Funding for Health Care Services in California Prisons

One of today's big news items is the Governor's signing of the California budget. The adoption of the state budget seems to have refueled a dispute between California Health Care Services (Receiver J. Clark Kelso) and California government executives.

Although a Receivership of California's prison health care services was established back in 2005, friction between the parties became particularly apparent in August of 2008 when Receiver J. Clark Kelso filed a motion to compel the state to begin funding the $7.9 billion needed for the extensive reform of California's prison medical system. You can read the motion and supporting documents here (look for 8/13/08 date).

In response to the motion, State Controller John Chiang issued this statement. Attorney General Edmund G. Brown Jr. also responded to the motion by filing his own motion in opposition.

In support of his motion, Attorney General Brown references the Prison Litigation Reform Act (PLRA). The PLRA was passed by the U.S. Congress in 1996 and signed into law as Title VIII in Public Law 104-134 (see page 67 in the PDF). The PLRA is also referenced in the full report issued by the Legislative Analyst's Office "Update of the California Prison Receivership: 2007".

For more background information on the Receivership, take a look at the website of the California Prison Health Care Services and their collection of documents related to the case of Plata v. Shwarzenegger. You can also look at the Receiver's reports on the status of the California prison medical system. For a point of comparison to these reports, you can look at a 1998 report by the California Research Bureau "Health Care in California State Prisons."

January 2009 Update:

"Improper" spending-

A recent report by the State Auditor concludes, "staff at Prison Health Services ignored state contracting laws, as well as the alternative contracting requirements established by a federal court, when it acquired $26.7 million in IT goods and services in a noncompetitive manner..."

Safety of Bisphenol A (BPA)

Recent controversy has been brewing regarding the use of the chemical Bisphenol A (BPA) in consumer products ranging from water bottles to the lining in cans. The Food and Drug Administration (FDA) has created a task force to further investigate the possible health effects of BPA, but has released a draft assessment stating that it currently considers it safe. Some consider the conclusions in this draft assessment to be in discordance with a report recently released by the National Toxicology Program and an article published in the Journal of the American Medical Association.

Congress is also interested in the safety and use of BPA. Senate Bill 2928 was introduced as the "BPA-Free Kids Act of 2008" in April. Both the House and the Senate have held recent hearings regarding BPA. While these hearings have not yet been published, audio webcasts and printed testimonies are available. The hearing on "Safety of Phthalates and Bisphenol-A in Everyday Consumer Products" was held before the House Subcommittee on Commerce, Trade, and Consumer Protection on June 10, 2008. The hearing on "Plastic Additives in Consumer Products" was held before the Senate Subcommittee on Consumer Affairs, Insurance, and Automotive Safety on May 14, 2008. Also, the Congressional Research Service released the report "Bisphenol A (BPA) in Plastics and Possible Human Health Effects" in May.

Questions about the safety and use of BPA are not necessarily a recent development. Check out the "Informational hearing on the health effects of phthalates and bisphenol-A on children" held before the California Assembly Committee on Health back in 2006.

You might also want to review this BPA fact sheet from the CDC. And if you're interested in what other countries are doing about BPA, take a look at this page from the Government of Canada.

Some Federal Deposit Insurance Corporation (FDIC) basics

Recent discussions about the financial stability of major banking institutions, such as Washington Mutual, have prompted increased attention on the Federal Deposit Insurance Corporation (FDIC) and the strength of its insurance fund. One of the FDIC's principle responsibilities is the insurance of bank deposits for at least $100,000. In order to get a better understanding of the FDIC's consumer protection measures, check out the following publications:

FDIC Consumer News (quarterly)

"Your Insured Deposits: FDIC's Guide to Deposit Insurance Coverage"

And to calculate your FDIC insurance coverage, check out EDIE (Electronic Deposit Insurance Estimator).

Although the FDIC has undergone multiple changes since its inception under the Banking Act of 1933 (Public Law No. 73-66, 12 USC Sec. 227), a recent major reform was signed into law in 2006 as the Federal Deposit Insurance Reform Act of 2005.

Congress has held a number of hearings concerning the Federal Deposit Insurance System. Here are some of the more recent ones:

• "Viewpoints of the FDIC and select industry experts on deposit insurance reform" (2001)


• "Viewpoint of select regulators on deposit insurance reform" (2001)


• "Deposit insurance reform : hearing before the Subcommittee on Financial Institutions and Consumer Credit of the Committee on Financial Services" (2001)


• "The Federal Deposit Insurance System and recommendations for reform" (2002)


• "The Federal Deposit Insurance System : hearing before the Committee on Banking, Housing, and Urban Affairs" (2003)


• "Oversight of the Federal Deposit Insurance Corporation" (2004)


• "The consideration of regulatory relief proposals" (2005)


• "Consideration of regulatory relief proposals" (2006)


• "H.R. 698 : the Industrial Bank Holding Company Act of 2007" (2007)


• "Recent events in the credit and mortgage markets and possible implications for U.S. consumers and the global economy" (2007)

And here's a congressional report regarding the Reform Act of 2005:

"Federal Deposit Insurance Reform Act of 2005 : report (to accompany H.R. 1185) (including cost estimate of the Congressional Budget Office)" (2005)

The Government Accountability Office (the investigative branch of congress) has also issued a number of reports on the FDIC. Here are two of the most recent ones:

"Deposit Insurance: Assessment of Regulators' Use of Prompt Corrective Action Provisions and FDIC's New Deposit Insurance System" (2007)

"Management Report: Opportunities for Improvements in FDIC’s Internal Controls and Accounting Procedures" (July 2008)

And the Congressional Budget Office (responsible for estimating budget effects of proposed legislation) published this report in 2005.

If you're interested in other aspects of FDIC oversight, you might want to check out the website for the FDIC Office of the Inspector General.

And if you're curious about similar federal insurance for credit unions, check out the National Credit Union Administration.

Minerals Management Service Scandal

There has been much reporting on the recently completed investigation of the Minerals Management Service, an office within the Department of the Interior, which include various allegations ranging from drug use to conflict of interest violations. The investigations were conducted by the Department of the Interior's Office of the Inspector General. You can find the three reports presented to congress by the OIG here.

It appears that this is not the first time that congress has looked into the operations of the Minerals Management Service. Here are just a few congressional hearings regarding the MMS and/or the DOI:
"Oil and Gas Royalty Management at DOI" (PDF)
"Interior Department: a culture of management irresponsibility and lack of accountability?"
"Reports, audits, and investigations by the Government Accountability Office (GAO) and the Office of Inspector General (OIG) regarding the Department of the Interior"

You might also want to look at some of the reports issued by the US Government Accountability Office:
"Litigation over Royalty Relief Could Cost the Federal Government Billions of Dollars"
"Data Management Problems and Reliance on Self-Reported Data for Compliance Efforts Put MMS Royalty Collections at Risk"

If you're interested in government ethics and conflicts of interest, you might want to take a look at the website for the Office of Government Ethics, which includes their advisory opinions. California has a state government level equivalent in the Fair Political Practices Commission; find their advice summaries here.

Possible Pay Cuts for State Workers

Back on July 31, 2008, Governor Arnold Schwarzenegger issued Executive Order S-09-08 which effectively ordered a reduction in the pay of over 175,000 California State workers to the federal minimum wage of $6.55 per hour. The precedent for this action was set in 2003 under then-Governor Gray Davis. Schwarzenegger cites the decision of the California Supreme Court in the case of White v. Davis, 30 Cal. 4th 528 (Cal. 2003) in his executive order. However, State Controller John Chiang stated that he would not comply with the order. To see the most recent information on the legal battle between Governor Schwarzenegger and Controller Chiang, including the papers filed with the court in the case of Gilb v. Chiang, check out The State Worker.

During the similar situation in 2003, Assembly Bill 1535, which would have ensured regular pay for state workers, was proposed, though never passed. To see what the current legislature is doing in this regard, check out this informational hearing held before the California State Senate on August 4, 2008. And to get the gubernatorial/executive perspective on the matter, check out this article from the Department of Personnel Administration and the Governor's speech from August 31, 2008.

California Emergency Response Teams

It's hurricane season, and even though California doesn't experience hurricanes, California sends help to areas affected by hurricanes, other natural disasters, and acts of terrorism. The help is in the form of Task Forces who operate under FEMA and are coordinated by local fire protection districts. There are eight task forces in California, and approximately 28 nationwide.

The Task Forces are composed of "firefighters and paramedics rescue specialists, emergency room physicians, structural engineers, heavy equipment specialists, canine search dogs and handlers, hazardous materials technicians, communications specialists, and logistics specialists. This unique technical rescue team responds with 70,000 pounds of prepackaged search and rescue tools and medical equipment to conduct around the clock search and rescue operations at domestic and international disasters, both natural and man-made."

Task Force 3, the task force closest to Santa Cruz, is based out of the Menlo Park Fire Protection district and specializes in urban search and rescue. Task Force 3 teams were deployed to Louisiana for Hurricane Gustav, and to Texas in preparation for Hurricane Ike. Currently there are eight national Task Force groups being sent to help with Hurricane Ike, including Task Force 8, from San Diego.

If you like to watch money or markets...

...but don't have the patience to wade through detailed economic reports, then you'll want to take a look at the Beige Book released by the Federal Reserve Board on Wednesday Sept. 3rd.

The Beige Book is released eight times a year and consists of comments (a.k.a. anecdotal information) gathered from contacts in business, agriculture, and labor as well as banks and advisory councils outside the Federal Reserve Board.

What's the big deal? The Beige Book provides a snapshot of market conditions and economic issues that may signal how the Federal Reserve Board will act to set monetary policy. The Beige book is released two weeks before the Federal Reserve Board of Governors meets, and is one of many indicators (in addition to detailed national forecasts) used by the Board to gauge the economy. Topics covered include: consumer spending and tourism, nonfinancial services, manufacturing, real estate and construction, banking and finance, agriculture and natural resources, and prices and wages.

It's not a perfect indicator, but it contains a wealth of interesting information about the economy - and it includes information nationally as well as by region (Boston, New York, Philadelphia, Cleveland, Richmond (VA), Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, San Francisco). Not bad for an economic source!

Visit the Federal Reserve Board's Education page to learn more about the Federal Reserve Board, consumer banking, basic information on loans and credit, interest rates and other personal financial information.