Regulators on Friday shut down banks in Florida, Georgia and Michigan, a total of five closures that lifted the number of U.S. bank failures this year to 39.
The pace of closures has slowed, however, as the economy improves and banks work their way through piles of bad debt. By this time last year, regulators had closed 64 banks.
The Federal Deposit Insurance Corp. seized First National Bank of Central Florida, based in Winter Park, Fla., with $352 million in assets, and Cortez Community Bank of Brooksville, Fla., with $70.9 million in assets.
The agency also took over First Choice Community Bank of Dallas, Ga., with $308.5 million in assets; Park Avenue Bank, based in Valdosta, Ga., with $953.3 million in assets; and Community Central Bank in Mount Clemens, Mich., with $476.3 million in assets.
Miami-based Premier American Bank agreed to assume the assets and deposits of First National Bank of Central Florida and Cortez Community Bank. Bank of the Ozarks, based in Little Rock, Ark., is acquiring the assets and deposits of First Choice Community Bank and Park Avenue Bank. Talmer Bank & Trust, based in Troy, Mich., agreed to assume the assets and deposits of Community Central Bank.
In addition, the FDIC and Premier American Bank agreed to share losses on $270 million of First National Bank of Central Florida’s loans and other assets, and on $51.3 million of Cortez Community Bank’s assets.
The agency and Bank of the Ozarks are sharing losses on $260.7 million of First Choice Community Bank’s assets and $514.1 million of Park Avenue Bank’s assets. Talmer Bank & Trust is sharing with the FDIC $362.4 million of Community Central Bank’s assets.
The failure of First National Bank of Central Florida is expected to cost the deposit insurance fund $42.9 million. The failure of Cortez Community Bank is expected to cost $18.6 million; that of First Choice Community Bank $92.4 million; Park Avenue Bank, $306.1 million; and Community Central Bank, $183.2 million.
Florida and Georgia have been the hardest-hit states for bank failures. Twenty-nine banks were shuttered in Florida last year and 16 in Georgia. The four shutdowns in those states on Friday brought to four and 10 the number of bank failures in Florida and Georgia, respectively this year.
California and Illinois also have seen large numbers of bank failures.
In 2010, authorities seized 157 banks that succumbed to mounting soured loans and the hobbled economy. It was the most in a year since the savings-and-loan crisis two decades ago.
The FDIC has said that 2010 likely would mark the peak for bank failures.
There were 140 bank failures in 2009, costing the insurance fund about $36 billion. The failures last year cost around $21 billion, a lower price tag because the banks that failed in 2010 were smaller on average. Twenty-five banks failed in 2008, the year the financial crisis struck with force; only three were closed in 2007.
From 2008, the year the financial crisis struck, through 2010, bank failures cost the fund $76.8 billion. The deposit insurance fund fell into the red in 2009, and its deficit stood at $7.4 billion as of Dec. 31.
The FDIC expects the cost of resolving failed banks to total around $52 billion from 2010 through 2014.
Depositors’ money _ insured up to $250,000 per account _ is not at risk, with the FDIC backed by the government. That insurance cap was made permanent in the financial overhaul law enacted in July.
The number of banks on the FDIC’s confidential “problem” list rose to 884 in the final quarter of last year from 860 three months earlier. The 884 troubled banks is the highest number since 1993, during the savings-and-loan crisis.
Yemen’s opposition parties said Tuesday they will soon sign a deal mediated by neighboring Gulf countries for the embattled president to step down, possibly defusing months of deadly government protests across this impoverished Arab nation.
President Ali Abdullah Saleh, who has ruled for 32 years, has already agreed to the proposal that would create a national unity government and have him transfer power to his vice president within 30 days of the deal being signed. In exchange, Saleh and his family would received immunity from prosecution.
But the proposal, put forward by the six-nation Gulf Cooperation Council, appears to have opened a serious rift between opposition parties and the hundreds of thousands of protesters who have taken to the streets daily since February to demand Saleh’s immediate resignation.
The coalition of youth groups behind the two-month-old uprising rejected the deal, and in a statement called for nationwide civil disobedience between 8 a.m. and noon on Wednesday. The groups vowed to repeat this action every Saturday and Wednesday until Saleh steps down.
“We will march to the presidential palaces, the government headquarters and parliament and occupy them peacefully,” said Abdul-Malek al-Youssefi, an activist and protest organizer. “Our demands are that the regime leave along with the opposition leaders who are old and no longer reflect the aspirations of the street.”
Mohammed Salem Bassindwa, head of the opposition’s national dialogue council, told The Associated Press on Tuesday that he expected to soon sign the initiative by the GCC, which is led by regional heavyweight Saudi Arabia.
“We have approved the Gulf Arab initiative and the signing of the agreement will take place in the next 24 hours,” he said.
However, a senior opposition figure said the GCC proposals were accepted under pressure from the United States and Saudi Arabia, which wields immense influence in Yemen. The officials spoke on condition of anonymity because of the sensitivity of the subject.
Washington has poured millions of dollars into Yemen in recent years to help its security forces fight al-Qaida militants who have taken refuge in some of Yemen’s remote or mountainous areas.
While the deal has been approved by the opposition coalition, several dissenting voices have emerged within the movement.
Mohammed al-Sabri, spokesman of the opposition parties, criticized the acceptance of the GCC initiative. He noted that he was speaking for himself and not in his capacity as the movement’s spokesman.
“The opposition has betrayed its members and the Yemen street,” he said. “How can we speak about the corruption of the government and at the same time share a national unity government with it?”
Tawakul Karman, a senior member of the main opposition party, Islah, also rejected the proposals.
“We will not accept them and will continue our protests harder,” she said at Change Square near Sanaa University where thousands of protesters have camped for weeks.
In the country’s second largest city, Taiz, security forces opened fire on tens of thousands of protesters, killing one demonstrator and wounding at least 14 were wounded, activist Nouh al-Wafi told AP.
Security forces also wounded at least eight protesters in the western city of Hodeida, and three in the southern port city of Aden.
The protesters were demanding Saleh’s immediate resignation and rejecting the GCC proposals.
More than 130 people have been killed by security forces and Saleh supporters since the unrest erupted in early February. At least 40 were killed in a single attack on March 18 by rooftop snipers overlooking protesters in Sanaa.
In my work as a financial journalist, I speak with a lot of advisors and just as many individual investors. Lately I
Want to go where the jobs are? Check out New York’s tech industry. The city’s second annual NYC Startup Job Fair, held Friday, drew a packed-to-capacity crowd of both job seekers and those looking to hire them.
It was so jammed that the organizers turned away 80 startups looking to attend and recruit.
"This is the only industry that has a booming number of jobs — and they cannot fill those jobs fast enough," said Drew Nichols, development manager at career website TheLadders.com.
With 400 employees, his company is looking to expand across all fronts. Nichols is especially eager to hire more software developers.
"The market in New York is very tight," he said.
SecondMarket business strategy analyst Alex Horn started the event last year to help grow the New York tech ecosystem. "There wasn’t really an opportunity for students looking for jobs in the startup space," he said.
And as venture capitalists pour money into startups and valuations soar, the hunt for employees has taken off.
Karsten Vagner, recruitment manager at ZocDoc, a medical appointment scheduling startup, said they are "aggressively hiring."
How aggressive? Think costumes, beer pong, and $100 cash on the spot.
The ZocDoc crew dressed as doctors and nurses, enticed attendees with games of beer pong (ok, the cups were filled with water), and handed out a "resume" on the company — while collecting nearly 300 resumes from job seekers.
They also created a quiz for potential engineers, dishing out $100 cash and an interview invitation to those who passed along.
"Next week, I expect us to make a dozen hires," Vagner said.
But it’s not just engineering positions that are opening up.
"We’re hiring in everything," said Nikki Laffel, who runs production at Quirky, a consumer products company. "We’re scheduled to double in size this year."
Held at AOL’s (AOL) headquarters and co-hosted by the Columbia Venture Community and NYC Ventures, two university-based networking groups, the startup fair drew a steady stream of college students hoping to work at entrepreneurial companies.
Anku Oberoi, a New Jersey Institute of Technology student who will graduate this year, came with a stack of resumes payday advance.
"New York is like the finance capital of the world. I think it’s time for another industry to take over," he said. "Tech seems to be that next industry."
New York City Council Speaker Christine Quinn cast the startup boom as a sign of a recovering economy. "These start-ups are evidence that Silicon Alley is alive and well in our city, and that there is so much creativity and economic activity happening right now," she said.
While there’s talk of a recovering economy, there’s also chatter — and concern — about an increasingly bubbly tech outlook. After all, this is how the hiring scene felt at the height of the dot-com mania, with startups devouring every skilled employee they could find. Then the bubble burst and the pink-slip parties started.
But such dark thoughts had no place at Friday’s packed gathering. Samantha Smith, a student at NYU, sees this as a prime time for entrepreneurship.
"It’s never been easier to start something," she said.
And for graduating students eyeing the job market, working in a creative environment where blue jeans and hoodies are the standard office attire doesn’t sound like a bad gig.
"The culture of a startup is so much fun," Smith said. "It’s more open."
The Unfair Fair
So what about the 80 startups that got turned away?
An e-mail that went out to the rejects accidentally cc’d all of them. So they banded together, creating their own mailing list and hatching plans for their own recruiting event: The New York City Unfair Job Fair. (They later renamed it to the Silicon Alley Job Fair.)
"It took on a life of its own," said Dan Goikhman, co-founder of Mojiva, one of those turned away. "This will culminate in an event produced by startups, for startups and those looking to work with them."
The organizers hope to hold their event within the next month or two. They’re in talks with venues such as Terminal 5, one of New York’s popular music spots.
The goal, Goikhman said, is to "be fun, somewhat different, and hopefully not your average job fair."
China’s passenger-car sales grew in March at a pace that was below forecasts after incentives ended and fuel prices rose, the China Association of Automobile Manufacturers said.
Dispatches of cars including multipurpose vehicles and sport-utility vehicles to dealerships rose 6.52 percent from a year earlier to 1.3 million units, the association said in a statement today. That pace was about one-tenth of the 63 percent sales increase reported in March of last year.
“The overall vehicle sales growth in March was below our expectations,” Zhu Yiping, the association’s statistics head, said at a briefing in Beijing today. March has historically been a peak period for car sales in China following the week-long Chinese New Year holiday that was celebrated this year from Feb. 2 through Feb. 8, according to the association.
“Car sales growth may continue to slow for a few more months as customers brought forward purchases to the end of last year,” said Harry Chen, an analyst with Guotai Junan Securities Co. in Shenzhen. “The pace may pick up again in the second half as potential demand is still there.”
Slowing Growth
Sales growth in China this year may fall short of the association’s previous estimate for an increase of 10 percent to 15 percent, said Dong Yang, vice chairman of the association.
“I am concerned about whether our growth rate is too low,” Dong said. “Some automakers’ profitability may be undermined this year and some may even face difficulties in their operations payday advance.”
Total vehicle sales gained 5.4 percent in March to 1.8 million units, the auto group said. Vehicle sales for the first quarter increased 8.1 percent to 5 million units.
Passenger car sales during the first quarter rose 9.1 percent to 3.8 million units, according to the association.
China this month raised interest rates for the fourth time in less than six months in a bid to rein in inflation. Economic growth may slow this year to 9.6 percent and to 9.2 percent next year from last year’s 10.3 percent pace, the Asia Development Bank said in a report last week.
The government on April 7 increased retail gasoline and diesel prices for the second time this year after oil advanced to a 30-month high.
GM China Sales
GM sold 233,014 vehicles in China last month, the Detroit- based company said April 2. Deliveries barely rose from March 2010’s 230,048 and followed a 6 percent increase in February.
Honda Motor Co.’s sales fell 5.3 percent last month from a year earlier to 58,611 units, the automaker said April 6. BYD Co., the automaker backed by Warren Buffett, reported a 41 percent plunge in March sales.
–Tian Ying, with assistance from Bonnie Cao and Stephanie Wong in Shanghai. Editors: Vipin V. Nair, John Liu
To contact Bloomberg News staff for this story: Tian Ying in Beijing at +86-10-6649-7571 or ytian@bloomberg.net
Transocean Ltd. gave its top executives bonuses for achieving the “best year in safety performance in our company’s history” _ despite the explosion of its oil rig that killed 11 people and spilled 200 million gallons of oil into the Gulf of Mexico.
The company said in a regulatory filing that its most senior managers were given two thirds of their total possible safety bonus.
Transocean noted “the tragic loss of life” in the Gulf when the rig operated by BP PLC exploded last April. But it said the company still had an “exemplary” safety record because it met or exceeded certain internal safety targets concerning the frequency and severity of its accidents, according to the filing with the Securities and Exchange Commission on Friday.
Safety accounts for a quarter of the executives’ total cash bonuses. The total bonus for CEO Steve Newman last year was $374,062.
According to calculations by The Associated Press, the total value the company assigned to Newman’s compensation package was $5.8 million.
That figure includes an $850,000 base salary _ a 34 percent increase from the prior year; perquisites of $622,057, which includes housing and vacation allowances, among other things; and the $374,062 bonus. Also included in the figure are stock options valued at $1.9 million and deferred shares valued at $2 million when those awards were granted in March 2010.
Transocean’s Deepwater Horizon oil rig explosion on April 20 in the Gulf of Mexico killed 11 workers and set off the largest offshore oil spill in U.S. history.
A commission appointed by President Barack Obama earlier this year said the explosion was caused by a series of time and money-saving decisions by Transocean, BP and oil services company Halliburton Inc. that created an unacceptable amount of risk.
In the regulatory filing, the company said its bonuses were appropriate as a way to recognize its executives’ efforts in “significantly improving the company’s safety record” and implementing a new internal planning system.
Those efforts have “enabled the company to maintain its financial flexibility during a challenging period, while, at the same time, positioning the company for sustained growth in the future.”
The Associated Press formula calculates an executive’s total compensation during the last fiscal year by adding salary, bonuses, perks, above-market interest the company pays on deferred compensation and the estimated value of stock and stock options awarded during the year. The AP formula does not count changes in the present value of pension benefits. That makes the AP total slightly different in most cases from the total reported by companies to the SEC.
The value that a company assigned to an executive’s stock and option awards for 2010 was the present value of what the company expected the awards to be worth to the executive over time. Companies use one of several formulas to calculate that value. However, the number is just an estimate, and what an executive ultimately receives will depend on the performance of the company’s stock in the years after the awards are granted. Most stock compensation programs require an executive to wait a specified amount of time to receive shares or exercise options.
Unemployment across the 17 euro countries fell below 10 percent in February for the first time in over a year, official figures showed Friday, in another sign the region is enjoying a fairly sturdy economic recovery despite debt troubles in a number of countries.
Eurostat, the EU’s statistics office, said unemployment fell by 77,000 in February, helping to take the rate down to 9.9 percent _ the lowest since December 2009 _ from January’s 10 percent. The January rate had previously been estimated at 9.9 percent but was revised up in Friday’s report.
Lower unemployment is good for the wider economy as it could help ratchet up Europe’s perennially weak consumer spending levels.
Analysts say that’s important if the recovery in the eurozone is to step up a gear. So far much of the recovery has been based on booming industrial conditions in Germany, Europe’s powerhouse. That’s evident in the unemployment rate in Germany, where the unemployment rate dropped to 6.3 percent in February from 6.5 percent in January.
Though falling unemployment is encouraging, Europe’s economy faces a number of headwinds, including a rising inflation rate. Figures Thursday showed consumer prices spiked by 2.6 percent in the year to March, way above the European Central Bank’s target of keeping inflation at “close to, but below 2 percent faxless cash advance.
As a result, the bank is widely expected to raise its main interest rate from the record low of 1 percent at its monthly policy meeting next Thursday. That expectation has in turn pushed up the value of the euro, which could potentially depress growth, too. Though a higher currency may make imported goods cheaper, it’s unlikely to be met with much enthusiasm by exporters.
That’s a toxic brew for a number of countries still reeling from a debt crisis that shows few signs of abating.
The last thing countries like Spain, which has the eurozone’s highest unemployment rate of 20.5 percent, Greece, Ireland and Portugal need are higher borrowing costs and an elevated exchange rate.
“With inflation likely to remain high and wage growth subdued, real labour income will probably shrink this year,” said Ben May, European economist at Capital Economics.
“With the spreading fiscal squeeze set to hit households too, we continue to expect household spending in the region as a whole to grow at a sluggish pace and sharp falls in Southern Europe and Ireland are probably inevitable,” May added.
Ireland may merge two of its biggest lenders as part of a raft of measures aimed at drawing a line under Europe’s worst banking crisis.
The government is considering folding EBS Building Society, the fifth-largest, into Allied Irish Banks Plc (ALBK), the second- largest, according to two people with knowledge of the situation. An announcement may come today after the central bank publishes the results of bank stress tests at 4:30 p.m. in Dublin, said the people, who declined to be identified because the matter isn’t yet public.
The country is taking “the first step in making changes to the financial system that are long overdue,” Phil Hogan, Ireland’s environment minister, told national broadcaster RTE Radio today. Finance Minister Michael Noonan will later in parliament announce “important decisions,” Hogan said.
Ireland is trying to show investors, its taxpayers and the rest of the euro region that the nation has plugged all the holes in the banking system, whose collapse so far cost 46.3 billion euros ($65.8 billion) in capital and crippled what was once Europe’s most dynamic economy.
The third round of stress tests covers Bank of Ireland Plc, whose shares have dropped 65 percent over the last six months, Allied Irish, EBS and Irish Life & Permanent Plc. Noonan will set out how more money the banks need from a 35 billion-euro bailout fund set aside for them.
“There is no overnight solution here,” said Gavin Blessing, a bond analyst at Collins Stewart Plc (CLST) in Dublin. “It’s going to be quarters or even years before these banks can raise debt at attractive levels and fund themselves independently again in the wholesale market.”
Bailout Fund
Ireland’s banks were reliant on the European Central Bank for 88.7 billion euros of funding at the end of last month, the Irish central bank said today. They may have borrowed as much as an additional 70.1 billion euros in exceptional liquidity from the Irish central bank, according to figures on March 11.
The government may have to inject 27.5 billion euros extra into the banks in total, according to a survey of 10 analysts and economists by Bloomberg News.
This would exhaust about 80 percent of the bank fund set up last year as part of Ireland’s bailout by the European Union and International Monetary Fund. The fund includes 17.5 billion euros from Ireland’s own resources.
“A realistic number would be 40 billion euros,” said Brian Lucey, associate professor of finance at Trinity College, Dublin. “They will come in between 25 billion euros to 30 billion euros. Anything more will be a difficult sell.”
Bank of Ireland
Bank of Ireland, the largest lender, will seek as much as 5 billion euros, said two people with knowledge of the matter. Irish Life will require more than 3 billion euros, while EBS will need about 1 billion euros, three people with knowledge of the banks said credit report. The people declined to be identified because the figures aren’t yet public.
The government controls four of the six domestic lenders, including Anglo Irish Bank Corp., which epitomized Ireland’s building boom and collapsed with the bursting of the property bubble and 15 percent decline in gross domestic product. Anglo Irish said today its final pretax loss was 17.7 billion euros for 2010, a record for an Irish company.
A fifth bank, Irish Life, yesterday suspended its shares until tomorrow on speculation the state will have to take majority control. The stock fell 45 percent on March 29. The company is weighing the sale of its profitable life assurance and investment management units to shore up its bank business, three people with knowledge of the talks said yesterday.
Announcements
Noonan decided yesterday to scrap the sale of state-owned EBS to a group including U.S. billionaire Wilbur Ross’s leveraged-buyout firm and Dublin-based Cardinal Capital Group. The state said in December is was acquiring 93 percent of Allied Irish, while it seized full control of EBS in May.
After central bank Governor Patrick Honohan, 61, publishes the results of the stress tests, Noonan, 67, who worked with Honohan in government in the 1980s, will address parliament shortly afterwards.
The main focus of this year’s assessment is on home loan portfolios after lenders were forced to sell 72.3 billion euros of risky commercial real-estate loans to the state last year at an average discount of 58 percent.
Deposits by Irish residents fell 9.8 percent in February from a year earlier, the central bank said today in Dublin. The decline was 1.8 billion euros over the month, it said.
The ECB expects Ireland to stand ready with a “backstop facility” for Irish banks, Lorenzo Bini Smaghi, an ECB executive board member, said yesterday.
Russian Car
Armed with the stress tests results, Ireland’s month-old Fine Gael-led government will seek to reopen the terms of the country’s 85 billion-euro bailout inked in November. Noonan will bring the results to a meeting of European finance ministers in Budapest starting on April 8 as he pushes for a reduction in the 5.8 percent interest rate on the loans.
The government also said it wants the ECB to provide longer-term financing for the banking system, and is seeking permission to share losses with senior bank bondholders. European policy makers are opposed to imposing losses on bank bondholders, on concern that it may reignite a banking crisis across the euro region.
Irish authorities also want fellow euro members to take direct stakes in the banks or provide insurance against losses for them as it tries to find buyers for lenders.
“It would be great if we could sell Bank of Ireland and Allied Irish for a euro to an overseas buyer, but that’s not going to happen,” said Jim Power, chief economist at Friends First in Dublin, who likened Irish banks to Soviet-era cars. “I compare it to trying to sell a 20-year-old Lada.”
Federal Reserve Vice Chairman Janet Yellen said the central bank could use communications to make policy more accommodative, lower unemployment and raise the rate of inflation if financial markets expected a tightening of policy before the Fed intended.
If policy makers expected the Fed’s target rate to stay lower for longer “and market participants came to share that view, then financial conditions would become significantly more accommodative, even in the absence of any change in the current level of the funds rate,” Yellen said, according to prepared text of a speech today in New York.
“Such a shift in policy expectations would be associated with a lower trajectory for the unemployment rate,” Yellen said at the University of Chicago Booth School of Business’s annual U.S. Monetary Policy Forum. The shift would also cause “a somewhat higher path of core inflation,” Yellen said.
Yellen is leading a committee of policy makers to evaluate the effectiveness of the central bank’s communications strategy as it carries out a plan to purchase $600 billion of Treasuries by the end of June to boost the recovery.
Yellen also said the policy making Federal Open Market Committee is “regularly reviewing the asset purchase program in light of incoming information,” echoing the language of its statements. She said the panel “will adjust the program as needed” to fulfill its congressional mandate to deliver full employment and stable prices.
Presents Scenario
The Fed vice chair presented a scenario in which the Fed persuaded investors that it would postpone a policy tightening by one year from current expectations. Charts accompanying her presentation showed unemployment falling by 0.5 percentage point by 2013 from this action, and core inflation rising by 0.3 point.
She said that “it is not my intention to provide new information about the outlook for the U.S. economy or monetary policy,” and that she only wanted to “highlight the role of central bank communications in bolstering the effectiveness of unconventional monetary policy.”
The Fed first lowered its target interest rate to a range of zero to 0.25 percent in December 2008. In March 2009, it began saying it would keep rates low “for an extended period.”
In November 2009, the Fed said it would maintain its policy so long as the economy had “low rates of resource utilization, subdued inflation trends, and stable inflation expectations.”
Adjusting Language
Yellen said that “down the road, once the recovery is well established and the appropriate time for beginning to firm the stance of policy appears to be drawing near, the FOMC will naturally need to adjust its ‘extended period’ guidance and develop an alternative communications strategy to shape market expectations about the policy outlook.”
She said that in the case the economy faltered, current communications might cause markets to expect a later tightening of policy. “The forward guidance now in place might well be sufficient to facilitate an outward shift in the expected path of the funds rate, just as we saw over the course of last year,” she said.
Yellen also elaborated on a defense of the Fed’s large- scale asset purchases that she gave in Denver last month, saying that without the purchases, unemployment would have “remained persistently above 10 percent, and core inflation would have fallen below zero this year.”
Yellen, 64, became vice chair of the Fed in October after serving six years as president of the San Francisco Fed. She also served as a Fed governor from 1994 to 1997 and as chairman of President Bill Clinton’s Council of Economic Advisers from 1997 to 1999.
Among the seemingly bedrock principles that gird conservative policy are these:
The less government involvement in private lives, the better.
The money you earn is yours, not the government’s to decide how much you can have.
And yet some House Republicans now say that whatever money a tax break lets you keep is actually government cash going into your pocket.
Likewise, you might be shocked to learn that while Republicans are directing a multifront assault on a government requirement to buy insurance, these House Republicans want to dictate what kind of coverage Americans can and can’t buy with their own money.
What issue could possibly prompt conservative Republicans to hammer away at bedrock precepts?
Abortion, of course.
Not content with the Hyde Amendment making it impossible for federal money to go for abortions (except in extreme cases), not satisfied with complicated measures enacted to ensure no federal funds indirectly touch privately funded abortions, sponsors of a new bill are trying to use last year’s health-care overhaul to make it even less likely that insurers will offer abortion coverage to anyone.
It’s called the No Taxpayer Funding for Abortion bill, but don’t let the title fool you. The measure could curtail privately funded abortions, too.
Voiding Tax Breaks
Sponsored by New Jersey Republican Representative Chris Smith, it would void tax breaks given to companies and the self- employed for insurance premiums on policies that cover abortion. The idea is that by leaving more of your money in your pocket, the government is giving you some of its cash.
Nor could a woman pay premiums for such a policy with pretax, flexible-spending accounts. True, she earned every penny of that money, but if she’s not paying taxes on it, she can’t spend it on something anti-abortionists don’t like.
Smith would also make sure that no one who gets a federal subsidy under the new health-care law could sign up at an insurance exchange for a plan that offers abortion benefits, thus discouraging insurers from offering such policies even to the unsubsidized.
As for abortion riders for people willing and able to pay for the benefit, insurers reported last year that employers tend not to ask for them. It’s one thing to have a policy that covers it along with other unplanned injuries and illnesses, as most insurers do. But apparently not many people pay extra in advance just in case they have an unplanned, unwanted pregnancy.
Conservative Thought
Given the overblown rhetoric about the “nationalization” of health care, surely Republicans should oppose government dictates on what sort of policy an insurer can provide, an employer can offer and an individual can buy privately cheap business cards.
Where are we, Canada?
And then there’s the fact that this bill would invite the government to intervene in the most intimate of decisions, which should turn conservative thought on its head.
No, that principle, too, gets a blink when the issue is abortion.
I get it that some opponents consider abortion, even some forms of contraception, to be murder. To some, you might as well kill a newborn as use a pill that prevents a zygote — a fertilized egg smaller than a grain of salt — from attaching to the uterus.
But that’s theology, not science, and it shouldn’t dictate public policy.
Building Barriers
The Smith bill’s true aim isn’t to prevent taxpayer funding but to take the movement closer to its ultimate goal of ending all abortion.
Anti-abortion forces can’t do that outright because it would be unconstitutional and has been since 1973. But ever since the U.S. Supreme Court so ruled in Roe v. Wade, opponents have been passing state and federal laws to throw as many barriers between women and abortion as courts will allow, while pushing Republican presidents to name judges who will permit more hurdles.
Humiliating gauntlets now greet women seeking even privately funded, early term abortions in many states. A poor woman must somehow scrape together the money, even if the pregnancy endangers her health.
Only if she’s at risk of dying or the victim of rape or incest can Medicaid pay for it, unless she lives in one of the 17 states that let state money pay.
Women at War
For women who put their lives on the line to serve their country in war zones, safe, legal abortions are almost impossible because military hospitals can’t provide them.
That’s how it is already.
With this and other anti-abortion measures on their agenda, House Republicans are undercutting their claim that they want to focus on fiscal restraint and on jobs.
Any characterization of the Smith bill as a cost-saver insults anyone within earshot. It is less expensive to end a pregnancy than to carry it to birth.
As for diverting focus from employment and spending issues, it seems there’s always time to enact another limit on a woman’s right to abortion.
It’s nothing to deviate from an agenda aimed at giving Americans what they most want, which is jobs. Not for those who are willing to ignore basic conservative principle to involve government in more people’s private lives.
Ann Woolner is a Bloomberg News columnist. The opinions expressed are her own.)
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