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Tuesday, November 13, 2012

Stephen Colbert Shuts Down \'Super PAC\'

Count Stephen Colbert among those disappointed “super PAC” operatives who think they didn't help decide the presidential election.

But Mr. Colbert is taking it one step further: he is shutting down his group, Americans for a Better Tomorrow, Tomorrow.

In a letter posted to the group's Web site, Mr. Colbert cited the “timely passing” of Ham Rove, an actual canned ham that Mr. Colbert called the super PAC's “adviser and chief strategist.”

“Due to Ham Rove's timely passing, I am announcing that Colbert Super PAC is shutting down effective immediately,” Mr. Colbert wrote.

On Monday's “Colbert Report,” Mr. Colbert expressed fear in taking money from “anonymous, scary donors,” and professed that they were trying to kill him for using donations ineffectively.

After attempting to fob the blame on Jon Stewart, Mr. Colbert offered the donors “a head on a platter” and did away with Ham Rove. He then made the group's remainin g funds - almost $800,000 - “disappear” to a new 501c4 group through an Internal Revenue Service loophole, as explained by his lawyer, the former Federal Election Commission Chairman Trevor Potter.

“During this time of mourning, we ask that you respect our privacy, and more importantly, the privacy of our money,” Mr. Colbert continued in the letter. “It wishes to stay out of the public eye, so please don't go trying to find it. Rest assured, you won't. We have a really good lawyer.”

Mr. Colbert's super PAC was a joke that became real, evolving from a skit mocking the Citizens United decision to a full-fledged super PAC, at one point raising more than $1 million. While never explicitly stating his intentions, Mr. Colbert used the group to raise awareness of loose campaign finance laws.

Last August, his group released a 60-second ad, advocating a write-in campaign for “Rick Parry” in the Ames straw poll in Iowa. (Gov. Rick Perry of Texas, then considered an early favorite for the Republican nomination, opted not to officially enter the race until after the straw poll.)

The comedian then increased his super PAC credibility and released an attack ad in South Carolina during the state's primary, calling Mitt Romney a serial killer in a satire of the attacks against Mr. Romney's former company, Bain Capital.

As of Tuesday night, a termination report for Americans for a Better Tomorrow, Tomorrow had not been posted on the Federal Election Commission Web site.



The Cost, in Dollars, of Raising a Child

In an article in the Your Money special section we just published about bulletproofing your finances, I wrote about one big money move that would be awfully beneficial to my bottom line: not having children. For all that we know about how expensive it is to raise a child, however, we don't know exactly how much it costs.

So I decided to come up with an estimate, rough as it is, for what it would cost my spouse and me to have one child. I figure it would run close to $2 million by the time it was all over. How did I come up with that estimate?

The United States Department of Agriculture Department publishes an annual report on what families spend on their children, so I used that as a basis for some of my calculations and then tailored them to our own finances and geography. In 2007, The Wall Street Journal tried to improve upon the government figures, but some of the expenses they included seem based on the budgets of the truly rich , like furniture from Pottery Barn and bottled water delivery.

Without excessive expenditures, surely people like us could raise a child for more than the $435,030 the government estimates but less than the $776,000, $1 million or $1.6 million guessed at on the pages of the Wall Street Journal. Right?

I had hoped so, but my estimation of what my spouse and I might spend â€" and, crucially, what we might lose â€" having a child ended up being more than those estimates.

In order to be as conservative as possible, I stuck with the Agriculture Department's figures for the cost of food, transit, clothing and miscellaneous expenses (personal care items, entertainment, reading materials) for children in a two-parent household in the urban Northeast with a combined income of over $103,350.

Those costs are higher in New York City, but our earnings are below the average for the category we fall in, and I wanted to be conservative in my calculations. But for hou sing, health care and child care I changed the numbers to be more specific to where we live. I used the average cost of full-time child care in New York City for the first few years, $12,750 to $16,000, according to the Administration of Child Services, and then reverted back to the Agriculture Department numbers for child care and education until age 18.

My health insurance plan would charge us nearly $4,000 more each year for an additional dependent. Co-pays, prescriptions and other therapies could easily cost another $750 each year. At some point, our hypothetical child would probably have braces as we both did, which costs $4,000 out of pocket.

To estimate the cost of housing a child, I subtracted our rent from the rent we would pay to live in our neighborhood in a more suitable space - one with higher security, a more responsive landlord, reliable heat and better stroller-accessibility. Staying in our neighborhood and continuing to rent would keep our other costs in check, especially because of the quality of the public schools here.

Just as our parents paid most of our undergraduate tuition, my husband and I would want to help our child pay for college. To pay for half of the projected tuition at an average-price four-year public university would require we save $5,328 each year from birth to age 18, according to BlackRock's college savings calculator.

And since we would probably not cut off our child financially once he or she reached the age of majority, I added the cost of the basics (housing, clothing, food, transportation and health care) between age 18 and 25, when the child would no longer be covered under our health insurance. Later in life, when this young adult has children, we will still spend money by supporting our grandchildren at a rate of $8,289 every five years, the average according to a MetLife study of grandparents' relationships with their grandchildren.

Then there are the losses I would suffer as a working mother: half a year of forgone wages while on maternity leave and earning 73 percent of what men earn instead of 90 percent like nonmothers (or in my case, the equivalent fraction of my current salary) for the remainder of my career, according to a Columbia University study on the motherhood wage gap. This doesn't include reduced benefits like 401(k) contributions, but it still adds up to over $700,000. The flip side of this equation is what economists call the “fatherhood premium,” which increases a man's earnings about 4 percent.

Of course these expenditures and losses are not the strict minimum required to raise a child â€" not by a long shot. But if we were to have a child and do what most other parents do by trying to give this new little life the very best start possible, it would probably cost us $1.8 million including everything I mentioned above.

Then there are other sacrifices to mental health and perhaps fiscal health, too, albe it in ways that are hard to predict. Some of those disadvantages seem readily apparent, like lower marital satisfaction, higher depression rates, plus that “mommy track.”

So did you think about the cost, in dollars, of having a child before you decided to become a parent? Or do you find the whole idea of factoring in it at all to be odd?



Student Loan Hurdles for Members of Military

U.S. soldiers near Kabul, Afghanistan, earlier this year.Associated PressAmerican soldiers near Kabul, Afghanistan, earlier this year.

You would think that military members who are actively serving their country shouldn't have to spend time arguing with their student loan servicing company, right?

Apparently, that's not the case.

A recent report from the Consumer Financial Protection Bureau finds that service members often have a tough time getting access to loan benefits available to those serving on active duty, like interest-rate reductions and loan forgiveness programs.

The average cumulative amount of student loan debt for active-duty service members graduating from college in 2008 was $25,566, according to the N ational Center for Education Statistics. There are a number of special benefits and protections available to help service members manage this debt, but the programs were enacted through a patchwork of laws, and the benefits vary depending on the type of loan in question. Sometimes, details of how the programs work can be confusing - and loan servicing companies don't always help clarify things.

“Unfortunately, the complexities of these provisions, together with problems in loan servicing, have created difficulties for many military families when attempting to manage their debt,” the agency reports.

Many service members, for instance, simply defer their loans or obtain a forbearance, which lets them skip monthly payments while on active duty. But they may not always understand that on some types of loans, interest may still accrue, often resulting in ballooning loan balances. And they may not be told about possible alternatives tha t can lower their monthly payments to more affordable levels.

One parent of a service member told the bureau that his son's three loans totaled just over $61,000 when his son graduated. But the servicer now says the total is almost $85,000, because of a five-month deferral of payments during military service.

One borrower told the bureau that his loan servicer automatically put his loans into forbearance without his permission. “I did not ask for my account to be placed in forbearance and as a result of this action, it is currently accumulating interest,” he wrote.

Programs like “income-based repayment” may allow service members with federal loans to reduce their monthly payments while on active duty. Then, if they remain in the service for 10 years and make 120 on-time payments, they can take advantage of the “public service loan forgiveness” program, which forgives the remaining balance.

Borrowers with both private and federal loans may be eligible for the Servicemembers Civil Relief Act, which reduces the interest rate on loans to 6 percent.

The potential cumulative benefits of these programs are shown in this example in the report: “A service member who takes out $81,000 in loans for school will ultimately owe up to $101,000 after his in-school deferment. If he elects to continue to defer his payments while serving on active duty, he will owe more than $165,000 over the life of the loan.”

But if he enrolls in income-based repayment, qualifies for public service loan forgiveness and receives the benefit of the interest-rate cap under the civil relief act while on active duty, he'll instead pay about $110,000, saving almost $55,000 over the life of the loan.

The agency has received complaints, however, that service members are made to jump unnecessary hurdles to qualify for the programs, like the interest-rate cap. Some borrowers have said they were told by their loan servicers that th e interest-rate cap would expire annually, and that they would have to resubmit additional orders to retain the benefit. It seems unfair and unrealistic, at a minimum, to expect someone who is perhaps dodging bullets to take time out to refile paperwork with a loan servicer.

That's not how the program is supposed to work, according to the agency. Once a service member requests the interest-rate cap, “the servicer should apply the benefit for the duration of active-duty status.” No repeat filing is necessary.

Have you had trouble getting information about loan benefits for military members?



Will Obama Agree to Entitlement Cuts? He Already Has

Labor unions and other liberal groups that helped re-elect President Obama are starting a push this week to make sure that any new budget deal does not chisel away at entitlement programs.

Their message to the president, beginning with a meeting at the White House on Tuesday, is that he won a mandate to raise taxes on the wealthy while resisting cuts to Medicare and Social Security, and that they intend to stand firm with him on that position.

The problem here is that urging Mr. Obama not to join House Republicans in reducing entitlement spending is like pleading with John Travolta and Olivia Newton-John not to reunite for a Christmas album. It's just too late.

Sure, there was a lot of specious debate during the campaign about which candidate would protect older people from the evil designs of the other. Mitt Romney claimed, dubiously, that Mr. Obama had raided sacred Medicare financing to pay for his health care plan. Mr. Obama said that Mr. Romney would follow the lead of his running mate, Representative Paul D. Ryan, and scrap Medicare altogether for future generations.

But both candidates had to know how thoroughly disingenuous this debate really was. The fact is that Mr. Obama, during his “grand bargain” negotiations with the House speaker, John A. Boehner, in the summer of 2011, had already signed off on painful cuts to Medicare, Medicaid and Social Security, even if he never once mentioned that during his re-election campaign. So he knew there was a deal to be had that would preserve - and perhaps even strengthen - these programs without destroying them.

And if Republicans were outraged over those cuts, it's only because they were demanding far steeper reductions in all three programs. The idea that Republicans had to stop Mr. Obama from recklessly cutting Medicare was probably Mr. Romney's most misleading attack, and that's saying something.

None of this is theoretical or subjective. It's spelle d out clearly in the confidential offers that the two sides exchanged at the time and that I obtained while writing about the negotiations last spring.

In his opening bid, after the rough framework of a grand bargain was reached, Mr. Boehner told the White House he wanted to cut $450 billion from Medicare and Medicaid in the next decade alone, with more cuts to follow. He also proposed raising the retirement age for Social Security and changing the formula to make benefits less generous.

Mr. Obama wasn't willing to go quite that far. But in his counteroffer a few days later, he agreed to squeeze $250 billion from Medicare in the next 10 years, with $800 billion more in the decade after that. He was willing to cut $110 billion more from Medicaid in the short term. And while Mr. Obama rejected raising the retirement age, he did acquiesce to changing the Social Security formula so that benefits would grow at a slower rate.

T his distance between the two sides on entitlement spending was sizable but not unbridgeable. In the end, the deal fell apart over the ratio of cuts to revenue. Mr. Obama wanted $400 billion more in new revenue than he and Mr. Boehner had initially discussed. Mr. Boehner couldn't sell that number to his caucus, and he wasn't going to try without getting even more drastic cuts to entitlements in return.

What's relevant here, though, isn't simply that Mr. Obama agreed to scale back entitlement spending. It's that he had the support of his most liberal advisers and allies, too.

No one working in the White House was thrilled by the prospect of slashing Medicare and especially Social Security, which Democrats firmly believe should be excluded from any budget negotiation. Even so, there was near unanimity among Mr. Obama's advisers that making those cuts was worth getting a framework that would avoid a debt default and begin to put the nation on a different fiscal traje ctory.

And just hours before the deal with the speaker unraveled, Mr. Obama met with his party's top Congressional leaders, Harry Reid and Nancy Pelosi, and asked for their support. Neither Mr. Reid nor Ms. Pelosi felt like celebrating over the terms, to be sure, but it's significant that both lawmakers told the president they would get behind it.

Liberal activists will tell the president that things are very different now. He's won a mandate, they will say, and that means he doesn't need to compromise.

But while Mr. Obama can probably claim some vindication on the need to make the tax code more equitable, it would be a stretch to say that the voters demanded that he hold the line against entitlement cuts as part of a broader deal. The possible terms of a grand bargain hardly ever came up during the campaign, because neither side wanted to talk about it.

Mr. Obama may have more leverage now than he did in 2011 to put a hard limit on the scale of entit lement cuts, but it's unthinkable that he could reach a comprehensive deal - something he still badly wants to do - without at least accepting the terms he found acceptable the first time around. That's how negotiations work.

So while it may be good strategy for progressive groups to pressure the White House on entitlement spending, no one should harbor the illusion that the president won't sign off on reductions. The simple fact is, he already has.



TimesCast Politics: The Petraeus Scandal Widens

Reuters
  • 0:01  The Latest on Petraeus

    Michael D. Shear reports on the latest from the investigation into General David H. Petraeus, including that the F.B.I. is said to have found thousands of pages of correspondence between Gen. John Allen, the top NATO commander in Afghanistan, and Jill Kelley.

  • 5:08  National Security Implications

    Dean Baquet looks at the possible national security implications stemming from Mr. Petraeus's resignation.

  • 10:44  An Intervie w With Rep. James Lankford

    Megan Lieberman interviews Representative James Lankford about the upcoming fiscal cliff negotiations.

  • 16:14  Previewing the Fiscal Cliff

    Carl Hulse looks ahead to the fiscal cliff negotiations.



Ryan Surprised by Voters in \'Urban Areas\'

Representative Paul D. Ryan of Wisconsin on Monday blamed Democratic turnout in “urban areas” for the loss by the Republican presidential ticket last week, saying he was surprised that he and Mitt Romney did not do better in the nation's big cities.

“The surprise was some of the turnout, some of the turnout especially in urban areas, which gave President Obama the big margin to win this race,” Mr. Ryan said in an interview with WISC-TV. “When we watched Virginia and Ohio coming in, and those ones coming in as tight as they were, and looking like we were going to lose them, that's when it became clear we weren't going to win.”

The remarks prompted scorn from some liberals who viewed Mr. Ryan as blaming inner-city minorities for the Republican defeat.

“Paul Ryan emerged from dustbin of n othingness 2 blame his & Romney's defeat on “urban” vote,” one person tweeted. “These 2 losers continue 2 demean minorities.”

Another tweeted that “Urban vote” = minorities. Paul Ryan is saying he lost because minorities actually went out and voted. SHOCKER. MINORITIES HAVE RIGHTS, TOO.”

Several people pointed out that Mr. Romney and Mr. Ryan also lost some largely rural states with few minorities, like New Hampshire and Iowa. Those losses cannot be explained away by focusing on urban voters, they noted.

In the interview with the television station, Mr. Ryan said he did not think that the nation's voters had rejected his long-standing ideas for how to restructure the nation's budget and cut spending.

“I don't think we lost it on those budget issues, especially on Medicare - we clearly didn't lose it on those issues,” he said.

Follow Michael D. Shear on Twitter at @shearm.



Rising Out-of-Pocket Health Costs

I looked over some medical statements recently and realized that even though my family had spent roughly $3,000 out of pocket for health care this year, we would still fail to meet our annual deductible.

We're not alone. Workers who get health insurance through their employers have seen the average deductible nearly double over the last six years, a new analysis from the Kaiser Family Foundation finds.

In 2012, 72 percent of covered workers face a general annual deductible, up from 52 percent of workers in 2006, according to a deeper look at data from the Kaiser/HRET Employer Health Benefits Survey. Among workers who have an annual deductible, the average deductible for single coverage, across all types of plans, is $1,097 this year, up from $584 in 2006.

Those working at smaller companies - those with fewer than 200 workers - were more likely to have higher deductibles, the analysis found.

Now, I'm not necessarily compl aining - even though the $3,000 that was spent on health care is $3,000 that won't go into our retirement account, or into our children's college funds. We knowingly opted for a higher deductible to keep our monthly premiums lower. And we had savings to cover the costs that the our insurance plan didn't.

But what about families who are living paycheck to paycheck, and don't have backup savings?

Previous surveys have found that some families forgo needed care because of the higher costs.

“While many working families have sufficient savings and coverage in case of a medical emergency,” the analysis concluded, “the growth in workers' contributions and cost sharing may increasingly become a financial strain on some households.”

Have you noticed that you're paying more for health care? How are you managing higher deductibles?



Support Wavers for Anti-Tax \'Pledge\'

WASHINGTON - It is known simply as “the pledge.” And if you are a Republican member of Congress, it has been considered heresy to do anything short of fully devoting yourself to its low-tax principles.

But as Congress gathers for its lame-duck session and confronts a serious set of economic and tax questions that could bring the country to the brink of the so-called “fiscal cliff,” one of the lingering questions is whether the pledge - drafted and enforced by Grover Norquist's Americans for Tax Reform - will hold up.

Already there are indications it may not. According to a report in The Hill, the Capitol Hill newspaper, incoming members of Congress and even a few returning ones are refusing to honor it. The pledge calls for elected officials to oppose “any and all efforts to increase the marginal income tax rates.”

And, perhaps more critically, signing the pledge also includes vowing to oppose reducing tax deductions and credits. Members of both parties have signaled that they would be willing to accept a tax compromise that included eliminating certain deductions, especially those for high-income people, as opposed to a broad tax increase.

Mr. Norquist told The Hill he is not concerned that some members might walk away from the pledge. ““That doesn't keep me up at night.”



Tuesday Reading: Cholesterol Tests May Not Require Fasting

A variety of consumer-focused articles appears daily in The New York Times and on our blogs. Each weekday morning, we gather them together here so you can quickly scan the news that could hit you in your wallet.

  • What I saved from the flood. (Booming)
  • Facebook's false faces undermine its credibility. (Business)
  • Elmo puppeteer accused of underage relationship. (Media Decoder)
  • With airfares, travelers trade clarity for greater choice. (Business)
  • Alzheimer's precursors seen in brain at early age. (Science Times)
  • Antibiotics are a gift to be handled with care. (Well)
  • Cholesterol tests may not require fasting. (Well)
  • Unusual number of people living with relatives. (Economix)
  • More companies are tracking online data. (Bits)
  • A lie that's good for password security. (Gadgetwise)
  • A new bid for the 100-watt lightbulb market. (Green)


The Early Word: Deductions

Today's Times

  • Democrats are latching on to one of Mitt Romney's ideas - to raise taxes on the rich through a hard cap on income tax deductions. Jonathan Weisman explains that they think the cap could help reach a bipartisan deficit reduction agreement, while Mr. Romney proposed it as a way to pay for an across-the-board cut in income taxes.
  • Labor leaders' robust support for President Obama didn't end on Election Day, Steven Greenhouse reports. They intend to back him through his second term on issues like Medicare, Medicaid and Social Security.
  • Senator John Kerry of Massachusetts and Susan E. Rice, the American ambassador to the United Nations, are the front-runners to succeed Hillary Rodham Clinton as secretary of state, but they are both dogged by issues that could complicate their path, Mark Landler writes.
  • “The Optimizer” cannot be bought at any gadget store or online retailer, but obtaining it can help you beat a better-financed opponent in a presidential advertising war, Jim Rutenberg reports.
  • More same-sex marriage initiatives could be coming to a ballot near you in 2014, Erik Eckholm writes.

Around the Web

  • Former Gov. Rod R. Blagojevich of Illinois will now be slinging books at the prison library, WBBM Newsradio reports.

Happenings in Washington

  • The newly elected members of Congress will start their orientation on Capitol Hill.