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Chris Christie 2015 Budget Townhall

Chris Christie 128 TownhallYesterday, Chris Christie delivered his annual budget address to the Legislature. Today, he hosted his 128 Town Hall meeting with as much fan fare as his first. To the repeat offenders  --as he so amicably calls them-- it was a sight for sore eyes. Infrastructure wise, as he was keen to point out n his introductory  speech, anyone closely following the trends in the national business climate know(s): Forbes ranks the New Jersey climate 41. The Republicans that follow global politics know the significance of that number. It's a need for improvement indicator, not a fair weather indicator. That distance away from the central tendency of the fifty states, puts businesses intelligence and the ability to harness investment potential of the state's human and financial capital as a very low priority for New Jersey's government agencies.

Since I have been working in the financial sector, I have had the opportunity to test the applicability of that measure of business friendliness. From a user's perspective, New Jersey has one of the easiest sites to navigate, and filing Corporate Sales Tax in this state is by far the fastest. A total of almost 3 mins, compared to about  an hour for states like Washington and Colorado. So what makes business magazines rate New Jersey so poorly? In a word. No make that two: "rates stupid".  New Jersey has one of the highest Sales Tax Rates in the country. Correction the highest base Sales Tax Rate in the nation at 7%; and when coupled with local county and municipal surtax, it ranks 20th.

If this Legislature gets its way, it would take a 10% Sales Tax Rate, according to estimates, to keep funding government without making serious changes to the system. Namely, changes to the State Pensions.  In response to this daunting challenge, Christie established a task force to explore possible alternatives to bring the State's fiscal house in order.  The NJEA, one of the largest unions, partnered with this task force to establish a road-map designed to put the state back on better footing --going forward. Two key points in the plan: 1. Allowing unions to manage their members contributions themselves, instead of being managed by the State. 2. Making a special dedication through a constitutional  amendment  --subject to voter approval, as to the percentage that the state will contribute towards funding the employee pensions.

A third issue: moving away from a defined benefit plan to a defined contribution is a long talked about cost-saving measure. In some regards, this could benefit employees more than the current system. In an economic crisis, like the one we just experienced, the return maybe limited for a given period. Over time, however, similar shocks can be absorbed by the market. Those retiring in that unique time span of 2-3 years (2007-09) may have to be issued select retirement privileges.  Fortunately, 401K's and other retirement plans don't need to be cashed out all at once. They can continue to earn interest income after the retiree stops working. Universities and large charities have what are called endowments which provide them with a perpetual funding stream for a single, lump-sum investment. The implication for retirees is a future in which the options for wealth creation are endless.

Opponents on the other side of the aisle will quickly argue that not everyone is intellectually savvy enough to navigate the series of investment packages offered by the financial industry, exposing state employees to the same down side risk managed by private sector workers. And that is true. State workers will have to calculate the risk-return on their investments. I would argue that that knowledge would eventually lead us to a more affluent society. It would probably lead to more effective and efficient government, simply because the draw of the public employee payroll system will be eliminated, and the feasibility of a career in the private sector will be equally as likely for some, where it had once been un-thought of.

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New York Launches Tenant Harassment Prevention Task Force

NEW YORK – Governor Andrew Cuomo, Attorney General Eric Schneiderman and Mayor Bill de Blasio today are announcing the launch of a joint enforcement task force, titled the Tenant Harassment Prevention Task Force, to investigate and bring enforcement actions – including criminal charges – against landlords who harass tenants. Tenant harassment complaints in Housing Court have nearly doubled since 2011. The task force will confront the rise in complaints that landlords are using a variety of tactics, including disruptive and dangerous renovation and construction projects, to force tenants into vacating rent-regulated apartments. Previously, when owners have neglected their buildings and allowed them to fall into extreme disrepair, the NYC Department of Buildings and Department of Housing Preservation and Development have used their enforcement powers to ensure compliance with housing and building codes, while cases involving harassment and rent regulation have been handled by New York State’s Division of Homes & Community Renewal Tenant Protection Unit (TPU), which was created by Governor Cuomo in 2012 to investigate landlord patterns and practices of harassment and illegal profiteering. The new task force will conduct joint cellar-to-roof inspections, coordinate enforcement actions, and when necessary speed the prosecution of predatory landlords who purposefully distress properties as a form of harassment in order to displace tenants and deregulate rent-stabilized apartments. “Every New Yorker deserves a safe, affordable, and decent place to live,” Governor Cuomo said. “Working with our partners in the State and City, and building upon the success of the Tenant Protection Unit, we will further crack down on unscrupulous and unlawful practices and ensure that tenants’ rights remain protected.”

Dept of Labor Lawsuit on mismanaged benefits finally solved

BRIDGEPORT, Pa. — After nearly six years of litigation, a federal district court in Philadelphia recently entered a $39.8 million judgment, protecting the rights of workers who participated in more than 400 death benefit plans mismanaged by John J. Koresko V; companies he controlled; and a former associate, Jeanne Bonney. The defendants are permanently barred from serving as fiduciaries to any employee benefit plan and, with the exception of Bonney, must make restitution to the plans.

The decision follows a 2009 lawsuit filed by the U.S. Department of Labor. The judge ruled that Koresko of Bridgeport, Pennsylvania, and other defendants diverted tens of millions of dollars in plan assets through more than 21 accounts using more than 18 different entities at more than eight different banks. Spanning more than 12 years, the scheme saw assets from the plans' trusts, used for real estate purchases in South Carolina and the Caribbean island of Nevis, to pay outside attorneys, lobbying expenses, operational expenses of Penn-Mont Benefit Services, Inc., and Koresko's law firms, and for Koresko's personal expenses, such as boat rentals and utilities. The misuses of assets violate the Employee Retirement Income Security Act.

"The defendants completely disregarded the duty of loyalty they owed to the employee benefit plans and the workers who rely on them," said Assistant Secretary of Labor for Employee Benefits Security Phyllis C. Borzi. "In an ideal world, this does not happen. When it does, there is justice in undoing this massive fraud, and in banning the defendants from coming anywhere near employee benefits again."

Kim Guadagno fostering efforts to support business growth in New Jersey


Kim Guadagno On Tuesday, Lieutenant Governor Kim Guadagno addressed approximately 100 business owners at the New Jersey Business Action Center’s (BAC) Resources for Business Growth event held in Lakewood. As a part of the administration’s ongoing efforts to keep New Jersey’s programs accessible to our state’s business community, the Lieutenant Governor and the BAC hosted their 13th Resources for Business Growth event, with a particular focus on manufacturing and exporting. Check out pictures from Tuesday’s event below.

Obama Care Talking Points -Individual

Deadlines and Penalties
If you don’t have coverage in 2015, you’ll pay a penalty of either 2% of your income, or $325 per adult ($162.50 per child) — whichever is higher. The penalty for noncompliance cannot exceed the national average premium for Bronze-level-qualified health plans (about $3000). A single individual making $45,000 annually will owe the Federal Government $900.

There is an annual open enrollment period for the health insurance marketplace each year. This year open enrollment 2015 runs from November 15th, 2014 to February 15th, 2015. During the open enrollment period you can enroll, switch plans, and get subsidies.

If you missed the deadline you won’t be able to get cost assistance on marketplace insurance or an ACA-compliant private plan until the next open enrollment period starts on November 15th.

Premium assistance is available to households that make up to 400% of the Federal Poverty Level, which changes yearly. For example, assistance is available for a family of 3 with income between $19,790 to $79,160. If your income falls below the ranges, you may qualify for Medicaid. If your income is above the ranges, you may qualify for a tax credit.

The maximum subsidy for a family of 3 is $515 per month on a Silver plan, however, there is a $5,000 deductible and $9,000 maximum out of pocket cost.

Plans fall into four categories:

  • Bronze covers 60% of the total average costs of care
  • Silver covers 70% of the total average costs of care
  • Gold covers 80% of the total average costs of care
  • Platinum covers 90% of the total average costs of care

New Jersey Monthly Cost /Subsidy

Based on the New Jersey Plans from the website a single individual, with 0 income can choose from plans that are estimated to cost between $279 and $600 per month (depending on the plan category, see above). The estimate is the same for a single individual with $120,000 of annual income.

While the plans remain the same, despite income level, the subsidy changes on a sliding scale. You get less of a subsidy the more money you make. Based on estimates, after subsidy, a single individual making between 25,000 to 30,000 annually will pay between $66 to $88 per month for insurance in the silver category.

You will have the option to have your subsidy applied towards your health insurance premiums on a month-to-month basis or to claim it on your federal tax return.

National Enrollment Numbers and Key Statistics

By December 24th over a million Americans had enrolled in plans through the marketplace and 800,000 Americans signed up for Medicaid. By the end of January the number rose to over 3 million in Federal and State marketplaces combined.

Medicaid, which currently covers nearly 50 million low-income Americans, funded an estimated $339 billion in services in 2008. Obamacare (Affordable Care Act) expands Medicaid to cover people with incomes up to 133 percent of federal poverty guidelines.

As a result of ACA (Affordable Care Act)  Premiums increased in New Hampshire 16%, New Jersey 2%, DC and Iowa 11%, and Pennsylvania, Louisiana and North Carolina by 12%.

Obama Care Repeal

Donald Norcross MemeToday, the House voted to repeal the Affordable Care Act, most commonly known as ObamaCare, citing the numerous discrepancies in the act and the burdensome implications that it places on tax paying citizens and the business community at large. ObamaCare, is a government engineered health care plan that is designed to be implemented by the open market. Ironically, Democrats are fine with the notion of providing vouchers/subsides for Healthcare, however, oppose the same concept when it comes to providing a thorough and efficient education for the nation's children.

The vote went along strict party lines, with all but three Republicans voting in favor, and 3 abstaining. The Democrats all opposed. Most notable of which was Donald Norcross, who willingly crossed party lines before, voting for the Keystone XL pipeline, but did not vote for this particular measure. A promise he boldly made before the South Jersey Chamber of Commerce, during his 2014 election bid.

The Affordable Care Act was a clever way to pass the buck. The notion that spreading the cost of providing care over more insurers decreases the price for everyone, was the pitch. The problem is that there is existing insurance coverage through State level Medicare and Federal Medicaid. Those programs have been abused by doctors, over-billing and double billing clients, because the tab was picked up by the government. To assume that this new government sponsored plan would be any different is laughable. The fraud is so ingrained in the system that the CBO has no arithmetic value for the loss incurred by the government, while accepting the fact that it exists, they estimate that upwards of $64 billion is attributable to what they classify as improper payments. This gives us a hint as to why Donald may have voted against the measure to repeal the act. As his brother, George Norcross, is closely aligned with an Urban Hospital.

Congressman Lance, a sound fiscal conservative, along with the other members of the New Jersey Republican caucus voted in the affirmative. Lance's press statement reads, “Instead of making health care more affordable and accessible for all Americans, Obamacare is driving up costs and putting the government between patients and their doctors. Today the House has taken formal action to repeal the President’s health care law and replace it with patient-centered solutions that use competition and innovation to drive down costs, crack down on frivolous lawsuits and reduce waste, fraud and abuse. As a member of the Energy and Commerce Committee I look forward to being on the front-lines of this effort."

The trouble with the veto privilege, that Obama is tempted to use, is that it sets the stage for electing a Republican President. Failures within the legislation have been substantial enough to prompt a repeal, that is something that cannot go unnoticed, let alone un-remedied. Those who voted to put a majority of Republicans in both houses and into the various executive offices were hoping for this exact sort of change.

US India Financial Inclusion Strategies

Jacob LewMUMBAI, INDIA - Today, Secretary of the Treasury Jacob J. Lew visited a Unique Identification Enrollment Center in Mumbai, India.  These centers, which have been established by the Government of India across the country, have already provided identification for and helped establish bank accounts for 800 million Indian citizens.  This initiative underscores the importance of financial inclusion and how increasing active participation in a society’s economy helps promote growth and prosperity.

Financial inclusion is a high priority for the U.S. Department of the Treasury.  Not only is financial inclusion an important goal in and of itself, but it is increasingly recognized that financial exclusion can be a factor in preventing countries from reaching their full economic potential.  At the household level, financial inclusion enhances the ability to smooth consumption, manage life’s risks, and take advantage of economic opportunities such as starting or growing a small business. Also, from a broader macroeconomic perspective, studies show that financial inclusion has a direct bearing on national economic growth rates and is inter-related to the issues of financial stability, integrity, and protection.

Paul Ryan Advances US Trade in the Pacific

Paul RyanWASHINGTON — This afternoon, a bipartisan delegation from the U.S. House of Representatives left Washington for a week-long visit to three Asian nations participating in ongoing Trans-Pacific Partnership negotiations. The eight-member delegation will meet with senior government officials and American and local business leaders in an effort to advance the U.S. trade agenda and strengthen ties with these countries. More information about the trip will be released throughout the week. Upon departure, House Ways and Means Committee Chairman Paul Ryan (R-WI) released the following statement:

"Our economy, our national security, and our very standing in the world are all tied to our trade agenda. Other countries are trying to reshape the state of play in Asia, and so we have to stay engaged. Our trading partners need to know that the United States is serious about advancing its trade priorities and strengthening our ties in the region. They also need to know that we will not accept just any agreement. We will accept only one that truly breaks down barriers for American exporters. I look forward to talking more about expanding economic cooperation with our friends in Asia."

Other members of the delegation are Rep. Gregory Meeks (D-NY), Rep. Devin Nunes (R-CA), Rep. Pat Tiberi (R-OH), Rep. Dave Reichert (R-WA), Rep. Charles Boustany (R-LA), Rep. Vern Buchanan (R-FL), and Rep. Rep. Adrian Smith (R-NE).

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White House Notes

Trade has an important role to play in supporting good-paying, middle-class jobs in the United States.

In fact, exports supported more than 11 million jobs in 2013. That's why President Obama is working with Congress to secure the Trans-Pacific Partnership -- the most progressive trade agreement that will ensure our workers benefit from trade that is both free and fair.

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Market Move

The 10-year U.S. Treasury yield dropped yesterday to the lowest since May 2013 after the SNB’s surprise move and lowering of already-negative deposit rates. The won rose and local bonds rebounded after falling yesterday on the Bank of Korea’s unanimous decision to leave interest rates unchanged.

Fast Facts

This year, the IRS will begin auditing companies for compliance with the Foreign Account Tax Compliance Act (FATCA). Failure to comply with the new FATCA reporting requirements will result in the IRS imposing a 30% withholding tax on U.S. payments to non-compliant Foreign Financial Institutions (FFIs).

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