry growth.By 2018, Volkswagen's China annual capacity will reach at least 4 million vehicles, Heizmann told the China Daily, adding the group's workforce, including those at joint ventures, would rise to 85 000 within 3-5 years from 50 000 now. Heizmann was at the Guangzhou autoshow on Thursday.The German automaker will also build plug-in hybrid cars in China within 2-3 years and make plug-in hybrid powertrains, he added. Encouraged by Beijing's initiative to put 5 million electric and plug-in hybrids on the road by 2020, foreign automakers are gearing up to tap the potential for green cars in China.General Motors Co, which already sells its plug-in hybrid Chevrolet Volt in China, this week rolled out its first China-developed electric car, the Sail Springo EV. Nissan Motor Co Ltd is also promoting its Leaf electric car with local governments and will expand the effort to include its Venucia e30 China-only electric car  made at its joint venture with Dongfeng Automobile Co Ltd - next year.Globally, Volkswagen, jostling with Toyota Motor Corp as the world's number-one automaker, is expected to increase spending by 12% to as much as €70bn for its 12 brands over the next five years, compared with €62.4bn for 2012-16 agreed a year ago, analysts have said.That would be a record, but also represent a slowdown. The €62.4bn target was more than a fifth higher than over the 2011-15 period.

Brits top the whisteblowers list

 

More than one in ten tip-offs about corporate wrongdoing received by the US Securities and Exchange Commission (SEC) came from overseas, with British whistleblowers topping the list, said a global investigations firm on Thursday.Nearly one in four of the 324 overseas tip-offs came from Britain with Canada second and India third, according to Kroll's analysis of the annual report from the US body responsible for regulating the securities market.Under new US regulation introduced in 2010, the SEC starting paying whistleblowers, both at home and abroad, for coming forward with information that results in successful prosecutions."The bounties offered to whistleblowers by the SEC are likely to have huge repercussions for companies, particularly international ones, as they mean whistleblowers based anywhere in the world are more likely to go to the regulator rather than their company," said Kroll Managing Director, Benedict Hamilton.Britain's 74 tip-offs were well above second-placed Canada which had 46, according to data from the fiscal year 2012.Regulators in Britain do not offer similar rewards at the moment but Kroll said Britain's Parliamentary commission on banking standards has asked the Financial Services Authority regulator to consider the move.Data released last month showed the number of whistleblowing cases reported to the FSA were up 276% in four years.The SEC received nearly 1 000 calls to its helpline from June 2007 to May 2008 compared to 3 733 in the same 2011 to 2012 period.