Are SSA No-Match Letters Putting American Jobs at Risk?

Sabtu, 30 April 2011

The Social Security Administration (SSA) just announced it will resume its practice of notifying employers of discrepancies in employee paperwork through “no-match letters”—a mechanism which threatens countless American jobs. Despite the Administration’s clear assertion that the letter “makes no statement” about a worker’s immigration status, employer confusion over the letters has led to erroneous firings and lost wages in the past, and threatens to be the case now. It is anticipated that over 1 million workers will be the subject of these letters.

Each year, employers file a Wage and Tax Statement (Form W-2) with SSA and the Internal Revenue Service to report how much they paid their employees and how much they deducted in taxes from employees’ wages throughout the year. SSA sends a no-match letter when the names or Social Security numbers listed on an employer’s Form W 2 do not match SSA’s records. According to SSA’s Office of the Inspector General, more than 70 percent of the 17.8 million discrepancies in SSA’s database belong to native-born U.S. citizens.

Sounds harmless, right? Wrong. While the purpose of these letters is simply to ensure that workers are getting credit for their earnings, a now-rescinded 2007 Bush administration rule turned the letter on its head. Under the rule, U.S. Immigration and Customs Enforcement (ICE) could use the receipt of a no-match letter as evidence that an employer had knowledge that the employee who is the subject of the letter is not authorized to work and required employers to take certain steps to avoid liability, including terminating employees who could not fix database errors. The new rule essentially sent the message that a no-match letter would be used against the employer to prove an immigration violation.

The National Immigration Law Center and other civil rights and labor unions filed a lawsuit to stop this economically devastating rule, which was eventually blocked by the courts. In fact, in issuing a decision that blocked the rule from being implemented, the Court stated that if the rule were allowed to proceed, it would “result in irreparable harm to innocent workers and employers.” And in 2009, Secretary Napolitano rescinded the no-match rule citing the lawsuit. SSA also suspended its employer no-match program over the last three years.

So why send the letters now? Employers fearful of ICE enforcement will ignore SSA’s claims that the letters do not make an assertion about immigration status, and unnecessarily fire immigrant and US-born workers alike. The government itself estimated that if the rule were implemented at least 70,000 citizens and legal immigrants would lose their jobs because of confusion over the rule and challenges that workers would face in correcting errors. The U.S. Chamber of Commerce put this number at 165,000.

In a time of 9% unemployment it seems almost unfathomable that the Administration would re-institute a policy that will cause the loss of American jobs. It’s time to retire the ineffective Social Security Administration “no-match” letter, and focus on creating jobs.

Why Schmidt might have to sell Google stake

Selasa, 19 April 2011

NEW YORK (CNNMoney) -- Google Chairman Eric Schmidt is rumored to be on the short-list for the Commerce Secretary job. But accepting that role is a multi-billion dollar decision.

To avoid conflict of interest, presidential appointees must go through a thorough vetting process by the agency the nominee is appointed to, the White House, and the Office of Government Ethics.

Conflicts could arise if any assets or securities that a nominee holds could benefit from their decision making. Those conflicts must be nullified for the appointee to be given the job.

That means if Schmidt were appointed, and his Google holdings were found to be an issue, he'd likely have to sell off his stake in the search giant.

Schmidt owns more than 9 million Google (GOOG, Fortune 500) shares in his portfolio. At current prices, that works out to nearly $5 billion.

Federal rules would require Schmidt to sell off his stake in 90 days. Market analysts said Google is such a highly traded stock that selling 9 million shares over three months would have no noticeable impact.
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But it's unlikely Schmidt would want to sell everything off right away -- especially since the stock is still trading about 29% below its all-time high.

As a result, the law allows Schmidt to put his stock into a blind trust. Portfolio managers would gradually sell the stock off and replace it with securities that don't conflict with the Commerce Department's work, such as Treasuries, or broad index funds.

Schmidt would still face a potential conflict of interest, though, since the blind trust wouldn't be all that "blind."

"Putting it in a blind trust would be hopelessly ineffective," said Alan Morrison, professor at George Washington Law School. "It's the worst kind of fig leaf, because it's not 'blind' in any sense of the word. What's Schmidt going to say? 'Do I own Google? Really?'"

The Office of Government Ethics mandates that employees of the executive branch can't own more than $15,000 of a stock or asset that would conflict with their work. Going from $5 billion to $15,000 isn't going to happen in a day.

To get around that requirement, the OGE allows people in conflict to recuse themselves from certain activities. That means even after his Google shares are put in trust, Schmidt would still have to recuse himself if a conflict arises with Google.

The good news for Schmidt is that the Department of Commerce doesn't deal all that heavily in Google's businesses.
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Schmidt would obviously never get a job at the Department of Justice, the Federal Trade Commission or the Federal Communications Commission, which constantly examine and regulate Google's activities.

The biggest potential conflict would be the Commerce Department's "privacy bill of rights" initiative, which encourages websites to voluntarily post simple notices that clearly state what personal information will be collected and what will be done with it. But experts say that's a very weak and dubious conflict.

The upside for Schmidt is that even if he is forced to get rid of his Google stock, he wouldn't have to pay capital gains taxes.

The OGE allows executive branch employees to defer tax burdens if they are required to get rid of their assets to avoid a conflict. The law says the tax deferral "aids in attracting and retaining highly qualified personnel in the executive branch."

Former Treasury Secretary Henry Paulson controversially took advantage of that law. Paulson, who was CEO of Goldman Sachs prior to joining the government, saved millions of dollars by putting his $700 million Goldman Sachs (GS, Fortune 500) stake into a blind trust.

Interestingly, Paulson's trust couldn't buy Treasuries, since being the Treasury secretary certainly would have made holding those assets conflict with his duties.

Schmidt would only need to pay capital gains taxes if he were to later sell the securities that the trust bought during his tenure as Commerce secretary.

So don't shed too many tears for Eric Schmidt. Yeah, he'd have to give up his Google stake, but he could save many tens of millions of dollars by doing it.

Can tech make a dirty fuel clean?

Fort McMurray, Alberta (CNN) -- This is Drew Zieglgansberger's dirty little secret: a huge metal tube that's filled with a roaring natural-gas flame.

"Here's the big culprit," Zieglgansberger said, yelling over the squeal of the industrial process, which is used to melt oil out of the ground here in northern Canada. "We're burning natural gas to get out something like butane (oil). We know that, but I wanted to show you anyway. It's a massive amount of energy we use to create the steam."

This is the oil industry's answer to the traditional process of strip mining Canada's boreal forest to extract "oil sands" from the ground.

Instead of digging for oil, "in situ" oil fields such as this one, about 500 miles north of Canada's border with Montana, send pipes and steam into the ground to slurp the fuel out of the dirt.

The metal tube is large enough "you could get three half-ton trucks in there," said Zieglgansberger, who is Cenovus' senior vice president at Christina Lake. The fire heats water, which winds around inside the tunnel in pipes that look like brain matter. Cenovus injects that steam into the ground to melt a sticky form of crude that's mixed in with the dirt about 1,200 feet below the surface. The heat and water loosen the oil, allowing it to be pumped back to the surface and then refined.

The huge flame is the "culprit" because all of the energy it takes to power the process makes extracting oil in this way rather inefficient.

But it's also an opportunity: Cenovus and others see this type of operation as an environmentally friendly alternative to oil sands mining. Instead of clearing the forest to dig out this oil-dirt mixture, and leaving ponds of toxic waste on the surface, in-situ developments such as this do their work underground.

The companies do cut strips out of the forest to conduct seismic tests that tell them where the oil is located. They argue this is both aesthetically pleasing and environmentally friendly. Some environmentalists, however, say the strips still pose problems for local wildlife, including migrating caribou.

The oil industry sees this type of operation as its future. By 2015, most of the oil produced from Canada's massive oil sands reserve will be steamed out of the ground instead of mined, Zieglgansberger said. About 80% of all oil sands will be extracted using this method, according to the Canadian Association of Petroleum Producers.

These technological advances could lead to a cleaner manner of oil extraction.

"Technological advancements are what started this industry, and it's what is going to help this industry continue to grow," said Anne Marie Toutant, vice president of mining operations at Suncor, the company that started mining for oil here in 1967.

The mining side of Canada's oil sands is also making an effort to be greener.

Suncor plans to stop building new tailing ponds, which are toxic lakes of industrial waste that have been blamed for killing migratory birds. The company has developed a new polymer that it can inject into these lakes to turn them back into land much more quickly.

"We're now talking about reducing our footprint to about one quarter of what it would have been," said Bradley Wamboldt, general manager for tailings at Suncor. "Viewed from space, that means you see less of an impact."

The company recently opened up a field on the site of a former tailing pond after filling the hole with dirt and then planting native vegetation on top. The Alberta government has certified only 257 acres of land as fully reclaimed -- 0.16% of the total active mining area. About 6,500 acres are at some intermediate stage of the process, according to the province's environment ministry.

Projects such as these, and the promise of in-situ technology, lead Zieglgansberger to believe technology and innovation can make a dirty fuel cleaner.

"I don't want to do something that's going to make my grandkids say they're ashamed of their grandfather," he said.

The industry gets an unfair rap, he said.

"We're not just a bunch of cowboys out here punching holes in the ground so we can hold up our money bags and go, "Arr! Look at us!' "